Court should summon VA over failed Butler contract
Pay attention to a lawsuit involving the botched first attempt at building the new Butler VA medical center. The lawsuit might complete the story of how a convicted racketeer landed the largest federal contract in Butler County history, before the Department of Veterans Affairs rescinded it.
The $7.8 million lawsuit was filed Dec. 2 by the AmeriServ Trust and Financial Services Co., acting as trustee for the Employee Real Estate Construction Trust Fund — the ERECT Fund.
The lawsuit says the ERECT Fund lent $7.5 million toward the proposed $67.2 million health care center on a 21-acre plot known locally as Deshon Woods — along Route 68, adjacent to the existing VA campus in Butler Township. The loan closed April 2, 2013.
That loan and others were made to Westar Development, which in June 2012 had been awarded the contract to site, build and operate the medical center for 20 years. The contract total exceeded $150 million.
In August 2013, the VA rescinded its contract to Westar after Robert Berryhill, a Westar senior vice president was indicted on construction-related fraud charges in U.S. District Court in Cleveland.
AmeriServ alleges in its lawsuit that the government knew of the federal investigation involving Berryhill before the trust lent money to Westar. It further alleges it would not have made the loan if the government had shared what it knew about Berryhill.
The lawsuit puts its finger on a central issue: What else did federal officials know about Westar, and when did they know it?
Consider that the VA’s Office of Inspector General eventually determined that Westar was secretly controlled by Michael Forlani of Cleveland. Two years ago, Forlani pleaded guilty to bribery and racketeering charges in connection with a massive corruption scandal involving several Cleveland-area political figures.
Prosecutors accused Forlani of paying more than $96,000 in bribes to his friend, then-Cuyahoga County Commissioner Jimmy Dimora, now serving a 28-year prison term for racketeering and 30 other corruption-related charges.
Forlani paid bribes totaling nearly $40,000 to then-Maple Heights School Board President Sandy Klimkowski and a family member.
He paid nearly $80,000 in bribes and campaign contributions to then-Parma School Board member J. Kevin Kelley. Forlani’s company received $4.42 million in contracts and subcontracts from the Parma school district, according to prosecutors.
Forlani has an established pattern of paying bribes and getting government construction contracts.
No one has specified or alleged that Forlani or his associates paid any bribes to secure Deshon Woods or the VA contract to build or run the Butler VA medical center. But it seems naive to assume blindly that Forlani changed his pattern — particularly after the VA’s own Office of Inspector General determined that the VA’s contract officer for the Butler project did nothing to check Westar’s references or documentation; and, when a competing developer filed an official protest. Regarding that protest, which was filed several months before the ERECT Fund approved its loan to Wester, it “was determined by the [contract officer] to have no merit without any follow-up or discussion with the developer who filed the protest,” according to the OIG report.
The federal government now is asking the court to dismiss the ERECT Fund lawsuit. In its appeal, the government admitted that the VA’s contracting officer had even talked with the FBI about Berryhill but denied the group’s allegations that it had complete knowledge of Berryhill dating back to 2012.
The court should not drop this proceeding; if anything, federal prosecutors should be poring over the evidence reported by the OIG and demanding an accounting for puzzling oversights. Anything less than a thorough and open investigation will leave the public wondering to what extent in can trust the integrity of the decision-makers behind Butler County’s biggest ever government contract.
