The general manager of a subsidiary of Waste Management of Illinois was convicted Friday in federal court of paying $12,000 in bribes to suburban Fox Lake officials to obtain a $700,000-a-year municipal garbage collection contract in 1981.
John E. Horak, 58, general manager of HOD Disposal, was found guilty of one count of racketeering and 37 counts of mail fraud.
He had testified in his own defense that the payment of $10,000 of the money had been approved by the president of Waste Management of Illinois, a subsidiary of Waste Management Inc., the nation`s largest disposer of solid waste.
U.S. District Court Judge Charles Norgle ordered the jury to return to court at 1:30 p.m. Tuesday to resume deliberating on a request by government prosecutors that Horak be ordered to forfeit more than $3 million worth of Waste Management Inc. stock; his salary and bonuses earned from June, 1981, through July, 1985; and any pension or profit-sharing funds earned through his employment at HOD Disposal.
Horak, of Spring Grove, faces a maximum penalty of 205 years in prison and $62,000 in fines on the racketeering and mail fraud counts. Norgle set no date for sentencing.
Horak testified Thursday that he was told before he delivered the $10,000 payment that it had been approved by James DeBoer, president of the Illinois waste company and a vice president of the national corporation.
The testimony is believed to be the first public allegation linking high- ranking officials of Waste Management Inc. to the payment of bribes.
A spokesman for Waste Management Inc. said on Thursday that Horak`s testimony contradicted his earlier denials of corporate approval and that the company would not comment further while the trial was pending.
Assistant U.S. Attorneys Ira Raphaelson and Daniel DuPre contended that Horak paid the money to assure that HOD would retain the garbage-collection contract it had maintained with the Village of Fox Lake since 1954.
Horak founded HOD in 1951 with two partners, both of whom were no longer involved when Waste Management Inc. purchased the company in 1972. Horak was kept on as general manager and given shares of Waste Management Inc. stock for the sale of the company.
By the time the indictment was returned last year, Horak`s holdings in Waste Management Inc. stock had grown to more than 68,000 shares, worth just over $3 million at the current selling price.
Former Fox Lake Mayor Richard Hamm and former Village Trustee Richard Gerretsen testified that they had received payments from Horak after HOD Disposal was the second lowest bidder for the garbage contract in June, 1981. The contract was approved by the village board on July 6, 1981.
Gerretsen and Hamm pleaded guilty earlier to accepting those and numerous other bribes. Gerretsen is serving a six-month work-release prison term; Hamm is scheduled to surrender in March to serve a three-year prison term.
Horak testified that Gerretsen approached him for money shortly after bids were opened and he learned that HOD had been outbid. Horak testified that he called his supervisor, John Groenboom, a vice president of Waste Management of Illinois.
Groenboom telephoned Horak a few days later and reported that he had discussed the matter with DeBoer, who had given approval to make the payment and said, ”It`s done every day.”
DeBoer was also the immediate supervisor of Raymond Akers Jr., who worked as a Chicago City Council lobbyist for Waste Management of Illinois and has been identified by sources as a man who helped FBI undercover informant Michael Raymond offer payments and favors to Chicago officials for city collection contracts.
