- The U.S. Attorney's Office for the Northern District of Ohio has charged Rufus Taylor, the former head of the Cleveland Demolition Bureau, with soliciting and accepting bribes from contractors in return for giving them information that provided an edge against the competition in winning city work and for giving them spots on the city's bid list.
- Taylor was in charge of awarding "board up" contracts for vacant properties and carrying out emergency demolition projects, as well as inspecting and approving completed work before contractors were paid. The amounts contractors gave Taylor ranged from $300 to $8,000 from 2013 through 2016. Taylor allegedly received payment for putting one contractor on the city's bid list and again after the contractor was awarded a project. He also reportedly gave the contractor inside information about upcoming work. The attorney's office also charged him for giving information about other bids to a second contractor so that the company could make sure it submitted the lowest numbers in its proposal.
- Taylor faces one count of bribery in a federally funded program and one count of extortion. U.S. Attorney Justin Herdman said in a statement, "Public contracts should go to the most qualified bidder, not the best connected. We will remain vigilant and public employees who take bribes will be brought to justice."
Although it might be tempting to some contractors to "give a little" in exchange for lucrative public contracts, what they should realize is that it is not only the public official who is on the legal hook in these situations.
For example, three top executives at Buffalo, New York, general contracting firm LPCiminelli were charged with paying bribes to state officials to win a $750 million solar panel factory project. Eventually, charges were dropped against one and a second pleaded guilty and testified against former company CEO Louis Ciminelli, who was found guilty in July. Ciminelli faces up to 20 years in prison, but his attorneys said they would appeal the decision.
But LPCiminelli has had more to contend with than just the legal mess. The company reportedly lost approximately $4 billion in contracts as the allegations came to light and ended up auctioning off its equipment and tools, as well as laying off 10% of its workforce as it has shifted to a program management and development model.
Fraud and corruption, however, can also be an issue in the private sector. In fact, an April report from The Real Deal claimed that corruption in the New York City construction industry was almost part of doing business there. The size of some massive city projects make it easy to hide inflated line items and intentional overbilling, and this is especially true if two or more parties to a project get together and engage in this type of activity together outside the project's system of checks and balances.