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Beshear, Williams could take stand at bid-rig trial

One of Kentucky's highest-profile public corruption trials in decades starts this week in U.S. District Court in Lexington.

Jury selection is scheduled for Monday in the bid-tampering trial of road contractor Leonard Lawson and former state Transportation Secretary Bill Nighbert. The trial is expected to last at least three weeks.

Lawson and Nighbert's political connections are so far-reaching that Democratic Gov. Steve Beshear and Republican state Senate President David Williams, neither of whom are accused of wrongdoing, are prepared to take the witness stand to discuss the defendants.

Federal prosecutors say Nighbert and Lawson rigged $130 million in state road projects in 2006 and 2007 during the tenure of Republican Gov. Ernie Fletcher. They say Nighbert arranged for confidential Transportation Cabinet bid estimates to be leaked to Lawson, which allowed him to submit profitable bids that would not be disqualified for being too high.

It's rare for a cabinet secretary — someone chosen by the governor to run a major state agency — to stand trial on charges that could land him in prison. The last one is believed to be L. Rogers Wells Jr., finance secretary 20 years ago under Gov. Wallace Wilkinson. Wells was charged with participating in a kickback scheme with a lottery executive. The judge in that case ordered an acquittal.

"My client is presumed innocent, and we have faith in the system," Nighbert's attorney, Howard Mann of Corbin, said Friday. "We wish it hadn't come to this."

Lawson, a major campaign donor to both political parties, has enjoyed influence and friendships for decades with county judges, state legislators, governors and congressmen.

"We trust the jury will do its job," said Lawson's attorney, Larry Mackey of Indianapolis.

For those Kentuckians who already believe most of their politicians are corrupt, this trial could be further embittering, said Stephen Voss, a University of Kentucky political scientist.

"These high-profile cases really color the public's perception of how the system operates, and that's unfortunate," Voss said. "People lose faith in their government."

The prosecution's chief witness is Jim Rummage, who served as Nighbert's deputy state highway engineer. Rummage says Nighbert told him to deliver the bid estimates, sometimes in exchange for payments from Lawson, including $20,000 in cash and some frozen fish.

When Nighbert left his post in 2007 at the end of Fletcher's administration, a company that Lawson co-owns, Utility Management Group, gave him a "consulting" position that came with a $125,000-a-year salary, a $34,500 Toyota Avalon and medical insurance for him and his wife, prosecutors say.

Simultaneously, Nighbert worked as the $70,000-a-year transportation adviser to state Senate President David Williams, R-Burkesville, helping lawmakers craft the state road plan.

Williams could be asked to testify at the trial about his employment of Nighbert. Beshear could be asked to testify because he said he spoke to Lawson in 2008 when the contractor complained about how the state was treating his companies.

Spokespeople for Beshear and Williams last week said the men are ready to testify but have not been given a date to appear in court.

'Impaired' lead witness

Lawson and Nighbert have pleaded not guilty. In hearings and court filings, their lawyers have attacked Rummage's credibility.

In his initial interviews with the Transportation Cabinet's inspector general, who was investigating a tip, Rummage denied participating in a bid-rigging scheme. Later, Rummage changed his story and accused Nighbert and Lawson of ensnaring him in a crime.

"At the outset, the court notes that Rummage's credibility is severely impaired," U.S. District Judge Karl Forester wrote in an October ruling on what evidence could be introduced at trial. Rummage "has come forward with important parts of his current story very late in the game."

Rummage ultimately told the FBI he would cooperate as a witness. Lawson and Nighbert were indicted in September 2008 on charges including bribery and obstruction of justice.

Although Rummage secretly tape-recorded conversations with Lawson in which the emerging criminal investigation was discussed, he did not record the alleged encounters in which he gave Lawson bid estimates.

The taped conversations capture Lawson instructing Rummage to hire certain defense lawyers that Lawson favored and to remain silent in front of the grand jury.

"Jim, if you want to have a good future, then it's still there. But if you go the other way, you're in bad shape," Lawson told Rummage in a March 26, 2008, phone call, which Rummage taped and gave to the FBI. "If you go and say that I did things for you, it just causes me a big problem."

The defendants

Lawson, 70, long has been one of Kentucky's top road contractors, as well as one of its wealthiest and most politically influential citizens.

His companies dominated Central and Eastern Kentucky road building as he acquired political clout through heavy campaign donations, friendships and private business deals with the state's elected officials.

For example, Lawson gave or raised nearly $50,000 for the 1995 election of Democratic Gov. Paul Patton; afterward, he won hundreds of millions of dollars in road contracts from the Patton administration.

In 1983, one of Lawson's companies pleaded guilty in U.S. District Court to felony bid-rigging for privately agreeing with other companies to allocate state highway projects among themselves rather than competitively bid for them. Lawson's company paid a $150,000 fine.

The U.S. Justice Department's Antitrust Division investigated Lawson and other Kentucky road contractors from 1997 to 2001 for possible violations of competitive bidding laws. But it closed that case without charging anyone.

Nighbert, 58, is a former mayor of Williamsburg in Whitley County.

Taking over the Transportation Cabinet in 2005, Nighbert pledged it would stop being a source of ethics scandals.

"We're not going to allow some of the problems seen in the past," Nighbert said.

However, Nighbert was indicted twice during an investigation of hiring practices. State prosecutors said his cabinet promised merit jobs for Republicans and illegally punished Democratic employees. Fletcher issued a mass pardon for his administration that covered Nighbert and other aides facing criminal charges.

(Forester, the judge in the bid-rigging trial, ruled Friday prosecutors cannot mention Nighbert's indictments in the state-hiring case because it could unduly prejudice jurors against him.)

Documents released during the hiring investigation showed that road contractors, including Lawson, were allowed to weigh in on key cabinet decisions, such as the promotion of district engineers who oversee road projects.

In 2006, Nighbert and Fletcher invited road contractors to a Governor's Mansion luncheon and assured them Kentucky would spend more than $2 billion on road projects over the next two years. Then they hit up the contractors for donations to Fletcher's re-election campaign.

In the bid-rigging case, prosecutors say Nighbert and Lawson spoke often during and after the alleged conspiracy. Phone records show the men calling each other hundreds of times in 2007, sometimes using their home phones or private cell phones and late at night, according to court filings.

In a recent court filing, defense lawyers said Lawson and Nighbert are personal friends, not just one-time professional associates.