Published: September 03, 2008 07:58 pm            

Nighbert indicted

Indictments come less than a month after release of FBI affidavit

By Brad Hicks | Staff Writer

A federal grand jury indicted former Williamsburg mayor and former Kentucky Transportation Cabinet Secretary Bill Nighbert, road contractor Leonard Lawson and one of Lawson’s employees on Wednesday for their alleged involvement in a conspiracy to help Lawson win state road projects.

Nighbert, 57, and Lawson, 69, were each indicted on six counts, including theft from a government agency, bribery and obstruction of justice. Lawson’s employee, 37-year-old Brian Russell Billings, was indicted on three counts for his alleged involvement in a scheme to leak confidential KTC project cost estimates to Lawson’s companies.

The indictments come less than a month after an FBI affidavit detailing the ongoing investigation was released to the media.

The indictments allege that on eight different occasions between June 2006 and August 2007, either Nighbert, who was then transportation secretary, or Lawson directed then-deputy chief state highway engineer James Rummage to obtain confidential cost estimates for Lawson.

Before letting road contracts out for bid, KTC has an engineer prepare a cost estimate of the project — a figure kept confidential until after sealed bids from contractors are opened. By obtaining that cost estimate in advance, a single contractor might submit a higher bid but stay below the ceiling the cabinet routinely uses to evaluate bids. That ceiling is 7 percent over internal bid estimates.

“It was the object of the conspiracy to provide Leonard V. Lawson with confidential KTC engineer’s estimates for prospective road contracts for which Leonard V. Lawson anticipated being the sole bidder, for his use in formulating his bid on those projects, and to compensate Charles William ‘Bill Nighbert and James Rummage for their assistance in so doing,” the indictment states.

The indictments allege that on eight occasions between June 2006 and August 2007, Rummage provided bid estimates either directly to Lawson or through Nighbert. In November 2006, Nighbert also allegedly told Rummage to obtain the engineer’s estimates on unrelated projects in an effort to “camouflage” the link to Lawson.

The confidential engineer’s estimates allegedly helped Lawson win about 10 road contracts worth approximately $130 million.

Lawson also allegedly paid Rummage $5,000 on four separate occasions in return for obtaining the estimates. He also allegedly paid Nighbert for his help with more than $67,000 “disguised” as part of an employment contract with a utility management company, UMG. No officials with UMG — which has offices in Corbin and Pikeville — are named in the indictments.

THE INVESTIGATION

The Office of the Inspector General of the KTC began an investigation into the bid-rigging allegations in January. In a Jan. 25 interview with the OIG, Rummage allegedly falsely reported to an investigator that he provided the estimates to Nighbert only for the budget purposes and denied releasing these estimates to any entity outside the KTC.

In February, the Federal Bureau of Investigations began an investigation and also interviewed Rummage. According to the indictment, Rummage again stated the estimates were only provided to Nighbert and were not released outside the KTC.

But in March, Rummage hired a lawyer and recanted his earlier statements, admitting he had illegally given out the engineer’s estimates to both Nighbert and Lawson in exchange for payment.

According to the indictment, Nighbert met with Rummage in January at a restaurant parking lot in Lexington to discuss what Rummage should say during the OIG interview. Nighbert allegedly directed Rummage to tell investigators he had obtained the estimates so Nighbert could determine the economic feasibility of the projects.

The indictment alleges that several times in March, Billings told Rummage in writing how to handle the ongoing investigation and encouraged him to drop his current attorney and use one suggested by Lawson.

The indictment also quotes recorded phone conversations between Lawson and Rummage in which Lawson allegedly attempts to dissuade Rummage from working with investigators and take on a new attorney.

“Jim, I can’t tell you what to do, but you need to take ... the attorney that ... it’s against the law for me to tell ya what to do after this has come up ... I can just tell ya what Brian told you ... I mean the one (defense lawyer) that you got, uh, if you listen to him, (about cooperating) you know, it’s — everybody’s got a problem. ... And, there ain’t no problem the other way (using an attorney selected by Lawson),” the indictment quotes Lawson as saying to Rummage in March.

At one point, Lawson tells Rummage investigators are “scaring the hell out of you is what they’re doing – what you need to do is – is call JW (Lawson’s unnamed attorney, according to the indictment) and, uh, tell him what’s going on ... and that ain’t gonna cost ya nothing.”

Lawson also allegedly encouraged Rummage to take the fifth amendment when before the grand jury: “You walk in — you walk in (grand jury) and a — and you say, I mean if — if you take the Fifth ... I mean that’s the end of the story.”

THE RESPONSE

Nighbert’s attorney, Howard Mann of Corbin, said he had not received or had an opportunity to review the 22-page indictment when contacted by media, but he said he was frustrated that Rummage had not been indicted as well.

“My office was informed by the media during lunch hour today that certain indictments had been rendered from the grand jury sitting in Lexington,” Mann wrote. “Without having seen the indictment, it is presumed that it relates to the allegations which were leaked last month and have been much publicized in the press.”

Mann stated that Rummage, prosecutors’ chief witness, has “admitted lying on multiple occasions and admitted to other illegal activity” and questioned a possible deal between Rummage and prosecutors.

Rummage’s portions of recorded conversations are not part of the indictment record. His attorney Marc Murphy said Rummage was not granted immunity, although the indictment quotes Rummage telling Lawson at one point that he was considering cooperating with investigators in exchange for immunity.

“When it is appropriate, we’ll have negotiations and discussions over Jim’s legal fate,” Murphy said.

Mann said his client will enter a not-guilty plea in court.

“There will certainly be multiple issues raised with the court,” he wrote, “including the manner in which confidential grand jury material became public before any charges were filed.”

Larry Mackey, attorney for Leonard Lawson, could not be reached for comment via telephone, but also issued a statement: “We have cooperated with the federal investigation and conducted our own. There is simply no credible evidence that Leonard Lawson violated any laws. Mr. Lawson built businesses which served the public and employed hundreds of his fellow Kentuckians. He won every contract fair and square and because he builds safe and sound roads. The indictment is evidence of nothing. In time, evidence will show that Leonard Lawson committed no crime and should have never been charged. Today’s indictment does not excuse the prosecution’s earlier leaks of grand jury information. Worse yet, the earlier leaks have only destroyed Mr. Lawson’s right to a fair trial.”

The U.S. Attorney’s Office was unable to comment on the case but has indicated more indictments may follow.

“For too long, the important work of the Transportation Cabinet – and of its thousands of conscientious employees – has been tainted by misguided leadership and a culture of cronyism and corruption,” Gov. Steve Beshear stated in a release. “Eliminating this culture, a culture we inherited, has been one of our chief goals – and biggest challenges. We welcome and have cooperated fully with this federal investigation into the previous administration, recognizing its potential for helping us scrub clean this cabinet.”

CNHI writer Ronnie Ellis contributed to this story.

        

• Click to discuss this story with other readers on our forums.