COLUMBUS - A top-ranking construction company executive has accused the governor's brother, Paul Voinovich, of attempted bid-rigging and padding company payroll records in connection with a Youngstown-area sanitary district project, according to state audit records obtained by The Enquirer.
A spokesman for Paul Voinovich denied any wrongdoing and dismissed the allegations as the comments of a "disgruntled employee."
The latest allegations follow Monday's release of a massive state audit of the Mahoning Valley Sanitary District (MVSD), which provides drinking water for Youngstown and nearby Niles. In the report, State Auditor Jim Petro called for repayment of nearly $2.7 million spent by past and present MVSD employees and contractors.
He has forwarded his findings to the Youngstown office of the FBI, Ohio Ethics Commission and prosecutors in Mahoning and Trumbull counties.
MVSD is the only sanitary district in the state with the authority to sell bonds to finance construction projects. It placed sole authority for awarding multimillion-dollar contracts in the hands of two people: Youngstown attorney Edward Flask and Edward DeJute of Niles. Both have been fired as a result of the controversy.
The audit accuses the pair of abusing their authority and accuses Mr. Flask of approving a series of contracts, then receiving $1.9 million worth of legal or consulting contracts from many of the same firms he hired.
The audit also questions the practices of some of Ohio's most prominent companies, including the V Group, an architectural and construction firm owned by Gov. George Voinovich's brother, Paul. The audit alleges that the V Group cleared $2 million - an 80 percent profit - for services not yet performed.
No findings have been issued against the V Group because the firm did not receive public money directly. Instead, it received the funds indirectly, by subcontracting with Gilbane Building Co. of Rhode Island. Mr. Petro is seeking repayment of $1.9 million from Gilbane.
Work papers that accompany the audit portray Paul Voinovich and other V Group officials as close associates of the MVSD officials who are among the main targets of the probe.
Hiring questioned
For example, Bill DiMarino, a former project executive of the Gilbane firm, said that on one occasion, Paul Voinovich told him to recommend the hiring of a subcontractor who had not submitted the lowest bid, according to interview notes taken by state auditors.
Mr. DiMarino said he objected, noting that another company offered a better deal. Rather than spend the public's money wisely, Paul Voinovich and Mr. DeJute, then-MVSD director, suggested that the low bidder be persuaded to withdraw. They said the contract "had to go" to the higher-priced firm, audit records state.
"DiMarino informed the V Group people that he didn't like what was going on and that he wouldn't be a party to rigging bids," according to the interview notes.
The higher-priced firm won the contract.
An FBI agent was present for the interview, which took place in Florida, where Mr. DiMarino now lives, the records state.
During the interview, Mr. DiMarino also accused the V Group of inflating invoices. "At the end of 1992, he rejected a couple of the V Group pay requests because some of the employees listed on the pay requests didn't provide the services," the interview notes state.
Paul Voinovich was unavailable for comment.
V Group Vice President Frank Fela said MVSD work was competitively bid and noted that the audit report makes no mention of allegations of bid rigging.
"No one in this company has been a party to rigging bids," he said. "I think the fact that there's been a whole lot of statements made, but I don't see anything in the audit itself, would substantiate that position. So I think you have the comments . . . of a disgruntled employee."
Mr. Petro, however, called the allegations "serious" and said auditors thought the V Group was overpaid.
Mr. Fela contends that the firm's profit is exaggerated but he declined to disclose accurate numbers.
A Gilbane spokeswoman said she could not comment on Mr. DiMarino's allegations but said the firm is challenging the audit findings. During his interview with investigators, Mr. DiMarino said Gilbane officials fired him in March 1993 and he thinks the firing "was related to his situations with Paul Voinovich and DeJute." His dismissal came several weeks after the company had awarded him a bonus and after he led all project executives in the company in fees generated in the previous year, interview notes states. He could not be reached for comment and his attorney declined to comment.
Ties to governor
Gilbane executives also have close business and political ties to George Voinovich. Top-ranking officials in the firm have donated at least $21,000 to his campaigns for governor, and the firm has received at least three major state construction contracts. The contracts were awarded in 1994, 1995 and 1996, and fell under the auspices of then-chief of staff Paul Mifsud, who used to work for the V Group.
For more than a year, Ohio Inspector General Richard Ward has been reviewing state building contracts. The probe followed a series of Enquirer articles that detailed allegations of contract steering involving Mr. Mifsud and other Voinovich appointees. The governor has denied any wrongdoing and insists that state contracts have been awarded properly.
Mr. Mifsud, meanwhile, awaits trial on multiple felony charges for allegedly trying to cover up a $100,000 deal on home remodeling work performed by a state contractor. He has pleaded not guilty.
