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State Office Finds No Proof of Minority Subcontractor ’Fronts’

Wed February 15, 2006 - Southeast Edition
CEG



RALEIGH, NC (AP) The State Construction Office said it found no evidence confirming allegations that subcontractors sought to fake minority participation in a $94-million Columbus County prison project.

The Carolina Associated Minority Contractors complained to the state in September that some minority-owned firms had been asked to pose as “fronts” for the project so that subcontractors could meet state hiring guidelines.

The review could not substantiate the claims and suggested poor communication or a misunderstanding of the state’s minority participation requirements may have prompted the allegations.

Centex Construction is the general contractor of the 1,000-bed prison scheduled to open in 2008.

“We find no evidence that false statements were knowingly provided … to the state by Centex,” the review said.

North Carolina law requires that builders make “good-faith” efforts to steer 10 percent of state construction to businesses owned by women, racial and ethnic minorities, and people who are socially and economically disadvantaged. Centex made its major subcontractors responsible for finding minority firms.

Kenneth Johnson, a lawyer for the contractors, said the state should have questioned more contractors. He declined to comment further until examining the report.

The allegations include Centex subcontractors offering minority firms supply contracts, but getting the materials from companies the subcontractors had already lined up. Another firm accused a Centex subcontractor of wanting to pay him to observe work on the project.

State officials visited three of the 18 minority contractors Centex said it planned to hire last February as part of the review.

Centex said it cooperated with state officials in the investigation and agreed with the conclusion.