Sunday Reading: The Wayne Huizenga Story
I just happened on this classic written by Steve Almond in 1994 about South Florida's hard-driven, complicated, and sometimes brutal mogul.
Uh, it jumps.
Citizen Wayne - The Unauthorized Biography
A college dropout and the product of a broken home, H. Wayne Huizenga rose to become the King Midas of South Florida. His formula for success? A dash of hard work and perseverance, and a lot of hitting below the belt.
by Steven Almond
Miami New Times Vol. 9, No. 33 (December 1-7, 1994)
Of all the myths that follow Wayne Huizenga -- Wayne as a self made man, champion of the little guy, and savior of South Florida -- none does so much in accounting for the Wayne who presented himself to Thomas Millwood on October 11, 1960.
At age 22, Harry Wayne Huizenga, Jr., was at what can be characterized as a crisis point in his young career. While his classmates from nearby Pine Crest High School were earning their diplomas from elite colleges and slipping into comfortable jobs, Huizenga had done little but wander in the five years since graduating high school, drifting from low-wage jobs to a brief stab at college to a hitch in the army reserve.
The heir to a once-prosperous family whose economic fortunes had gone bust in Florida, Huizenga came back to Fort Lauderdale in 1960 with a newlywed wife. Seething with ambition but without much in the way of prospects, he took a job selling trash-hauling services door-to-door.
Thomas Millwood, however, was not swayed by the sales pitch, a rejection that evidently caused something in young Huizenga to snap.
According to a civil suit Millwood filed in November 1961, Huizenga refused to vacate the premises. "After using abusive and profane language to both Millwood and his wife, the defendant Huizenga attacked Millwood in a fit of anger and without provocation...striking him on his face and body, using great force and violence, thereby inflicting great bodily harm and mental shock."
The altercation left Millwood with a ripped shirt, broken sunglasses, and abrasions on his face. Most painful, noted the lawsuit, was the "permanent injury to the testicles and genital area as a result ofgrabbing and twisting by the defendant."
The matter went to trail, where Huizenga claimed Millwood had instigated the violence. The jury believed Millwood and awarded him $1000 in damages.
The price was a steep one, especially for a fellow just starting to make his way in the world. But Huizenga learned a vital lesson from the incident, one that would serve him well. Namely: When met with resistance, don't get caught grabbing the opposition by the balls -- have someone else do it.
This brand of prudent ruthlessness has, in many ways, propelled his stupefying rise from lowly garbage toter to master of all he surveys. It was in evidence throughout his stewardship of Waste Management, Inc., the voracious garbage giant that staked him to a fortune, and during the acquisition of Blockbuster Entertainment Corp., the video-rental company that sealed his reputation as Wall Street's King Midas.
The embarrassing scuffle in Thomas Millwood's front yard, of course, has long since been erased from Huizenga's official mythos, as has the dark underside of his corporate legacy. Today, the 56-year-old Huizenga is known chiefly as the straight-shooting owner of South Florida's beloved sports teams. Paid toadies and awestruck reporters paint him as a model of corporate benevolence, a self-made tycoon. At sporting events, fathers point to Huizenga as proof of the adage "The American dream can come true for anyone."
In fact, his life is far better testament to the prevailing law of American aristocracy: Make enough money and people quit asking how.
Wayne Huizenga, through his assistants, declined numerous requests for an interview with New Times. In previous press accounts, however, he has referred to his childhood as austere ad disciplined, an upbringing structured by the family's membership in the strict Dutch Christian Reformed Church. A more objective depiction of his early years would include the words miserable, chaotic, and dangerous. Huizenga's father Harry was the fourth and final son of a Dutch immigrant named Harm Huizenga, who founded Chicago's first garbage-hauling company in 1894. Shunning the family business, Harry became a carpenter and eventually a homebuilder. Wayne was born in 1937, his sister Bonnie five years later. The family lived in the tranquil Chicago suburb of Evergreen Park.
Harry was not an easy man to live with. In a divorce petition filed in 1954, Jean Huizenga accused her husband of ongoing mental and physical abuse that eventually landed her in a mental hospital. He would demand sex and when she didn't comply, he beat her, she stated. Police records indicate that she filed a complaint alleging that Harry terrorized her on New Year's Eve 1953. He moved the family to Florida soon after, hoping to salvage his marriage and make a killing in the Florida real estate market. Both plans failed.
On July 26, 1954, a deputy from the Broward County Sheriff's Department arrived at the family's modest home off Federal Highway to serve a complaint filed by Jean Huizenga, accusing Harry of "extreme cruelty" and seeking a divorce after eighteen years of marriage. The deputy left the papers with fifteen-year-old Wayne.
The divorce unfolded in a flurry of nasty motions that laid bare the extent of the brutality in the Huizenga home.
"This past July, he cam e into the room," Jean recounted in court. "And when I asked him not to wake the children and go back into his own room, he hit me. He walked around the other side of the bed and hit Bonnie and when Wayne came to the door to try and stop him from hitting me, he hit him, he hit Wayne too."
"I don't think we ever got one night's sleep around here," young Wayne testified. "[Harry] was always getting up in the middle of the night and would come in the bedroom and monkey around with my mother and wake us all up...He would push us down on the floor, hit mother, Bonnie, and myself."
After the divorce, the rancor dragged on for several years. Harry, who had buried himself in debt building three homes he couldn't subsequently sell, was reprimanded by a judge for failing to make child-support payments. Jean also accused him of breaking into her home and assaulting a male friend of hers. Harry retaliated by attempting to have custody of his children transferred to his relatives in Chicago, accusing his ex-wife of being a mentally unstable adulterer. (The couple eventually remarried in 1978.)
