More On The "CESSPOOL". Read My Short Comment.

Indicted contractor Leonard Lawson battled his way to the top
By Tom Loftus

West Virginia paving contractor Daron Dean says he learned a decade ago how tough it is to compete with road-construction magnate Leonard Lawson.
Advertisement

It was 1997, and Dean's company had underbid Lawson to win its first contract in Kentucky.

"The first thing he (Lawson) done was he hired my lab technician," Dean said. "And he hired my asphalt plant operator. ... So I had no lab technician and no plant operator."

Dean said his company found replacements and finished the job, but he decided to sell Lawson his plant -- staying in the paving business by purchasing asphalt from Lawson.

"I knew I wasn't going to be able to fight that battle long," he said.

Lawson has been fighting battles in the rough-and-tumble business of Kentucky highway contracting since he began as an entry-level maintenance worker in 1957.

But now he faces his toughest fight -- indictment on six charges of bribery, conspiracy and obstructing justice and a possible long prison sentence.

The federal grand jury indictment issued last week charged that he bribed former Transportation Secretary Bill Nighbert and a cabinet engineer to obtain confidential cost estimates for some state contracts in 2006 and 2007.

Lawson's attorney, Larry Mackey of Indianapolis, said the evidence will show Lawson committed no crimes.

"Mr. Lawson built businesses which served the public and employed hundreds of his fellow Kentuckians," Mackey said in a statement. "He won every contract fair and square because he builds safe and sound roads."

Through a spokesman, Lawson declined to be interviewed for this story.

Lawson has succeeded in the Kentucky road-building industry as perhaps no one else has in recent decades.

He has bought, leased and sold companies, equipment and quarries. And he has established areas of the state -- currently in central and south-central Kentucky -- where he has virtual monopolies. Thus, he faces no competing bids for the vast majority of the paving contracts his companies have sought over the last 20 years.

State bid records show that the five companies owned in part by Lawson and his family won more than $418 million in state highway contracts between Jan. 1, 2006, and Dec. 31, 2007. That's more than any other state road contractor, though Lawson and his family own only part of the companies that won those contracts.

More than half of that amount involved contracts for which the Lawson-affiliated company submitted the only bid.

Along the way, Lawson -- a registered Democrat -- and his family have given hundreds of thousands of dollars in political contributions to candidates of both political parties for offices from county magistrate to governor and U.S. senator. And he's raised hundreds of thousands more.

Lawson, 69, and his wife, Bonnie, live in a mansion on an 877-acre Fayette County farm. Their only child Steve, who heads most of the family contracting interests now, lives with his family in a larger mansion on the farm. The property, both mansions and other buildings are valued at $18.8 million.

Lawson flies in a jet owned by one of the many family companies. He has a home in Naples, Fla.

Former Gov. Paul Patton, who served from 1995 to 2003, said Lawson has been a close friend for many years.

Asked about the qualities that have made Lawson so successful, Patton said, "Leonard is just smart, and he evidently can comprehend the big picture. He doesn't get down into details."

Patton describes Lawson as an extremely shy man who -- despite his prominence as a contractor and political fundraiser -- shuns the public spotlight and likes to spend time with his family and go fishing in Florida during the winters.
Meager beginnings

Lawson has come a long way since his boyhood in the Bell County community of Beverly, where his father was a coal miner.

"Nearly starved," Lawson said as he recalled his youth in a 1994 interview.

"He grew up in a very humble beginning," said Rep. Greg Stumbo, a Prestonsburg Democrat who, like Patton, has received large political contributions from Lawson. "Any money he's made he's acquired it through his own efforts. I don't have anything bad to say about Leonard Lawson."

He graduated from Red Bird Mission School in Bell County, where he met his future wife. And he worked in the late 1950s and early '60s as an hourly laborer for a succession of road contractors in Tennessee and Kentucky.

In the early 1970s Lawson started his own company in Bowling Green but was driven out of business by competition.

He went back east and in 1976 formed Mountain Enterprises, at Flat Lick in Knox County, and began to grow. But in 1983 Mountain Enterprises pleaded guilty in federal court to antitrust violations. The company paid a $150,000 federal fine and $123,000 in damages to the state.

Lawson said in the 1994 interview that the trouble arose from a highway project on U.S. 25E in southeast Kentucky -- a project he was willing to forsake for work in other areas.

