Saturday, July 22, 2000

Money for roads misspent

Report says funds went for computers

By Robert Anglen
The Cincinnati Enquirer

        Cincinnati engineers claimed they were buying asphalt for street repair projects, but a city investigation has found they were getting computers, fax machines, modems and other office equipment.

        Engineers also bought $83,344 in additional equipment through city contractors, who got the merchandise and then billed it back to the city as a job cost with markups as high as 15 percent.

        “We will take up discipline as appropriate,” City Manager John Shirey said Friday, adding that the case is being reviewed by the Hamilton County prosecutor and the city solicitor “for prosecution and civil recovery.”

        He said the total amount of money involved is unknown. He also doesn't know how widespread the problem was.

        In a report released Friday, the city's Office of Municipal Investigations noted that certain employees were involved in submitting misleading vouchers for payment, but investigators “have reason to believe that other engineers and inspectors acted similarly.”

        They say nothing was found to indicate an attempt to defraud the city because most of the items purchased “were necessary for the construction projects.”

        Investigators also found that repairs to the street where former Mayor Dwight Tillery lives in Bond Hill were “reprioritized to ASAP status” in 1997 after Mr. Tillery contacted then-Public Works Director John Hammer.

        Mr. Tillery said Friday that he never used his influence for any repairs. He

        acknowledged calling the Public Works Department about the street work, but said it was because his office received several resident complaints.

        “It's clear that people in public works have done bad things,” he said. “Now they're trying to deflect it on me.”

        That is the same thing Councilwoman Minette Cooper said Friday when she called reporters only an hour after Mr. Tillery's interview.

        “The real issue is being deflected,” she said, adding that she was very disappointed with the way investigators handled this report. “I don't care about Dwight. This suggests that, as a council member, we can't live or work on a street that's being repaired.”

        The city's investigation was triggered by a 1999 probe of Barrett Paving, a contractor accused of billing the city for asphalt it never used. While looking into that, investigators from OMI and the Hamilton County prosecutor's office said several city employees came forward, charging improper contracts.

        Employees also accused Councilman Charlie Winburn of receiving favorable treatment to correct a plumbing problem at his residence, but investigators found no evidence to substantiate that claim.

        For its investigation of the contracts, nine projects were reviewed since 1993.

        “The investigation encountered missing documents, altered documents and the failure to inventory purchased items” and “revealed years of poor record keeping by the city engineering division,” the report said.

        It outlined charges that city contractors would inflate the cost of asphalt needed for a particular project in order to purchase equipment that city officials wanted. The cost of those items was also marked up to cover the contractor for making the purchase, according to the report.

        In one case, the cost of four thermometers needed for a project were converted into cubic yards of asphalt. But the cost also included a $202 markup for the contract.

        That same markup was used when city employees bought $83,344 worth of items not related to the projects to which they were charged. For instance, a $5,189 computer charged to a 1996 project actually cost taxpayers $5,448 because of a 5 percent markup that went to the contractor.

        Mr. Shirey said only two contractors — Barrett Paving and Ray Prus and Sons — were reviewed by investigators.

        Investigators put most of the blame on Jay Gala, the city's principal engineer for construction management since 1986. They are recommending corrective action, accusing him of failing to supervise and monitor contracts.

        In a statement to investigators, Mr. Gala said he was unaware of the purchasing scheme.

        Mr. Gala is one of three supervisors put on paid administrative leave in January for failing to catch more than eight years of fabricated road reports that caused $15 million to be diverted to other projects.

        In annual reports from 1991 to 1997, city engineers reported that 818 lane-miles of roads were repaired at a cost of about $65 million. But in an internal audit found 460 lane miles had actually been completed for about $50.5 million. The upshot is that 60 percent of city streets are not in good condition.

        Although two of the supervisors were allowed to return to work last month, Mr. Gala was not.

        City Transportation Director John Deatrick, who took over as head of the department last year, said many controls are being put in place to ensure this doesn't happen again.

        “We are looking for correction,” he said Friday. “We want a swift, fair resolution of any problems raised in the report. We want justice to be done and move on.”


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