Huizenga was apparently adept at masking the turmoil. Pine Crest High teachers and classmates remember him as a happy, popular kid whom played center on the football team, served a senior class treasurer, and made decent grades. Huizenga was undoubtedly among the least wealthy at Pine Crest, which at the time was the area's only prep school. While one of his classmates was given a Rolls-Royce for her sixteenth birthday, the future multimillionaire shared an unreliable 1939 Pontiac with a friend.
After graduating Huizenga went to Chicago, where he drove a bulldozer for several months. In 1956 he enrolled at Calvin College, a small Christian Reformed school in Michigan. He dropped out after a year and a half. In September 1959 he enlisted in the army reserve. He was on active duty for six months, long enough to complete his training. The next year he married and moved back to Fort Lauderdale, where he finally gravitated to an industry that commanded his interest: garbage.
The first time John Leech saw his friend Wayne Huizenga drive past in a garbage truck, his heart sank. "I thought, 'Oh God, I better hit the books. It must be pretty rough out there if poor Wayne's already driving a garbage truck," recalls Leech, a Pine Crest alum who is now a vice president at Smith Barney in Fort Lauderdale.
Poor Wayne was actually on his way to making a killing. Though traditionally a service undertaken by blacks, waste disposal was a no-miss proposition in the in the Broward of the early 1960's. "The way people were settling here, there wasn't anything to do but make money," recalls Wilbur Porter, who along with his son-in-law John Currington ran Porter's Rubbish Service, one of the county's first major garbage firms.
Not long after joining Pompano Carting, Huizenga came to the same conclusion. For months he pressed Porter to let him purchase a share of the business so he could start his own company. Porter relented in 1962, selling the young entrepreneur a snub-nosed truck and $500 worth of customers. Huizenga soon parlayed this humble stake into a booming concern.
While official legend attributes the transformation to a Herculean work ethic, John Currington recalls it differently. "Wayne played it real smart," says Currington, who now owns a bail-bond service on Broward Boulevard. "He used to hold meetings in the back of this redneck bar in Hollywood. I remember those real well, because me and my father-in-law were the only blacks there. Wayne ran the meetings, and he was always pressing my father-in-law for money to help pay for some lawsuit against the county, several hundred dollars a week. He would put forward these legalities to the group, and a few of his close associates would Amen. If you didn't understand what was going on, you didn't ask questions. And my father-in-law was not a man with much formal education. You might say those demands and pressure was one of the things that got to be too much for Wilbur and he sold out.
"You might construe that Wayne was taking advantage of us," Currington continues. "I would definitely look at the situation differently now. But that's the American way: Do unto others and do it quick. Wayne still gives my brother-in-law tickets to the Marlins or the Panthers. Nice box seats. I won't take those tickets, 'cause I know how Wayne got where he is."
Wilbur Porter, now 84 years old, says he remembers attending the meetings Huizenga led, and making regular payments for legal costs. But he says the primary reason he sold out was another looming pressure: organized crime.
"Some big shots from up north, syndicate guys, had come down," Porter recalls. "I could see what was going to happen. The big fishes were going to eat the little fishes. So I got out."
Before long, it was Huizenga who was the biggest fish around. By 1969 his single truck had become a fleet. With his father and father-in-law as partners, he had launched half a dozen garbage-collection companies, with routes that stretched from Key West to Tampa. These early years set two precedents for Huizenga: They showed him the remarkable profit to be made by consolidating a small, fragmented industry; and they gave vent to his obsessive work habits.
"Wayne dated a woman who worked for the same company I did," remembers John Leech, his high school friend. "This would have been when he was in his midtwenties. His business was doing quite well. And I remember one time this woman told me where Wayne had taken her on their last date: He had taken her out to see the pigs that ate the garbage he collected.
Given his father's business failings and the toll they extracted form the family, it is not hard to trace the source of Huizenga's drive. Unfortunately, this drive seems to have led him down a familiar path when it came to his domestic life. In August 1966, six years after they were married, Huizenga's wife Joyce filed for a divorce. In her complaint, she accused Huizenga of "extreme cruelty."
The particulars of his alleged conduct, detailed in Joyce's divorce petition, bore a chilling similarity to the accusations Jean Huizenga had lodged against Huizenga's father a decade earlier: "That the defendant insults the plaintiff in front of friends; that on one occasion the defendant physically abused the plaintiff by picking up a chair and hitting her with it; that the defendant twisted the plaintiffs arm and made it black and blue, that on another occasion the defendant backed out of the driveway and almost ran over the plaintiff." Joyce Huizenga noted that her Husband also accused her of adultery and of being an unfit mother for their two young sons.
At a court-ordered hearing, she elaborated on her marital woes, describing her husband as a workaholic whose open derision was largely responsible for her shattered nerves. "One night when we were eating dinner-our baby was in the hospital and I was kind of upset because we didn't know what was wrong with him," she recounted. "And [our son] Wayne wouldn't eat his dinner. And Wayne started hollering at him and telling him to eat his dinner. And I asked him if he would just not holler. I said that I was upset because the baby wasn't feeling well. And I pulled [our son's] stool a bit closer to me, and he slid off the edge of it. And Wayne picked up the stool and hit me with it. And he hit me and twisted my arm."
Carroll Jones, who had married Wayne Huizenga's mother after her divorce from Harry, testified on Joyce's behalf, portraying Wayne as an uncaring man who seemed to take pleasure in humiliating his young wife. "The girl had two kids," Jones said. "She needed help. She needed a little affection. She needed a lot of things that he wasn't giving her."
