Recycler's checkered past is weaponized in plastics fight

SAN FRANCISCO — A fight over cleaning up the environment is getting dirty.

Plastics companies trying to fend off a California ballot initiative to boost recycling are bringing up its ties to a San Francisco waste hauler that pleaded guilty last year to bribing city officials.

The company in question, employee-owned Recology, is a pioneer in recycling and composting technology. Its curbside food-scrap service helped inspire a statewide composting law aimed at reducing methane emissions. All of its 450 trucks in San Francisco run on renewable fuels, and it generates more than 90 percent of its electricity from carbon-free sources.

But it's the bribery scandal that ballot initiative foes are focusing on — and that could hurt chances of passing rules to curb the proliferation of single-use plastics even though Recology and environmentalists are aligned with the majority of California voters. It's an example of how the time-honored political tactic of demonizing the opposition can be applied to issues as well as candidates.

The measure, which is set to be put before voters statewide in November, would ban Styrofoam, put a fee on single-use plastic products and foodware, and require them to be made recyclable or compostable by 2030. Proceeds from the fee, estimated at several billion dollars per year, would go toward recycling infrastructure and environmental restoration.

It's the latest attempt to reduce plastic waste in California after three years of failed legislative attempts to overhaul plastic packaging. Oceana, the Nature Conservancy and the Monterey Bay Aquarium are among the environmental groups backing the initiative, but Recology is its primary funder, contributing $3.8 million through the end of last year.

The company admitted last year to bribing San Francisco officials to get favorable contracts and treatment — a "corrupt and reprehensible cheating of the American public," as an IRS agent put it. Six city officials have stepped down in the wake of the federal and city investigations.

The American Chemistry Council and the California Business Roundtable began highlighting that history last week, sending out a press release pointing to Recology's $36 million fine and its overbilling of customers by $100 million.

"It is remarkable that a company that was found guilty of fraud, of bribery, of corruption, is the front firm," Michael Bustamante, a spokesperson for the opponents' campaign, said in an interview. The industry groups are also arguing the measure will cost $9 billion in increased taxes and recycling costs, half of which they say would be passed on to consumers.

Environmental groups backing the measure countered by pointing to an investigation California Attorney General Rob Bonta announced last month into fossil fuel and petrochemical companies for their alleged role in promoting plastic use and exaggerating the benefits of recycling.

"We have no doubt that the voters of California will see this press release for what it is, which is a mere distraction," Anja Brandon, U.S. plastics policy analyst for the Ocean Conservancy, said in an interview. "The opponents are largely the same fossil fuel and petrochemical industries that have benefited from inaction for years."

She added that the fee is intended to be paid by manufacturers and not explicitly passed on to consumers: "They would be litigated if they chose to do that because it is quite literally written into the statute," she said.

Recology is no longer involved in the initiative — it terminated its campaign finance committee in November — but is still supporting it. "Recology put up the seed money to form a ballot committee and launch a statewide initiative that ultimately led to the California Recycling and Plastic Pollution Act of 2022," company spokesperson Robert Reed said in a statement. "We’re proud of our role in launching this important environmental effort, and urge Californians to vote in November."

The corruption scandal could overshadow Recology’s environmental bona fides at the ballot box, political observers said. Ballot initiatives generally face an uphill battle in California, although proponents point to recent internal polling that showed 62 percent approval.

"The rule of thumb is it's always harder to pass a measure than to defeat one," said David Townsend, a Democratic political consultant. "To pass a measure, everything has to be flawless. To defeat a measure, all you have to do is find a weak link and pound that."

Recology's checkered reputation could complicate the measure's narrative.

"They have to make it really clear: good guys and bad guys, environmentalists and polluters," said Paul Goodwin, a pollster who specializes in ballot campaigns. If opponents promote a narrative where "the good guy is the bad guy," voters might reflexively reject the measure, he said. "The more complicated it gets, the easier it is to beat."

The opponents’ attack is an opening salvo against the measure. But it also functions as saber-rattling to get environmental groups to agree to a legislative deal before the deadline to remove measures from the November ballot. If lawmakers reach a compromise by the end of June, it would stave off an expensive fight that could cost $100 million on both sides.

"We'd want to see the legislature find a fix on this, but if they can't, we'll be ready to take this to the voters and defeat it in November," Bustamante said.

Environmentalists are holding firm. "The ballot initiative has already qualified and we are fully planning on taking it to the ballot," Brandon said. "We are actively standing up a coalition-supported campaign that sees this through to the ballot."