Cold, hard facts about heating oil: The industry, plagued with corruption, needs a watchdog

Written on: November 17, 2016 by ICM

Unsurprisingly for those with a passing knowledge of New York, this scam is not new. According to recent testimony before the Council’s Committee on Sanitation and Solid Waste Management, the problem dates back 30 years. The last major case was federal, with two companies charged in 2007 making off with $50 million over a 17-year period.
As important as they are, criminal charges are never the only answer to widespread and longstanding crime in a single industry. To that end, City Councilman Antonio Reynoso (D-Brooklyn) has introduced a bill that would give BIC the authority to regulate the heating oil supply industry, including the power to require background checks and licensing, and to revoke licenses for bad actors.
This solution has the benefit of having succeeded in a similar industry. In the 1990s, New York’s commercial waste-hauling industry — made up of nonmunicipal garbage trucks contracted by business customers — had similar problems.
Garbage disposal is highly profitable and not particularly transparent, which explains its attractiveness to the Mafia families that ran the city’s criminal underground in the 1970s and 1980s. To the extent law enforcement was onto the crooks, prosecutions became mere costs of doing business.
That all changed in 1996, when a high-profile state prosecution against 23 carting companies and four trade associations for conspiracy, racketeering and anti-trust violations convinced lawmakers that a deeply rooted, industrywide solution — and not a quick fix — was required for sustained improvements. Not content to rest on their laurels, law enforcement officials enthusiastically supported addressing the underlying problem.
As a result of these prosecutions, the City Council created the Trade Waste Commission in June 1996. This new agency assumed control of licensing and regulation of all businesses participating in the trade-waste industry within the city, and made new rules to carry out its mandate.
Over time, the commission changed the industry in a permanent way. It set maximum collection rates and denied licenses to applicants who lacked integrity. The result? Organized crime no longer controls the industry, which today enjoys a healthy, competitive and fair business environment.
Heating oil transport is now in a similar predicament. The mob may no longer reign supreme, but opportunistic criminals still exist and will continue to take advantage of markets that lack appropriate protections.
Unlike in 1996, the city doesn’t need to create an entirely new agency. The Trade Waste Commission was reorganized in 2001 to become BIC — the same mayoral agency now pushing this common-sense reform. BIC’s mission has since been expanded to include other industries that organized crime historically controlled, including the public wholesale markets at Hunts Point and the shipboard-gambling industry.
In short, BIC is perfectly suited to regulate the heating oil industry. Sometimes, an ounce of crime prevention is worth a pound of indictments.
Alonso, a managing director of the global consulting firm Exiger, served as Manhattan chief assistant district attorney.
Article courtesy of: New York Daily News Opinion Page