The issue of stolen property has become a major headache for the recycling industry, with scrap prices high in a period of economic stress. Beyond public image, there are potential adversaries who can play hardball.
When Metal Management of Mississippi Inc., a local division of Sims Metal Management Inc., filed a federal lawsuit against a new tag-and-hold law in Mississippi, the court clerk received "interested party" notifications from BellSouth Telecommunications Inc., Mississippi Power Co. and the Mississippi Malt Beverage Association. Groups like those influence legislatures and want to make life tough for whoever steals their wire and kegs. Before long, a builders' group probably will show up to join those "interested parties."
The Institute of Scrap Recycling Industries (ISRI) has posted a lengthy list of items that yards should avoid buying from unauthorized parties—objects typically belonging to public utilities, municipalities, railroads or cemeteries.
Making the warnings stick can be difficult. Some intriguing narratives emerged from a seven-month undercover investigation in Eau Claire County, Wis., which led to search warrants at five scrapyards.
Potentially stolen material was seized from three recyclers and a fourth scrapyard had records showing irregular purchases of junked vehicles, but in August the District Attorney's office in Eau Claire County said it had decided not to file formal charges as long as there is no recurrence of the allegedly questionable behavior. A fifth yard emerged unscathed from the raids but had accepted suspicious material earlier on, according to a police affidavit.
The interesting bits are what the police claim to have heard from yard employees while working undercover, throwing light on the attitudes and practices that can make promises of good behavior leaky.
One scrapyard allegedly received a spool of copper labeled Xcel Energy, an electric utility based in Minneapolis. "The employee instructed the undercover investigators to take the spool apart, claiming that he did not want to weigh the copper and the spool together. The employee then instructed the investigators to take the end of the spool with them and stated that he could "get rid of the rest of the pieces" that didn't carry the utility's label. The sellers received $371.20 for the 128 pounds of new copper wire and another $26.10 for empty beer barrels, the affidavit says.
A truck delivered 1,200 pounds of train rails to another scrapyard. A crane unloaded the material. When the sellers—undercover police—showed up at the office for payment, they were asked whether they could show ownership or authorization to sell. Answer No. Payment was refused. The would-be sellers were told they "could either pick the scrap rail back up or leave it." An undercover investigator informed her that he was not going to attempt to retrieve the scrap iron/steel from the large scrap pile. "Law enforcement authorities did not receive a report regarding that suspicious transaction," according to the affidavit. Those rails presumably made it to a mill but the make-believe thieves got zilch.
Another episode involved the sale of insulated copper wire, marked with red stripes intended to show ownership by Xcel Energy. The undercover investigators were asked if they had stolen the copper. They stated no. "The (scrapyard's) employee then stated that if it were the property of a railroad, it would be a federal offense and a harsh penalty would result," the affidavit said. The investigator then asked " 'What if it were cut from an (Xcel Energy) spool?' The employee stated that he would probably get a slap on the hand."
Wisconsin law on scrap purchases was tightened in March, part way through the Eau Claire County undercover investigation. Wisconsin sellers now must provide photo identification, plus address and birth date, to be kept on file along with a description of the purchased metal. The measure stopped short of requiring images of the merchandise.
The Eau Claire police affidavits suggest that some recycling workers are casual about suspicious material. These employees may have surmised that lapses won't land anyone in serious difficulty, and discouraging that view will be a necessary element in any campaign to curtail circulation of stolen property.
The five scrapyards visited by undercover police on June 4 were formally registered businesses. Unlicensed salvage dealers also figure in the stolen property problem, a state Transportation Department investigator involved in the Eau Claire probe told a local reporter.
Some jurisdictions erect even higher barriers to stolen property than Wisconsin. Measures have been enacted requiring an image of the merchandise, a thumbprint from the seller, a delay between sale and payment, payment by check only and—most drastically—storing each purchase separately for 10 days "on site, separate and subject to easy and convenient inspection during normal business hours," to quote the ordinance language of Memphis, Tenn. The most extreme measures typically exempt scrap from industrial firms and licensed contractors.
Beyond a certain point, such restrictions come close to banning scrap from informal peddlers, according to ISRI.
In a brief against Memphis' ordinance, ISRI says that many low-income scrap suppliers lack business addresses or telephone numbers because they are poor and transient. These "are hardworking individuals who, were it not for America's castoffs, would be unable to earn a living. These people may go from one auto repair shop to another, collecting worn-out auto parts. They may go to machine shops and help clean out the cuttings from new parts made for farm or manufacturing equipment. Requiring these individuals to be paid by check that is held for three days simply consigns them to a more difficult existence."
One Memphis scrapyard said it uses psychology to discourage thieves from offering loot.
"We maintain a Wall of Shame at our company, on which we post records of those persons who have been caught as a result of our work with the police," said Lonnie Worley, president of Memphis-based Worley Brothers Scrap Iron & Metal Inc.