The Ohio Attorney General’s Office 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.
Alum is a chemical that is used to treat both waste and drinking water. Last year, an executive of one manufacturer pleaded guilty in federal court in New Jersey to creating and maintaining a bid-rigging and price-fixing scheme. This indictment, and the executive’s eventual guilty plea, resulted in additional indictments of other executives and unleashed a flood of class-action litigation.
At this stage, the Ohio Attorney General’s Office is gathering documents from municipalities and public entities that use alum to determine whether they were affected by the alleged conspiracy.
Municipalities are urged to contact the Ohio Attorney General’s Office if they purchased alum or ferric acid between 1997 and 2010 for their wastewater or drinking water treatment.
According to the guilty plea and indictments, the alleged alum price-fixing and bid-rigging conspiracy worked like many other vendor-purchaser price-fixing conspiracies. 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).
Bids designed to lose are called “sham” bids. Early indications suggest that the conspiracy may have involved the use of sham bids in order to give the false appearance of competition. These alleged activities may have cost Ohio taxpayers significant amounts of money in the form of artificially high prices paid by governmental entities for alum.
The Ohio Attorney General is authorized by law to represent municipalities and public entities in antitrust matters such as this one. If your municipality or other public entity uses alum, or another similar water treatment chemical called ferric acid, please contact the Ohio Attorney General’s Antitrust Section at
614-466-4328 or email
Alum_Investigation@OhioAttorneyGeneral.gov.
Your information is vital to helping the Ohio Attorney General’s Office determine who may have been affected by this alleged conspiracy and the amount by which each may have been harmed.
Time is of the essence, so we hope to hear from you soon.