By ERIC EYRE
Charleston Gazette-Mail
CHARLESTON, W.Va. — In the six months since a Putnam County firm and its owner admitted taking part in a kickback scheme with Division of Highways engineers, the state has paid the contractor nearly $800,000, records show.
Bayliss & Ramey, an electrical contracting firm with a statewide contract to repair traffic signals, acknowledged that it conspired to commit wire fraud, according to a signed agreement with federal prosecutors. The firm’s owner, Mark R. Whitt, pleaded guilty in December to a wire fraud charge in connection with the scheme.
In a recent letter to state lawmakers, acting Purchasing Director Mike Sheets said the agency typically doesn’t strip a company from doing business in West Virginia — a process called debarment — until after sentencing.
“A mere accusation, allegation or even a guilty plea is not sufficient,” Sheets said in his letter. “A guilty plea in a criminal case can change and does not represent a conviction until the case is finalized.”
Whitt’s sentencing hearing is scheduled for July 31. Earlier this year, he transferred ownership of Bayliss & Ramey to his wife, according to records filed with the secretary of state. The DOH has paid the contractor $795,809 since December.
Sheets said the Purchasing Division would initiate proceedings to bar Bayliss & Ramey from doing business in West Virginia after Whitt’s sentencing in federal court. The agency has been working with Department of Transportation lawyers and the Legislature’s Commission on Special Investigations, Sheets wrote.
Sheets was responding to a request from Delegate Gary Howell, R-Mineral, who wanted a report on any actions taken against Whitt and the Putnam firm.
Howell said he’s heard different opinions on when the state can sanction companies that hold state contracts. Some lawyers have told him a guilty plea is sufficient, while others say a formal conviction is necessary, he said.
Federal prosecutors allege Whitt used a state contract to illegally funnel work to a South Carolina company, while inflating invoices by 20 percent to ensure his firm was paid for its role in the kickback scheme. Whitt helped to conceal the illegal flow of funds from the DOH to Dennis Corporation in South Carolina, according to prosecutors.
Four others have pleaded guilty to federal charges in connection with the kickback scheme: Marshall University engineering professor Andrew Nichols, former DOH engineers Bruce Kenney and James Travis Miller, and Dennis Corp. executive Daniel R. Dennis. More than $1.5 million was illegally diverted to Dennis Corp. in exchange for $200,000 in bribes and kickbacks, according to the criminal charges.
In October, Bayliss & Ramey signed a deferred prosecution agreement with the U.S. Attorney’s Office in which the company agreed to cooperate with federal investigators and adopt corporate reforms to prevent fraud in the future. In exchange, federal prosecutors agreed to drop all charges after 18 months.
Lawyers for Whitt and the Putnam firm did not respond to a request for comment last week.
The Purchasing Division has banned one company and two people from bidding on contracts and doing business with the state. They are Wallpapers In Stock of Charleston, Clark Diehl (owner of Wallpapers In Stock) and Gerry Barton of Valls Creek.
Diehl was convicted on fraud charges in 2011 after admitting he was illegally awarded a bid to redecorate offices at the state Capitol. Barton served two years in prison after being convicted of stealing government surplus property and money laundering.
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