The Anointed Highway Superintendent
Why the following documentation is important to you.
- You will learn how an architect and a owner schemed to replace a contractor with one of their "buddies" at over twice the actual project cost to finish.
- Why a written contract is not worth the paper written upon.
- How a government agency can get away with perjury, fraud, breach of contract, abuse of power and gross incompetence and negligence with impunity.
- How arbitrators can be bought and paid for with immunity and never have to justify a thing.
- How environmental regulations only apply to the private sector, government agencies are apparently exempt from them.
- How the "good-ole-boy" network keeps everything under wraps.
- How our justice system fails to protect the rights of the people (unless you are rich, well-connected or associated with the government).
Even though several years have passed since the following situation took place, it is still relevant today. The events that occurred then have happened to others and will happen again unless one remains diligent and our so-called justice system begins to believe in justice for all and not only the well-connected.
The Clinton County Highway Department in New York State entered into electrical and general construction contracts with Wand Electric, Inc., an electrical and general contractor, in 1993 to renovate some offices in its highway garage. What ordinarily would have been a simple run-of-the-mill office retrofit ended in the termination of Wand's general construction contract, a two-year arbitration process and the end of Wand Electric through the failure of a panel of arbitrators to enforce contract law and instead dispense "justice" based on bias and persuasion.
What occurred was that an arrogant, megalomaniacal highway superintendent, Francis LaBarge, (a man who had 110 grievances filed against him by his own employees in a two-year period) and an incompetent, unethical architect, James Arvay, conspired against Wand and terminated Wand’s general construction contract without just cause.
Wand had, in its sixteen year existence, successfully completed hundreds of federal, state and local public works projects, all without conflict or litigation. Wand had started as an electrical contractor and in 1988 had started a general construction firm to further expand its capabilities and had billings over $2,000,000 in 1993.
The highway department project consisted of two phases (upstairs and downstairs) to be completed in 120 days and was a general retrofit of old original offices into modern, metal stud and acoustic ceiling, wallpapered offices with new HVAC and electrical.
Right off the bat, the job was star-crossed as the architect and highway super failed to get a state building permit by time construction was to start that Spring. This delayed job start by four months. Also, the highway super never wanted Wand on the job in the first place as he preferred his favorite contractor, Murnane Builders, to do his bidding.
This can only lead to speculation as to why Murnane was the "preferred" contractor. Perhaps because Murnane had previously received no-bid contracts to build the County jail through his business partner Senator Ron Stafford. Or perhaps LaBarge had some sort of "relationship" with Murnane when they built the County landfill, which he ran. No proof, just speculation.
The architect's plans did not meet state specs in some parts and he introduced a non-standard flooring design to cover asbestos tile that was doomed to failure. There were several delays caused by the architect and super in making color selections, approving submittals in a timely manner and ordering one-of-a-kind materials that had long lead times pushing the 120 day project completion date well past its due date. Of course, all these delays weren't their fault - it was the contractor's!
These delays and the resulting animosity came to a head during Christmas of 1993. Arvay, knowing that the County paid their invoices the last weekend of the month, waited until three days before Christmas to deny Wand's progress payment in full citing "some doors are not closing properly" and that there was a "buckle in the flooring" (caused by his poor design). These two items, at worst, were punch list items but Arvay used these poor excuses as a reason to deny the entire $25,000 in progress payments to Wand. This caused Wand undue hardship in meeting accounts payable and Wand stated in a letter to both the County and the architect, that they would be off the job until such time that payment was made. The architect refused to meet with the County, Wand, and its subs knowing he didn't have a leg to stand on and LaBarge shortly thereafter terminated the contract
Rather than admitting their own shortcomings and delays, the dynamic duo terminated Wand's GC contract (while ordering Wand to keep on with its electrical contract which they had no intention of paying for - this is considered fraud by the way) and completely changed the job scope to cover their mistakes, hired their preferred contractor on a time and materials basis with no cost constraints and stuck the additional bill to Wand without mitigating with Wand’s surety.
Prior to contract termination, the highway superintendent caused the following:
- Heat was turned off in the work area at night despite repeated verbal and written requests asking that this not be done. This caused delays in the morning while Wand’s employees waited for the work area to heat to proper installation temperature for wall and floor coverings.
- Crews from Wand and its subs were turned away by the superintendent when they attempted to perform their work.
- Color selections for many items were never made by the owner (LaBarge) precluding Wand from ordering the materials thus further delaying the job.
