Will #New York #Cut Off the #Fuel for #Corruption?

Corrupt companies in New York’s fuel oil industry mastered the art of fraud long ago. They have delivered less oil than customers thought they had bought, then sold the rest on the black market. One popular scam involved rigging oil trucks to push air, rather than oil, through their meters, creating false delivery receipts.

Federal prosecutors charged executives of two companies a decade ago with a scheme that earned them tens of millions of dollars. In 2015, the Manhattan district attorney’s office won indictments against nine companies, and Manhattan and Brooklyn prosecutors charged several individuals in another oil fraud last year.

Two class-action suits in state court now accuse oil companies of charging thousands of customers for tens of millions of gallons in which waste oil from cars and other sources made up as much as 25 percent of the volume. According to data gathered by lawyers for the plaintiffs, waste oil was delivered to such customers as the State University of New York, the City University of New York and Mt. Sinai Hospital.

Waste oil has been found to damage furnaces, and environmentalists argue that burning it in home heating systems increases pollution that lingers over the surrounding areas, contributing to asthma, heart disease and other ailments in poor neighborhoods.

Until the 1990s, commercial garbage collection in the city was a similar cesspool, with the Mafia dominating the industry through extortion, price fixing and threats of violence. Then the city created a muscular law enforcement agency — now known as the Business Integrity Commission — that has gained a national reputation for the way it rooted out corruption.

So it’s absurd that a City Council bill that would give the commission jurisdiction over the home heating oil industry would not pass easily. But Council members and other elected officials are running away from the bill, fearing a backlash from the politically powerful unions and the home heating oil industry.

The need for the regulations laid out in the City Council bill is painfully evident.

It would empower the Business Integrity Commission to license dealers and their deliverers and to deny licenses to dishonest companies. Companies that committed fraud — by shorting customers or illegally blending waste oil into their shipments — could have their licenses revoked and their trucks impounded, and they could also face criminal penalties.

The Manhattan district attorney, Cyrus Vance Jr., has urged the City Council to pass the bill, partly because costly, time-consuming criminal investigations by prosecutors are having what he described as a limited impact on systemic fraud across the home heating oil industry.

The bill made especially good sense, he said, because the commission had proved itself by driving organized crime out of the waste removal industry and because the regulatory structure laid out in the bill closely follows the law under which the commission itself was created.

The oil heating industry and the Teamsters union oppose the bill, arguing unconvincingly that it would be too expensive for the companies and would cost jobs. Other defenders of the status quo contend that the bill represents overkill — because criminality in the industry is relatively rare.

But the indictments that have been leveled against corrupt companies and individuals over the last several decades tell a different story. Moreover, it is just a matter of the time before a new fraud comes to light.

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