Thursday, April 11, 1996 | 11:59 a.m.
and Jeff Schweers
The Clark County Commission wants a second audit of Silver State Disposal Service's financial books to determine if the garbage company has been inflating rates.
Silver State, which has a monopoly on garbage collection in Clark County, is accused of cheating the Internal Revenue Service and lying about its bottom line to county residents.
A federal grand jury Tuesday indicted the garbage company, President Joe Anstett, vice presidents Richard and Thomas Isola and four others in a 26-count indictment. The Justice Department contends it has evidence of 10 years of tax fraud dating to 1984.
The filing of formal charges has spurred the call for greater financial scrutiny, though some county and city officials have been aware of the federal investigation for the past four or five months.
"We cannot technically, under the Constitution, say a person is guilty until proven otherwise," commission Chairwoman Yvonne Atkinson Gates said. "But we can look at what scenarios could play out here and be prepared to make rate adjustments if (residents) were being overcharged."
Local officials should not expect any cooperation from the Justice Department, which has refused to disclose the total amount of money in dispute.
"I can't go beyond the public record," First Assistant U.S. Attorney Howard Zlotnick said. "I have a professional responsibility to adhere to, (that) outweighs any curiosity" about whether garbage rates would have been any cheaper.
Until now, Clark County has relied on Silver State's own audits and the company's "integrity" and assurances that "everything is above board," Assistant County Manager Dale Askew said.
But that trust has been shaken by the IRS, which contends it can prove that at least $175,600 was spent on personal items and falsely billed as expenses.
Last month, a Silver State spokesman said the actual amount of money in dispute is about $450,000.
The indictment also alleged that Silver State workers and, at times, equipment were used to remodel five houses and a barn and improve an Arabian horse ranch.
These alleged expenses were included in financial statements given to the County Commission and the cities of Henderson, Las Vegas and North Las Vegas in support of rate increases.
Under Gates' direction, Askew is contacting the three city governments to gather support for an independent audit. The certified public accountant would be chosen by elected officials.
The idea is supported by Henderson Councilwoman Amanda Cyphers and others. Cyphers said the cities must be extra certain that financial dealings with Silver State are "clear and clean" because of the perception of fraud.
The county has yet to hear from the cities of Las Vegas and North Las Vegas.
Rates last were raised in 1994 when local governments approved a $1.55 a month increase for a total rate of $9.70 a month per household.
At the time, then-County Commissioners Karen Hayes and Don Schlesinger called for a second, regulatory audit in addition to the one provided to them by Silver State.
This regulatory audit -- similar to ones conducted by the Nevada Public Service Commission, which regulates the electric and telephone companies -- would have focused on whether Silver State could justify the increase based on expenses.
But Hayes and Schlesinger's proposal did not pass, and instead county commissioners asked for an independent audit, which Silver State already was providing them.
Terry Page, the PSC's director of regulatory operations, said his accountants and auditors are trained to discover when personal purchases like a swimming pool or fence are billed as a company expense.
In Silver State's case, the indictment accused top officers of having an arrangement with Steel Engineers Corp. and P&S Metals Co. to buy such items as Jet Skis, snowmobiles, seafood, bicycles, cameras and televisions and then bill Silver State for "steel."
Silver State's auditor of 20 years, Richard Bowler of Piercy Bowler Taylor and Kern, said Wednesday that he found nothing in the company's books that raised red flags.
Bowler, who was questioned by the grand jury, said he saw no evidence of what is described in the indictment. Silver State's attorney, John Moran Jr., did not return telephone calls Wednesday.
The county maintains it would not have learned of the alleged fraud either through Bowler's audit or a regulatory review.
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