Water Industry Bid-Rigging Investigated In Ohio

Ohio’s top lawyer is looking into illegal scheming in the state’s water and wastewater industry.

State Attorney General Mike DeVine announced in April that he is “investigating an alleged bid-rigging scheme affecting purchasers of aluminum sulfate, otherwise known as alum. Many municipalities and public entities that purchase alum may have fallen victim to this illegal conspiracy,” according to his office.

“His office urged municipalities to send notice if they bought alum or ferric acid between 1997 and 2010 for wastewater and drinking water treatment,” Legal Newsline reported.

DeVine’s office says he is concerned with so-called “sham bids.”

“In essence, competing alum providers would bid to sell their alum to various municipalities and public entities. Before those bids were made, however, the companies allegedly agreed amongst themselves who would win the bid (or at least who would submit the lowest bid, and thus most likely be the winner),” DeVine’s office said.

Ohio is not the only state facing such challenges. Last year, Frank Reichl of New Jersey, the former executive of water treatment chemicals manufacturer General Chemical Corp., “pleaded guilty for participating in a 13-year-long scheme to eliminate competition by price-fixing, bid-rigging and directing business to specifically-chosen pulp and paper companies across the country,” Talk Radio News Service reported.

Aluminum sulfate plays a critical role in the water treatment industry. According to the firm Chem Service Inc., which specializes in lab standards, water treatment is the top industrial use of aluminum sulfate. Here’s how it is used, per the nonprofit Safe Drinking Water Foundation:

The coagulation process involves adding iron or aluminum salts, such as aluminum sulphate, ferric sulphate, ferric chloride or polymers, to the water. These chemicals are called coagulants, and have a positive charge. The positive charge of the coagulant neutralizes the negative charge of dissolved and suspended particles in the water. When this reaction occurs, the particles bind together, or coagulate (this process is sometimes also called flocculation). The larger particles, or floc, are heavy and quickly settle to the bottom of the water supply. This settling process is called sedimentation.

To read more about potential corruption within the water and wastewater treatment industries visit Water Online’s Labor Solutions Center.