More bad news for Veolia 

Demand for investigation grows

Demand for investigation grows

Charges of inadequate oversight, possible fraud, conflicts of interest, lack of maintenance, reduced water testing and the risks to Indianapolis’ drinking water have brought Veolia to the attention of state regulators.
Former Veolia employee Roger Edlin

On June 30, the Indiana Utility Regulatory Commission presented Veolia officials with a list of 30 questions. Days later, a lawsuit was filed against Veolia by former employee Roger Edlin charging that Veolia Water Indianapolis fired him in retaliation for speaking out on matters of public safety. According to the suit, Edlin “repeatedly warned water officials that their decision to cut back spending [and thereby increase profits] by delaying needed repairs, decreasing staff needed to maintain filtration equipment … and taking other corner-cutting steps would eventually lead to a dangerous situation.” Veolia fired Edlin after 23 years at the utility in response to the Jan. 6 boil-water advisory that closed schools and restaurants.

The day NUVO’s last report on VWI appeared (July 6), Fox 59 began a series examining “serious accusations about the management of the water company.” Among the issues covered, Tracie Wells reported that the city’s contract manager, Carlton Curry, wrote an eight-page list to VWI outlining numerous contractual and verbal promises broken by the company. In spite of all these failures, the city paid Veolia 92 percent of its $9 million incentives last year.

Veteran water workers told Fox 59 that they have “witnessed Veolia management directing other workers to follow improper state procedures, skimp on safety standards and even change computer documents in the new internal system Curry and other board members review to make it appear that Veolia is meeting all incentive criteria.”

Wells also uncovered the possibility that the early water conservation measures by VWI came because they couldn’t meet demand due to lack of maintenance on the treatment system and to save money on chemicals. In an on-camera interview a disguised employee told Fox 59 that he wouldn’t drink Veolia’s water.

Another interview produced the following remarkable exchange with Carlton Curry, the city official overseeing VWI. When Wells suggested dissatisfied customers don’t have a choice since “you can’t change water companies,” Curry snapped, “Sure you do … you can drill a well … you can bring in private water.”

According to insiders, Veolia officials are scrambling — not to correct dangerous deficiencies, but to find out who is telling the media about those deficiencies. Rumors are flying that more veteran employees may be fired in retaliation.

On Friday, July 15, City-County Councilor Jim Bradford took to the IURC a “formal demand for investigation” of VWI. Bradford’s letter noted that he had attached “documents which appear to show a pattern and practice of false reporting, possible fraud, violation of contractual agreements with the City of Indianapolis, tampering with test results, diminution of prior test standards, improper record keeping, alteration of records … and willful compulsion of employees to engage in actions that have endangered our water supply.”

Why does Mayor Peterson put up with the steady stream of bad news from a contractor like Veolia? Why does Carlton Curry write scathing internal memos about VWI but consistently defend the company in public? Why does the Waterworks Board approve nearly every Veolia project and millions in ratepayers’ money as incentive to VWI? Some answers may lie in how and why VWI was chosen to run the city’s utility and who locally benefited.

To begin with, Veolia made a brilliant choice of high-powered politically connected “advisors” to land the contract. The team included Marion County Democratic Chair Ed Treacy and former Chair Kip Tew, former State Democratic Chair Robin Winston and Tom New, former chief of staff for Gov. Frank O’Bannon. Hiring Winston as a full-time consultant for Veolia was even part of the company’s two volume proposal to the city.

Who else is politically connected to Veolia?

• William Shrewsberry resigned as Bart Peterson’s deputy mayor to become a consultant. He started Shrewsberry and Associates and landed a $260,000 consulting contract with the Department of Waterworks in December 2002. NUVO found that the city has paid Shrewsberry nearly $850,000 since October 2002 for various “professional services.”

• Water Board member Jack Bayt owns Crystal Catering. Veolia gave Crystal a three-year contract to run their cafeteria in April 2004. Cafeteria prices increased by 20 percent with the announcement.

• Carlton Curry, who recently told reporters that Veolia is “exceeding expectations” and the city is pleased with Veolia “across the board,” may have reasons to make Veolia look good. In 2001, Curry was paid $40,000 to “consult” on the water utility deal. He was then appointed to the Waterworks Board by former City-County Council president Beurt Servaas and subsequently voted to give Veolia (then USFilter) the $1.8 billion contract. Curry now makes $90,000 a year to oversee that 20-year contract.

The Citizens Water Coalition, made up of state, local and national public interest groups, called for a “comprehensive and thorough audit” of Veolia’s performance by an “objective third-party audit agency” during a press conference July 21. All four local broadcast stations covered the news conference at the City-County Building. The in-house government station, Channel 16, did not record it.

The Indiana Utility Regulatory Commission is now focused on Veolia. And on July 21, the Office of Utility Consumer Counselor announced that they also would be reviewing the information presented to the IURC by VWI. So before you give up and dig your own well, contact the IURC or the OUCC. For complaints about poor water quality or service call 232-2712, or write the Utility Consumer Affairs Complaint Division, 100 N. Senate Ave., Indianapolis, IN 46204.

Jack Miller is a freelance writer and a board member of the Hoosier Environmental Council, which is part of the Citizens Water Coalition.

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