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SECURITY CONCERNS


Copper: The new gold M


BY GREG GOODE Special to TheWholeSaler


Cooper Supply Company is a plumbing wholesaler located in the southwest


suburbs of Chicago. The growing issue of copper theft is a huge con- cern for M. Cooper and for other businesses across the country. For ex- ample, in 2006 M. Cooper purchased $9.2 million of copper material, which equates to 3.4 million pounds. Global consumption caused the scrap cost for this material to sky rocket from $.97 cents a pound in 2001 to over $4.00 a pound in 2006. In 2007, M. Cooper saw more than


$35,000 in copper material stolen from the company. Four employees were caught and the company de- cided to prosecute them. These em- ployees had no prior arrests and were charged with only a misdemeanor. M. Cooper Supply CEO Dennis


Goode vowed that day to get in- volved with changing the current laws. Presently, he is the chairman of the Government Affairs Committee of the American Supply Association. His involvement on this issue was in- strumental in passing of The Copper Theft Prevention Act of 2008/2009. ASA, a national plumbing industry organization that networks with wholesalers all over the country, has created a panel that spends time in Washington, D.C., lobbying Congress to bring resolution to this problem. The increased global supply and demand of copper has caused an un- precedented upward spike in its cost. Because of this, copper has become the most recognized commodity among thieves to be stolen and scrapped for cash. A lack of govern- ing on this growing problem has al- lowed thieves to take full advantage of the situation. Drug addicts, gang members and organized groups that are interested in making a quick buck have made this into a very lucrative business because of the national ex- posure to the value of copper. These individuals are pulling off


large-scale thefts at utilities, ware- houses and new residential subdivi- sions. As a result of the current


• Global copper price boom results in huge thefts of copper


• Threat to security • Law needs bigger teeth • $1 billion loss/year


recession, the primary targets have been the abundance of foreclosed homes or vacant properties. “These rings or gangs hit several houses per day, yielding more than $20,000 in profits per month” — FBI Criminal Intelligence Section, 2008. Thieves are recruiting young teenagers or indi- viduals who do not have a criminal record. In most cases, perpetrators without a criminal record are charged with a misdemeanor, which has rela- tively low fines and serve no jail time.


A national threat requires action The issue is significant because


the theft of copper is jeopardizing America’s critical infrastructure and is a threat to homeland security. The impacts are massive and affect


available to law enforcement agen- cies to assist them in tracking down and prosecuting copper thieves. Fi- nally, any transaction of more than $250 would be paid by check instead of cash and the new law would im- pose civil penalties up to $10,000 for failing to document a transaction or for engaging in cash transactions of more than $250. Subsequently, Hatch-Klobuchar in-


troduced the Secondary Metal Theft Prevention Act of 2009. This Act was aimed toward copper thieves and the purpose was to set a federal baseline in which all states would have to obey. Several states never instituted a policy for the transaction of precious metals and the scrap yards. Nevertheless, this bill does not pre-


A thief started cutting copper in an underground feeder vault. An explosion occurred and caused


the water treatment plant that fed the whole city of Minneapolis to shut down temporarily.


many different aspects of the infra- structure such as the building indus- tries, transportation, electrical and telecommunications. The Department of Energy esti-


mates copper theft cost this nation al- most $1 billion a year according to the Coalition Against Copper Theft (2008). The Copper Coalition is a Washington, D.C.-based advocacy group made up of some of America’s leading trade associations concerned with the widespread outbreak of cop- per theft. In the last couple of years, there


have been several proposed Acts in- troduced to Congress and the new legislation was passed into law. The purposes of these acts were to force strict mandatory requirements on scrap yards and metal recyclers across the U.S. First was the Copper Theft Pre-


vention Act of 2008. This bi-partisan bill was introduced by Senators Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.). Under this new law of the Hatch-Klobuchar legislation, scrap metal dealers would be required to keep records of copper transactions, which would in- clude the seller’s name, address, transaction date, amount and de- scription of the copper. Also, a copy of the seller’s driver’s license or other government-issued ID card would be kept on file. The scrap metal dealers would


maintain these records for a mini- mum of one year and make them


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clude each state enacting state law for which the penalty could be harsher. This proposed act was very similar to the Copper Theft Prevention Act of 2008 with a couple of addendums. For example, the records available


to law enforcement agencies would be enhanced from one year to two years. Transactions would still be in the form of a check, however, and the amount paid would be lowered from $250 to $75. Additionally, scrap yards cannot pay the seller cash within a 48-hour period from last sale to prevent thieves from making smaller transactions to avoid receiv- ing checks. Furthermore, the Hatch-Klobuchar


legislation contained a “Do Not Buy” provision. This bans scrap yards from buying copper from indi- viduals who are not established busi- nesses and forces the seller to provide written documentation such as a business license and or a federal tax ID certificate.


Examples illustrate urgency Equally important is the Hearing


before the Subcommittee on Crime and Drugs of the Committee on the Judiciary United States Senate, on July 22, 2009. In summary, this hear- ing had statements given from indi- viduals such as Senators Orrin Hatch (R-Utah) and Amy Klobuchar (D- Minn.). Klobuchar shared several sto- ries that took place in the state of Minnesota. One story was about how copper


•THE WHOLESALER® — MARCH 2011


thieves removed copper wire from a Federal Aviation Administration tower and caused the tower to lose communications with in-flight air- planes and air traffic controllers. Moreover, she describes how thieves stole copper wiring from emergency warning sirens which were then un- able to warn residents of approaching tornados. Sen. Klobuchar has been a leader in advocating for this national problem to be heard by Congress stated, “The common denominator is the threat that it poses to public safety and to our infrastructure” (Metal Theft Public, 2009). Some of the other witnesses who


gave statements at the hearing are top level executives from Fortune 500 companies. Companies such as Quest Communications and Northern States Power described how their operations were affected. Frank Coffey, director of critical infrastructure for Qwest Communications, shared how the company has been plagued by this issue. Qwest provides voice, data, In- ternet and video services globally. In 2008, several thousand feet of


copper cable was stolen and Qwest customers were left without service. Ten days later the same run of copper was stolen again. Another example given was how thieves stole aerial cable, which disrupted many services including emergency 911. David M. Sparby, president and


chief executive officer of Northern States Power, elaborated on a thief who started cutting copper in an un- derground feeder vault. An explo- sion occurred and caused the water treatment plant that fed the whole city of Minneapolis to shut down temporarily. Universal Scrap Metals Inc.


(USM) is one of the Midwest’s largest wholesaler/processor of scrap metal. USM provides a full range of comprehensive scrap management services and technically advanced scrap handling equipment to all types of industrial accounts throughout metropolitan Chicago and the U.S.


Current laws not enough Julie Okmin with USM contends


that their company already had sim- ilar city and state laws that almost mirror the Copper Prevention Act of 2008/2009. She argues that most large companies such as USM main- tain records as a normal course of business and that the current laws are not harsh enough to stop copper thieves. There are three classifications of


crimes consisting of felonies, misde- meanors, and infractions. The Law Office of Ross G. Thomas of Indi- anapolis, whose expertise is criminal (Turn to Copper theft... page 154.)


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