Owners of local construction companies testify in Schieber trial

February 12, 2020 | Courts

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NEWKIRK — The jury assigned to former Kay County Commissioner Dee Schieber’s trial heard from the owner of River Ridge Construction, the owners of Hembree&Hodgson Construction, the owner of Clark Construction, and legal counsel for the Oklahoma State Auditor’s office today.

Schieber, who served as Kay County Commissioner, 1995-2015, has pled not guilty to seven misdemeanor charges of willful violation of law regulating official conduct. 

Schieber and former county commissioner Tyson Rowe, 40, were charged with a host of crimes on March 31, 2017, by the Oklahoma State Auditor’s office. (see story)

River Ridge Construction owner Darren Wood continued his testimony from Tuesday. (see story)

Schieber’s attorney, Jarrod Stevenson, told Wood that prosecutors are trying to say his business is doing well because of Kay County contracts. “But you have been doing various things to try and make your business successful, correct,” asked Stevenson.

“That is my job,” replied Wood.

Stevenson said Wood has completed projects for other counties and other business such as Devon Energy.

He asked Wood about the problems that occurred with the Oakland Road project. Wood said it was an experiment that failed and he got blamed for it. “If I remember right that concrete was only six inches thick and had no re-enforcement,” he said. “I believe it was saw cut and I think they were trying to mirror a job down south.” 

“In your opinion this was an experiment that failed but because you were the finisher you got blamed,” said Stevenson. “Yes,” replied Wood.

Stevenson asked Wood about the Pecan Road project proposal and presented copies of emails between Bureau of Indian Affairs engineer Tom Simpson and River Ridge representative Shawn Kiser.

Attorney Jarrod Stevenson and his client Dee Schieber chat during a break in Schieber’s jury trial.

“River Ridge submits a proposal and Simpson, suggests moving some numbers around so the mobilization fee is higher and the bid is the same,” said Stevenson. “Simpson is the one who suggested you bump the fee from $50,000 to $300,000. Not River Ridge’s idea and not Dee Schieber’s idea.” “Yes,” replied Wood.

“You feel this is whole mess is political correct,” asked Stevenson. “Yes,” said Wood. “The BIA does what they want to do. The county commissioners are just a pass through.”

“We can see your company has direct involvement in how projects are done,” said Stevenson. “Yes we submit a bid or quote we expect to get paid that,” replied Wood.

“You were asked by the auditors why Schieber and Rowe received more money then commissioner Steve Austin from the BIA and you said they routinely go to tribal events and promote them is that correct,” asked Stevenson.

“Yes, I probably said that. We have Kaw, Tonkawa and the Otoe tribes here and they all get funded so many dollars a year that they save up. If you don’t play nice with the Indians they don’t play nice with you. They want their pictures on the front of the papers.”

Stevenson asked Wood if the fact that Schieber is his cousin by marriage helped his company land Kay County contracts. “No,” replied Wood.

Canadian County assistant district attorney Austin Murrey, who is prosecuting the case, asked Wood about bonding.

“I won’t bond nothing that isn’t engineered stamped,” said Wood. “So your saying there wasn’t any engineering on these roads,” asked Murrey. “I’m sure not,” said Wood.

Murrey asked Wood if he has done work on Schieber’s private property. Wood said his company built a gate for him.

Murrey called Mick Dodson, state auditor inspector legal counselor to the stand.

Dodson spent most of the day explaining the processes used to investigate the case which included working closely with county clerk Tammy Reese’s office. He also explained the Public Competitive Bidding Act which has been around since the 1970s. 

He said the auditors pointed out problems with BIA contacts in the audit as well as other issues.

“It was one of the lowest audit ratings an entity could get,” he said. “Kay County was doing much of this work through the six month term bids so it was important to see who the contractors were.”

He said there were a number of findings on the Traders Bend Head Walls project including that it was not bid as a public project.

“When it was bid, the county still did not go with the lowest bidders,” said Dodson.”It was a challenge for us when we were doing this investigation. Our thinking was lets take it a step further because officials were telling us they were doing these projects under term bids. We concluded all of these projects should have fallen under the PCBA.”

Dodson talked about a special mix of concrete used on one of the projects that was not on the six month bid list. He also said there was an administrative fee that was invoiced at no charge.

“We don’t know how to categorize it,” he said. “It is basically just an extra dollar amount.”

He testified that Evans and Associates received a separate payment on the Pecan Road project and that Kay County paid River Ridge for concrete despite the fact they were not the low bidder.

“Did Kay County pay River Ridge for things that were nowhere on the six month bid list,” asked Murrey. 

“Yes,” replied Dodson.

Dodson addressed the sale of land near the county jail to River Ridge.