Huizenga did not testify at the hearing or dispute the divorce. Five years later he remarried, this time to a secretary in one of his companies, Southern Sanitation Service. He later adopted his second wife's Marti's two children.
By the seventies Huizenga was itching to expand. So was Dean Buntrock, who had wed one of Huizenga's cuisins and taken over the family's Chicago-based garbage company, Ace Scavenger Service. Like Huizenga, Buntrock was an ambitious young Turk who saw the riches that lay in cornering the country's vast waste-collection market.
In 1971 the pair took their new enterprise, Waste Management, Inc., public. Buntrock's vision was to build a nationwide sanitation corporation; Huizenga's role was to snatch up as many competitors as possible. During one stretch of 1972, he crisscrossed the U.S., buying out 90 haulers in nine months. The blitzkrieg helped establish a strategy that would characterize his career as a dealmaker: Move in quickly, pay with stock rather than borrowed cash, and retain key management personnel.
In the next decade, WMI emerged as the industry's leader, parent to hundreds of subsidiaries not only in the U.S. but across the globe. Revenues swelled to billions of dollars, the success attributed largely to the shrewd management of Buntrock and Huizenga.
Huizenga served as WMI's president from 1971 until 1982, at which time he became vice chairman of the board of directors. He left the firm in 1984, but for several years afterward carried on his affiliation as a paid consultant and a major stockholder. (As of last month, Huizenga still owned four million shares in the firm.) And just as he helped shape the company, the company shaped him. By the time he relinquished his management role, he had graduated from small-time businessman to major-league magnate. WMI, in short, made Wayne Huizenga what he is today.
Huizenga speaks proudly of his tenure at the helm of WMI. He has reassured reporters who question him about the garbage industry's unsavory reputation that WMI "ran a clean shop."
There is ample evidence to suggest otherwise.
Dozens of state and federal investigations, lawsuits, and press accounts indicate that WMI ran a profit-obsessed conglomerate that was not averse to employing Huizenga's standby tactic: When met with resistance, grab your competition by the balls, and twist.
The authors of a 1991 Greenpeace report about the history of WMI concluded, "To create an empire, the company has mixed business acumen and foresight with strong doses of deception, corruption, and monopolism." The San Diego District Attorney's Office seconded this impression in a scalding 1992 report that reviewed WMI's history of environmental problems and alleged public corruption. (San Diego County was considering doing business with the company at the time.) The transgressions catalogued in these reports include everything from bribery to death threats. Waste Management had commissioned lengthy responses to rebut the documents, which the company characterizes as filled with "inaccuracies [that are] intentional and designed to malign [WMI]."
The garbage business has long been associated with the underworld. The reason is simple. With little to differentiate one hauler the next, mob specialties such as price-fixing, predatory pricing, and thuggery often have been employed to protect established territory and ensure a healthy profit.
Huizenga has repeatedly denied any association with organized crime. "That reputation comes from your part of the country, up north," he told a New York Times reporter some years ago.
He was apparently unaware of the resume of co-founder Dean Buntrock. In 1960 the Wisconsin attorney general accused Buntrock and eleven other officials of unfair business practices as a result of the haulers' efforts to infiltrate the Milwaukee trash market. Their companies' alleged tactics, detailed in a 1962 civil suit filed by the attorney general, included "threatening physical harm to the owners of competing firms...and their families and destruction or damage to their property and equipment." The Milwaukee Circuit Court issued an injunction against the companies, which remained in effect for eight years. Buntrock's Ace Scavenger Service was also a member of a Chicago trade association that was sued in 1972 for price-fixing and harassing competitors. The trade group settled the suit by paying a $50,000 fine and agreeing not to engage in these practices for five years.
In 1972, in the midst of WMI's buying spree, the firm reportedly paid $1.7 million in its own stock to a man named Louie Visco, in exchange for Universal By-products, a Los Angeles-based concern. According to the San Diego district attorney's report, Visco had been the target of repeated organized crime investigations; he was never indicted. In 1979 WMI began efforts to buy SCA, at the time, the nation's third-largest refuse company and one widely reputed to have employed known Mafiosi. Though the federal government intervened for fear a monopoly was in the works, WMI eventually gained control of many SCA subsidiaries. As per company policy, WMI retained many of SCA's managers.
Given the nature of the trash industry, it is perhaps inevitable that an enterprise as massive as WMI would occasionally associate with mob figures. But the authors of the San Diego District Attorney's Office report pointed to criminal violations such as price-fixing, bid-rigging, and predatory pricing-all designed to increase revenues by eliminating competition-and went on to observe: "The definition of 'organized crime' is generally assumed to be merely another term for the Mafia, of traditional organized crime families. However, now the term 'organized crime' may be applied to many criminal enterprises with divergent interests. Any enterprise which is organized to circumvent the law for profit may be properly described as 'organized crime.'" The report revealed that as of 1992, WMI, along with its subsidiaries and employees, has faced antitrust lawsuits and/or government investigations in seventeen states.
In the past, when faced with allegations of illegal business practices, WMI has often chosen to pay a fine or settle out of court rather than have these allegations aired in a public forum. In 1990, for instance, the company paid $19.5 million to settle a class-action suit filed in Philadelphia regarding price-fixing between 1978 and 1987. In 1987 the Florida Attorney General's Office filed suit against WMI and other garbage firms, alleging that the haulers kept garbage bills "artificially high" through price-fixing and bid-rigging from 1971 to 1984. WMI settled the suit for $725,000.