- Theft of tools and materials from Wand’s trailer under the lock and key of the County superintendent were never reimbursed to Wand.
- Asbestos tile was removed by untrained and unqualified County personnel with no EPA required safety precautions.
- Peeling lead paint was ordered removed by the architect, again with no EPA required report on file or concern for environmental hazards.
- Valid, signed change orders were never paid.
- A newly installed tile floor was ruined by Highway Dept. employees shortly after installation despite warning signs to stay off for at least 24 hours.
- LaBarge wouldn't let Wand store materials inside the highway garage and then proceeded to have his people plow snow against the materials stored outside.
Wand filed for arbitration in March of 1994. It took one year to appoint three arbitrators and set the initial date for arbitration. Don't ever let anyone kid you into believing that arbitration is faster than trial by jury. Meanwhile, Wand had been unable to bid any further work because the surety would not underwrite any bonds until this matter was resolved. Bonded work accounted for the majority of all construction work in our geographic area as there is little private enterprise growth compared to government works. Therefore, Wand was forced to close its doors and wait for arbitration to bring justice.
Once the lies of the architect and superintendent were exposed in the initial three days of the arbitration hearing, the County Attorney, Louis E. Wolfe and the County Administrator, William Bingel, along with the higher echelons of the Clinton County Legislature, Chairman Melvin “Bob” Bruno and Jay LePage, decided that the best course of action was to further lie and conceal the truth. The motive? Once Wand's claims expert detailed his findings with supporting documentation, the County realized that they had been bamboozled by the architect and highway superintendent and that there was absolutely no justification for contract termination. Facing a claim for over $2 million because of loss of business, reputation, etc., what does any good democratic government do when caught with its pants down? Lie, cover up, and blame the victim, Wand Electric. The following is some of what came to light.
- County attorney Wolfe was overheard in a local restaurant how “he was going to put Wand out-of-business”, some weeks before the contract was terminated.
- The County ordered Wand to finish the electrical portion of the contract but had no intention of paying for it, admitted they owed the money and has never paid for the work. County Administrator Bingel told one of Wand’s creditors that “Wand has been paid all it’s ever going to be paid.” when Wand filed for final payment on the electrical portion of the contract which had never been in contention! Chairman Melvin “Bob” Bruno never answered two certified letters addressed to him asking for payment on this part of the contract.
- Labarge and Arvay were responsible for getting a building permit to start construction and failed to do so delaying the start by four months. Arvay then initially failed to extend Wand's contract by the full four months until several meetings were held pointing out his error.
- This delay necessitated Wand having to provide heat at its own expense during the colder months which should have been an additional charge to the County because of the permit delay.
- The County accused Wand of failing to provide the permit during the arbitration proceedings as it was called for in the contract documents. After cross-examination, it was admitted by Arvay that the County had indeed agreed to provide the permit and this was made known to all bidders prior to bid date. Obviously, perjury had no influence on the decision of the "arbitrators".
- County attorney Wolfe introduced into the proceedings unfounded allegations of a “criminal investigation” by the Department of the Army into a roofing contract Chilstead Building Company had completed. Chilstead being an entirely separate entity owned by Wand’s owner. Wolfe corresponded with Army officials ultimately resulting in a bogus lawsuit against Chilstead which was dismissed and thrown out of court as without merit. But not before it had cost Chilstead (Wand) thousands in defending itself. This, of course, being the whole point.
- The County’s preferred contractor, Murnane Builders, was hired on a time and materials basis with no cost constraints to REDESIGN the work and REHIRED many of Wand’s original subcontractors to finish the work. The architect’s total incompetence precluded the original job from being acceptable.
- Wand’s surety originally asked Wand to complete the work with them guaranteeing payment. Wand refused knowing that LaBarge would never allow them to finish. The surety obtained a quote from an out-of-town contractor to finish the work AS SPECIFIED for $61,000. The County refused, never negotiated with the surety, and had Murnane make design modifications totaling over $125,000! Guess who they stuck with this bill.
- Wand had to obtain a court injunction to prevent the County from destroying the evidence before Wand’s professional consultant could come in and make his observations, who incidentally concluded that “there was no reason for contract termination”.
- The County paid the architect, Arvay, over $16,000 for his “unbiased” testimony even though he was a prime cause of the problems.
- The County paid out-of-work political lawyer Alan Burczak (former democratic NYS Assistant Attorney General) $5000 to write the County’s memorandum of law to the arbitrators because Mr. Wolfe couldn’t be bothered during his annual winter vacation. Here was an attorney that knew absolutely nothing about the proceedings but was being given taxpayer largess because of his political connections.
