9 road deals linked to Lawson

13 contracts sought by U.S. grand jury

jbrammer@herald-leader.comAugust 22, 2008 

FRANKFORT — Nine of the 13 state road contracts subpoenaed by a federal grand jury investigating alleged bid-rigging in the Transportation Cabinet have ties to politically influential road contractor Leonard Lawson.

Those contracts, awarded in 2006 and 2007, total $129,969,573, the same amount identified in an earlier FBI affidavit that alleged Lawson bribed a state highway engineer to get confidential cost estimates of road projects.

The FBI affidavit, filed Aug. 8 in U.S. District Court in London, said ”the total value of contracts won by Lawson affiliated companies for which he had the KTC (Kentucky Transportation Cabinet) engineer’s estimates during 2006-2007 was approximately $129,969,000.“

The sworn statement also said state highway engineer James Rummage was paid $20,000 in cash by Lawson and sometimes gave the secret estimates to then-Transportation Secretary Bill Nighbert.

Lawson might have tried to repay Nighbert by funneling money through an Eastern Kentucky corporation, the affidavit said.

The internal cabinet estimates could help a contractor maximize profits, especially if the contractor were the sole bidder. The cabinet typically rejects bids that are more than 7 percent greater than its own estimate.

Each of the nine subpoenaed contracts related to Lawson were single-bid contracts, but the bids are not uniformly 7 percent above the cabinet’s own estimates. They range from 3.7 percent below the cabinet’s estimated costs to 8.5 percent above.

An attorney for Nighbert has said his client has done nothing wrong. Lawson’s lawyer has questioned why information about the investigation has been leaked to the public, and stressed that Lawson should be presumed innocent.

Rummage is assisting federal investigators. No charges have been filed in the case.

A federal grand jury subpoenaed records of the 13 state road contracts on Aug. 7.

Chuck Wolfe, a spokesman for the Transportation Cabinet, said Thursday that ”the cabinet does not know why these contracts were selected.“

The two-page subpoena asks for ”any and all itemized engineer’s estimates and copies of all bids submitted“ for the contracts.

The Herald-Leader found through an open records request that bids by Lawson-related companies were exactly 7 percent higher than the cabinet’s estimates on five contracts in 2006 and 2007.

State transportation records also show that Lawson’s companies bid between 6 percent and 7 percent higher on 11 contracts.

Of the nine Lawson-related contracts subpoenaed by the grand jury, five were won by Gaddie-Shamrock LLC of Columbia, two by L-M Asphalt Partners LTD of Lexington, one by Bizzack Construction LLC of Lexington and one by Central Rock JV Nally & Gibson of Lexington.

Other companies’ contracts subpoenaed were Elmo Greer & Sons of London, Faulkner Construction of Louisville, Kay & Kay Contracting of London and Hall Contracting of Louisville.

What the grand jury wanted

Here is a list of contracts subpoenaed. Each item includes the date bids were let, the winning company, the amount awarded, the number of bidders, percentage of variance from the cabinet’s internal estimate and a description of the project.

June 23, 2006: Gaddie-Shamrock LLC. $6,608,473.58. One bidder. 5.4 percent above estimated cost. Various routes in Adair, Clinton, Cumberland and Russell counties.

July 21, 2006: Elmo Greer & Sons. $10,863,119.73. One bidder. 6.8 percent above estimated cost. Work on I-75 in Laurel County.

July 21, 2006: L-M Asphalt Partners LTD. $25,070,242.98. One bidder. 3.2 percent above estimated cost. Work on I-75 in Fayette County.

Aug. 25, 2006: Kay & Kay Contracting. $16,894,042. Two bidders. 5.2 percent below estimated cost. Work on I-75 in Laurel County.

Oct. 27, 2006: Gaddie-Shamrock LLC. $3,576,655.05. One bidder. 8.5 percent above estimated cost. Work on Louie B. Nunn Parkway in Adair County.

Nov. 17, 2006: Faulkner Construction. $4,413,700. Seven bidders. 30.5 percent below estimated cost. Work on bridge in Jefferson County.

Nov. 17, 2006: Central Rock JV Nally & Gibson. $49,880,219.02 awarded. One bidder. 3.7 percent below estimated cost. Work on bridge on I-75 in Scott County.

Nov. 17, 2006: Hall Contracting. $1.6 million. Three bidders. 2.5 percent above estimated cost. Work on weigh station on I-75 and I-71 rest room facilities for Kenton and Boone counties.

Dec. 15, 2006: Gaddie-Shamrock LLC. $3,772,804.34. One bidder. 5.8 percent above estimated cost. Work on Louie B. Nunn Parkway in Adair County.

Dec. 15, 2006: Gaddie-Shamrock LLC. $5,629,050.64. One bidder. 7.2 percent above estimated cost. Work on Louie B. Nunn Parkway in Adair and Russell counties.

March 23, 2007: L-M Asphalt Partners LTD. $14,067,638.48. One bidder. 7.9 percent above estimated cost. Pavement work on I-75 in Fayette County.

March 23, 2007: Gaddie-Shamrock LLC. $2,910,926.58. One bidder. 5.6 percent above estimated cost. Work on Kentucky 55 in Adair County.

Sept. 7, 2007: Bizzack Construction LLC. $18,453,552.91. One bidder. 3.3 percent above estimated cost. Work on I-64 near Catlettsburg.

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