WMI reportedly does not take well to public meddling. In 1988 New Orleans officials conducted an audit of the firm's charges and claimed that WMI and overcharged the city by more than one million dollars since 1976. Sanitation Director Pat Koloski and his garbage supervisor, Cecil McFarland, met with WMI officials to discuss the discrepancy. Koloski and McFarland later told reporters that during these talks the WMI officials assured them that they would "wear cement boots" and "meet their maker" as a result of the allegations.
WMI had also sought to influence politicians by making generous campaign contributions. In 1974 the U.S. Securities and Exchange Commission launched a sweeping investigation of the company. According to SEC records, WMI officials allegedly had made "false and misleading statements" during acquisitions regarding "among other things, business operations of WMI and the market price and transferability of securities issued by it. In connection with the trading in securities of WMI, persons have employed manipulative, fraudulent, and deceptive devices and contrivances and have created a false and misleading appearance with respect to the market in WMI securities." The SEC did not name Huizenga, though he was one of the executives in charge of making the acquisitions.
That inquiry failed to substantiate the claims, but the SEC wasn't finished. The agency learned that Huizenga and another WMI official in Florida allegedly had been using dump fees to create an illegal "slush fund" for political contributions. In 1975 Huizenga and another company executive testified before the SEC; on the instructions of his attorney, Peer Pederson, Huizenga invoked the Fifth Amendment and refused to answer questions concerning potentially illegal political contributions. A year later he signed a consent decree, in which he did not admit any wrongdoing but agreed to cease making "unlawful political contributions."
WMI and its employees have continued to contribute, however. In 1980 the firm established its own political action committee, which, as of the 1988 elections, had grown to be the seventh-largest corporate PAC in America. Huizenga himself had been a generous supporter of the Republican Party. George Bush sent him a card on his 50th birthday, and Huizenga had since hosted fundraisers for then-Vice President Dan Quayle and other GOP bigwigs.
At times WMI employees have used flat-out bribery to win over public officials charged with making decisions vital to the company's profits.
In 1971 a pair of alderman whose home city of Milwaukee was negotiating a contract with WMI enjoyed a week in sunny Fort Lauderdale on the garbage hauler's tab, according to a subsequent newspaper account. In 1979, in exchange for immunity from prosecution, former Margate City commissioner Rick Schwartz testified that he sold his vote on a city contract to WMI for $3000. In 1983 a WMI operations manager in Tampa confessed to having offered bribes to local county commissioners. (The company asserts that the bribes occurred before the manager was in WMI's employ.) During 1987 a WMI lobbyist pleaded guilty to bribing a Chicago alderman.
Although Huizenga and other high-ranking WMI officials have dismissed incidences of illegal business practices as the handwork of a few overzealous underlings, there is evidence to suggest that these purported renegades were acting with corporate approval.
In 1980, for instance, a grand jury in Atlanta indicted officials from WMI and two other garbage giants for conspiring to fix prices for the previous six years. The defendants eventually were found guilty at trial. An FBI memo regarding the charges noted that investigators believed "the activities at Atlanta were probably directed by corporate officials from the company headquarters."
In 1985 John Horak, the general manager of a WMI subsidiary, was convicted of bribing the mayor of a small Illinois town to obtain a waste-hauling contract. While company executives disavowed any knowledge of the illegal activity, Horak maintained at trial that he expected to be reimbursed by WMI officials.
"All the significant pricing decisions, marketing strategies, and corporate goals of these companies emanate from headquarters," maintains Harold Crooks, who has spent a decade studying the rise of the nation's major trash haulers and is the author of two books on the subject, Dirty Business and Giants of Garbage. "In WMI's case, this is especially true. To say that these subsidiaries are bad apples is ridiculous, because they are actually tightly meshed into centralized operations."
In their rebuttals to the Greenpeace and San Diego reports, Waste Management officials admitted wrongdoing by a "few individuals." but they stress that measures such as the company's antitrust-compliance program ensure that employees operate within the law.
More disturbing than WMI's disregard of fair business practices has been its disregard of environmental laws. As of 1992, some 45 WMI-owned or -operated waste sites had been tagged by state and/or federal regulators as being out of compliance. Five had been shut down. The company has paid millions of dollars in fines and out-of-court settlements. A 1989 SEC report noted that WMI had admitted it was being investigated in 89 separate cases involving polluted sites on the federal Superfund cleanup list. Greenpeace calls WMI "one of the world's biggest polluters." According to that organization's 1991 report, WMI paid an estimated $45 million in fines and settlements during the 1980's. Because WMI and its subsidiaries violate environmental laws so persistently, because the effects of these violations can take years to detect, and because regulation historically has been so lax, it is difficult to gauge the magnitude of the ecological damage the garbage behemoth has inflicted.
Ironically, Huizenga and Dean Buntrock were among the first trash magnates to grasp the extent of the U.S. environmental movement. Their response, however, was profit-oriented: They sought control of as many landfills and dumping sites as possible and diversified into hazardous-waste disposal.
"WMI basically looked at its subsidiaries as little cash machines," observes author Harold Crooks. "They wanted to hear about revenues, not regulations."
Peter Phung learned that the hard way. From 1979 to 1981, he was chief chemist at Ohio Liquid Disposal, which was run by Chemical Waste Management (CWM), a hazardous waste-disposal subsidiary primarily owned by WMI. Phung was fired after raising a stink about the firm's illegal dumping practices. Specifically, he alleged in a federal lawsuit that over his objections, company officials routinely fabricated lab results and buried dangerous toxic wastes such as arsenic at their Vickery, Ohio site. According to Phung, the dumping usually took place at night, in order to avoid his meddling. CWM officials later paid a $2.5 million penalty to settle an EPA suit regarding violations at the Vickery site, including illegal dumping. They also ponied up an additional $15 million to settle a civil suit brought by Vickery residents. (Phung himself sued CWM for wrongful termination; the matter was settled out of court.)
