Targeted by an investigation into bid-rigging, road contractor Leonard Lawson last year urged a state highway official to stay silent when called before a federal grand jury — or else the official would suffer, Lawson warned.
"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 Jim Rummage, who was the deputy state highway engineer in former Gov. Ernie Fletcher's Transportation Cabinet.
"If you go and say that I did things for you, it just causes me a big problem," Lawson told Rummage in their March 26, 2008, phone conversation, which Rummage taped and gave to the FBI.
Rummage testified Thursday in U.S. District Court in Lexington, and prosecutors played tapes of his conversations during a hearing to determine how much of the taped material can be used as evidence at a trial tentatively set for November. The hearing continues Friday.
Lawson and former Transportation Secretary Bill Nighbert are charged with scheming to rig $130 million in road construction projects by leaking confidential internal estimates to Lawson before he submitted his bids. A Lawson employee, Brian Billings, also is charged with conspiring to cover up the scheme.
The men deny the charges.
For decades, Lawson's companies have 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.
While Nighbert ran the Transportation Cabinet, he and Lawson regularly socialized in Kentucky and Florida — where Lawson has a second home — and flew together on Lawson's airplane from Florida to Mexico, Rummage testified.
In June 2006, Rummage said, he was summoned to Nighbert's office at the Transportation Cabinet. Inside, he found Lawson sitting with the transportation secretary. Nighbert ordered him to get a copy of the cabinet's internal estimate on a road project in south-central Kentucky for which bids were not yet due. Rummage said he complied and gave the estimate to Nighbert.
In the days that followed, Nighbert asked for more estimates, Rummage said. The third time, he said, Nighbert handed the estimate back to him and said "Give it to our friend in Lexington ... Give it to Mr. Lawson."
"At that time, I realized it was inappropriate and illegal," Rummage said.
Thereafter, Rummage said, he delivered several estimates directly to Lawson at his Lexington home and office. On his first visit to the Lawson home, Rummage said, Lawson gave him a gift of frozen fish and then slipped something into his right pants pocket. Rummage said he pulled out a thick roll of $100 bills wrapped in a rubber band — $5,000 in all.
By the time Rummage retired from his state post in August 2007, the contractor had given him three more $5,000 bundles, for a total of $20,000 in bribes, he said.
Rummage said he spent the money rather than withdraw cash from his bank or use his credit card. After opening their bid-rigging investigation, FBI agents became suspicious about Rummage's growing bank account and lack of credit card activity.
In March 2008, Lawson and Nighbert realized they were targets of the investigation, Rummage said. Around that time, he decided to cooperate with the FBI and become a witness, he said.
In conversations recorded by Rummage and played in court Thursday, Lawson and Nighbert urged Rummage to say nothing incriminating to investigators. In one taped conversation, Nighbert said the requests for estimates could be legitimately explained if Rummage was asked about them.
"But the bottom line is, when hell freezes over, they'll never hear it from us," Nighbert said on tape.
In repeated phone calls, Lawson urged Rummage to hire a lawyer of Lawson's choice — one who would advise him to not cooperate with investigators — and Lawson suggested that he would pay for the lawyer.
Lawson also offered possible explanations Rummage could give to investigators for his recent wealth other than bribery, such as a second job or a lifetime of diligent saving.
"Jim, there's a million ways you can show coming up with that money," Lawson said in a March 12, 2008, taped call. "They can't prove cash."
Billings, the Lawson employee, was dispatched to meet with Rummage in his truck in various parking lots, where he scribbled notes conveying Lawson's latest instructions and handed them to Rummage.
In one meeting — which Rummage videotaped and was played Thursday — Billings typed text messages on his cell phone that, Rummage said, reiterated Lawson's desire for Rummage to hire a lawyer of the contractor's choosing.
Whenever Rummage started to say something out loud in response, Billings scowled, shook his head and silently gestured to the cell phone.