Eyeing The Competition

The title of the hand-scribbled memo outlined Waste Management's goal in no uncertain terms: "Cadiz Kill." In 1995 Cadiz Inc., an agricultural firm based in Santa Monica, Calif., was leading opposition to Waste Management's proposal to build a mega-garbage dump near its property. So, like any other tactically thinking business, the country's largest trash hauler brought in a consultant to get things moving.

Joseph Lauricella, though, wasn't your typical McKinsey man. He set up a sham pro-dump grassroots organization. His duties, according to San Bernardino County grand jury indictments and his testimony, included swiping confidential data, sabotaging potential deals and spreading rumors that linked Cadiz to illegal dumping and drug trafficking--all in an attempt to drive down its stock price and cripple its lobbying efforts. Last fall Lauricella was sentenced to six years in prison for his consulting efforts. Waste Management and four of its executives, who claim that Lauricella was a renegade acting on his own, have pleaded not guilty to various charges, including stock fraud and wiretapping.

Waste Management may specialize in garbage, but it isn't the only outfit accused of playing dirty. Far from it. Just last week, Motorola sued Intel for allegedly hiring away key employees to obtain its microchip trade secrets. Minneapolis-based agribusiness giant Cargill recently acknowledged that a rogue employee may have lifted proprietary genetic material from a competitor, an admission that effectively killed a $650 million deal to sell its North American seed division to a German biotech venture.

Next week a Taiwanese father-and-daughter business team is scheduled to be tried for paying a U.S. research engineer to pilfer manufacturing secrets from label maker Avery Dennison. Another Taiwan-based executive goes on trial in early April, charged with attempting to buy the secret formula for Bristol-Myers Squibb's cancer drug Taxol for $400,000--just one of many alleged plots to fleece R. and D.-rich pharmaceutical firms. Last spring a Gillette consultant went to prison for trying to market secret designs of the company's Mach3 razor to competitors such as Bic. And a small Maryland soft-drink distributor claims that Coca-Cola Enterprises, the bottler partly owned by Coke, used wiretapping and other shady tactics to destroy his business. CCE denies all the charges.