Midlands DOT engineer allegedly altered contracts, encouraged fraud to benefit area company
By RON AIKEN
A South Carolina Department of Transportation engineer and a local crane company have had a business relationship for years that has involved more than $530,00 in unauthorized payments, the altering of contracts to deny approved vendors nearly $150,000 in revenue and the repeated payment of overtime to company operators who did not work it, documents obtained exclusively by Quorum reveal.
From allegations of under-the-table payments to submitting fraudulent invoices and willful violations of both DOT policy and state procurement law, the details that emerge over hundreds of pages of documents, spreadsheets and emails obtained by Quorum through the Freedom of Information Act show DOT District 1 bridge engineer Duane Gamm’s pattern of, at best, preferential treatment toward West Columbia-based White Crane Company; at worst, potentially criminal wrongdoing.
The improprieties, which had gone undiscovered for years, were found in early August when a conscientious new employee noticed a pattern of troubling inconsistencies with Gamm’s paperwork and methods. The gravity of the problem quickly became evident and sparked a comprehensive internal investigation by DOT involving the reviews of hundreds of purchase orders, contracts and invoices dating back years as agency officials try to get a handle on the scope of the problem and determine what, if any, legal liability it has been exposed to.
What is not in dispute is that DOT officials thus far have proof that from September 2015 through June 2017 (at least), Gamm knowingly authorized work totaling $530,000 to White Crane Company prior to a purchase order having been issued and illegally circumvented state procurement code by continuing to order work from White Crane Co. after it had exhausted its existing contract’s financial terms.
In four pages of internal ratification documents produced to legalize, after the fact, Gamm’s unauthorized procurements — errors DOT only discovered when an employee noticed a pattern of troubling inconsistencies with policy in Gamm’s paperwork — the case against Gamm is made clear under the heading “The Facts and Circumstances Surrounding the Act”:
- Work performed without a purchase order:
1) Invoices from White Crane Co. were received for work done on three bridges from June 27, 2016 through Aug. 3, 2017. These requests were made, and services provided, directly between Gamm and Earl Moore, operator for White Crane Co. The services were provided without a purchase order in place and therefore not brought to the District Office’s attention until receipt of the invoice for services already rendered.
2) While there was no contract in place, additional requests for crane service were made to White Crane Co. totaling $110,000. These requests were made, and services provided, directly between Gamm and Moore. The services were provided without a purchase order in place and without seeking competition and were not brought to the District Office’s attention until receipt of the invoice for services already rendered.
- Unauthorized alterations of contracts:
Use of cranes was already contracted with Florence Concrete for setting of bridge spans via authorized contract awards and four separate purchase orders totaling $367,000. Cranes that were bid with the manufacturing and delivery of the bridges were never used on the bridges because they were refused by Gamm, who subsequently requested a separate crane from White Crane for the same jobs.
- Additional unauthorized procurements found:
During its examination of other White Crane invoices involving Gamm, DOT officials found more than 30 unauthorized procurements from September 2015 to June 2017 totaling $530,000 for work performed before a purchase order was issued.
Brian Keys, Deputy Secretary for Finance and Administration, said DOT “is still in the process of discovering what happened,” referring to it as “an unfortunate situation.” He said more conversations between DOT personnel and White Crane Co. are needed to determine the company’s understanding of Gamm’s methods and the relationship between Gamm and Moore.
Until then, Keys said, it’s impossible to draw any conclusions “without more information than we have now” and he said he has seen no evidence of wrongdoing on the part of White Crane Co. or found evidence of a financial relationship between White Crane Co. and Gamm.
What is known, emails and contracts show, is that the relationship between Gamm and White Crane Company goes back to at least 2011 with Gamm, at nearly every turn, arguing for more money or work for White Crane than records show was authorized.
‘SO MUCH WORK UNDER THE TABLE’
Just as the discrepancies first began to surface in August, “we were right in the middle of an HR situation (in District 1),” Keys said. DOT divides the state into seven districts. District 1 is comprised of Lexington, Richland, Kershaw, Lee and Sumter Counties.
As it turns out that human resource “situation,” multiple emails reveal, involved the two people directly responsible for the procurement crisis DOT — until now — has attempted to keep out public view: Gamm and former District 1 administrative specialist Tracey Henderson (she has since moved to another area).
At issue between the two was conflict over Gamm’s procedures and methods.
In an email from Brian Motley, Resident Maintenance Engineer for Kershaw County, to Alan Kazusko, assistant district maintenance engineer, dated Aug. 11, Motley apprises Kazusko of the situation between Gamm and Henderson.
“We’ve had a couple of issues with Duane Gamm lately and an incident yesterday with him that really concerned Tracey, to the point that she is worried about her job and considering asking not to do procurement for the District Bridge Crew any longer,” Motley wrote. “A week or so ago, Tracey asked Gamm why the crane operator had overtime every week when the crews working on the
bridge only had 40 hours.”
“Gamm told her he didn’t know but that it really didn’t matter since it was such small amount of money anyway. Gamm also told Tracey that he uses the operator all the time, even when they are not actively working on a bridge. For instance, that day the operator was supervising Gamm’s crew tying steel. Yesterday, Tracey received an email from White Crane wanting a purchase order number for 2 weeks’ worth of work on (bridge) 543-81 in Sumter County. Tracey told the lady that she did not have a PO because she didn’t know they were working on that road.
“Tracey told Gamm that she had no idea what he needed and that all he had to do was let her know and she would order it for him but that she can’t go back and cut a PO after the fact. Gamm then told Tracey to just charge it to another bridge but she told him that is illegal and that she couldn’t do that. Gamm then told Tracey that he really didn’t care because when he got asked about it, he’s going to say that he told her to cut a PO for the crane and that she just didn’t do it.”
At that point, Motley wrote, Henderson told him “she is worried that she will get on trouble because of Gamm trying to do so much work under the table. She is worried that Gamm will accuse her of not doing something and that she will lose her job. I told Tracey that as long as she is doing the right thing that she has nothing to worry about. Tracey said her stomach is in knots and that she has been worried ever since Gamm told her about using the operator to supervise his crew.”
On Aug. 23, Kazusko relayed his concerns and Motley’s email to Norma Hall, DOT’s overall director of procurement.
Kazusko said he told Henderson not to fear for her job and that “she is doing the right thing.”
For Keys, the right thing to do is fix the mistake(s).
“We’re doing everything we can do to put responsible measures into effect to track total expenditures,” he said.
In the meantime the ratification documents, signed by head District 1 officials as well as DOT chief procurement officer Sherry Bart and Deputy Secretary for Engineering Leland Colvin, also include the personnel corrective action being considered for Gamm.
“Duane Gamm will be required to retake Procurement training class,” the document states.
Speaking to Quorum on Tuesday, Brian Keys, Deputy Secretary for Finance and Administration, said no disciplinary action has yet been taken against Gamm, who earns $73,317 a year, though “it is still under consideration.”
“At this point he can no longer do procurement.”
White Crane Company has yet to respond to questions posed by Quorum.