Kentucky

Bid-rig trial opens with talk of conspirators, cozy relationship

Leonard Lawson, a man born into poverty, toiled for decades to build the road-building empire that made him a wealthy man -— but now a web of conspirators want to bring him down, one of Lawson's defense lawyers said Tuesday.

Lawson, 70, and former Transportation Secretary Bill Nighbert, 58, are on trial in U.S. District Court in Lexington, charged with rigging bids for $130 million in state road projects in 2006 and 2007 during the administration of Gov. Ernie Fletcher.

In his opening statement, Assistant U.S. Attorney Ken Taylor said Lawson, the state's top road contractor, cultivated Nighbert and arranged for him to get "a fake job" at a company Lawson co-owned after Nighbert left state office in late 2007.

"The two of them, Mr. Lawson and Mr. Nighbert, became very cozy," Taylor said.

Lawson attorney J. Guthrie True told the jury in his statement that Transportation Cabinet officials with a grudge against road contractors in general and Lawson in particular worked with an FBI agent and federal prosecutors desperate to build a case around Lawson.

Jim Rummage, the former cabinet engineer who is the key prosecution witness, knew he was suspected of wrongdoing for repeatedly asking for cabinet bid estimates days before road contractors' bids were due, True said.

The estimates reveal what the cabinet is willing to pay for each project, and they are made public only after bids are opened.

With the FBI demanding to know why he got the bid estimates, Rummage initially said they were for internal budgeting use. Then he finally gave them Lawson's name, True said. Rummage told the FBI that Nighbert instructed him at various times to bring the bid estimates to him or to Lawson, who paid him bribes.

"The government was interested in Leonard Lawson," True said. "So he gave them Leonard Lawson."

Once Rummage fingered Lawson and Nighbert, the FBI and federal prosecutors coached him to secretly record conversations with Lawson and get the contractor to incriminate himself, True said. Despite Rummage's attempts, even as his law-enforcement handlers started to get frantic, Lawson never admitted on tape that he bribed Rummage or received bid estimates, True said.

Although eight of the bid estimates that Rummage obtained were for road projects later awarded to Lawson — at a final price of 3 to 8 percent above the bid estimates — several others were for projects that went to different contractors, True said. Simultaneously, Lawson was winning scores of state road projects without any allegations of his getting inside information, True said.

Lawson does cultivate governors and other government officials, as he did Nighbert, who became a friend, but that's just good business, not evidence of corruption, True said.

"If you can't call the governor by name, if you can't call the transportation secretary by name, you won't be in the road construction business for very long," True said. "Leonard Lawson knows the people who are important to his business."

Nighbert's defense team reserved its opening statement until later in the trial.

The prosecution's first witnesses were Mike Hancock, acting transportation secretary under Gov. Steve Beshear, and Chuck Knowles, the cabinet official who in December 2007 blew the whistle after learning that Rummage had repeatedly come downstairs at cabinet headquarters to obtain the bid estimates.

There is no legitimate reason for anyone inside or outside the Transportation Cabinet to see bid estimates other than the few staff engineers who calculate them, Hancock said. In his 30 years at the cabinet, including his time as acting secretary, he's yet to see a bid estimate, he said.

Seeing bid estimates would allow a road contractor to submit a bid that's greater than the state is willing to pay, but not so much greater that it would be rejected, potentially adding a lot of cost to projects, Hancock said.

Unfortunately, about 35 to 40 percent of bids opened at the Transportation Cabinet are single bids, which means there was no competition between contractors, Hancock said. For single bidders, a bid estimate would let them name their price, he said.

"That information is incredibly confidential," Hancock said.

Knowles testified that he learned over a casual lunch in December 2007 about Rummage repeatedly asking for bid estimates. Knowles said he reported that information to his superiors, who assigned it to the cabinet's Office of the Inspector General for investigation. Later, the FBI was summoned.

"It just set off a red flag for me, and I felt it was appropriate to bring it to somebody's attention," Knowles said.

True, Lawson's attorney, attacked Knowles' credibility.

Knowles and other cabinet officials resent road contractors for having too much influence inside the cabinet, True said. Also, the inspector general disliked Nighbert and the Fletcher administration, who had just left office following the 2007 election, because Nighbert had fired Mike Duncan, one of the office's investigators, True said.

The trial resumes Wednesday and is expected to last at least three weeks.

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