Highway engineer, aide resign

Conflict of interest is at issue

ralessi@herald-leader.comAugust 23, 2008 

The state’s chief highway engineer, O. Gilbert Newman, and one of his aides have resigned after questions surfaced about their involvement in the planned widening of a road adjacent to property Newman owns.

Transportation Cabinet Secretary Joseph Prather accepted the resignations Friday of Newman and Bill Gulick, executive adviser to the Office of Project Development.

The cabinet’s internal auditor concluded that both had created a potential conflict of interest by overseeing the planned widening of a two-mile stretch of U.S. 421 in Franklin County.

Newman, whom Gov. Steve Beshear’s administration hired in December, is a partner in CHN Developers, LLC in Frankfort, according to documents filed with the Secretary of State’s office. That holding company owns three tracts of farm land — totaling 162 acres — at 980 Taylor Road along U.S. 421, according to Franklin County property records.

On Monday, highway officials withdrew the project from its scheduled Aug. 29 bid letting.

Gulick should not have worked on the road-widening project because his former employer, WMB, Inc., was designing the road, the cabinet’s auditor concluded.

Their resignations come at a time when the Transportation Cabinet is under scrutiny by the Federal Bureau of Investigation. That probe is focused on allegations that former cabinet officials in the administration of former Gov. Ernie Fletcher traded confidential road project estimates in exchange for cash.

Prather said the disclosure of Newman and Gulick’s potential conflicts of interest was unrelated to the FBI probe.

”While I respect the work done by Mr. Newman and Mr. Gulick and have no reason to question their intent in this matter, even the perception of a potential conflict must be avoided, if we are to maintain the trust of the people we serve,“ Prather said in a statement.

Newman had disclosed his ownership of the property when he joined the administration but still participated in overseeing the road widening project, including signing off on a change order, according to the cabinet.

Newman didn’t return a phone message left by the Herald-Leader at his home. But in his resignation letter, Newman wrote that he ”may have erred“ by signing the engineering consultant services change order earlier this month.

”The change order was presented to me for routine signature under the recommendations and signatures of two others,“ Newman wrote in his letter, dated Aug. 22. ”Contrary to my attempt to completely remove myself from any involvement in the project, I signed the change order without reviewing the details.

”I regret any embarrassment this may cause to an administration that is attempting to make the Transportation Cabinet transparent and forthright,“ he wrote.

Newman’s letter said he would ”welcome any investigation“ into the matter. Cabinet spokesman Chuck Wolfe confirmed that Prather plans to ask the Executive Branch Ethics Commission next week to review the issue.

Both Newman and Gulick’s resignations are effective at the end of August, according to their letters. Prather tapped his chief of staff, Mike Hancock, to serve as interim state highway engineer until the position can be filled.

Beshear, who has repeatedly pledged to run a clean Transportation Cabinet, issued a statement saying the news of the forced resignations ”demonstrates clearly that we mean what we say.“

”We must hold ourselves accountable to a standard of conduct that is more stringent than ever before,“ his statement said.

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