Mahendra Sandesara, lab manager at an Illinois dump site run by CWM, accused the firm of illegally disposing of about 200,000 gallons of toxic waste during the first six months of 1980. He wrote a memo to his superiors, warning that "the present route of illegal disposal of wastes above and beyond the rejection of our quality-control personnel will lead this division to an unknown disaster." Sandesara later testified that he was told to destroy all copies of the memo. He left the company to join a competitor, and the Illinois Attorney General's Office later filed suit against CWM. The suit was settled when WMI agreed to a penalty of $50,000 while denting any violation of the law.
In 1983 the New York Times ran a series that laid bare WMI's dismal environmental record to date. The company's stock plunged eighteen dollars per share in two days. For the first time, WMI, which previously had been content to pay fines and settlements that were miniscule compared to its profits, had been hit hard. Officials responded with a massive public relations campaign and a policy that environmentalists labeled "the revolving door." Just as they had made a practice of hiring former city officials to deal with local governments, WMI's top guns began to sign on former regulators to deal with regulatory agencies.
"You have to remember that guys like Huizenga were dealmakers. They built the company through aggressive acquisition," noted Harold Crooks. "They were never interested in actually solving society's waste problems, in using their tremendous wealth for the research and development of technical solutions. They preferred to stick with what they knew: the use of political and financial muscle."
But as environmental awareness peaked in the early Eighties, the available sites for dumping grew scarce. It was at this juncture, Crooks says, that WMI's true colors showed. "As opposition grew, they began targeting those dump sites where the surrounding communities were least prepared to oppose them. Generally, areas full of poor minorities."
Chemical Waste Management runs the nation's largest dump, in the poor, primarily black rural community of Emelle, Alabama. Since 1978 the company has poured more than five million tons of toxic waste into Emelle's chalky soil. Edward Brashier, a technical manager at the site from 1979 to 1982, said he left CWM because he believed its dumping practices were exposing workers and area residents to health risks. "Their emphasis was to hurry up and get it in the hole and cover it up regardless of what it was," Brashier told a Chicago Sun-Times reporter in 1982. Two years later the EPA charged CWM with 38 counts of improper disposal of highly toxic chemicals, which had been detected in surrounding wetlands. At the end of that year, a consent agreement was reached whereby CWM paid $600,000 in penalties. By 1987 nearby residents were complaining of headaches and eye irritation they attributed to a chemical cloud emanating form the landfill. Unemployment in the area rose as businesses fled. Undaunted, CWM officials have tried to woo residents by showering local charities with gifts and offering dump-site jobs that pay double the minimum wage.
WMI's second largest landfill is located in Kettleman Hills, California, a small, remote community of Spanish-speaking farm workers. In 1985 the EPA announced it was fining CWM, which operates the site, for a total of 130 violations. WMI agreed to a consent decree requiring that it pay the EPA four million dollars in fines. A subsequent landslide at the site has threatened the structural integrity of its hazardous-waste dump.
By 1985 even some WMI shareholders had grown fed up. They filed a class action suit against the corporation for failing to disclose the extent of the liability incurred by its handling of toxic waste. WMI settled for $11.4 million.
In recent years, WMI executives have endeavored to buff the firm's tarnished image. They even chose a sleek-sounding name: WMX Technologies.
"The history of the company presents a combination of environmental and antitrust violations and public-corruption cases which must be viewed with considerable concern," the San Diego district attorney's report concluded in 1992. "We have reviewed recent practices and problems and our concerns have not diminished. The company's recent practices and violations do not appear to be different from the past." Within months of the report's publication, WMI sued the district attorney's office in federal court, for falsely linking it to organized crime. A judge dismissed all five claims. Although company officials were given the opportunity to refile two of the claims, they have appealed the judge's decision instead.
Waste Management deems the Greenpeace and San Diego reports' portrayal of its environmental record "unfair and slanted." The company's environmental-compliance record is "as good as or better than that of other companies in the waste-disposal industry," asserts public affairs director Chris Combs.
"The company has acted responsibly when faced with problems." combs adds. "Employees responsible for antitrust or environmental violations were terminated or disciplined and the company redoubled its substantial efforts to counsel and educate its employees to ensure future violations do not occur.
Ironically, Huizenga's adopted daughter Pam is an avid environmentalist who with her father's blessing has set up a newly established recycling program at Joe Robbie Stadium. She says she and her father do not discuss WMI's environmental record.
The first time Doug Howell set eyes on the new video-rental shop around the corner from his house in North Dallas, he knew it was going to be a winner. That spiffy store was the world's first Blockbuster. In 1986 Howell invested $600,000 in a partnership formed by his financial advisor, Scott Beck, to develop three new Blockbuster stores. Howell's plan was to maximize the value of these stores, then sell his share and retire early.
It wasn't long before Wayne Huizenga became interested in Blockbuster, as well. Tired of the weekly commute between WMI's Illinois headquarters and his Florida home, Huizenga decided after leaving WMI in 1984 to settle full time in Fort Lauderdale. He briefly considered retiring but was for too restless, and began acquiring small service-oriented companies instead. In 1987 John Melk, a friend from Huizenga's days as a WMI road warrior, urged him to visit the Blockbuster store Melk had recently invested in. Impressed by the establishment's bright, family atmosphere, Huizenga crunched some numbers, bought into the company and was soon its chairman.
