Negative press is bad for business, and Intercon Solutions CEO Brian Brundage can attest to that.
Brundage's Chicago Heights recycling company had to lay off more than half of its staff and say goodbye to 70 percent of its business after a damning accusation from the Basel Action Network, a Seattle-based environmental watchdog organization. Intercon's troubles were detailed in Monday's report on Chicago Heights Patch.
BAN has accused Intercon of shipping electronic waste to China through a third party while telling its customers and the news media it does not export or landfill materials. BAN's proof of this cames in the form of photos of a shipping container on Intercon's property that ended up in Hong Kong, China.
BAN founder Jim Puckett said the main trailer in question contained cathode ray tubes and batteries, required to be regulated by the U.S. EPA. Brundage said that accusation was the red flag for him.
"I’ve never shipped CRT glass internationally," Brundage said. "We’ve always had it refined domestically. That was one thing that I knew just didn’t make any sense. We have bills of lading that show that we are not the shipper. We even had to file a lawsuit to get the trailer information because it wasn’t ours."
Even if Intercon did ship the container to China, Brundage said, it would not matter because it did not contain CRT glass and batteries.
"To me it’s more important that it wasn’t CRT glass and batteries," Brundage said. "I can ship stuff to China. That’s not the problem. The problem is what the cargo was. I think, conveniently enough, Jim Puckett just decided to say it’s CRT glass and batteries because these are the two items that are regulated by the EPA."
So, what was in the container? Brundage is waiting to reveal that in the courtroom, but said he has documentation from a federal government agency detailing what was really in that container.
"So now you have a big ocean container that supposedly was ours and supposedly had CRT glass and batteries in it that’s been rejected from communist China coming back to the U.S.," Brundage said. "I just find it funny to believe that people would think that would go totally under the radar. Why Jim Puckett and BAN would have thought that our government would not be on top of it is beyond me."
The question of what was inside the containers should be easily answered by the Hong Kong Environmental Protection Department, but Brundage said he thinks officials rejected the shipment on Puckett's word.
"I bet they never even opened it, because if they did, they would have seen it wasn't CRT glass and batteries," Brundage said. "Think about it. If you told me, ‘Brian, I just put radioactive material in your car, don’t go in your car,’ do you think I’m going to go open up my car?"
Brundage cited an incident in November 2009, in which the Indonesian government rejected nine containers originating from CRT Recycling in Massachusetts after BAN said they contained CRT computer monitors. Peter Kopcych, the general manager at CRT Recycling, said the containers came back sealed.
"When the EPA got the containers here, none of the seals were broken," Kopcych said, adding that the containers were full of reusable TVs, which are OK to export without EPA regulation. "If the EPA found anything bad when they opened those containers, I would have been fined at least."
Another suspicious part of BAN's accusation is the photographs themselves.
Brundage rents the 250,000 square-foot Heights facility from his uncle, Howard Gossage, but Intercon is not the only business occupying the property. LKQ, an automotive replacement parts supplier, rents a part of the property as well. In his 2011 letter to Brundage, Puckett acknowledged that the photos were taken on LKQ's portion of the property.
In the letter, Puckett references an exchange with LKQ general manager Luis Mendoza, in which Mendoza said the trailer could not have come from LKQ. But in a phone interview with Patch, Mendoza said the questions were framed as if the trailer contained electronic waste.
"They asked me if I shipped electronics scrap to China," Mendoza said. "I only deal with diesel engines. I didn’t lie to them. (Puckett) made it sound like Intercon was accusing us of sending hazardous waste to China, and I told them no."
If the container, as Brundage is arguing, never contained hazardous electronic waste, Mendoza may have been answering improperly-posed questions. Mendoza said his company exports rebuilt engines, a key fact considering one of the other trailers BAN photographed was proven to contain automotive parts after an inspection by the China Certification & Inspection Group Co. Ltd. last year.
Brundage said he is not necessarily saying LKQ shipped the trailers in question.
"I'm just trying to point out the fact that BAN did not do their due diligence," Brundage said. "When they first had the audit done, they didn't even know we had another company on our facility. Now we know one of the trailers had alternators and starters in it."
Even if Brundage can prove his company didn't ship hazardous waste to China, a question still remains: Why would a nonprofit want to hurt a credible business?
The major point of Puckett's letter to Brundage was to alert the CEO his company was being denied BAN's E-Stewards Certification. The E-Stewards pledge was initially established in 2003 and became a fully-accredited certification in April 2009. To this day, the pledge includes a vow not to export hazardous e-waste, directly or "through intermediaries," to developing countries, which is the part BAN says Intercon violated.
Electronics Recyclers International, a California-based company that Intercon considers a competitor, happens to be one of the founders of the E-Stewards Certification, donating $50,000 to BAN for its creation.
Oddly enough, between 2007 and 2008 ERI sold nearly 7 million pounds of electronic waste to a Los Angeles company which then exported the materials to Hong Kong, according to a November 2010 Sacramento Bee report.
It appears ERI was guilty of doing exactly what BAN accused Intercon of doing. Upon learning about the pledge violation, Puckett told Sacramento Bee reporter Tom Knudson, "If we had learned of these bills of lading when he was doing this, we would have been all over it."
ERI was never denied the E-Stewards Certification, however.
Willie Cade, CEO of PC Rebuilders and Recyclers in Chicago, said his company sells CRT glass to Intercon, adding that the relationship between BAN and ERI makes him skeptical of any accusations coming from the watchdog.
"I think it’s important to understand the relationship between Intercon and ERI, two fierce competitors against one another," Cade said. "ERI getting a pass and Intercon not, and ERI having given money to BAN. I mean it’s a pretty clear picture."
Brundage was more aggresive in describing the connections, calling BAN's audit and letter a witchhunt set in motion by Intercon's biggest competitor. Puckett dismissed the idea that he was being influenced by ERI.
"That’s pretty desperate," Puckett said. "E-Stewards was founded by many recyclers, and Intercon can say they are all competitors because they aren’t part of that group. To claim that we somehow are influenced by that founder’s money is ridiculous."
Brian Brundage, Willie Cade and Peter Kopcych have each accused BAN of not doing its homework. Cade cited the lack of any government action against Intercon as further proof of the company's innocence.
"There has not been, to date, any credible evidence that there was anything illegal going on," Cade said. "EPA hasn’t stepped in. I mean, at this point they’d be fining them. It’s not like this skipped the radar.”
But BAN has not backed down from its claims. In fact, the organization filed a countersuit against Intercon in federal court earlier this month.
On Wednesday, Sept. 19: Read the next installment to learn about BAN's side of the story with comments from founder Jim Puckett, Hong Kong government officials and former Intercon employees who do not have a positive view of their former boss.
In Upcoming Posts: Patch will take a closer look at the lawsuit and find out what it will mean for each side. We will also examine exporting in the recycling industry and the definition of e-waste.
BAN's Evidentiary Report: The report BAN compiled from 2009 to 2011, including photos of the trailers that were shipped to China through California. You can find a copy of this report attached to the article.