The Courier Journal And ALL News Media, Including ALL Bloggers, Should Stay On The "Cesspool" Story. It Is Our Chance To Attempt To CLEAN UP Kentucky.

Below is an update from the Courier-Journal:

FRANKFORT, Ky. -- Federal investigators say they are trying to determine whether road contractor Leonard Lawson has an interest in a Pikeville company that made a $36,050 payment to former Transportation Cabinet Secretary Bill Nighbert.

Utility Management Group, which is known as UMG, made the payment to a Nighbert business early this year, according to an affidavit by FBI Special Agent T. Clay Mason.

The Courier-Journal reported yesterday that, according to the affidavit, Nighbert or Lawson directed former state engineer James Rummage to obtain confidential cabinet cost estimates for road contracts in 2006 and 2007. Such estimates are supposed to be secret until sealed bids for the contracts are opened.

"Investigators believe UMG is the conduit for Lawson to reward Nighbert for his assistance while serving as KTC Secretary," Mason stated in the affidavit, which was obtained Friday from the U.S. District Court clerk's office in London.

The affidavit, dated Aug. 1, was given to obtain court approval of search warrants for UMG and a Corbin accounting firm, Marr, Miller & Myers. The accounting firm's president, Archie Marr, is chief executive officer of UMG.

Federal agents seized documents and computers from UMG, which manages the Mountain Water District in Pike County, and the accounting firm during a search last Monday.

The affidavit says "business records, correspondence and documentation … may reveal that Leonard Lawson is the true owner or otherwise has control of UMG."

Attorneys for Nighbert and Lawson have said their clients did nothing wrong, and Assistant U.S. Attorney Ken Taylor has declined to comment.

Lawson's attorney, Larry Mackey of Indianapolis, declined to comment yesterday when asked if his client had any ties to UMG.

Marr couldn't be reached for comment yesterday.
Lawson's history

Lawson, of Lexington, has been a major road contractor and political contributor in Kentucky for more than two decades. He and his family currently own interests in construction companies that do business in the central and south-central parts of the state.

The cabinet's confidential cost estimates are made so the cabinet can know when bids for road contracts are unreasonably high. For decades the cabinet has tried to follow an unwritten policy of rejecting and rebidding contracts if only one bid is received and it is more than 7 percent over the estimated cost.

Knowing the cost estimate in advance could be valuable to a contractor facing no competing bid because he could bid at least 7 percent over the estimated cost and still be confident of winning the contract.

The affidavit says that "on some occasions Rummage delivered the engineer's estimates to Nighbert, but on others he gave them directly to Lawson. On four of these times, Lawson gave Rummage $5,000 cash, for a total of $20,000."

According to the affidavit, the value of contracts won by Lawson-affiliated companies for which he had the engineer's estimates during 2006-07 was nearly $130 million.

Current Transportation Cabinet officials confirmed in April that the FBI had been reviewing records and interviewing employees in an investigation related to matters that took place during the 2003-07 administration of Gov. Ernie Fletcher.

The affidavit provides the most specific details to date about what investigators are interested in. A federal grand jury has heard witnesses in the case, but no one has been charged.

Rummage, who retired March 31, is cooperating with investigators, his attorney said.

The affidavit says, "Given that Lawson paid Rummage for information that Nighbert directed Rummage to obtain and give to Lawson, investigators believe that Lawson and Nighbert had some arrangement whereby Nighbert would be compensated when he left state government."

Nighbert went to work in January as a member of the staff for the Senate Republican caucus. He stepped down from that job in July.

But the affidavit revealed that Nighbert also got a job with UMG after his tenure as transportation secretary ended last Dec. 10 when Beshear took office.
Checks to Two Bucks LLC

The affidavit states that a subpoena of bank records revealed that on Jan. 7 a check for $36,050 from UMG and payable to a company called "Two Bucks LLC" was deposited in Nighbert's personal account.

The affidavit stated that Marr, UMG's chief executive officer, said Nighbert was "retained to perform consulting" and that "through his political connections, could assist in developing additional business."

According to the affidavit, Marr said the $36,050 check was "an advance for Nighbert to purchase (a) car because the company did not want to purchase the car for liability reasons."

The affidavit stated that "Marr admitted that Nighbert had done no work for UMG."

Nighbert's attorney, Howard Mann, said in a statement to The Courier-Journal Friday, "It is simply not true that Mr. Nighbert performed no work" for UMG.

The affidavit states that a subpoena of UMG also produced copies of three checks of $10,417, each payable to "Two Bucks, LLC" dated in January, February and July.

Mann said Nighbert did not cash the checks while he was employed by the Senate Republicans, and soon after the end of a special legislative session this summer he "resumed" work for UMG.

"Mr. Nighbert has not done anything wrong and is guilty of nothing but trying to work and earn a living," Mann said.

UMG had provided investigators with an employment agreement under which Nighbert was to be paid $125,000 annually, in addition to the car.

But Mason stated in his affidavit that "investigators believe the 'agreement' was generated after this investigation became known to officials."

He noted in the affidavit that the agreement contains no signatures and the investigation "revealed no performance done by Nighbert under the terms of this agreement."

But Mann said in his statement that the agreement, dated Nov. 13, 2007, "is, in fact, legitimate and prepared contemporaneous with lawful business discussions."

The affidavit also says investigators have gathered information linking Lawson to UMG Chief Operating Officer Greg May.
Nighbert's work

Senate President David Williams, the affidavit stated, told investigators that at a recent political function in Frankfort "Nighbert introduced May to Williams using terms that May worked 'with' or 'for' Lawson."

The affidavit states that lawyers representing UMG and its officials "admit their clients have significant relationships with Leonard Lawson."

Williams' office issued a statement yesterday in which he said he has "known Bill Nighbert for over a decade. I have never known him to do anything illegal or unethical. Judgment should be reserved until the end of the judicial process."

May couldn't be reached for comment yesterday.

Mason stated that Newman and current Transportation Secretary Joe Prather told him that "Lawson was trying to build a bridge to the new administration by urging Prather to install Rummage as Chief State Highway Engineer."

Prather rejected the suggestion, according to the affidavit. Mason stated that Prather said "Nighbert told him that to succeed at the job, you have to be friendly with Leonard Lawson."

Prather confirmed yesterday that Nighbert had made that statement about Lawson. However, he said he did not recall Lawson urging him to put Rummage in a specific job.

Prather said Lawson told him simply that "you need to take care of Jim Rummage."

Editor's comment: It appears from ALL indications (including personal knowledge) that Secretary Joe Prather understands that the office of the Chief State Highway Engineer is the office that manages and sustains the "Cesspool", and thus Mr. Prather has refused all PRESSURE to appoint a State Engineer (probably one hand selected by Leonard Lawson).

While Mr. Prather deserves DUE appluse for this move, he needs to understand that the State Highway Engineer is NOT ALONE in stirring the "Cesspool". Many of the ones who enabled this "STINKING" practice are STILL HOLED UP in the Cabinet.

Editor's comment: Check out more on the government's affidavit.

It sure sounds like some folks (and their lawyer(s)) may be in BIG federal trouble.