In 1989 Blockbuster bought Scott Beck's share of the video franchise for $119 million. Beck received $27 million worth of Blockbuster stock and joined Blockbuster Entertainment Corp.'s board of directors. There was no seat on the board for Howell. And no big payday. He was cut out of the deal and wound up having to sell his life insurance and borrow money on his credit card to make ends meet. In 1991 he sold his stake in the partnership back to Blockbuster for $491,000 worth of stock.
Howell sued Beck and Blockbuster. This past September, a Texas judge found that the defendants had bilked Howell and ordered that they pay the investor a total of $123.5 million. After a lengthy trial, Judge Leonard Hoffman further determined that company officials had misrepresented themselves in the prospectus issued in connection with the acquisition and perpetrated "a sham...in order to avoid federal income taxes [and increase] the value of Blockbuster stock unlawfully." Hoffman found the testimony of Beck, Blockbuster general counsel Thomas Hawkins, and vice chairman Steven Berrard "not credible." The judge also chided Peer Pederson , Huizenga's old lawyer and friend, for rendering a legal opinion that Howell could be excluded from the deal when Pederson stood to gain several million dollars from the transaction. "The defendants," Judge Hoffman concluded, engaged in a civil conspiracy to fraud Howell...such conduct offends the public sense of justice and propriety>'
Though Huizenga was never called to the witness stand, Berrard conceded during his testimony that his boss "shared responsibility" for the deal.
"On a day-to-day basis, was Mr. Huizenga involved?" Howell's attorney Michael Gruber asked.
"In the early outset, yes. Once an agreement was at least reached in principle, then the rest of us took over and followed up on the details," Berrard responded.
"You have to understand the magnitude of the deal," Gruber says in retrospect. "According to the evidence we've seen, it gave Blockbuster the crucial territories it needed to go nationwide and boosted its stock value so that it could continue buying out competitors. The judge's findings show Blockbuster and Beck were so eager to do this deal that matters such as tax and security laws became secondary.
"What you have is a very good example of how Blockbuster's principles were able to cash in on the company's mammoth growth by excluding the little people like Doug Howell," concludes Gruber, who says he plans to name Huizenga personally in the next lawsuit he files, on behalf of two other early investors.
For Gruber, the case raises deeper questions about Blockbuster's pattern of acquisition. Specifically, he points to the firm's practice of employing a complex accounting method known as "pooling of interests." which boosts the value of a business' stock every time it buys out a competitor. Gruber stressed at trial that his client was cut out of the deal between Blockbuster and Beck so the company could use pooling. In his ruling, Judge Hoffman found that the acquisition should have not have been treated as a pooling of interests.
The Texas state judge isn't the first to have faulted the chain's financial practices. Back in 1989, the Wall Street brokerage house Bear Stears issued a report alleging that Blockbuster's growth was "due to dubious merger accounting" and other ploys intended to artificially inflate the company's net worth. Like Judge Hoffman, the authors of that report questioned the legitimacy of Blockbuster's penchant for pooling.
The SEC itself investigated Blockbuster in 1990. The agency's concern wasn't pooling but insider trading of information in the wake of the same deal over which Howell eventually sued. This time Huizenga was summoned to testify, marking the third time in three years he had been called before the SEC and grilled about insider trading. (In 1988 SEC agents interviewed him after he bought out his chief competitor in the rental business, Major Video. The next year SEC staffers questioned him at length after he and a number of relatives purchased stock in Chemlawn just a few days before the lawn-care chain was purchased by WMI. The Chemlawn matter was also probed by the FBI.) None of the investigations, however, resulted in charges.
For plain old consumers, Blockbuster offers a classic example of the Huizenga modus operandi. He targeted an industry dominated my non-and-pop operations, eliminated the competition by purchasing them or pricing them out of business, then jacked up fees. There was a time when Blockbuster charged three dollars for a three night movie rental. Today the rate is three bucks for a single night, with an additional penalty for late fees.
Under Huizenga, Blockbuster experienced jaw-dropping growth. The company's corporate culture, however, has changed very little from the early days. Like WMI before it, Blockbuster is run by a phalanx of conservative white men who toil long hours in a highly competitive, profits-first environment. Though company executives have assured the media that they've taken steps to ensure diversity, former employees describe the firm's glass-paneled headquarters in Fort Lauderdale as a "boy's club."
Joanne Di Lorenzo, an administrative assistant, sued Blockbuster for sexual discrimination two years ago. She claimed that she was demoted after complaining that a vice president made unwanted sexual advances. The suit was settled last year; terms were not disclosed, and Di Lorenzo no longer works for the company.
Susan Jacobsmeyer, a former director of operations, planning and analysis at Blockbuster, sued last year, claiming she was discriminated against and ultimately fired because of her gender. The matter remains unresolved.
Ron Episcopo, a former manager of management and development, filed a suit in 1992 alleging that he was subject to "repeated and continuous harassment and humiliation consisting of insults, slurs, and derogatory comments" and was later fired owing to perceptions that he was HIV-positive. Episcopo claims in his suit which court records indicate is still pending, that one of his superiors told him pointblank that he was not being promoted in light of "the AIDS situation."
It has been twenty years, but Jim Prigodich can still see the giant bonfire: six months of his life going up in flames.
Back in 1974, Prigodich was a city of Hollywood police officer faced with an unusual task: to investigate Waste Management, Inc., one of the three companies vying to take over the city's garbage services. The probe, ordered by City Manager Tony Elder, went on for months. The resulting report, which concluded that the company had links to organized crime and had engaged in a variety of illegal business practices, made for big headlines in the Hollywood Sun-Tattler and the Miami Herald.
