Housing authority probe target

April 21, 1994|By Melody Simmons and Jim Haner | Melody Simmons and Jim Haner,Sun Staff Writers

Signaling a widening probe into possible corruption in the city's Housing Authority, federal prosecutors have ordered the agency to turn over records concerning part of $23 million in no-bid repair contracts given out under an emergency renovation program last year.

The U.S. attorney's office demanded that the agency turn over to a federal grand jury by Tuesday documents on construction and lead-paint testing that highlight some work done in the past year on more than 1,100 public housing units.

In all, eight companies are named in the subpoena, including two that were formed within months of the issuance of the no-bid contracts.

Sources close to the investigation said yesterday that the probe is an outgrowth of an FBI investigation of John Dutkevich, a 46-year-old former project manager for the authority who pleaded guilty to bribery in U.S. District Court Jan. 12.

Federal prosecutors had charged Dutkevich in a 14-count indictment with bilking the agency and contractors of $25,000 over three years, but 13 counts were dropped in exchange for Dutkevich's testimony before the grand jury, court records show.

Dutkevich refused to comment yesterday.

The latest subpoena orders the Housing Authority to turn over certain records of an emergency program begun in May 1993 that was aimed at reducing the agency's waiting list of 18,000 families by renovating housing throughout Baltimore.

Contractors were issued nearly $23 million in no-bid contracts under the program to repair 1,136 public housing units, said authority spokesman Zack Germroth.

Daniel P. Henson III, the authority's executive director, said he was "not overly concerned" about the latest investigation.

"I don't know what it's all about, but we are turning the records over," he said. "Any time you do things differently, within government, you have to expect folks to come in and look at it closely. I welcome a scrutiny of our efforts."

A source close to the investigation said the grand jury will look into how the contracts were awarded, and whether the work was performed properly and costs accounted for.

The grand jury also will consider whether agency inspectors properly approved work done on certain units -- paying particular attention to lead-paint testing and removal services -- the source said.

To that end, the subpoena orders the Housing Authority to turn over documents concerning seven of the 32 contractors hired under the program. The companies are Budget Contractors, Sedrick F. Chavis Contractor Inc., D. W. Cook Co., J & M Construction Inc., Lanocha Construction Co. Inc., C. Staten Development Co. and Elias Contracting Corp. According to Maryland Department of Assessments and Taxation records, two of the companies -- D. W. Cook and C. Staten Development Co. -- were incorporated in the past six months.

The subpoena also orders that records from Environment Protection Co., which continues to conduct the lead-paint testing it began in January 1993, be turned over.

The subpoena calls for the authority to release all contracts, construction proposals, cost estimates, invoices, telephone messages, faxes, inspection reports and payment records between the eight companies and the authority from September 1992 to the present. Company officials confirmed that they also have received subpoenas.

The thrust of the investigation mirrors in many ways the Dutkevich case, which suggested wider problems in the agency, sources said.

According to federal court records, Dutkevich, a project manager for the authority, began soliciting bribes from contractors on a multimillion-dollar renovation project at the George B. Murphy Homes in West Baltimore as early as November 1990. Apparently undetected by the agency, he collected thousands of dollars in payoffs, gifts and "bonuses" from the companies over the next three years.

In November 1990, he approached officials with Pittsburgh-based Classic Contractors, which was working for the authority under a $1.9 million contract, and offered to recommend that the authority approve an additional $150,000 in payments to the company for extra work not covered in the contract. The cost of Dutkevich's services, records show, was a $2,500 kickback.

The next month -- having won approval for the extra work -- company officials paid Dutkevich an additional $2,000 for his help, records show.

At the same time, Dutkevich approached another company working under a $1 million contract on the same project and demanded a $1,000 "Christmas bonus" a week before the holiday.

Three weeks after that, Dutkevich flew to Palm Beach Gardens, Fla., as the guest of Classic Contractors for an all-expenses-paid weekend at an upscale golf resort that cost the company $1,031.53.

Two months later, Dutkevich met two Classic officials at Fisherman's Wharf, a restaurant in Towson, and took $2,000 more in payoffs over dinner and drinks, records show.

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