"I went into a meeting ... with two or three different people there," he said. "... They were talking about the job, and I told them I didn't have any interest in the job. I wasn't allowed to say that I didn't have any interest in it, wasn't going to bid. It was against the law."

About the same time, Lawson companies began buying and leasing the plants and quarries of other major players in Eastern Kentucky's blacktop industry.
Growth and politics

In the 1994 interview, Lawson attributed his success to doing quality work, being willing to take risks and being at the right place at the right time as older contractors looked to sell out.

"Most of the fathers didn't bring their children on to run the businesses," Lawson said. "A lot of them, when they got unhealthy or died, they got into problems. I was there. I just happened to have the timing right."

The success was obvious. A Courier-Journal analysis in late 1994 found that between December of 1988 and July of 1994 his Mountain Enterprises won 495 state contracts worth $137 million. Mountain was the only bidder for 471 of those contracts worth $127 million.

The growth occurred as Lawson emerged as a major political contributor and fundraiser -- particularly in campaigns for governor.

But Lawson didn't always back winners. For instance, in 1987 Lawson and members of his family and his employees contributed at least $22,000 to the Democratic gubernatorial campaign of then-Lt. Gov. Steve Beshear.

Beshear lost that primary race to Wallace Wilkinson; Lawson and the Mountain Enterprises folks stepped forward with at least $20,000 in contributions for Wilkinson in his successful general election campaign.
Other connections

Lawson's dealings with powerful Frankfort figures have gone beyond political contributions. He invested $60,000 in a real estate partnership peddled by Dr. Bill Collins while Collins' wife, Martha Layne Collins, was governor. During Wilkinson's 1987-91 administration, Lawson bought $207,000 worth of land from a Wilkinson partnership for his new company headquarters in Lexington.

The family charitable foundation gave $35,000 to a veterans' charity headed by Heather French Henry, wife of Steve Henry, who was lieutenant governor during the Patton administration and a 2007 candidate for governor.

Lawson's foundation also gave $25,000 to the effort by former Gov. Ernie Fletcher's wife, Glenna, to renovate the Governor's Mansion.

Patton said that Lawson has given more than $1 million to Pikeville College and that his donations made it possible to build the cancer treatment center in Pikeville that bears Lawson's name. Tax records of the family's charitable foundation dating to 1999 show it gave more than $425,000 to Sayre School, a private independent school in Lexington.

Lawson insisted in the 1994 interview that the huge amounts of political contributions he's made and raised brought him no tangible returns.

"I have never received anything back, other than I could get a phone call returned of if ... I … griped that I wouldn't get my fair share of something -- or our community wasn't getting a fair share," he said.

Lawson was able to gripe directly to Beshear earlier this year.

According to the federal indictment, Lawson told James Rummage, the key witness in the pending bid-tampering case, that he had spoken with Beshear earlier this year. Lawson said that he told the governor about the "mistreatment" of Rummage, then a state engineer, and that Beshear said such mistreatment would stop, according to the indictment.

Beshear later said through spokesman Jay Blanton that he listened to Lawson's complaint over the treatment of his company by the cabinet but did not recall any conversation about Rummage.

In late 2005, the Lawson family sold Mountain Enterprises to an Ireland-based international construction conglomerate. But the family continued to own road construction interests, which have expanded in the last three years.

In 2006, they bought part of the south-central Kentucky paving company Gaddie-Shamrock. Last year the family expanded its interests in the Bluegrass by buying Central Rock Mineral in Lexington.
Competition slowed

And it has made smaller moves. Last year, the Lawson-affiliated Allen Co. leased the asphalt plant of Lincoln County Ready Mix, in Stanford. Bid records show that the move brought to an end the competition Allen faced for state asphalt contracts from Lincoln County Ready Mix in Boyle, Lincoln, Garrard and Madison counties.

Asked why he leased the plant to his competitor, Dwayne Greer of Lincoln County Ready Mix said, "I wasn't making any money."

State bid records for asphalt paving contracts in those counties show how competition drives down the cost of road contracts for the taxpayers. Between Jan. 1, 2006 and when the competition ended in mid-2007, the low bids for 22 asphalt contracts in those four counties averaged 18 percent below the state's cost estimates. Since the competition ended, the average winning bid for 13 contracts in those counties has averaged just 1 percent under state cost estimates.

Editor's comment: Leonard Lawson said this funny line about what his vast political contributions got him: "I have never received anything back".

Yes, that is belly shaking LOL.