Editor's note: Zach, this is chicken feed, just chicken feed compared to the rape of family estates by the Probate Court of Cook County and its crooked lawyers and judges. Lucius Verenus, Schoolmaster, ProbateSharks.com
McHugh Construction to pay $12 million fine as part of federal, state probe
A James McHugh Construction Company trailer and sign at the Wolf Point West Tower site in downtown Chicago. (Chris Walker / Chicago Tribune / May 1, 2014)
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One of Chicago's most clout-heavy construction companies has agreed to pay more than $12 million in penalties after it was snared in a probe into whether a woman-owned business was really an illegal front to win government contracts.
Court papers revealed today that a project manager for a minority-owned subcontractor blew the whistle on the wrongdoing.
In a statement, Ryan Keiser said he was angered the most by McHugh managers who were “so matter-of-fact about cheating” the minority contracting programs.
“It happens right out in the open,” Keiser wrote. “So many of the prime contractors are doing it and all of them know what’s happening. The suppliers have to play along to get the business. And none of them has any concern that they will get in trouble. The City of Chicago’s leaders and similar politicians throughout the country just don’t seem to care. That’s why I had to blow the whistle.”
After a more than two-year investigation, the U.S. Attorney's Office and Illinois Attorney General’s Office announced the $12 million fine against McHugh. Keiser stands to collect 17 percent of the settlement – or about $2 million.
McHugh admitted no wrongdoing under the settlement.
The settlement covers McHugh’s contracts on some of the biggest recent public works projects in the Chicago area, including the massive reconstruction of Kennedy Expressway ramps in 2005, the revamp of the CTA Red Line Howard station in 2006, the reconstruction of the North Avenue bridge, and the Wacker Drive viaduct reconstruction in 2010.
McHugh also agreed to implement a compliance program and have an independent monitor oversee its subcontracting process for three years in exchange for not being barred from future government contracts.
U.S. Attorney Zachary Fardon said in a statement the settlement shows that in end it’s more costly for companies to try to circumvent minority subcontracting laws than to “simply comply with the requirements and retain disadvantaged businesses to actually participate in these public construction projects.”
“It’s important that McHugh and other companies realize that compliance with these requirements is both a good business decision and the right thing to do,” Fardon said.
The investigation came to light in February 2012 when federal prosecutors unsealed charges against Willowbrook construction firm owner Elizabeth Perino for acting as a "sham pass-through" subcontractor involved the reconstruction of the North Avenue bridge and Wacker Drive as well as work on the Red and Brown lines, all projects in which McHugh acted as prime contractor.
According to the charges, Perino submitted bills for work McHugh actually performed, allowing McHugh to meet its requirements for hiring disadvantaged businesses.
The charges are pending against Perino, 59.
After the settlement with McHugh was announced today, the company's chairman issued a statement saying they were "pleased we were able to reach a successful resolution with the government and put this matter behind us."
Court papers revealed today that a project manager for a minority-owned subcontractor blew the whistle on the wrongdoing.
In a statement, Ryan Keiser said he was angered the most by McHugh managers who were “so matter-of-fact about cheating” the minority contracting programs.
“It happens right out in the open,” Keiser wrote. “So many of the prime contractors are doing it and all of them know what’s happening. The suppliers have to play along to get the business. And none of them has any concern that they will get in trouble. The City of Chicago’s leaders and similar politicians throughout the country just don’t seem to care. That’s why I had to blow the whistle.”
After a more than two-year investigation, the U.S. Attorney's Office and Illinois Attorney General’s Office announced the $12 million fine against McHugh. Keiser stands to collect 17 percent of the settlement – or about $2 million.
McHugh admitted no wrongdoing under the settlement.
The settlement covers McHugh’s contracts on some of the biggest recent public works projects in the Chicago area, including the massive reconstruction of Kennedy Expressway ramps in 2005, the revamp of the CTA Red Line Howard station in 2006, the reconstruction of the North Avenue bridge, and the Wacker Drive viaduct reconstruction in 2010.
McHugh also agreed to implement a compliance program and have an independent monitor oversee its subcontracting process for three years in exchange for not being barred from future government contracts.
U.S. Attorney Zachary Fardon said in a statement the settlement shows that in end it’s more costly for companies to try to circumvent minority subcontracting laws than to “simply comply with the requirements and retain disadvantaged businesses to actually participate in these public construction projects.”
“It’s important that McHugh and other companies realize that compliance with these requirements is both a good business decision and the right thing to do,” Fardon said.
The investigation came to light in February 2012 when federal prosecutors unsealed charges against Willowbrook construction firm owner Elizabeth Perino for acting as a "sham pass-through" subcontractor involved the reconstruction of the North Avenue bridge and Wacker Drive as well as work on the Red and Brown lines, all projects in which McHugh acted as prime contractor.
According to the charges, Perino submitted bills for work McHugh actually performed, allowing McHugh to meet its requirements for hiring disadvantaged businesses.
The charges are pending against Perino, 59.
After the settlement with McHugh was announced today, the company's chairman issued a statement saying they were "pleased we were able to reach a successful resolution with the government and put this matter behind us."
"Over the last 26 months, we have not only cooperated fully with the government, but we have taken proactive steps to become an industry leader in (minority and women-owned business) compliance issues," Patricia McHugh said in the statement.
"We now look forward to moving ahead with the dozens of public and private sector projects we are engaged in, while also continuing our longstanding commitment to improving opportunities for disadvantaged businesses in Chicago," she said.
McHugh reported $513 million in revenues last year and has 600 employees, business records show.
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