News & Observer | newsobserver.com | Black's son bid high but got jobs

Published: Nov 11, 2007 12:30 AM
Modified: Nov 11, 2007 05:08 AM

Black's son bid high but got jobs

Ex-manager: Deal struck to pick son

 

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TIMELINE FOR THE BLACK CONTRACTS

JUNE 2003: The state legislature authorizes the construction of three 1,000-bed maximum security prisons in Greene, Bertie and Columbus counties. The authorization, added to the state budget bill, allows the state to select Centex as the construction manager instead of seeking bids from other construction firms. It also allows Centex to bypass public bidding laws in hiring subcontractors. The state prefers Centex because the company had built the three previous North Carolina prisons.

Some House lawmakers seek to limit the new construction to two prisons. After last-minute negotiations between Senate leader Marc Basnight and House Co-speakers Jim Black and Richard Morgan, the third prison is kept in the budget.

MAY 2004: George Zaborowski, a project manager for D.H. Griffin Concrete Services, complains in a letter to his boss that Centex is insisting that D.H. Griffin hire Black Pest Control for state prisons under construction in Greene and Bertie counties. The company is owned by Black's son, Jon Black. His price is $62,000 per prison, roughly three times that of the lowest bidder, Mz. Bugs Termite Control Co.

FEBRUARY 2005: In pricing documents given to the state Department of Correction, Centex states that Black Pest Control will provide termite prevention for the new state prison in Columbus County at a cost of $73,600.

JUNE 28, 2006: Black Pest Control bows out of the Columbus County project, telling Centex that Black had closed its nearby office in Wilmington. By this time, state and federal investigations have been launched into Speaker Jim Black's legislative and campaign activities. Centex later replaces Black Pest Control with Strand Termite & Pest Control Co., which offered to do the job for less than half what Black would have received.

GENERAL ASSEMBLY, STATE CONSTRUCTION OFFICE, N.C. DEPARTMENT OF CORRECTION, CENTEX CONSTRUCTION, ZABOROWSKI

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A company owned by the son of former House Speaker Jim Black won contracts to provide pest control at the state's newest three prisons, although competing bidders offered to do the work at less than half of Black's price.

Black Pest Control was paid $124,000 for prison construction projects in Bertie and Greene counties, although a business in Stafford, Va., bid $42,000 on the same work. At the state's latest prison project in Columbus County, Black Pest Control won the job in 2005 with a price of $73,600, even though a Brunswick County company was willing to do it for $20,600.

Centex Construction, the company that oversaw construction of the three prisons, which cost a combined $245 million, said it wanted Jon Black's company, Black Pest Control, because it did good work on smaller Centex projects. But a former project manager at two of the prison construction sites said he was pressured to hire Black.

George Zaborowski, project manager for a Centex subcontractor, D.H. Griffin Concrete Services, said two Centex officials demanded that his company hire Black in 2004 to satisfy a state lawmaker whose vote proved crucial to Centex's getting the prison construction business. He said the lawmaker was not named.

"It was part of the deal," Zaborowski said in an interview. "For Centex to get [the prison contracts], this had to happen."

One of those two officials, Mike Ryan, said he could not remember the conversation and had no further comment. In 2004, he oversaw construction of the Greene and Bertie prisons for Centex. The other, David Kraft, is no longer with the company and could not be reached.

Jon Black declined to comment. His attorney, Edward T. Hinson of Charlotte, said no special influence was involved in the pest control contracts. Black Pest Control is a 67-year-old business based in Charlotte. It also operates in Charleston, S.C.

Officials for Centex said it recommended Black to D.H. Griffin, which was responsible for finding an exterminator for the Greene and Bertie prisons. For the Columbus County prison, Centex hired Black outright.

Centex is now owned by Balfour Beatty Construction of London. Company officials said they preferred Black Pest Control because of its performance on two small bank branches Centex built in the Charlotte area in 2002 and 2003.

Low bidders can lose

Companies seeking the state's business on major construction projects typically have to offer the lowest bid to win the contract. But that law generally does not apply to subcontractors on the prison projects. That allowed Black Pest Control to win the work at the Greene and Bertie prisons despite its higher bid.

Normally, Black would have had to be the low bidder on the Columbus prison because Centex hired Black directly, but lawmakers exempted Centex from having to select the low bidder on the prison contracts. Black later bowed out of that project.

In private negotiations, House and Senate leaders inserted a provision into the 2003 budget bill that effectively allowed Centex to hire the subcontractors it wanted regardless of price.

At the first two prison projects, Zaborowski resisted hiring Black. He produced a letter that he said he wrote in May 2004 to his boss at D.H. Griffin expressing his concerns about Black's price and what appeared to be favorable treatment of the House speaker's son.

"As you are aware," Zaborowski wrote, "I have never been receptive of using Black for this phase of the project because of the monetary and illegal collusion issues."

He also noted that a woman-owned business that would have helped meet the contractor's minority hiring goals had "in good faith supplied us with a respectful bid and proposal for both projects at $40,000 per project less than Black Pest Control."


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dan.kane@newsobserver.com or (919) 829-4861
News researcher Lamara Williams-Hackett contributed to this report.
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