Former USFilter employee investigated by Rockland, MA for corrupt practices

By Patrick J. Cronin
Friday, January 16, 2004

While Rockland officials have been tightlipped about the on-going investigation of the sewer department, sources close to the investigation said a fraud audit reveals numerous legal problems with the town's current contract with USFilter, the company hired to run the town's sewer plant.

Sources say the state inspector general is currently reviewing the town's contract with USFilter, which was signed in 1998, and how it was procured. A spokes- person from the state inspector general's office would not comment on whether their office is conducting an investigation.

Former Superintendent Gregory Thomson, who is being accused of embezzling more than $370,000 from the town's sewer department, was the one who wrote the 1997 Request For Proposal to run the town's sewer plant. A copy of the Request for Proposal reveals it may have been tailor made for USFilter.

At the time, Thomson, who was previously a sewer commissioner, was just hired as the town's first sewer superintendent. The Request For Proposal mentioned Professional Services Group, which later became USFilter, by name twice. The Request for Proposal also stated "all proposers are required to supply a belt filter press and must be equal to or better to the one that is currently in operation." The companies bidding were also required to have a staff of 10 employees to run the Rockland Sewer Plant.

There were two companies interested in running the town's sewer plant; Professional Services Group, also known as USFilter, and Woodward and Curran.

The Request For Proposal was sent to Professional Services Group and its Regional District Manager Michael Sause, who was recently indicted with Thomson for embezzling more then $300,000 from the town in 2002 and 2003.

Woodward and Curran stated they were interested in running the plant but disagreed with commissioners concerning the number of employees needed to run the town's sewer plant. While Woodward and Curran assured officials that they could run the plant with less, Thomson refused to change the requirement.

Woodward and Curran also couldn't supply a belt filter press and as a result did not bid on the contract.

With Woodward and Curran out of the picture, Professional Service Group, or USFilter, was the only company left to bid to run the town's sewer plant. The company bid $1.2 million to run the town's sewer plant, which was the same amount that sewer commissioners budgeted in their annual budget that was prepared in 1996, according to sources.

Sewer Commission minutes from 1996 to 2001 reviewed by the Mariner shows only one mention of the 1997 Request For Proposal. Minutes from a 1996 meeting state that "the request for proposal is nearing completion." The minutes have no mention of the process and why USFilter was selected to run the sewer plant. The minutes also have no mention concerning the sewer commissioners vote to award the contract to USFilter.

Town Accountant Jack Franey said the sewer department ended up purchasing the belt filter press from Professional Services Group four months after the company was awarded the new contract. Several officials question why the town didn't purchase the equipment before they went out to bid to find a company to run the town's sewer plant.

Even though the contract states USFilter is required to have 10 employees running the town facility, they currently only have eight, according to the audit.

The Request For Proposal stated that all capital purchases must be approved by the sewer commission. However, that requirement was omitted when the town signed the contract with USFilter which put the town at a disadvantage.

After the contract was signed, it appears several provisions in the contract were not followed.

One of the main reasons why officials decided to conduct the fraud audit was because there were certain questions regarding what money was spent by USFilter and what money, if any, should have been returned to the town.

Officials said under the first contract signed in 1994, the sewer department gave USFilter $50,000 for preventive maintenance and repair and $100,000 each year for equipment replacement and facility maintenance.

They added under the second contract, signed in 1998, the sewer department gave the company $75,000 for maintenance and repair, and $100,000 for equipment/capital replacement.

According to both contracts, "At the end of each fiscal year, all unexpended funds from the allowances shall be returned to the sewer department."

It appears no money was ever returned to the town.

Sources said the money allegedly stolen by Thomson and USFilter Regional District Manger Michael Sause, estimated at $370,000, was supposed to come back to the sewer department from USFilter. Sause was indicted on three counts of larceny in August.

Minutes from the sewer commissioners reviewed by the Mariner show no mention of any capital purchases or any documentation concerning what was taken out of those maintenance accounts and for what purposes. USFilter, as part of the contract, was supposed to provide monthly reports to the commissioners concerning the accounts and where the money was being spent.

At the time, sewer commissioners said the reports did exist but must have been destroyed by Thomson before he was arrested on the embezzling charges.

USFilter has been operating the town's sewer plant since 1994. They added France's Veolia, formerly Vivendi Environment, initiated the first two contracts on the project between itself and the town under different names, not USFilter.

The first contract was signed by the town with Metcalf & Eddy Services, Inc., which was subsequently bought by the Professional Services Group. The contract was for three years. The second contract was signed in 1998 between the town and the Professional Services Group. The contract was to last 10 years with an option for an additional 10 years.