News • 18 May 2003

US sleaze link to hospital incinerator replacement

By Julian Manduca

The long-suffering residents and boat owners of Pieta, Msida and Guardamangia may well have to suffer the polluting incinerator at St Luke’s hospital for some months longer, MaltaToday, can reveal.

On 5 April it was announced that the old incinerator which pollutes the surrounding area was to be replaced within six months, but complications have arisen because a Maltese company is contesting the granting of the tender to Sarrebico Medical Supplies.

The controversy concerns Sarrebico’s suppliers Sanitec, manufacturers and distributors of microwave disinfection systems for medical waste treatment and its parent company Guardian Investments LLC.

In the US high-ranking Sanitec officials have been implicated in fraud.

The incinerator, because of its age, is not reaching the required temperature necessary, leading to incomplete incineration of medical waste including body parts.

The replacement equipment is meant to be installed in the coming months and should later be transferred to the new Mater Dei hospital.

Environment groups and Local Councils had been lobbying for years to have the incinerator replaced, and after several delays a tender was awarded on 20 March 2003 for its replacement to Maltese company Sarrebico Medical Supplies Ltd, which was to supply Sanitec equipment.

According to the Acting Director of Contracts the ‘Order to Start works’ fell on 14 May 2003.

Rival bidder IWT Group Malta Ltd, short listed for the tender has, however, attempted to block Sarrebico several times.

On 8 May this year IWT presented its latest judicial protest against the Director of Contracts and Sarrebico asking for the tender to be granted to IWT.

A previous similar attempt by IWT was turned down by the court.

On its part Sarrebico told MaltaToday "We have won the award and have every intention to supply the hospital with the Waste Decontamination Plant and have every intention to fulfil the contract to the Government's satisfaction."

In a counter protest to the court Sarrebico defended Sanitec and said it had received correspondence from US corporation Guardian Investments LLC showing that Sanitec was not bankrupt.

Sarrebico said the correspondence clearly showed that Guardian Investments LLC was the owner of Sanitec Group, and that this company was not bankrupt nor was it involved in illegal activities.

Sanitec is, however, involved in a legal battle over technology ownership and market right in the US.

IWT claims Sanitec former president Joseph Delloiacovo wrote a letter to various clients saying: "this battle has been ongoing for more than a year, and has, unfortunately, devastated the company’s ability to continue operations. At the moment the future of Sanitec is unclear. However, due to serious funding problems, our operation in New Jersey will have to be shut down as of February 14, 2003.

"We continue to believe in the technology, but over these past 18 months, it has been impossible to respond to you our suppliers, friends and clients, in a manner that was up to our very high standards."

It is unclear when the letter was written, but Sanitec and Delloiacovo, who is still listed as president on the website although he retired a year ago, are not contactable through the company website.

When MaltaToday asked Sarrebico whether Sanitec would be in a position to supply and support the equipment the reply was: "You might not be aware but all major parts are sourced from third party manufacturers and our technical support is forthcoming from the EU representatives as well as the various branches of Sanitec in the US."

However, MaltaToday contacted journalist James McNair who has been writing about the activities of Guardian Investments LLC in the Cincinatti Enquirer for at least a year, and asked whether it was likely that Sanitec could provide the service that the Malta hospitals would need. McNair said: "It doesn't appear that anyone connected with any permutation of Sanitec is in a position to deliver and support a machine outside of the US. Even if they were, there's still the question of technology ownership and market rights that is being disputed in court."

Asked whether Sanitec was still operating, McNair said: "All I know about the legit Sanitec is that it shut down its New Jersey HQ and sold its Kentucky plant sometime last year. The Kentucky plant has since been shut down as well."

According to IWT among the documents submitted by Sarrebico Medical Supplies in its judicial protest dated 28 April was one signed by Stephen Ventre against whom a ‘Cease and Desist’ order was issued by the state of Ohio and who is implicated in the George Fiorini affair (see Sleaze in the US).

The document stated that Stephen Ventre was the sole member of Guardian Investments LLC and Sanitec Group LLC, IWT said in its court protest.

Also implicated is one Terry Quatkemeyer, Ventre’s cousin who pleaded guilty last year to hoodwinking three Los Angeles banks out of more than $1 million in loans and is serving a prison sentence. Quatkemeyer, a Cincinnati native took on the alias Terry Quinn after moving to Los Angeles in the 1970s and got involved with Guardian Investments, which raised more than $13 million — much of it through former Cincinnati insurance agent George Fiorini — for a plan to buy and expand a medical waste disposal company: Sanitec. Ventre entrusted most of the money with his cousin, Quatkemeyer. Investors, mostly retirees solicited by Fiorini, are now suing to recover their money.

MaltaToday, asked the acting Director of Contracts whether it expected any delay in the installation of the replacement equipment. The Acting Director of Contracts relied that "The course of works to be undertaken is to follow a set time-schedule whose ‘Order to Start Works’ incidentally falls on the 14th May 2003." It is unclear whether the works have actually commenced. Asked whether it was advised by the Health Department to choose Sarrebico and Sanitec and whether the Director of Contracts had conducted any research into the reputation of Sanitec. The reply was: "It is normal practice for the Director of Contracts and the General Contracts Committee to examine the adjudication reports referred to them by the demanding department (in this case, the Department of Health) and after in-depth study of the findings, take the necessary decisions towards the subsequent awards of contracts."

The General Contracts Committee had however, decided on 24 December 2002 that it was "fully satisfied that they have given IWT all the remedies available in the Regulations to sustain their claim that their offer was the most advantageous one of those submitted but they are equally and unanimously convinced that the complainant has failed to prove this fact," and the decision to grant Sarrebico, which made the cheapest offer of Lm 546,931 was confirmed.

As things stand, Sarrebico is claiming the equipment to replace the old incinerator will be delivered as planned and that Sanitec, or some form of it will be able to provide the necessary support. US journalist Jim McNair believes this is impossible and claims Sanitec is not in a position to supply or assist anybody outside the US. The ministry of health and acting director of contracts have not replied to questions as to whether any research was conducted on Sanitec before and since the award of the tender, and have not confirmed whether the incinerator will be replaced as planned.

Strangely enough when MaltaToday asked Sarrebico Medical Supplies for a profile of Sanitec it was directed to http://www.sanitec.com the website of bathroom manufacturers in Finland. Just to be sure, MaltaToday contacted Sanitec Corporation and its Finnish representative Ilona Matikainen replied: "We are in a different business."

MaltaToday is indebted to Greenpeace Mediterranean for much of the information in this article.

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