Audit report on two former county commissioners alleges violations

Ponca City Now - December 3, 2015 9:03 am

To see the complete audit report, visit https://www.sai.ok.gov/Search%20Reports/database/KayCoBoCCWebFinal.pdf

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Two former Kay County commissioners engaged in favoritism and apparent widespread violations of Oklahoma’s competitive bidding laws in awarding more than $5 million in public construction and reconstruction projects, according to a state investigative audit released Wednesday.

Former Commissioners Dee Schieber and Tyson Rowe each were cited in the audit for multiple potential criminal violations.

In one allegation, state auditors alleged that Rowe, 36, engaged in self-dealing by having his private dozer company subcontract to do nearly $20,000 in work on two county projects.

Rowe denied wrongdoing Wednesday, while Schieber could not be reached for comment. Both left office in January.

State Auditor and Inspector Gary Jones said he has turned the audit report over to Garfield County District Attorney Mike Fields to review for possible criminal charges.

"We are in the process of reviewing and evaluating that to determine what, if any, action we will take," said Fields, who was assigned the case by Attorney General Scott Pruitt after Kay County District Attorney Brian Hermanson stepped aside.

Many of the allegations of wrongdoing centered around projects awarded to River Ridge Construction of Newkirk.

Without taking bids, Schieber — working in conjunction with the Bureau of Indian Affairs — awarded River Ridge Construction a $1.7 million project to reconstruct five miles of N Pecan Road, auditors said.

"Not bidding the North Pecan Road project was an apparent violation of the Public Competitive Bidding Act," auditors said. "In addition, the transacting of business by an individual commissioner outside the authority of the Commission would make the agreement illegal, unlawful and void."

The county compounded its potential legal problems by providing River Ridge Construction $350,000 in upfront mobilization costs, which would "appear to be an advance of funds in violation of … the Oklahoma Constitution," auditors said.

Auditors contend River Ridge Construction was overpaid $500,000 on another road project — the Blackwell Wind Farm Roads project — after it failed to include construction material costs in its winning bid.

“It certainly looks like public funds were used to underwrite financing so a particular vendor could get started in the road construction business,” said Jones, the state auditor. “The county failed to obtain a warranty bond on one project and, within a year, the road was already cracking. Another, $1.7 million project, wasn’t bid as required by law and no contract between the county and the vendor for this project even exists.”

Rowe was cited by auditors for having his private dozer company, R & R Dirt Contractors, subcontract with River Ridge Construction to perform nearly $20,000 in dozer work on two projects River Ridge was doing for the county.

Rowe "also may have benefited in an apparent shell game in which the county ended up purchasing a trailer previously owned but no longer needed by the commissioner in a series of swaps with one particular vendor involving older model county-owned trailers for new models of the same trailer," auditors said in a news release. "The county let bids for a specific trailer matching the one that had belonged to the commissioner."

Rowe said he doesn’t believe he did anything wrong.

"Every bid that we ever let, or anything that we ever bought or contracted, our district attorney, Brian Hermanson, was in the meeting and he looked over every contract that was there," Rowe said. "And to my knowledge, … I don’t believe that we ever did anything wrong."

Hermanson issued a statement challenging Rowe’s contention that he had approved everything.

Hermanson said that while he or an assistant attend every county commissioners meeting, the actions that brought criticism from auditors were not presented to him for approval.

Auditors also criticized the former Kay County commissioners for:

• Manipulating bids and apparently overpaying in the $180,000 purchase of a used vibratory pile driver from River Ridge Construction.

• Failing to advertise or award bids for several road or bridge projects funded by the Bureau of Indian Affairs.

• Creating potential conflicts of interest by conducting personal business with contractors that do significant work for the county. (For example, Rowe hired River Ridge Construction to build a hay barn on his personal property and that same contractor built a gate over Schieber’s personal driveway in exchange for pipe, auditors said.)

• Selling 20 acres of county land to River Ridge Construction without following proper legal procedures.

• Potential violations of the Oklahoma Open Meeting Act.

 

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