Words key to Corporex settlement

Friday, October 16, 1998

The Cincinnati Enquirer

COVINGTON -- Whether Kenton Fiscal Court votes this morning to settle a bitter dispute with the builder of its new courthouse depends more on words than dollars.

Discussions of a possible settlement between the county and the builder, Corporex Cos., continued Thursday in anticipation of a special 8 a.m. fiscal court meeting.

The county is suing Corporex and its chairman, Bill Butler, to recoup an $850,000 settlement paid to the two losing bidders -- Wessels Construction and Development Corp. and Carroll Properties -- over the 1996 competition for courthouse and parking garage construction contracts.

The county accuses Mr. Butler of manipulating the process to win the roughly $36 million projects.

Corporex and Mr. Butler deny any wrongdoing and place blame on the county for failing to follow its own rules. In particular, company attorneys have previously detailed why they believe Deputy Judge-executive George Neack targeted them. Mr. Neack has denied the allegations.

Corporex and Mr. Butler said there was nothing improper about his meeting the night the bids were opened at the home of then Judge-executive Clyde Middleton, where the developer was able to see competitors' bids and later copy them. Corporex and Mr. Butler said the bids were public records available to anyone.

Mr. Middleton resigned at the time of the settlement. In his Feb. 11 resignation speech, he said, "I inadvertently and unintentionally did not comply with the Kenton County procurement code."

County officials contend that by having competitors' proposals, Mr. Butler was able to have an unfair advantage in revising his offering. A grand jury requested by the Kentucky attorney general's office is to meet later this month to examine whether laws were broken in the bidding process. Subpoenas issued to county officials have said that Mr. Middleton is the subject of the investigation.

In addition to leading to the resignation of the county's top official, the dispute has been contentious since the Wessels first complained after the bid awarding in 1996.

Judge-executive Rodney "Biz" Cain, who was appointed to succeed Mr. Middleton, has made a goal of resolving the case so everyone involved can move on. But negotiations between the county and Corporex hadn't gotten very far until now.

Mr. Cain has confirmed that Corporex is increasing its offer, but declines to say how much.

A previous offer of $200,000 was rejected. In rejecting that amount, Mr. Cain said, the county would not settle for anything less than $425,000.

He said again Thursday that $425,000 is the fairest settlement price, since the county and Mr. Butler would bear responsibility equally for what happened.

The key now appears to be how that responsibility is worded in any settlement. That language carries added significance in view of the attorney general's criminal investigation of the bidding process.

"I don't think the money is the focus," Mr. Cain said.

In the initial settlement offering, Corporex wanted the county to state that neither Mr. Butler, Corporex nor its officials did anything wrong in the bidding process.

County officials are reluctant to agree.

"I can't say that," Mr. Cain said. "I wouldn't say that anyway because I don't know. That, to me, would be selling out for money."

Commissioners Steve Arlinghaus and Bernie Moorman wouldn't say whether they would approve a settlement that said Mr. Butler did nothing wrong. But both said they couldn't be limited by the settlement in what they would say during criminal proceedings.

"There's no doubt in my mind that what they (Mr. Butler and Mr. Middleton) did was wrong," Mr. Arlinghaus said, leaving for a jury to decide whether it was criminal.

"I won't perjure myself, nor will the other commissioners," Commissioner Moorman said. "I'm confident of that."

Commissioner Nyoka Johnston declined comment on all questions regarding the case.

Mr. Arlinghaus said the only way anyone will know what really happened between Mr. Butler and Mr. Middleton is for the criminal investigation to be completed. He said he couldn't vote for a settlement that would cut the legs out from under the attorney general's inquiry.

However, both Mr. Moorman and Mr. Arlinghaus said their views could change if Mr. Butler offered the entire $850,000.

Mr. Moorman said he would ask the attorney general at that point to drop the criminal investigation -- if Mr. Butler also paid the county's legal fees -- because the government would be reimbursed completely.

In a related development, two more county officials have been subpoenaed to testify before the grand jury, which is set to meet Oct. 28.

Kenton County Attorney Garry Edmondson and Deputy Judge-executive George Neack said they received subpoenas to testify.

Three officials who previously received subpoenas are: Kenton County Administrator Ralph Bailey, Treasurer Ivan Frye and project manager Rob Thrun.

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Words key to Corporex settlement