The government's bid-rigging case against road contractor Leonard Lawson and former state Transportation Secretary Bill Nighbert partially collapsed Tuesday when the judge dismissed two bribery counts and suggested other charges might fall as well.
Prosecutors rested their case after two weeks of trial, and defense attorneys began presenting their evidence.
After prosecutors rested, U.S. District Judge Karl Forester said they failed to prove Lawson arranged for Nighbert to get a $125,000-a-year consulting job with Utility Management Group, or UMG, after Nighbert left the Transportation Cabinet in 2007.
Lawson helped found UMG and owns 19 percent of it. But on the witness stand Monday in Lexington, UMG chief executive Archie Marr said the company made its own decision to hire Nighbert because of his potentially useful political connections.
"I don't see any connection whatsoever between Mr. Lawson" and the UMG job, Forester ruled in court, as Lawson and Nighbert grinned.
The UMG job was an important part of prosecutors' allegation that Lawson rewarded Nighbert for leaking confidential bid estimates in 2006 and 2007 for road projects worth $130 million.
Forester left intact the rest of the case, including charges of theft, conspiracy and obstruction of justice. But the judge suggested that in coming days he might dismiss additional charges, such as conspiracy, that are related to to Lawson's alleged bribery of Nighbert.
In his ruling Tuesday, outside of the jury's hearing, Forester also said he saw no pattern in Lawson's 2006 and 2007 road-building bids to suggest that he made use of bid estimates, if he had them. Bid estimates show what the cabinet is willing to pay for a project; they are not revealed to the public until bids are opened.
Forester's family previously had ties to the road-building industry. As disclosed in a July 2008 Herald-Leader article, Forester's son-in-law is Frankfort lobbyist Sean Cutter, who represented the Kentucky Association of Highway Contractors until last year, after Forester became the judge on the case. Lawson long has been active in the industry organization. His son, Steve Lawson, who is attending the trial, served as an officer and sat on its board of directors.
Following the article, the judge asked lawyers in the case whether they believed he needed to recuse himself. No objections were filed.
Before the prosecution rested Tuesday, defense attorneys continued grilling the lead FBI agent in the case. The lawyers poked at contradictions between evidence that FBI Agent Clay Mason presented to the grand jury in 2008 to get indictments and evidence the jury is now hearing.
For instance, the government alleged in the indictments that Nighbert received $67,251 in checks from UMG. In fact, the checks total $67,301, which is $50 more, said attorney Kent Wicker, who represents Nighbert.
"Did you even check your math, Agent Mason, before you got your indictments in this case?" Wicker asked.
"Apparently not," Mason said.
If the government can make simple errors during its fact-gathering, Wicker said, it's possible the entire prosecution is in error.
Also Tuesday, defense attorney J. Guthrie True, representing Lawson, offered an alternative explanation for why Nighbert and Lawson spoke frequently by telephone during the alleged bid-rigging scheme. On Monday, Mason had showed the jury the men's phone records.
Lawson's wife, Bonnie, became ill and needed surgery in 2007, and Lawson's father died, True said. As a friend, Nighbert kept in touch with the Lawson family during this ordeal, he said.
"It wouldn't surprise you if Bill were checking with Leonard about the condition of his wife, the condition of his father and the passing of his father during this critical time period in 2007?" True asked Mason.
In his opening statement Tuesday afternoon, Wicker said the jury will hear from Bonnie Lawson, who will testify that on dates when her husband allegedly was in Kentucky participating in the bid-rigging scheme, he actually was at her bedside at the Mayo Clinic in Rochester, Minn.
The jury also heard from defense witness Frank Scott, a University of Kentucky economist. The defense team paid Scott to analyze road contractors' bids at the Transportation Cabinet from 2005 to 2008, which covers the period of the alleged bid-rigging scheme.
Scott testified he found nothing unique about bids submitted by Lawson's companies as compared to his competitors.
Lawson submitted many single bids because he owns the asphalt plants in a lot of counties, which gives him an advantage, Scott said. While Lawson won some projects despite submitting bids 10 to 15 percent above the cabinet's estimate for the work, that isn't unusual, Scott said. More than one in five of the cabinet's 1,100 single-bid awards exceeded the estimate by more than 7 percent, which the cabinet tries to use as its cutoff point on bids.
"The Kentucky Transportation Cabinet does not always adhere to its 7-percent rule," Scott said.