Vermeer Plants Hit by Tornado

Lu Inc. President Says Company Has ’Saved Many Lives’

Fri June 17, 2005 - Southeast Edition
CEG



CHATTANOOGA, TN (AP) The president of the company accused of installing shortened guardrails said his company has an “impeccable” safety record and did not violate any state guidelines.

Novice Cole, who is the president and second-generation family owner of Lu Inc., the company at the center of a federal investigation of the state’s guardrails, said his workers only cut guardrail posts when allowed under state rules.

“I know I’ve saved many lives,” said Cole. “I know we’ve kept people from running off the road.”

Kingston Springs-based Lu received $40 million in state contracts since 1998, plus millions more in subcontract work.

In January, a whistle-blower told the Tennessee Department of Transportation (TDOT) and a Nashville television station in that Lu crews violated their state work contract by cutting the length of wooden and steel guardrail posts before sinking them in the ground.

The claims have led to an ongoing federal investigation of Lu and a TDOT survey of all 4,000 mi. of guardrails in the state.

TDOT claimed another company, KRD Corp., of East Ridge, also installed unsafe guardrails. KRD officials dispute the allegation.

Cole said he first learned about the investigation in early March, after TDOT officials interviewed a Lu employee. Two state investigators interviewed Cole in his office March 17. FBI agents raided and took records from Lu’s office April 20.

Cole said he has cooperated fully with the FBI’s investigation and later turned over personal computers to the agency.

Lu’s attorney, Hal Hardin, said a TDOT regulation allows contractors to cut posts when “absolutely necessary.” He said TDOT has allowed contractors in the past to use their discretion in cutting posts.

A TDOT audit said Lu routinely set the posts 12 in. into the ground instead of the required 44 in.

TDOT Spokeswoman Kim Keelor said there are times when crews hit something impenetrable, such as bedrock or utility footings, and can’t sink a guardrail to the required depth. When that happens, the contractor is supposed to contact TDOT and work with state engineers to find a solution.

Lu officials never asked TDOT for permission to shorten a guardrail, she said. Keelor said TDOT will hold a hearing into Lu’s suspension as early as this month.

The allegations already have taken a financial toll on the company. Lu’s contracts with TDOT have been suspended, and the company has turned down several jobs outside the state because it no longer can bond its work. The bonds are insurance to guarantee job completion.