The Carthage Chamber of
Commerce will hold its annual banquet this
Friday evening, January 22, in Memorial Hall. The
event will begin with a social hour and silent
auction at 6 p.m. Following dinner at 7, an
awards ceremony is scheduled. The theme for this
years event is Spotlight on Carthage and
will be a semi-formal affair.
Various categories of
recognition will include the Golden Key Awards,
Artist of the Year, Athena, Small Business of the
Year, and Citizen of the Year.
The Chamber Board of Directors
will also recognize members who have contributed
their talent to enhance the past years
success of the Chamber.
"The success of the
Chamber is determined by the volunteer time
available to assist the staff with our
events," says Chamber President John Bode,
"so it is important to say Thank
you and recognize those people who are
willing to give that time and effort."
The event will also honor
retiring Board members and officers and welcome
new members and officers of the Board.
When Do You Ban
Michael Grabell, ProPublica
The Kentucky transportation
department has awarded $24 million in stimulus
contracts to companies associated with a road
contractor who is accused of bribing the previous
state transportation secretary, according to an
audit by the federal Department of
The DOTs internal
watchdog used the case to highlight the
significant delays in the time it takes for the
Federal Highway Administration to suspend or bar
someone from receiving government contracts.
Though the agency is supposed to make such a
decision within 45 days, federal highway
officials waited 10 months after the indictment
to put the men accused of bribery onto the list
of banned contractors.
The combination of lengthy
delays in the contractor suspension process and
the rapid disbursement of billions of stimulus
dollars "creates a perfect storm
for contractors intent on defrauding the
government," the inspector general audit
But the case also highlights a
common tension in the contracting world that is
now getting more attention with the nearly $800
billion stimulus package: What level of evidence
is enough to justify suspending a company from
receiving government contracts?
In the Kentucky case, at trial
this week, prosecutors have alleged that longtime
road contractor Leonard Lawson paid state
employees for confidential engineering estimates
that helped him get a leg up on bidding for
contracts. Lawsons name no longer shows up
on state business records for his previous
companies, but his son remains an officer or on
the board of directors of some of the companies.
The Code of Federal Regulations
states that persons and companies are affiliates
of each other if one has direct or indirect
control over the other. An agency can establish
that a relationship is strong enough to justify
suspension by showing interlocking management or
that a company shares facilities, equipment or
The inspector generals
office said DOT could have suspended the
companies under federal regulations. But DOT said
there wasnt enough evidence that Lawson
owned or controlled the companies any more.
In another case, ProPublica
reported in October that more than $30 million in
stimulus money had gone to defense contractors
suspected of abusing a system to help small
minority firms win government business. The
criminal investigation had been going on for more
than a year before the Air Force suspended them
The Air Force ultimately did go
after numerous companies that it believed to be
tied to a Southern California businessman, even
though the companies were listed under different
names on official business records.
And in a third case, The
Oklahoman newspaper reported last month about a
highway contractor who was suspended from state
road projects after pleading no contest to
conspiring to use unsuitable asphalt material and
intimidating a witness. Within months, his son
formed a new company at the same address and
received $2.7 million in stimulus contracts. The
son told the newspaper that his fathers
case had nothing to do with him and the only
connection was that they had the same last name.
Former DOT general counsel Jeff
Rosen said there is a constant tension in the
federal government between the desire to prevent
fraud and the danger of penalizing someone who
wasnt at fault.
"You dont want to
allow a shell game," he said. "On the
other hand, there are legal requirements for what
are the affiliates and how much control does one
have over another. It really depends on the
In an e-mail, DOT spokesman
Bill Adams said, "If an individual who has
received a suspension action by the Department of
Transportation places another individual in
charge of their company, the department would
review the situation closely to make sure that
the new individual in charge has independent
experience, knowledge of the business and that
there is no influence or control by the
individual under suspension."
He added that there must be no
"common financial interest" between the
new management and the suspended person. Also, a
company could be suspended if the
individuals conduct occurred in connection
with his duties for the company or with the
In the Kentucky case, DOT
investigators notified the Federal Highway
Administration about the indictment in September
2008. The audit does not name the individuals or
the companies that received stimulus contracts,
but the dates and details match those described
in the federal criminal case naming Lawson, his
employee Brian Billings and former Kentucky
Transportation Secretary Bill Nighbert.
According to the indictmen,
Lawson paid $5,000 in cash to one of
Nighberts subordinates on several occasions
in exchange for confidential engineering
estimates that gave him an advantage in bidding
for state road contracts. Prosecutors allege that
after Nighbert left office, Lawson hired him on a
fake consulting contract, paying him $10,000 a
month and providing a vehicle and health
Nighbert, Lawson and Billings
have all pleaded not guilty.
DOT investigators provided the
Federal Highway Administration with a draft
report that listed several companies associated
with the indicted men. The inspector
generals office doesnt elaborate in
the audit on what it means by
"associated." But it said the DOT could
have suspended the companies under federal rules.
Nevertheless, the agency chose
to suspend only the individuals because, in its
view, the available evidence wasnt legally
sufficient, Linda J. Washington, DOT assistant
secretary for administration, wrote in a memo in
response to the report.
The Federal Highway
Administration "did not find any evidence
that any of the suspended individuals owns or
controls companies to which [stimulus] contracts
were awarded," Adams said in an e-mail.
"If such evidence were presented, FHWA would
Chuck Knowles, deputy state
highway engineer, said Lawson used to own or
manage several construction firms that won state
road contracts for years. But those firms that
have now won stimulus contracts no longer list
him as an officer.
spokeswoman Hannah Ferrell said that the state
couldnt legally bar the firms from
receiving the contracts.
"If they had a low bid and
they can perform the work, we cant not
award it to them," she said.
"Theyre not the ones that have any
action against them, the companies
Calls to the companies were not
At the criminal trial this
week, the Louisville Courier-Journal reported,
Lawsons attorney said the case was
motivated by state transportation officials who
had a grudge against Lawson.
Former DOT inspector general
Ken Mead said just being under investigation
isnt necessarily enough to merit suspending
a company from government contracts, as sometimes
a competitor will make an allegation that
doesnt pan out. At the same time, he said,
agencies dont have to award a contract if
they suspect wrongdoing.
The cases often come in shades
of gray, especially when management changes are
"The sins of the father
are not always passed to the son," Mead