A former Perry Township, Ohio, tire recycler has less than two weeks to comply with a public health order regarding mountains of tires on his property before the case goes to the Stark County prosecutor's office. The decision follows a visit by health inspectors to the tire recycling operation, Renewable Energy Products, June 21.
The company's president, Paul Lioi, had an exclusive tire recycling contract with the solid waste district representing Stark, Tuscarawas and Wayne counties between 1996 and 2000. At least $2 million in public money flowed to Renewable Energy Products and sister companies at the same address during the recycling program.
Because the garbage district did not follow record-keeping procedures specified in its own contract with Lioi, however, public officials cannot say with certainty what happened to the money or the tires.
The inspection of the nearly 7-acre property -- which was not licensed by the health department for tire storage -- revealed:
• Scrap tire storage piles covered an estimated 1 to 1.5 acres, were at least 12 feet tall and more or less comprised a continuous pile. Ohio law specifies that tire piles be no more than 8 feet tall and no wider than 2,500 square feet at the base. The property also lacks adequate fire lanes.
• Mosquito larvae were discovered in standing water in the tires and in open, outside containers. That created a ``mosquito-breeding source nuisance.''
• Bales of scrap materials from the tire recycling operation, as well as household garbage and improperly stored chemicals, also were discovered.
Bob Somrak, environmental health director for the Stark County Health Department, conducted the inspection with two staffers. He said that even if Lioi were properly licensed to store tires, he still would have to remove about one-third of them.
The question now is who would pay for such an operation, which easily could cost tens of thousands of dollars.
Ohio EPA spokeswoman Heidi Greismer said that state funds will not be used to remove the tires because investigators have identified a list of ``responsible parties.''
Anybody with a financial stake in the business, regardless of involvement in the actual tire storage, could be on the hook.
Those targeted include: Lioi, banks involved with his business, additional businesses that operate out of the Perry Township location, and past and current investors in the businesses.
Greismer said the garbage district has not been named as a responsible party, but it could be. She estimates it will take about a month to identify everyone who will be asked to pay.
The Stark County prosecutor's office already has an open case on Lioi, who owes the county about $50,000 in unpaid property taxes, according to the county treasurer.
Lioi has filed for personal bankruptcy.
A Stark County Common Pleas judge has foreclosed on the property, but an appeal is pending. The court also has appointed a receiver at the request of Star Bank, which is owed more than $2.5 million. Lioi owes $130,000 for two other liens on the property, according to court records.
Meanwhile, the state's largest environmental group wants an independent investigation of the tire recycling program.
Ohio Citizen Action wrote a letter to Attorney General Betty Montgomery that said ``we are outraged that $2 million in public funds could vanish with no repercussions for any of the parties involved....
``Misspent money needs to be recovered; any fraud needs to [be] uncovered; and the system that gave rise to these practices must be reformed.''
The 100,000-member group's letter was addressed to the wrong state agency, however.
``That issue needs to be directed to the auditor's office. We don't have jurisdiction,'' said spokesman Bret Crow.
The state auditor's office has a committee that meets weekly to consider special audits, said spokesman Tom Prendergast.
Ohio Citizen Action's area director, Jennifer O'Donnell, said what concerns her the most about the tire deal was the lack of accounting. She said it also troubled her that Phillip F. Palumbo was both the district's executive director and treasurer.
``That's a clear lack of checks and balances,'' she said. ``Either there are no controls or there's corruption on some level. No one seems concerned about finding the money. We need to take a good look at what's going on. ''
The district's law firm of Squire, Sanders & Dempsey and the accounting firm Bruner-Cox reviewed Lioi's contract performance and concluded there wasn't enough evidence to successfully pursue civil litigation. The district paid Squire $145,000 for the report.
``Both the accounting firm and law firm are respected operations,'' said Stark County Commissioner Jane Vignos, who is one of nine county commissioners who oversee the district.
She said no further investigation is needed.
``We spent a good bit of money to make sure we did this right,'' she said.
But Tuscarawas Commissioner Jim Seldenright wants an independent investigation.
``When this started, I asked for a letter from each county prosecutor to request a (state crime lab) investigation,'' Seldenright said. ``If there had been an independent investigation, there wouldn't be any questions today, and it wouldn't have cost us $145,000, either.''
The garbage district's board of directors next meets July 12. Akron Beacon Journal