“We reviewed minutes from the commission meetings and found that on July 18, 2011, commissioners discussed selling 28.9 acres of land. Steve Austin wanted to keep land for expansion. Rowe wanted to sell 14 acres and Schieber said the people wanting to buy it wanted more than that. Then Sheriff Everette Van Hoesen wanted to save space for a juvenile detention center.” 

Dodson said River Ridge purchased 20 acres and Leaming Construction bought 7.89 acres. He said a investigators never found a certified appraisal for the land. Stevenson later pointed out that the two companies paid more for the land than the appraised amount.

Stevenson asked Dodson about the definition of the lowest responsible qualified contractor. Dodson agreed that the law does not define responsible or qualified.

“The only term we know the meaning of is lowest right,” said Stevenson. “Yes,” replied Dodson.

“If my son would have bid $5 a square yard, he might be the lowest but not the most responsible right,” said Stevenson. “Yes,” said Dodson.

“When you went though the invoices to support the payments to River Ridge did you see cheeseburgers listed,” asked Stevenson. Dodson said all things on the invoices except the mobilization fees were project centered.

Stevenson used a cheeseburger analogy to talk about items not listed on a bid list.

“Your making a cheeseburger and the bid list says meat is $1, the bun is $1 and the cheese is $1,” said Stevenson. “River Ridge says to make a good cheese burger you also need lettuce, tomato, and onion which are not on the bid list.”

Murrey asked Dodson if investigators ever found a public accessible record as to why the county passed over a lowest bidder. “No,” replied Dodson.

“In connection to Austin did you see the same pattern of behavior with him as you did with Rowe and Schieber,” asked Murrey. “No,” answered Dodson. “We did not see a favored contractor on Austin’s projects and his volume of work was less.”

Stevenson said, “If Austin wasn’t willing to shake hands and kiss babies at the tribe he wouldn’t have the same amount of money to work with as the others. Did you find purchase orders with Austin’s signatures,” he asked.

“Yes,” replied Dodson.

“Your not telling this jury that the only purchase orders that exist are signed by Schieber,” asked Stevenson. “No,” replied Dodson.

Murrey called Schieber’s former secretary, Debi Merhoff, to the stand. He showed her a canceled purchase order signed by her and asked if it was her decision to cancel it. “That would have been Dee or the county clerk’s decision,” she said.

Murrey called real estate appraiser Keith Inskeep to the stand and asked if he submitted a letter of opinion to Schieber. Inskeep said he did and that Schieber wanted the fair market value of the land. 

Murrey called John Hodgson, co-owner of Hembree & Hodgson Construction to the stand.

Hodgson said his company is a competitor of River Ridge. He said his company was turned down by the county on a boat ramp project. “We were told we weren’t the qualified bidder at the time,” he said. “We didn’t have any experience on boat ramps.”

Stevenson asked Hodgson about the 2012 Dry Road paving project they performed for the county.

“It appears that after you were awarded the contract, Hembree & Hodgson did two separate change orders asking for an additional $36,000,” said Stevenson.

Hodgson explained that Austin called and said the county wanted to add the curb and gutter to the project. “Did you ever show up at a county meeting and ask why you weren’t getting projects,” asked Stevenson. “No,” replied Hodgson.

“Was it your company that retain an attorney to look into this,” asked Stevenson. “Yes,” replied Hodgson.

Murrey called Brian Hembree co-owner of Hembree & Hodgson to the stand.

Hembree echoed what Hodgson said that his company was turned down by the county on the boat ramp project and that he sent a factual e-mail to all three commissioners regarding his concerns.

“Have you ever been told by another government agency that your are not qualified, asked Murrey. “No,” replied Hembree.

Stevenson said River Ridge did not get the boat ramp project.

Janson Clark, Clark Construction and Demolition, took the stand. Clark said he used to submit bids to the county but no longer does. “It’s not worth my time,” said Clark. “From the outside looking in River Ridge was getting all of the work.”

Clark said he contacted Schieber about the demolition contract on the old county jail.

“He let us walk through the building and look around,” said Clark. “I asked if there were formal bid documents and he said no just write a proposal. I was green and didn’t know better. I had just started my company within the year. I made a proposal and then was disqualified because I didn’t have a formal bidding document. It was very embarrassing to be the fool standing there.”

River Ridge got the job.

“After the jail was knocked down the debris were placed on county property. Normally when you knock a building down you take possession of the debris and dispose of it.”

Stevenson said Clark did not know anything about the agreement between the county and River Ridge about the debris disposal

Murrey called Schieber’s nephew, Tony Schieber,  T.S. Construction, to the stand.

He asked Tony if had ever been concerned with the connection between River Ridge and Dee. After a pause Tony replied,“I don’t know if concerned is the right word.” “Did you discuss the work that River Ridge did on Dee’s property with the auditors office,” asked Murrey. Tony said River Ridge hung two gates on his uncle’s property.

Testimony continues tomorrow.