April 19 (Bloomberg) -- A lawmaker seeking to curb smuggling of bottles and cans into California for cash redemption is invoking Newman and Kramer from the “Seinfeld” television show -- and a scam they hatch that leads to a car chase and a damaged mail truck.
Assemblyman Richard Gordon, a Democrat from Menlo Park, is proposing a bill that would require anyone who imports bulk amounts of recyclable containers into California to report where they came from.
An analysis of the bill details a pair of 1996 episodes of Seinfeld in which characters Cosmo Kramer and Newman, a postman, devise a plan to smuggle a mail truck full of bottles and cans from New York to Michigan and redeem them for 10 cents per container, versus 5 cents in New York.
“If I could, I would name it the Newman-Kramer Deterrence Act of 2012,” Gordon said in a telephone interview. “I’m not sure, candidly, that that was my initial intent. I was just kind of having fun and it was a good laugh in the office. But if it does bring some attention to what is an issue, hey, great.”
In the shows, Kramer and Newman decide to use a postal truck to avoid the costs of gas, tolls and permits so they can make their state-to-state recycling arbitrage pay.
Such plans aren’t merely fiction. In Maine last year, three people were indicted for allegedly cashing in 100,000 out-of-state bottles and cans worth more than $10,000. The state offers five-cent refunds on most containers and 15 cents for wine and liquor bottles.
‘Operation Can Scam’
And in Michigan in 2007, the attorney general’s office announced the conclusion of “Operation Can Scam,” in which investigators snared Ohio smugglers who “bilked Michigan taxpayers out of hundreds of thousands of dollars by perpetrating a continuous fraud on the Michigan Bottle Deposit Fund,” according to a press release. Container smuggling costs the state $13 million a year, the release said.
California lawmakers enacted the Beverage Container Recycling and Litter Reduction Act in 1986, paying 5 cents for containers less than 24 ounces and 10 cents for containers 24 ounces or larger. Since the program began, consumers have recycled 255 billion aluminum, glass and plastic beverage containers.
The containers can be redeemed on a per-container basis, up to 50 at a time, or by the pound, at about 2,200 recycling centers statewide. Only containers purchased in California are allowed.
According to the analysis of Gordon’s bill, Calrecycle, the agency that manages the state’s beverage container recycling program, doesn’t know how many bottles and cans are imported into California to be redeemed, though the agency believes it is a widespread practice.
Seinfeld aired on NBC, now owned by Comcast Corp., for nine seasons from 1989 through 1998.
Pushing Out Newman
In the relevant episodes, called “The Bottle Deposit,” Kramer winds up throwing the containers, then Newman himself, out of the truck to make it faster, to try to catch Jerry Seinfeld’s stolen car after spotting it on an Ohio highway.
While that’s not what the California bill’s creators had in mind when they tackled the issue, they hope memories of the show will raise its profile, said Jay Dickenson, the consultant for a legislative committee who wrote the analysis.
“That episode instantly to me summed up what they were getting at here, though they probably were thinking more about organized crime rather than mail carriers,” Dickenson said. “It’s such a popular show and people remember that episode, so I think it will help.”
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