Former Waste CEO Responds to SEC Allegations, Challenges Fairness.

Business Editors

CHICAGO--(BUSINESS WIRE)--March 26, 2002

Dean Buntrock, former CEO of Waste Management Inc., responded to the Securities and Exchange Commission (SEC) suit filed against him today, citing conflict of interest within the Commission and adamantly maintaining his innocence. Buntrock suggested that the exaggerated, inflammatory language of the SEC complaint was motivated by the desire to be seen as "cops on the beat."

The SEC's descriptions of Mr. Buntrock in its press release have more than pushed the bounds of decency and are unworthy of government officials, according to Buntrock's counsel, John T. McCarthy, Bell, Boyd & Lloyd, who filed the suit against the SEC on Buntrock's behalf.

"I am personally dismayed that the SEC is moving forward with these allegations regarding the accounting practices during my tenure as CEO of Waste Management," said Buntrock. "I believe that the allegations against me should not even be reviewed until the suit I filed against the SEC regarding the gross conflicts of interest within the Commission is given fair and thorough consideration. Beyond the issues outlined in the suit I filed more than four weeks ago, I deny each of the allegations that the SEC has raised against me."

The suit, which Buntrock filed Feb. 21 and which has not been responded to by the SEC, points to work completed by Charles D. Niemeier, the SEC's chief accountant in the division of enforcement, and Robert K. Herdman, the SEC's chief accountant, as the primary conflict.

Prior to their current positions at the SEC, both Niemeier and Herdman practiced in the private sector. They were hired by new Waste Management executives to aid them in executing a large write-down and restatement and provide a report to the SEC regarding the company's accounting practices from 1992 to 1997. Buntrock asserts that these individuals played key roles in generating private files for the SEC's review, which ultimately resulted in the Commission's decision to embrace the "big bath" or write-down and target former WMI leadership. Based on their work in the private sector, the current positions of these individuals in leadership roles at the SEC predetermined the action of the SEC on this matter.

"The SEC staff and Commission find themselves in an untenable position. They cannot recognize the merit of the other side's position because it would require the staff to directly challenge the past work of their current superiors," said Buntrock. "The connections are clear. So clear, in fact, that I believe it was impossible for this process to be a fair and objective one."

McCarthy added: "What is apparent from their allegations is that the SEC has fallen for the phony restatement that was contrived in 1998 by Steve Miller and Rod Hills hook, line and sinker. The real fraud was the new management's writeoffs and restatement that were designed to position the company for sale, largely to the benefit of new management.

One thing that is clear is that the gloves are off in this SEC debate. While the SEC's inquiry was being conducted, Mr. Buntrock was restrained from publicly commenting, but not any longer: "Mr. Buntrock, with the aid of expert accountants at the top of their profession, will show in court (and elsewhere) that the SEC's charges are unfounded and grossly unfair."

At this time, Buntrock believes the only appropriate course of action would be the appointment of an independent third party to review both his position and the massive restatement that took place at the direction of new Waste Management executives.

"I spent my career building a successful business at Waste Management and have been publicly and privately wronged by the allegations brought to bear by new leaders at the SEC with an undeniable interest in protecting their previous work product," Buntrock said.

"I firmly believe that, while under my watch, all of Waste Management's financials were fairly reported and in compliance with GAAP. I was never told otherwise, either by our internal accountants or our outside auditors."

Editor's note: Chronology available upon request.