- LaBarge has subsequently been fired. Or was he? If he quit as some say, then why was he given a $58,000 termination “bonus”. But if he was fired, does it not make sense that this was his payoff?
- A former chairman of the County legislature admitted in a telephone conversation that he was sure that the “County already knew the results of the arbitration proceedings before they were released”. What does this tell you?
- The County’s “expert” witness, the carpenter foreman for Murnane Builders (County’s preferred contractor), politician Robert Wicihowski, stated, “this was the worst job I have ever seen” and proceeded to outright lie, tell half-truths, and bring into evidence issues that Wand was never allowed to correct or finish and other items that were not the responsibility of Wand to correct. The following Spring, some estimated $200,000 of road work was done in front of Wicihowski's home by the Clinton County Highway Department. This road work consisted of installing a storm drainage system complete with drains and approx. 100 yards of 4' drain buried some 6' underground and emptying into a nearby stream. This is a violation of New York State environmental law, but when questioned about it, nothing was done by the State DEC, as they were protecting one of their own, namely Francis LaBarge, a former employee. This storm drainage system benefited no one other than Wichihowski.
- When asked to help obtain a NYS investigation into these improprieties, Assemblyman Chris Ortloff said “there is nothing I can do”. Senator Ron Stafford's office refused to even reply. Did I forget to mention that the "great" Ron Stafford, NYS Senator emeritus, is a business partner of Louis Wolfe and Murnane Builders?
- Complaints filed with the "Justice" Department resulted in form replies that were forwarded to the County District Attorney, Penelope Clute. For some reason, Ms. Clute declined to investigate. Maybe it had something to do with the fact that Ms. Clute's husband was both the personal and corporate attorney for one Mr. James Arvay, architect without peer.
The arbitration panel that heard the case was made up of three middle-aged conservative men; a lawyer with political ties, Gordon Davis, who was, at one time, head counsel to the Adirondack Park Agency (a political appointment), and two professional engineers, Fil Fina (a county highway engineer for 12 years just like LaBarge) and Richard Felak (a design professional just like Arvay) that apparently, because of their own personal biases and political pressure, completely failed to enforce contract law. Had they done so, there would have been only one conclusion, that the County Highway Superintendent and his architect had acted in bad faith right from the start and that there were many breaches of contract, all on the County's part. The Appellate Division of the New York State Supreme Court has upheld their decision stating essentially that arbitrators “do not have to follow contract law but rather can do as they please”. This is justice? I have one question for these “arbitrators”. How much was your payoff?
Detailed in Wand's memorandum to the arbitration panel are the lengths that the County took (in order to cover its butt), along with the Highway Superintendent, and the architect to ruin the reputation and force out of business a firm that had been in business for 16 years with combined annual sales of over 2 million dollars, had done hundreds of federal, state, and local government jobs as well as private commercial work, employed 16 people, and subcontracted with the best available specialty contractors in the area.
The final thought here is: The County had the right to terminate the contract if that was their wish. The problem is in how they went about doing it. No contractor before or since Wand Electric has been terminated for cause. Wand's corporate attorney stated in a letter, "you weren't supposed to get this job", once he had reviewed the claims expert files.
The County should have paid for the work completed and lost profits. NO written or substantiated proof was ever produced by the County to reinforce their position simply because they had none. What was produced by the County was a fabrication of verbal lies and half-truths. The arbitrators were derelict in their job and the appellate court reinforces the consensus that arbitrators can do whatever they desire with impunity. This is not justice.
In summation:
- LaBarge got the Taj Mahal he wanted but didn't have to justify or pay for
- Arvay was able to cover up his screw-ups by making design changes plus an extra $16,000 in billing and passing the cost onto the contractor
- Murnane was happy because he was being paid by the hour on a time and materials contract
- Wicihowski got a new storm drainage system at taxpayer expense that prevented Spring run-off from going onto his property
- the County was able to keep everything from the public and retain their Teflon Highway Superintendent
- And at the bottom of the list, was Wand Electric who got the shaft
- P.S.: As of early 2004, LaBarge still can't get a job, no one wants the "greatest manager the County ever had" (County Manager Bingel statement to the media in 1996) and works for his wife while Arvay the architect has fled to Canada leaving all his real estate properties abandoned and in foreclosure proceedings
Read the following memorandums and come to your own conclusions.
