After the city reached a settlement yesterday with a local construction company that admitted it broke municipal minority contracting rules, Mayor Martin O'Malley said he believes Baltimore is doing a better job in making sure businesses comply with the law.
"We try to do the very best we can to preserve the integrity of our minority business program, and I think this is evidence that we are doing that. This was a substantial recovery," O'Malley said yesterday at his morning news conference.
Poole and Kent, the embattled Baltimore construction company described in court papers as an unindicted co-conspirator in the public corruption case against a former state senator, will pay the city more than $800,000 after admitting it used a propped-up firm to win contracts designed for minority-run businesses.
The city's Board of Estimates, on which the mayor sits, approved the agreement unanimously yesterday.
Poole and Kent agreed not to bid for future city contracts until at least October. The company also pledged to increase its use of minority and female-owned subcontractors by $1 million over three years above and beyond minimum legal requirements.
"I think it's indicative of a city that takes its minority business program very seriously. You can make the same argument with regards to issues of police misconduct," O'Malley said.
According to the settlement, the company's former executives won city contracts by saying they would employ female- or minority-run firms as subcontractors. Poole and Kent completed work on several water treatment plants, officials said, but the participation of a female-owned subcontractor listed on the job was, in fact, a mirage.
In documents filed in federal court, company employees who have pleaded guilty revealed that the subcontractor, Namco, was a front for Poole and Kent. It was also used as a way to provide a no-show job for the wife of former state Sen. Thomas L. Bromwell Sr. in return for his political influence, according to federal prosecutors.
The settlement payment of $817,981 reflects a penalty imposed because the work was not completed by a legitimate minority-run firm, city officials said.
Poole and Kent, a plumbing and steamfitting contractor, has won multimillion-dollar state and local contracts. Yesterday, pointing to new management of the company, its top executive expressed optimism about moving beyond the scandal.
"We believe this agreement acknowledges both the company's extraordinary efforts to cooperate and that service quality has never been an issue," Adam E. Snavely, Poole and Kent's chief executive officer and president, said in a statement.
The company became embroiled in a federal indictment last fall when prosecutors targeted its former president, W. David Stoffregen, who is charged with bribing Bromwell. Stoffregen and the Bromwells, who also were charged, have all pleaded not guilty and are expected to face trial early next year.
Under new management, the company approached the city this year and asked to try to find a way to allow it to begin bidding again.
In addition to the city contracts, court papers filed in federal court allege that the company misled officials by using Namco in state contracts, including an airport terminal and a juvenile jail in Baltimore.
Officials with the state attorney general's office are waiting for additional developments in the federal criminal case before deciding what action, if any, should be taken against Poole and Kent, said spokesman Kevin Enright.