Published: September 03, 2008 05:32 pm            

Nighbert, Lawson indicted for bid rigging

Lawson employee also indicted, but not engineer who implicated others

FRANKFORT — After months of speculation and a leaked FBI affidavit, a federal grand jury Wednesday indicted road contractor Leonard Lawson, former Transportation Secretary Bill Nighbert, and Lawson aide Brian Billings on highway contract bid-rigging allegations.

Nighbert, 57, and Lawson, 69, were indicted on six counts of obstruction of justice and conspiracy of theft from government charges while Billings was indicted on three. Jim Rummage, a former Transportation Cabinet engineer who alleges Nighbert and Lawson conspired to provide Lawson internal bid estimates on projects on which Lawson’s companies bid, was not indicted. Rummage apparently taped conversations with Lawson and Billings, portions of which are quoted in the 22-page indictment.

Prosecutors said more indictments may follow. Rummage’s attorney, Marc Murphy of Stites and Harbison in Louisville, said Rummage was not granted immunity, although the indictment quotes Rummage telling Lawson at one point that he was considering cooperating with investigators in exchange for immunity.

Attorneys for Nighbert and Lawson denied their clients are guilty of anything. Nighbert’s attorney, Howard Mann of Corbin, was unhappy to learn of the indictments from reporters before he’d been informed of them – a courtesy sometimes extended to targets of investigations.

The indictments allege Lawson directed Nighbert to secure from Rummage internal bid estimates. By obtaining those in advance, a single contractor might submit a higher bid but stay below the ceiling the cabinet routinely uses to evaluate bids. That ceiling is 7 percent over internal bid estimates.

It also alleges Lawson paid Rummage $5,000 on four separate occasions in exchange for the information and to have used a utilities management company, UMG of Pikeville and Corbin, to reward Nighbert. Nighbert went to work for UMG this year at a salary of $125,000 a year and the cost of a vehicle. The indictment alleges his employment with UMG was a sham to disguise payments from Lawson. No UMG officials are named in the indictments.

The indictments allege that eight times between June 2006 and August 2007 Rummage provided bid estimates either directly to Lawson or through Nighbert. They include quotations from conversations between Lawson and Rummage in which Lawson discusses what attorney Rummage should retain and taking the Fifth Amendment before the grand jury. Rummage’s side of the conversations are not quoted.

In one, Lawson tells Rummage investigators are “scaring the hell out of you is what they’re doing – what you need to do is – is call JW (Lawson’s unnamed attorney, according to the indictment) and, uh, tell him what’s going on . . . and that ain’t gonna cost ya nothing.”

Lawson also said, “But Jim, you need to stick with the truth that you’ve already told everybody,” and says he doesn’t care if investigators are after “me because no way that Nighbert or any of ‘em can ever say I gave ‘em money.”

The indictment alleges Billings, acting on behalf of Lawson, met with Rummage on multiple occasions in restaurant parking lots, making hand signals for Rummage not to speak – presumably because he feared he was being taped – and submitted questions to Rummage in writing.

Lawson’s attorney, Larry Mackey of Barnes and Thornburg of Indianapolis, issued a statement: “We have cooperated with the federal investigation and conducted our own. There is simply no credible evidence that Leonard Lawson violated any laws.”

Mackey and Mann complained that information from the grand jury was improperly leaked to reporters.

“The indictment is evidence of nothing,” Mackey’s statement continued. “In time, evidence will show that Leonard Lawson committed no crime and should have never been charged. Today’s indictment does not excuse the prosecution’s earlier leaks of grand jury information. Worse yet, the earlier leaks have only destroyed Mr. Lawson’s right to a fair trial.”

Mann, Nighbert’s attorney, contacted by phone after the indictments were issued, said he hadn’t then seen them.

“I’ve not been given a copy. I learned about it at lunch when I started getting telephone calls from reporters.”

He later issued a statement saying Nighbert denies any wrongdoing and noting that Rummage had not been indicted but had “admitted lying on multiple occasions and admitted to other illegal activity.”

He said the fact Rummage was not indicted “would indicate that he has made a very good deal to avoid charges.” He said Nighbert will enter a “not-guilty plea and will vigorously defend any and all charges. There will be multiple issues raised with the court, including the manner in which confidential grand jury material became public before any charges were filed.”

Murphy, Rummage’s attorney, said his client “has not been provided immunity. There’s been no discussion in those specific terms with the U.S. Attorney, no promises or agreements.”

Murphy said Rummage continues to cooperate with investigators.

“When it is appropriate, we’ll have negotiations and discussions over Jim’s legal fate,” Murphy said.

The investigation of Lawson, Nighbert and eventually Billings began in February of this year, after Gov. Steve Beshear’s administration took over from that of Gov. Ernie Fletcher, for whom Nighbert worked as Transportation Secretary. It was begun by the cabinet’s Office of Inspector General which turned over information to federal investigators. Beshear and current Transportation Cabinet Secretary Joe Prather have made an issue of cleaning up the cabinet.

“We welcome and have cooperated fully with the federal investigation into the previous administration, recognizing its potential for helping us scrub clean this cabinet,” Beshear said in a statement.

His own Highway Engineer and aide resigned two weeks ago over allegations of a conflict of interest over a road project in Franklin County where the engineer, Gilbert Newman, owns property. Those allegations were produced by an internal cabinet audit.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. He can be reached by e-mail at rellis@cnhi.com.

        

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