July 13, 2011

Bridge to conflict

Ethics questions vex Bridges Authority chairman

 

Alarms sounded late last week when critics of the Ohio River Bridges Project alleged a conflict of interest. A construction firm jockeying for a contract wants to lease River Road property west of Zorn Avenue — if it’s rezoned. As it turns out, the land is owned by Paul Buddeke, brother of Charles Buddeke, chairman of the Louisville and Southern Indiana Bridges Authority, which plans to seek bids from builders early next year.

In mid-February, Fluor Enterprises Inc., which is building the eastern span of the San Francisco-Oakland Bay Bridge (mostly with Chinese labor) attended a local industry forum and was among 18 firms interviewed privately by the Bridges Authority. The forum also was attended by the Buddekes.

“The relationship between the Ohio River Bridges Project, Fluor and the Buddekes needs to be sorted out,” public transit advocate Jackie Green wrote in an email blast.

On Monday, LEO sat down with chairman Buddeke and Bridges Authority spokeswoman Christi Lanier-Robinson to clarify the confusion.

Buddeke said he’s never been a conduit, liaison or middleman between Fluor and his brother, although he is employed as a part-time advisor for his
brother’s company.

“My brother said, ‘Do you know anything about Fluor?’ I said, ‘Well, nothing other than they were one of the companies that came in to look at us,’ and he said, ‘Well, they came by for a visit,’ and I said, ‘Well hold on a minute, Paul … You and I can’t have a conversation about that. Do you remember the memo we signed back in November?’”

The memo, written by Charles Buddeke and signed by both brothers, says, “Change my position to part-time advisor and change my compensation to $1,500 per month retainer … As in the past, we must not discuss any bridge-related issue that would be unethical and/or is not public information. I also will not meet with you or anyone with your companies along with any present or potential bridge-related clients ... In return for the compensation, I will provide to you strategic advice on business plans …”

LEO: On one hand, you’re tasked with drumming up business and, on the other hand, you can’t — your hands are tied, in a certain realm. That would seem to be a conflicting sort of dual-role.

Charles Buddeke: I guess — if you didn’t disclose it. But the project’s so big — it spreads across so much — who doesn’t have a conflict? It’s been a pretty good source for stories for LEO!

Charles Buddeke later said he confines his strategic advisory role to issues unrelated to the bridges project.

Prior disclosures were referenced in a June 14, 2010, letter from Ellen M. Hesen, general counsel for Gov. Steve Beshear — who appointed Buddeke to the authority in October 2009 — to John Steffen, executive director of the Executive Branch Ethics Commission: “Neither he nor his spouse or children have any ownership interest in any of his family’s business …

“Please let me confirm that Mr. Buddeke does not currently have a conflict of interest. Should the Authority move into the area of construction planning or implementation, and Charles Buddeke III is still a member, any potential conflict, albeit a remote possibility, would be resolved by his disclosure and abstention in any matters which could possibly impact any of these businesses.”

In a July 21, 2010, response, Steffen agreed.

CB: We’re in this construction planning, but Fluor has no advantage or disadvantage over the 18 other firms we’ve interviewed. We haven’t even started that procurement yet … And if it appears that I have a conflict, I’ll recuse myself from that process.

LEO: So Charles steps out of the room — and the others don’t feel influenced?

Chiristi Lanier-Robinson: I hear you, but you look at the composition of that authority — they are all pretty strong individuals with their own personalities that have been asked by the governors and the mayor to do the right thing. And I think that they will fulfill that obligation.

On Dec. 7, Beshear issued a memo urging members of executive branch boards and commissions, including the Bridges Authority, to disclose in writing any actual or potential conflicts of interest. It defines one type of a conflict as participation in a decision or action that may benefit “anyone with whom you have a business, financial or close personal relationship.”

CB: If you look at the $2.9 billion that’s gonna go for this project, a land lease over there at my brother’s is not gonna be 2.8 of it.

LEO: Well, I think the concern is that by doing business with your brother, they’ll curry favor with you and get an inside track for a contract bid.

CB: They haven’t even gotten to the dance yet! I mean, the music hasn’t started … So much can happen between now and then. It seems like all of us could wait and see if Fluor makes the rounds.

CLR: We’re making assumptions that Fluor is gonna be in the dance.

But it’s an assumption that Fluor appears to be making.

On Feb. 17, day two of the Ohio River Bridges Project forum, which attracted some of the nation’s top construction executives, Fluor’s Dan Stoppenhagen told FOX-41: “We’re very confident in our ability to generate the innovation that will get it done faster, cheaper, or both.”

Paul Buddeke and his vice president of operations, Paul Lawson, also attended the industry forum.

“I can’t stop my brother from asking, you know, making a point to be at a forum,” Charles Buddeke said.

Last Thursday, Lawson confirmed that Fluor, “along with several other companies,” is a potential candidate to lease the 23 acres owned by his boss, “but there’ll be no negotiations until we get zoned.”

Asked how long he’d been talking to Fluor, Lawson said, “I was contacted by them after I attended the bridges meeting.”

In conclusion, Charles Buddeke said, “I’ve always met or exceeded anything that was expected of me in the way of ethics. So for somebody to say that I was doing this to benefit my brother, they just don’t know me.”