- Associated Press - Thursday, May 28, 2015

CHARLOTTE, N.C. (AP) - North Carolina transportation officials are pushing ahead with an embattled toll road outside Charlotte, even after a politically connected paving contractor involved in the $840-million project pleaded guilty last year to defrauding taxpayers.

The state Department of Transportation announced Thursday construction had begun on the Monroe Expressway, a 20-mile highway in Union County. The project, which had been stalled for years by a lawsuit over its environmental impact, is being built by a joint venture of three companies.

One of those firms, Boggs Paving Inc. of Monroe, pleaded guilty to conspiracy in September in what federal prosecutors described as a bid-rigging and kickback scheme involving nearly $88 million in government highway construction contracts between 2003 and 2014. Company president Carl A. “Drew” Boggs III is awaiting sentencing after pleading guilty to conspiracy and money laundering. He faces up to 25 years in prison and $500,000 in fines.

Despite that, the three-company consortium, Monroe Bypass Constructors LLC, has been paid $6.8 million by the state during the eight months since the guilty pleas were entered, according to N.C. Department of Transportation spokesman Mike Charbonneau. In addition, Boggs Paving has been paid $108,290 since September for two other road projects.

Charbonneau said that after Drew Boggs and five company employees pleaded guilty last year, the state agency suspended Boggs Paving from bidding on future contracts, but let it continue on the Monroe project.

Drew Boggs was forced to resign from the executive committee of the joint venture. However, as co-owner of Boggs Paving, he could still profit off the deal.

If the agency had canceled the contract, Charbonneau said the other two companies in the joint venture would be punished and about 100 employees working on the project would be affected.

“While Boggs Paving, as a company, is still one of three companies in the joint venture, the actual indicted individuals are not managing the project,” he said.

Drew Boggs did not respond to phone messages seeking comment Thursday.

Carla Miller, a former federal prosecutor and current fellow at the Safra Center for Ethics at Harvard University, said state officials could have sound policy reasons for sticking with Boggs, including the likelihood of lawsuits and further delays if the contract were to be voided. But she said that has to be weighed against the potential damage to the agency’s credibility by continuing to do business with a company that previously violated the public’s trust.

“The overriding consideration for citizens when you do something like that is that there’s a loss of trust in government,” Miller said. “People look at that type of thing and they don’t like it. They don’t want government contracts to go to companies that have a criminal taint to them.”

The Associated Press reported in September that Boggs and his family have been frequent contributors to North Carolina politicians from both parties, including Gov. Pat McCrory.

In March 2012, Boggs hosted a fundraiser for then-candidate McCrory at his $2.2 million home in Waxhaw. Following Boggs’ indictment last year, the Republican governor’s campaign said it would give to charity more than $10,000 in political donations tied to Boggs.

According to the federal indictment, Boggs and his co-defendants conspired to get federal and state contracts by claiming a minority-owned small business would do part of the work. Under state contracting rules, 15 percent of work on such projects must be completed by minority or female-owned companies.

Prosecutors say millions in payments to a bank account in the name of Styx Cuthbertson Trucking were later funneled back to Boggs Paving. To aid the fraud, magnetic decals for Cuthbertson covered the Boggs logo on trucks at the construction sites.

The Monroe expressway project was not included in the federal indictment, but records obtained by AP show that Monroe Bypass Constructors included Styx Cuthbertson Trucking on the 2011 list of minority contractors it submitted as part of its winning bid.

Charbonneau said Cuthbertson was removed from the state-approved list of minority contractors on the project.

“As with all major construction projects, NCDOT publicly advertised this project and awarded this project to the lowest bidder,” Charbonneau said. “It was not awarded through fraud.”

Even as the state moves ahead, there is still a chance the project could again be stalled by legal action.

The Southern Environmental Law Center has filed a motion on the behalf of a coalition of environmental groups, asking a federal judge for a temporary restraining order and a preliminary motion to halt the project.

Kym Hunter, an attorney for the environmental law group, said she wasn’t surprised by the state’s action.

“But we are nonetheless disappointed that they are moving forward at this point before a judge had ruled on the merits of the case, especially considering what happened the last time when they barreled ahead,” she said, referring to an earlier legal fight.

Her group filed a lawsuit in 2010 to stop the project, saying the environmental impact study was fundamentally flawed and the department presented “misleading information” to the public about cost-effective alternatives.

A federal judge in Raleigh rejected their argument, but the environmental group appealed and won in May 2012.

The transportation department had to restart its analysis, and apply for state and federal permits.

The environmental group’s new motion claims transportation agencies have again failed “to incorporate essential information about current traffic conditions and population growth patterns into their review.”

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Associated Press writer Michael Biesecker reported from Raleigh. Follow him at https://Twitter.com/mbieseck

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Follow AP writer Mitch Weiss at https://Twitter.com/mitchsweiss


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