Then WMI filed a lawsuit in federal court, claiming the reports contained false information and asking that all copies be destroyed. For a few weeks, Prigodich recalls, city officials talked about fighting the suit. "Then they realized it would cost $2000 a day and take months," says Prigodich. As part of the ensuring settlement, the City of Hollywood agreed to gather every copy of the report ever issued and burn them all. "We even had to take pictures of the bonfire. There was a court order," recalls the recently retired cop. To this day, he and others involved in the preparation of the report are not allowed to discuss its contents.
Those contents, however, were nothing more than a summary of investigations into the shady origins and practices of WMI, virtually all of which are a matter of public record and were subsequently noted in the San Diego district attorney's and Greenpeace reports.
That WMI was able to blot out the report using legal threats attests to the company's ability to regulate information published about it. Huizenga and his top lieutenants at Blockbuster have also proved to be control freaks par excellence when it comes to press coverage. "Dealing with the people at Blockbuster is like dealing with the Mafia," notes one reporter who has covered the corporation for more than two years and who requested anonymity. "Everybody's just scared to death of saying anything- even their ex-employees.
In a recent South Florida piece, a freelance journalist David Villano recounts a bizarre incident in which corporate communications manager Wally Knief berated him for having the gall to contact a former Blockbuster employee.
Indeed, the corporation forbids any employee from speaking to reporters without corporate permission. This past June, two ponytailed salesmen at a Blockbuster music store were summarily fired after they had complained to the Miami Herald about the company's draconian dress code, which does not allow men to wear their hair long. (Even staffers who praise Blockbuster in print have been reprimanded for speaking without clearance.)
During the past two months, New Times contacted Wally Knief on a half-dozen occasions, seeking an interview with H. Wayne Huizenga. Each time Knief said Huizenga was too busy. Huizenga did find time recently to grant an interview to a Miami Herald sports reporter. The resulting article touched on topics such as how much Huizenga tips at restaurants and whether he eats fast food.
In the more serious interviews he has granted, the multimillionaire paints himself as just another "little guy" who amassed his fortune by "being in the right place at the right time." His friends and associates like to stress how down-to-earth Huizenga is. The sort of gut, they say, who carries his own bags to his hotel room. They are also wont to note his gifts to charity, though no one is quite sure what percentage of his estimated net worth he has given away.
Huizenga himself recently discovered the ultimate way to polish his image: He set up camp on the sacred ground of professional sports.
All South Florida fans remember how Wayne Huizenga decided in 1990 to pursue a baseball franchise for South Florida. And the ecstatic summer day a year later when the keepers of the national pastime blessed our city. But not quite so many recall the contest of that historic announcement. He asked the fans for their advice about christening his new team.
The tally wasn't even close. The populace spoke as if with one voice. The name they uttered: Manatees. The Florida Manatees.
Huizenga, however, was not about to name his $95 million investment after a fat, slow-moving, nearly extinct sea mammal with an aptitude for being hacked to pieces by speeding boat propellers.
He opted for Marlins.
The choice was, as might be expected, based purely on profit motive. That, after all, was the whole point of buying a sports team. As Huizenga explained it to local reporters, a major league team would make ideal tenants at Joe Robbie Stadium, the rarely used venue he co-owned. He also liked the way the numbers looked when it came to merchandising. Thus were the Marlins born.
With the expansion team, Huizenga was recast as a curious sort of folk hero. His ensuing decisions to lure an expansion hockey franchise (the Florida Panthers) to town, then to buy the revered Miami Dolphins, vaulted him to the pinnacle of cultural power. In the tradition of the great Roman senators, he was worshipped as the man capable of providing the biggest and brightest circuses for the masses.
All across South Florida, Wayne became a one-name entity. (He is so well-known by his first name that people often mispronounce his last. The correct phonetics: HIGH-zing-uh.) Wherever he went, adoring crowds gathered. At this year's Greater Miami Chamber of Commerce banquet to celebrate the opening of the Dolphins' season, the players were bemused to find that the longest line for autographs belonged not to Dan Marino, but to Huizenga. Other than a few stodgy league officials, no one uttered so much as a peep about the obvious monopoly Huizenga had established. The local press ceased treating him like a businessman altogether. He was a celebrity.
And the folk hero wasted no time exploiting his newfound clout. Early last year, he proposed building a 2600-acre sports entertainment complex on the Dade-Broward border, anchored by his baseball and hockey teams. The planned park was slated to include a 45,000-seat domed stadium for the Marlins, a 20,000-seat arena for the Panthers, two theme parks, movie studios, TV and radio stations, a marine stadium, a sports museum, restaurants, shops, two luxury golf courses, parks, and plenty of space for amateur sports. A Disney World, in essence, for jocks.
Huizenga assembled a fearsome team of lobbyists and spent thousands wooing local and state politicians. With disconcerting ease he whipped them into a froth of yes men. The so-called Wayne's World was soon held out as a panacea for the local economy, a veritable geyser of jobs and tourist revenue, and a second chance for South Florida that had turned down Walt Disney when he came courting with plans for what was to become the Disney World theme park in Orlando.
Without a formal master plan, without disclosing how much public money he expected to extract from the local till, Huizenga managed to secure 438 acres of public land free of charge, as well as a promise that he could set up his own government to run the park. In a monumental abdication of their regulation duties, elected leaders effectively told a private developer; "You want to use tax-exemption bonds? Levy taxes? Condemn land? Go right ahead. We won't interfere." They virtually handed a huge swath of endangered wetlands, in other words, to the man who co-founded the environmental disaster called Waste Management Inc.
