By August 3, 2017 Read More →

WVDOH awards contracts to company involved in kickback scheme

By ERIC EYRE

Charleston Gazette-Mail

CHARLESTON, W.Va. — Putnam County contractor Mark R. Whitt pleaded guilty last year to his role in a kickback scheme directed by a West Virginia Division of Highways engineer.

Whitt’s company, Bayliss & Ramey, also admitted it had violated federal law after taking part in the scheme, according to a signed agreement with federal prosecutors.

“It was the biggest mistake of my life,” Whitt said in a statement sent to the Gazette-Mail.

But that hasn’t stopped the state from doing business with Bayliss & Ramey: The DOH has awarded three contracts to the firm this year, records show.

The contracts — for installing and repairing traffic signals and lighting — will pay the company $682,000.

A fourth contract — awarded before Whitt pleaded guilty to wire fraud charges but authorized by the DOH a month after his plea — will put another $58,331 into Bayliss & Ramey’s account.

Although Whitt has stepped down as Bayliss & Ramey’s president, he still works for the electrical contracting firm as its “intelligent transportation systems” coordinator/estimator. His wife, Janice L. Whitt, now heads the company and signs the DOH contracts.

As late as June — six months after his guilty plea — Whitt was corresponding with DOH officials, alerting them that he is Bayliss & Ramey’s contact for emergency signal repairs, according to an email.

Whitt was scheduled to be sentenced July 31, but his sentencing hearing was postponed until Aug. 22.

DOH officials said the agency couldn’t stop Bayliss & Ramey from securing state contracts because the Putnam electrical firm was the low bidder and had been previously approved as a “pre-qualified contractor” that showed it had the personnel, financial resources and experience to do the projects.

“Absent an official debarment or suspension, pre-qualified contractors cannot be prohibited from bidding on public contracts,” DOH spokesman Brent Walker said in an email. “Thus, the DOH was unable to prevent Bayliss & Ramey from being selected to perform the work.”

The company won’t be able to bid on projects later this year, though, because its pre-qualified status recently expired, Walker said. The DOH will continue to pay Bayliss & Ramey for signal work using the contracts approved earlier this year.

Federal prosecutors allege that Mark Whitt used a statewide signal maintenance contract to illegally funnel work to a South Carolina company, while inflating invoices by 20 percent to ensure the company was paid for its role in the kickback scheme. Whitt helped conceal the illegal flow of funds from the DOH to Dennis Corp., in South Carolina, according to the U.S. Attorney’s Office.

So far this year, Bayliss & Ramey has secured these contracts from the DOH:

In March, a $155,319 contract to install a traffic signal in Mineral County

In April, a $452,982 contract to install traffic devices in Doddridge County.

Also in April, a $74,806 contract to fix lighting on the Buffalo Bridge, in Putnam County.

The earlier $58,331 contract paid Bayliss & Ramey to repair a traffic signal on Oral Lake Road, in Harrison County.

As previously reported in the Gazette-Mail, the state Purchasing Division has declined to block Bayliss & Ramey from doing business with the state.

Purchasing officials have indicated that they would start proceedings to bar the company from bidding on state contracts — including those for state highways projects — after Whitt’s sentencing in federal court.

The DOH backs that plan.

“The DOH fully supports Bayliss & Ramey’s total debarment, and the DOH requested the assistance of the Federal Highway Administration and the West Virginia Purchasing Division to commence the debarment process,” Walker said.

A federal ban would stop the firm from doing any project financed with federal funds.

In his statement, Mark Whitt suggested that the company shouldn’t be punished for his crimes. The company has 22 employees, and none knew about or took part in the kickback scheme, Whitt said.

“None of those employees have done anything wrong,” he said. “The current owners and managers likewise are completely innocent of any wrongdoing. I am solely responsible for the unlawful conduct.”

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 2016, 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.

The DOH had no say in the agreement, Walker said.

On June 15, the DOH’s lead lawyer, Jonathan Storage, sent a letter to the Federal Highway Administration, explaining the company’s deal with prosecutors. The DOH didn’t know whether Whitt still has a controlling stake in the firm, according to the letter. Storage asked the federal highways agency to help decide if Bayliss & Ramey should be allowed to continue to bid on and be awarded public contracts.

Federal prosecutors have declined to take a position on the matter, according to Storage’s letter.

West Virginia regulations authorize the state transportation commisioner, “in his sole discretion,” to suspend or disqualify pre-qualified contractors for a conviction, “admission of a bidding crime” or “for an illegal act that pertains to competion for or performance of contract work” awarded by DOH.

Since July 2014, West Virginia has paid Bayliss & Ramey $12.5 million, according to the state auditor’s website.

The company holds four additional active contracts with the DOH that were awarded before the firm signed the deferred prosecution agreement and Whitt pleaded guilty last year.

Whitt said he has paid $250,000 in restitution to the state.

“I am no longer an officer or owner of the company,” he said. “I believe all concerned share the hope that the good jobs of the Bayliss & Ramey employees and the good work they have performed for the Division of Highways can continue.”

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