Trashing the locals

R>esidents of Colusa County—located just a short drive up Interstate 5 from Sacramento—thought they had secured a stronghold over the waste management industry in 1998 when they passed a ballot measure that would require a two-thirds vote at the polls for the approval of any new landfill.

Just two years later, the Cortina Band of Wintun Indians, with the help of a little-known waste company, announced plans to open a privately run landfill that would pack as much as 15 million tons of garbage into the foothills of Colusa County. Many are worried the deal could result in contaminated waterways and unattended piles of trash.

The Bureau of Indian Affairs granted Canada-based Earthworks Industries a 25-year lease of 443 acres to include a landfill, composting facility and petroleum-contaminated soil unit. The permit now sits on the desk of Judge Kathryn Lynn at the Department of Interior Board of Indian Appeals.

It’s been there for nearly a year, long enough for critics of the plan to drum up further concern about Earthworks, the principle business interest in the project. It was tribal leaders who approached Earthworks with the idea for a landfill.

As Earthworks worked closely with the Bureau of Indian Affairs to approve the project, the company boosted its clout on the Vancouver Stock Exchange with its only forecasted revenue coming from the landfill in Cortina. Earthworks started a company incorporated in California named Cortina Integrated Waste Management to administer the project.

Tedd Mehr is an attorney representing Colusa County residents opposed to the project. He convinced county supervisors to appeal the Bureau of Indian Affairs’ permit approval in 2000.

“I was making a big deal about their history,” Mehr said. “It’s my opinion that they [Earthworks] are money-raisers and they don’t care about the land. They’re going to raise as much as they can and probably sell their interests.”

Like all federally recognized Native American reservations, Cortina Rancheria’s 640 acres is immune from state and local law, and there are just a couple of dozen members who actually live on the reservation.

The attraction of landfill operators to the sparsely populated land is obvious. “If you are doing it outside of Indian land you’d have to go through three levels of government, right? As opposed to this where you are going through one,” Earthworks former administrator Mike Dumont said last year.

Nearby Colusa County farmers fear the water they rely on that runs down the hills to irrigate crops could become contaminated if the landfill goes into place. At the time Earthworks announced its plans, Colusa County officials questioned whether the land would be able to sustain the amount of truck traffic needed to make the site profitable.

The Board of Supervisors also thought the voting members of the band—most who did not reside in the area—were too disengaged from the immediate concerns of the 17,000 county residents and local farmers. But the county has no authority over the project.

Earthworks president David Atkinson insists the site will be lined properly—better than required by state or federal standards—and the company will remedy any detrimental effects the landfill might cause.

Yet Mehr and other citizens worry that Earthworks can’t be trusted. Its questionable corporate history leads them to fear the company might make its money and leave the reservation with a hefty pile of trash and contamination. The company has already raised close to $7 million for the project.

“In order to get under way, Earthworks has to get federal approval that would require advance funds necessary to obtain letters and credits and guarantees that should they abandon the tribe or the project at any time that sufficient funds are there to close the landfill in compliance with environmental law and to fulfill post-closure monitoring requirements,” said Howard Dickstein, the tribe’s Sacramento-based attorney. “Whether Earthworks is financially capable or not, which we think it is, is of no consequence to the safety of the project.”

In accordance with inside trading laws, Atkinson and other Earthworks directors have reported to the British Columbia Securities Commission their personal transactions of Earthworks stock. Since the inception of the company in 1993, Atkinson has shuffled thousands of personal shares nearly every week, slowly profiting off minor dips and swings of the penny stock. Other directors have done the same.

“I’ve made a substantial investment to support this company. The fact of the matter is the securities commissions and insider-trading reports are monitored by regulators. I trade in the stock on a continual basis. If I were doing something wrong, it would be red flagged,” Atkinson said.

In December 2000, Earthworks applied to the U.S. Securities and Exchange Commission for an over-the-counter stock listing. After the SEC listed 13 risk factors to be considered about the status of Earthworks’ Cortina project, Earthworks withdrew its application the following year and hasn’t applied again since. For example, the report reads, “The Company holds no physical assets of significance. The contractual rights that it holds may not have a realizable value.”

SEC also warns that there is no guarantee they will be successful in obtaining final approval for this project, which is bad news because the waste management project represents the only current business enterprise of the company.

The statement also mentions the fluctuation of Earthworks stock and several environmental factors of concern. “There is no assurance that the company will be able to satisfy what might become increasingly onerous environmentally related requirements,” the report reads.

Atkinson also has a history with a number of other environmental remediation companies enveloped in scandal. Between 1990 and 1993, Atkinson served as a director of World Tec Industries under president Nicholas Michael Ross. In 1996, Ross settled with the BCSC for insider-trading misconduct during his stay at World Tec from 1989 to 1992.

World Tec then merged with another publicly traded Canadian company called Solucorp. Atkinson’s father, Don Atkinson, was a director of Solucorp until about 1996. Then-President Joseph Kemprowski and other directors faced securities violations in 1995 and 1999. The BCSC ceased trading of the stock in 2000, and the investigation is continuing.

Atkinson said he had no connection to Ross, and he’d left World Tec in 1993 when Solucorp’s securities violations came to light. He then became president of Procordia Explorations, a subsidiary of World Tec/Solucorp, which carried out very limited mineral exploration work in Canada.

In February 1993, Atkinson announced that under the previous management of Bryan Fair, Procordia had its own share of regulatory worries. Later that year, Procordia was renamed Earthworks. “All ties to previous directors and management have effectively been severed,” Atkinson said.

“There was a group of management in charge of World Tec and Procordia. Existing management was removed from capacity to act as directors of public companies in 1993,” Atkinson said.

According to Atkinson, Earthworks has no relation to Solucorp other than sharing a mutual royalty interest in a molecular bonding technology for metal refinishing. Solucorp also sued Earthworks two years ago for more than $600,000 for accrued interest on an outstanding loan. A representative for Solucorp declined to be interviewed for this story after also denying that the companies were ever related.

For the concerned citizens that Mehr represents, the history of Earthworks and its nature as a public company does little to set their minds at ease that their land will be treated properly.

“You’ve got a Canadian company made up of questionable principles, and they’re doing business with Indians,” Mehr said. “It’s a crazy thing.”