The proceedings were carried out with such haste and grandiosity that the whole thing began to feel like a dream. Sure enough, South Florida woke up two months ago to find that Blockbuster Entertainment Corp. no longer existed. And that Wayne's World was very much in doubt.
H Wayne Huizenga's eyes have been compared to many things: robin's eggs, laser beams, banked fires. They have been described as icy, steely, piercing, sharp, and flat. On the morning of September 29, in an auditorium filled with friends, family, and adoring shareholders, those celebrated blue peepers indulged in a conspicuous bout of public weeping.
The event was a specially convened meeting at which Blockbuster shareholders were expected to approve the deal Huizenga had pursued for nine months: a merger agreement with cable TV giant Viacom, worth a whopping eight billion dollars. (As of October, Huizenga owned 15.5 million shares, eight percent of Blockbuster.)
The merger quickly took a back seat, however, to the real drama, which consisted of watching Huizenga bid farewell to Blockbuster. Like Michael Jordan, he was retiring at the top of his game, and the ceremony, appropriately was being staged at the Broward Performing Arts Center, a venue funded in part by Huizenga's largess.
The affair began with a booming voice urging all present to sit. A spotlight sliced through the dark, and into the beam stepped Huizenga. He leaned forward, gazing into the TelePrompTer, his thin lips addressing a pair of microphones coiled before him like trained serpents. For the nearsighted, his image was projected overhead on a giant video monitor. For the hard of hearing, a woman at the foot of the stage translated into sign language.
The speech Huizenga delivered was not, as some later described it, "emotional." He merely explained to the several hundred shareholders why trading in their Blockbuster stock for Viacom would net them lots and lots of money. He did manage one moment of unintended authenticity along the way. It came early on. Huizenga was talking about his disappointment at the nosedive in the price of Viacom stock.
According to his script, he was supposed to say: "When Viacom stock dropped to the low twenties, I was down too. But things have changed."
"What came out of his mouth was: "But things haven't changed."
There was a tense silence. Huizenga smiled despite himself, then whisked on.
The merger, he declared, "will enable the company to achieve our vision of becoming a fully integrated, global entertainment company. We'll be able to make a movie, put it in our theaters, rent it in our video stores, sell it on our pay-per-view channels, show it on our cable networks, and play it on our television stations. And while we're doing that, we'll publish the book, release the soundtrack, and make the video game and sell them in all of our stores."
There followed thunderous applause.
Huizenga turned to his first visual aid, a video that looked like an MTV product. Rock music pounded, the camera jiggled frantically, and images of the new corporation's assets- the smiling teeth of Melrose Place, Beavis and Butt-head, Roseanne- flashed across the screen.
The chairman then talked some more about the numbers. A few sourpusses looked unconvinced, but almost everyone else on hand, including the financial analysts, felt Huizenga had cut his shareholders a good deal.
He cued a second video, this one a look aback at Blockbuster's achievements. Happy employees waved to the camera. Babies clad in Blockbuster colors gurgled obligingly. Louis Armstrong sang "What a Wonderful World." Then Huizenga urged those who hadn't yet cast their votes to do so.
The aisles filled. "Go on, dear, get going," one white-haired woman urged her spouse. "We're all here to make a buck, right?"
Minutes later Huizenga announced that the merger had been approved handily. Then he made his closing remarks. It was at this point that he got choked up. "I'll miss all of you and all of this very much," he said, his face stretched into a rubbery grimace. He dabbed at his eyes with a hanky. The crowd cooed and many shutters snapped.
Huizenga fled to the wings, but reappeared moments later, eerily composed. "They got rid of that other guy," he explained, referring to his previous weepy incarnation. "I don't know where he came from. I will now take questions."
The only one worth asking was posed immediately: "What's going to happen with Wayne's World?"
Huizenga muttered something about his commitment to the project and said he would make his best pitch to Summer Redstone, the chairman of Viacom and the man in whose hands the project now rested. He would try to get the matter answered within the next month or so, he vowed.
The man who had asked the question looked disgusted. But he was quickly forgotten as Huizenga invited shareholders to celebrate with him in the lobby. There the multitudes gathered to sip mimosas from fluted glasses and munch on crustless sandwiches. Eager blond women stood near the exit, handing out commemorative golden Blockbuster paperweights.
Huizenga waded through the throng, patiently granting a few seconds to each subject. He beamed for the cameras and informed reporters that he would spend the next six months to a year overseeing the folding of Blockbuster into Viacom. Then, he confided, he would search out some new Cinderella company to run. "Whatever he does next, I want in!" shouted a man with cream cheese clinging to his moustache. This sentiment was echoed by all within earshot.
"Weren't you nervous about the vote?" a young woman asked Huizenga.
"I knew the numbers before I went onstage," he assured her.
As he bent to autograph another cocktail napkin, a commotion sounded behind him.
"Make way! Make way!" cried a red-faced man. "I've got Wayne's parents here. Make way!" Wally Knief, Huizenga's loyal assistant shoved through the crowd, dragging along two disoriented senior citizens. Harry and Jean Huizenga were here to share their son's shining moment. First, though, they had to run the gauntlet of reporters.
"He's been very aggressive all his life," Harry told whoever cared to listen. "I knew he'd be a success."
"He always loved to play with trucks," observed Jean, touching her new hairdo.
Huizenga hugged his mother, shook his father's hand, and then quietly urged the couple to make their exit. "Have someone bring a car around for Mom," he snapped at his father. Harry, shrunken by age, nodded obediently. And for the first time all morning, H. Wayne Huizenga's famous eyes looked hones-to-goodness happy.