Cleveland Ignored Red Flags on Airport Project

But as an electricians union official investigated the $130 million contract he the company hired by to do the electrical work, had a bogus office address in a Cleveland housing project.


At first, it looked like a simple turf war between two labor unions fighting over a lucrative piece of the most expensive construction project in Cleveland history.

The electricians union argued it should do the underground electrical work for the $500 million runway expansion at Cleveland Hopkins International Airport. The laborers union argued the work was simply ditch-digging, which was their domain.

But as an electricians union official investigated the $130 million contract awarded to Anthony Allega Cement Contractors six years ago, he discovered something disturbing: Chem Ty Environmental Inc., the company hired by Allega to do the electrical work, had a bogus office address in a Cleveland housing project.

That discovery, some council members argue today, should have prevented a monumental scam: front companies getting paid for doing no work at Hopkins.

But it didn't.

Instead, some council members say today, then-Mayor Michael R. White and his Cabinet ignored the red flags. And then-Council President Mike Polensek, White's bitterest rival, rammed through legislation that allowed the scam to occur.

The unlikely - and perhaps unwitting - alliance between White and Polensek still puzzles people involved in the fight. But the result is unmistakable, said Walter O'Malley, an official with the International Brotherhood of Electrical Workers Local 38.

"This was a scam," O'Malley said last week. "We knew it from day one. We knew damn well that Chem Ty was not doing a thing."

Allega's contract for the Hopkins expansion is under scrutiny because of the release of a city report this month in which leaders of Chem Ty and RMC Construction admit they were paid but did no work.

Chem Ty also kicked money back to Allega and Nate Gray, according to the report. Gray was White's best friend, and now is serving 15 years in federal prison for paying bribes to public officials in exchange for city contracts.

O'Malley said he repeatedly warned members of White's Cabinet that Chem Ty Environmental Inc. was not a legitimate company and was not qualified to work at the airport.

White and then-airport Director Reuben Sheperd ignored O'Malley's warnings about irregularities in Allega's bid, O'Malley said.

Allega's bid was much lower than all of the others because he was the only one calculating it using laborers' pay instead of electricians', who make about $10 more an hour, O'Malley said.

Allega and Sheperd did not respond to phone calls last week seeking comment.

City Council passed a law in March 2001 sponsored by Councilman Michael Dolan that would have forced Allega to calculate the bid using higher wages paid to certified electricians. But just seven weeks later, council did an about-face and rushed through legislation sponsored by Polensek repealing the law. The repeal passed 16-0.

Polensek said the issue in 2001 was a dispute between two unions. No one warned him about Chem Ty, he said.

"They never raised an issue with me that this was a front company," Polensek said earlier this month.

Councilman Bill Patmon, who ran council's powerful Finance Committee, agreed.

"Mike Polensek and everybody else saw this as a union issue," Patmon said. "I don't think you could have gotten 16 people to vote for a front company. That's a stretch."

But O'Malley read a message in the fact that the mayor ignored his warnings and City Council repealed the March 2001 law.

"Obviously someone in the city had an interest in giving it to Allega at any cost," he said.

Union official launches own probe of Chem Ty

One facet of the airport expansion was to build ducts to hold electrical wires. In 2000, O'Malley heard rumors that John Allega, president of Anthony Allega Cement Contractors, planned to bid on the job using lower-paid laborers instead of electricians, who traditionally have built them.

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