SALT LAKE CITY — The state paid out a $13 million settlement to one of the unsuccessful bidders for a record $1.7 billion Utah County road contract, which is at the center of a controversy over the influence of campaign contributions to Gov. Gary Herbert.
At a news conference Monday, Herbert said he didn't know about the settlement payment and accused his Democratic opponent, Salt Lake Mayor Peter Corroon, of "mudslinging."
Corroon said Utahns should be concerned about the payment, but insisted he was not questioning Herbert's integrity by raising questions about the links between the governor's meetings, contributions and state contracts.
The settlement payment to the Flatiron/Skanska/Zachry bid team came after a series of letters to the Utah Department of Transportation seeking to reopen the bid for the reconstruction of I-15 through Utah County that complained the state gave the winning bidder favorable treatment.
The state's evaluation oversight team in the bid awarded last December "failed utterly in its duty to provide 'an independent observation of the evaluation and selection process,' " a Jan. 5 letter from a Washington, D.C., law firm representing the Flatiron team stated.
But instead of reopening the competition for the contract, the state settled with the Flatiron team. The settlement amount was based on the hundreds of employee hours over a year or more the companies involved invested in putting together their bid.
UDOT Executive Director John Njord said the $13 million settlement was negotiated in January so work could get under way on the massive I-15 project without the threat of further action.
"The process was fair, and it was above board," Njord said. "We didn't want to enter into a contract with a black cloud hanging over our head."
The UDOT chief said he sat down with members of the Flatiron bid team to reach the settlement. During their discussion, Njord said there was no talk of the governor's campaign contributions from members of the winning bid team.
"That never came up," Njord said. "For them, this is all about their proposal. They invested a year's time in putting their proposal together. … They really thought they had won."
Colorado-based Flatiron Constructors Inc. chief operating officer Bob French said Monday he had "no idea" if contributions given to the governor by members of the winning bid team influenced the contract award.
"We felt that we were given a fair shake at the end of the day," French said. "I don't think there was anything untoward. Nobody ever asked us to contribute money to the governor. … I don't even know who the governor is."
French said the company would continue to bid on state projects and had no plans to contribute to Herbert. "I don't think it's that much different than any other state," he said when asked if he believed donating would boost his company's access to the governor.
The news of the settlement payment comes as Herbert is defending himself against reports he accepted a total of $82,500 from members of the winning bid team, Provo River Constructors.
One of those bid team members, Guy Wadsworth, gave $50,000 and had two private meetings with the governor in the weeks before the contract was awarded.
In a statement released Monday evening, Wadsworth said he is "a strong supporter of Gov. Gary Herbert and as such, do not apologize for supporting the governor's candidacy. I plan to continue my support for his campaign in the future because he is the right person for the job."
Wadsworth said his company is one of the leading contractors in the state and that he has been in the business for more then 30 years. "We have achieved our success through hard work and quality workmanship," he said. "This ill-spirited political attack by Peter Corroon is an affront to the years of effort we have invested in building our company and making Utah a better place to live."
He said the questions raised about the bid were a disservice to hundreds of employees involved with the project as well as to UDOT. He said Njord's "honesty and moral character are above reproach. We have lost many more bids than we have won, and we have always felt that we have been treated fairly."
Herbert said there was "no quid pro quo" and that he was not even aware who won the bid during a news conference held Monday at the state Republican Party headquarters. Flanked by GOP leaders, the governor said Corroon has publicly attacked him and assaulted the reputations of state officials.
"It is deeply disappointing and disconcerting" the governor said. "There's just no justification for this kind of mudslinging."
Herbert said he has "spent a lifetime striving to earn the public's trust. … After it's all said and done, the only thing I'm going to leave behind is my own reputation."
A KSL-TV analysis of the governor's schedule and his contributor list found several similarities with a case that made news last February, when Herbert's campaign deposited a $10,000 check from a coal mining company the same day he met with them. The approval of their permit to mine in southern Utah was apparently speeded up.
No one at the Herbert press conference disputed the facts as first reported Thursday and Friday by KSL-TV and the Deseret News.
Asked about the $13 million settlement paid out by the state to a losing bidder on the roads contract, Herbert said he was not aware of the payment.
"No. First I've heard of it," the governor said.
It is, he said, "legitimate to have a discussion, but not necessarily fair to draw a conclusion," about the settlement raising questions about the bid.
"You've got to look at it in its total aspects," he said. "There is no quid pro quo."
The governor described himself as "disengaged" from the bidding process. "That's not my responsibility," Herbert said.
He said he also does not know who's giving him campaign money.
Lt. Gov. Greg Bell labeled the concerns raised about Herbert as "entirely a smear campaign based on innuendo" and said voters should reject the negative turn the campaign has taken. "In Chicago politics, they call it 'pay for play.' But we're not in Chicago, and these kind of tactics ought not to be tolerated by Utah voters."
State GOP Chairman Dave Hansen said someone should be fired at the Corroon campaign for producing a document detailing concerns about the governor's actions.
"They've basically taken a chainsaw and fired it up and attacked everyone in its path," Hansen said. "They're whacking away. They don't care about the effect that it's having not only on the candidate, but on individuals."
Both Corroon and his running mate, GOP Rep. Sheryl Allen of Bountiful, said Monday they were not aware of the $13 million settlement.
"If the state's settling for $13 million with another contractor, citizens should be concerned," Corroon said, repeating his call for the governor to release more information related to the contracts, contributions and meetings in question.
Allen said the settlement, made during the 2010 Legislature, "certainly should have been more public. … This is a very large sum."
Corroon said his campaign was not questioning Herbert's integrity but calling for campaign reform, including limiting contributions from companies doing business with the state.
"This is an issue that's important to the citizens. Citizens are concerned about big money in politics," the mayor said. "The bigger the money, the bigger the influence. If we can limit campaign contributions, I think we can limit the influence of money in politics."
Corroon said the large contributions he has received, including $50,000 from developer Kem Gardner, don't fit the same pattern as the gifts given to the governor.
Last week, Corroon pledged that as governor, he would not accept campaign contributions from companies doing "significant" business with the state.
His campaign has started running new television commercials detailing the questions already raised about Herbert's fundraising.
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