Greene Disposal LLC, a new firm with several governmental ties, now serves as a middleman between gas drillers and municipal authorities, paying sanitation facilities to take tainted water and getting payment from drilling firms, while never actually touching the stuff.
Its team includes Patrick M. Risha, 28 -- son of former West Mifflin Area Schools Superintendent Patrick A. Risha -- and relatives of two officials of the Clairton Municipal Authority, which has contracted with the firm.
Greene Disposal was created in August 2009, according to state records. Two months later it edged out CNX Gas Corp. to gain control of Clairton's capacity for accepting the chemically tainted water used in shale gas extraction.
CNX, an offshoot of 146-year-old Consol Energy Inc., had approached the Clairton Municipal Authority asking if it could dispose of gas-drilling wastewater at the Mon Valley city's sanitation plant, for a fee. CNX offered to pay the Clairton Municipal Authority 6 cents per gallon to accept its gas-drilling wastewater -- often called frack water -- treat it and add it to the flow it discharges into Peters Creek and thereby the Monongahela River.
The same week, according to authority superintendent Patrick Canavan, Greene Disposal emerged with a better bid. Greene Disposal, based in the Greene County town of Mount Morris, offered to pay the authority 6.5 cents per gallon of water accepted. On top of that, Greene Disposal pledged to pay to deposit 39,500 gallons -- the maximum that the authority can take under state environmental rules -- even if it delivers less than that amount.
"It's a no-brainer," said Mr. Canavan. The five-member board voted, 3-0, with two members absent, to accept Greene Disposal's proposal and reject CNX's.
The vote came only after one of the absent board members, James Cerqua, disclosed in writing that he has a family member with a stake in Greene Disposal. Authority solicitor Gary J. Matta, of the law firm Dodaro Matta & Cambest, advised in writing that he, too, had a "potential conflict of interest" that required him to avoid any involvement in contracting with the company.
In a later interview, Mr. Matta, who lost a 1996 Democratic primary for state House, said he has a family member in the Greene Disposal ownership group and is also representing the firm.
"Neither of us are owners of that company," said Mr. Matta of himself and Mr. Cerqua. "We have been doing consulting work," helping Greene Disposal to market itself to other clients. There are seven or eight owners, Mr. Matta said, including the younger Mr. Risha. Mr. Risha also is listed as representing the firm in an industry directory.
Rather than retaining an outside lawyer to review the proposed contract with Greene Disposal, the Clairton Municipal Authority copied, with minor changes, a pact the firm had inked the month before with the Municipal Authority of the City of McKeesport, said Mr. Canavan.
Having gained the rights to deposit frack water at Clairton's plant, Greene turned around and contracted with CNX, allowing the gas firm to drop off its waste water at the Clairton Municipal Authority. Payment arrangements between CNX and Greene are not public, and Joe Cerenzia, director of public relations for Consol, said, "We don't divulge that information for competitive reasons."
"Greene Disposal does not actually transfer the water," Mr. Cerenzia said. "We contract truckers to haul it to these facilities."
Rather, Mr. Cerenzia said, Greene Disposal acts as a broker. "We pay them, they pay Clairton."
Though CNX is now paying a middle man for the right to unload its water at public facilities, the company isn't crying foul. Greene Disposal "saw an opportunity to take some risk and they bought up some capacity," said Mr. Cerenzia, "with the intent of leveraging that position."
Clairton's authority is on pace to reap nearly $700,000 in the first 12 months from the arrangement -- around $200,000 more than the amount it believes it would have received from CNX -- which is enabling it to replace pumps, motors, gate valves and other aging equipment, said Mr. Canavan. The pact expires at year's end.
The West Mifflin Sanitary Sewer Municipal Authority has also contracted with Greene Disposal to accept frack water at its treatment plant, but hasn't taken any shipments.
Mr. Risha, of Rostraver, could not be reached for comment. He is perhaps best known as the face of development firm Marquise Investments in its bid to open an adult entertainment business in a former medical building on West Carson Street in Pittsburgh.
The application to put an adult business there, next to a club for recovering addicts, was the subject of a negative vote by the City Planning Commission. But communication problems last year between city departments and city council resulted in the failure of council to hold a public hearing and vote within legal time frames. Marquise sued the city, and Allegheny County Common Pleas Judge Joseph James in November approved the application, sparking community protests and an unresolved debate in city government over who dropped the ball on the public hearing.
The city has appealed Judge James' ruling to the Commonwealth Court.
Marquise Investments rents the West Carson building from a company that is, according to state records, controlled by Mark A. Latorre. The names of Mr. Latorre and Mr. Risha also appear as owners on the mortgage for Westwood Golf Club in West Mifflin.
Their firm bought the club in March 2009 for $1.5 million. In May, the West Mifflin Area School District -- which employed the elder Mr. Risha as its superintendent until November -- filed a civil complaint against the golf club's owners, saying they owe $34,185 in property taxes for 2009, plus penalty, costs and interest.
Rich Lord: email@example.com or 412-263-1542.