In Kentucky, U. S. Attorney's Office "Blows" What Looked Like A "Slam Dunk" Bid Rigging Case Against Leonard Lawson And Bill Nighbert. Read More Below

Lawson, Nighbert not guilty on bid-rigging charges
By John Cheves

A jury on Friday found road contractor Leonard Lawson and former state Transportation Secretary Bill Nighbert not guilty of any crime following a three-week trial on bid-rigging allegations.

The jury acquitted the men on charges related to bribery, theft, conspiracy and obstruction of justice following a day of deliberating and reviewing several pieces of evidence, including audio tapes of four of Lawson's secretly recorded phone calls.

Federal prosecutors presented two weeks of evidence in the case to support their allegations that Nighbert ordered confidential bid estimates leaked to Lawson in 2006 and 2007 for road projects worth $130 million. Bid estimates tell what the cabinet is willing to pay for a project.

But other than one witness whose credibility was strongly questioned by the defense, they had nothing to directly link Nighbert or Lawson to the bid estimates or alleged bribes. They also failed to provide evidence that Lawson's bids on the projects in question were appreciably different from his bids on other projects at the time.

Lawson, 70, sagged in his chair and was embraced by his defense lawyers as the verdict was read. Moments later, he stood to whisper "Thank you" to each of the jurors — nine women and three men — as they passed him to exit the courtroom.

"I'd like to thank God," Steve Lawson, the contractor's son, told reporters outside U.S. District Court in Lexington, standing with his parents. "I'd like to thank this jury for having the courage to find the truth. My father is a good and decent man."

Nighbert, 58, who served as Gov. Ernie Fletcher's transportation secretary from 2005 to 2007, declined to comment.

But Nighbert's lawyer, Howard Mann, said the prosecution's case had too many holes, starting with the testimony of key witness Jim Rummage, a former Transportation Cabinet engineer.

Rummage testified that Nighbert told him to take bid estimates to Lawson, and that Lawson paid him $20,000 in bribes. In early 2008, Rummage said, Nighbert and Lawson pressured him not to cooperate when the cabinet's Office of the Inspector General and the FBI began to investigate the bid estimates.

Rummage's testimony was the only evidence presented to show that Nighbert ordered leaks, that Lawson got bid estimates or that Rummage got $20,000, Mann said. But defense lawyers were able to show inconsistencies in the dates Rummage offered and other details, he said.

Rummage secretly recorded Lawson, Nighbert and others on many occasions, but he never captured them breaking the law or directly discussing the alleged crimes on tape, Mann said.

"His tale was simply too fantastic and unbelievable," Mann said. "We felt that way all along."

Neither Lawson nor Nighbert testified during the trial.

Governor testified

Among those who did testify was Gov. Steve Beshear, who called Lawson in 2008 to assure the contractor that the new Beshear administration would be fair to his companies. During that conversation, Lawson brought up Rummage and asked the governor to look after him.

State Senate President David Williams, R-Burkesville, also testified. He is a friend of Nighbert's and created for him a $70,000-a-year job in the Senate when he left the Transportation Cabinet. Nighbert held that job for seven months in 2008.

In September 2008, when a grand jury indicted Lawson and Nighbert, Beshear issued a public statement calling it "a day of hope" and decrying the "culture of cronyism and corruption" that had infected the Transportation Cabinet.

After Friday's verdict, Beshear issued another statement.

"As you know, this case involves activities that occurred before I became governor," Beshear said. "Our cabinet and employees have fully cooperated with the investigation, and the criminal judicial system has now addressed it. We will continue our efforts to maintain an ethical and transparent government."

While under indictment, Lawson was barred by the U.S. Department of Transportation from participating in road projects involving federal funds, which includes most major projects.

However, state officials said, Lawson legally removed himself from his companies, including L-M Asphalt, Bizzack, Gaddie Shamrock and The Allen Co., several of which were involved in the bid-rigging case. Steve Lawson, the contractor's son and a longtime executive in his father's companies, remains affiliated with the firms.

The Transportation Cabinet continues to award contracts to the Lawson family's companies because Leonard Lawson no longer is connected to them, cabinet spokesman Chuck Wolfe said last week.

Politically influential

Lawson long has been one of Kentucky's top road contractors, as well as one of its wealthiest and most politically influential citizens.

His companies dominated road building in Lexington and across much of the eastern half of Kentucky, often through single-bid contracts. His large campaign donations, friendships and private business deals with elected officials allowed him political clout.

For example, Lawson gave or raised nearly $50,000 for the 1995 election of Gov. Paul Patton. Afterward, he won hundreds of millions of dollars in road contracts from the Patton administration.

In 1983, one of Lawson's companies pleaded guilty in U.S. District Court to felony bid-rigging for privately agreeing with other companies to allocate state highway projects among themselves rather than competitively bid for them. Lawson's company paid a $150,000 fine.

The judge did not allow the jury in the bid-rigging trial to be told about the 1983 guilty plea.

The U.S. Justice Department's Antitrust Division investigated Lawson and other Kentucky road contractors from 1997 to 2001 for possible violations of competitive bidding laws. But it closed that case without charging anyone.

Larry Forgy, the Republican candidate for governor in 1995, attended much of the trial. Forgy said Lawson's money helped sway the gubernatorial election against him, and he believes the millionaire road contractor holds too much power in Kentucky.

"I am grateful to the U.S. attorney's office and the FBI for what they tried to do for the taxpayers of Kentucky in this case," Forgy said. "I can only hope the federal government continues to keep an eye on the bidding at the state highways department."

Case on hold

Nighbert still faces a possible civil penalty before the Executive Branch Ethics Commission in Frankfort for failing to disclose his co-ownership of a company, Double Buck LLC, on his personal finance report while he was transportation secretary in 2007.

The company became an issue in the bid-rigging trial because Nighbert used a variation of its name — "Two Bucks LLC" — to collect payments from Utility Management Group, or UMG, a company that Lawson co-owns.

Prosecutors said the payments were bribes that Lawson used to reward Nighbert. UMG chief executive Archie Marr, who is Lawson's longtime accountant, testified that the company gave Nighbert a $125,000-a-year consulting job and a $34,000 car because his political connections made him an ideal salesman to pitch UMG's services to city and county leaders.

Judge Karl Forester dismissed the UMG part of the case during the trial, ruling that prosecutors failed to show evidence that Lawson was behind UMG's job offer to Nighbert.

If the ethics commission finds Nighbert guilty of failing to disclose his co-ownership of Double Buck, he could face a penalty ranging from a public reprimand to a fine of $5,000, although a smaller fine is more likely, said Dana Nickles, the panel's general counsel.

The ethics case was on hold while the criminal case proceeded, Nickles said. The ethics commission next meets March 19, she said.

Nighbert, a former Williamsburg mayor, was indicted twice as transportation secretary during an investigation of the Fletcher administration's hiring practices. State prosecutors said Nighbert's cabinet promised merit jobs to Republicans and illegally punished Democrats. Fletcher issued a mass pardon for his administration in 2005 that covered Nighbert and other indicted aides.