In an interview following the 5-0 vote, Supervisor Rich Schaffer said town officials suspected key employees of Jody Enterprises of lying or withholding information during bidding in late spring and during a special hearing last week.
Additionally, after the arrest of two employees and revelations that others had previously undisclosed interests in outside businesses, Schaffer said, officials questioned whether the company was prepared to haul garbage for 43,000 town households.
"I don't think as town supervisor I should be the one locking the town into a long-term relationship with people who clearly at this point don't have the wherewithal to go forward," he said. "We seriously question their integrity as to how they presented themselves to the town at the outset."
In August, two key Jody employees, William Stegemann and Michael Dalessandro, were charged with grand larceny in an alleged scheme to defraud Smithtown of $200,000 in recycling revenue. The men pleaded not guilty, and company officials said they were unaware of the alleged thefts.
Schaffer said Monday that the town's vetting was adequate. "If people either hide information from you or don't present you with correct information, you can only vet so far," he said.
Vincent Messina Jr., an attorney for the Jody Enterprises subsidiary that would have handled the Babylon contract, said Monday that he would "be reviewing the resolution with my clients. They will be evaluating legal options."
Since the district attorney's office began its investigation, many of the company's municipal clients have begun probes of their own.
Smithtown may revoke a contract that pays $2.15 million annually and sue the company for losses. Officials in Brookhaven, Huntington and Islip say they are reviewing the company's work.
Babylon officials hired private investigators to take surveillance video, which they played for company executives during a special hearing last week. Officials say it showed Dalessandro working at the company, contrary to sworn statements by executives. The company later explained in an unsigned statement that Dalessandro had been volunteering his time.
Babylon has scheduled a special hearing today at noon at town hall to address which company will collect garbage starting Oct. 1, when the current contract expires.