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
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
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
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
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
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.