Garbage-gate

By DAVID MOON, Moon Capital Management, LLC
July 26, 2009


Several years ago, Berkshire Hathaway purchased a mid-sized diversified company. One of the first things Warren Buffett did was explain his company’s culture to the CEO of this business.

“We don’t like to lose money, but we can afford to. We can actually afford to lose a lot of money. But we can never afford to lose our reputation. Once we lose that, we will never get it back.”

The values of an organization start at the top.

Three Knox County employees were fired two weeks ago for allowing people to pilfer garbage from the county dump. They were also accused of taking payola, sometimes as much as $25 per non-functioning lawn mower.

Garbage-gate.

Their boss, Solid Waste director Tom Salter, says their department has an explicit policy against using their positions for personal enrichment.

These guys work in a county where people can pay for medical procedures (I suppose that’s personal enrichment), personal travel expenses and other prohibited expenditures with a company credit card – and when discovered repay items with campaign monies.

In Knox County you can pull a gun on your wife and still not lose your position. You can serve on the school board even though you have a prohibition from going to one of the schools in your district.

In this town we elect felons and appoint former gang members to public office.

Years ago, an elected official in charge of overseeing Knox County’s management of the local cable television monopoly received free cable service from the company. He described the free MTV and ESPN as necessary “research.”

And I haven’t even gotten to the Law Director.

Personal enrichment might be prohibited at the dump, but it seems to be an institutional fixture in some other places around here.

Who can blame these guys for Garbage-gate?
I’m not excusing what the hardened garbage criminals did, but using a reasonable person standard, one would expect that their minor transgression would be excused, or at least they would get a second chance after being confronted with the evidence from the 10-month sting operation.

Of course, it’s possible that there is more to Garbage-gate than is being reported. Maybe.

I go to the dump. Several years ago, I gave an old lawn mower to an employee there. I knew darn well what he was going to do with it.

I also knew that if he didn’t take it, the county would get some small amount of money by selling the mower as scrap metal.

My guess is that few of the people whose trash was stolen would object – even if it meant a bit less revenue for the County’s scrap metal operation.

I might have even committed a crime, since I once took a stack of about 20 small plastic children’s chairs from the dump, just before they were thrown into the crusher. They were perfectly fine, and we used them for several kids’ birthday parties.

If Tom Salter wants to press charges, I’ve already retained Greg Isaacs. Not everyone can afford to – which might help explain who gets in trouble and who doesn’t.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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