Posted on 08/04/2003 2:29:54 PM PDT by AmericanMade1776
BOSTON -- The former chief of Boston's massive Big Dig highway project negligently failed to disclose $1.4 billion in cost overruns to the public, according to a Securities and Exchange Commission settlement announced yesterday.
James J. Kerasiotes and the Massachusetts Turnpike Authority have agreed to the settlement of fraud claims, but are not admitting or denying the findings, SEC officials said.
Kerasiotes ran the highway project until he was fired in 2000, when reports surfaced that Big Dig officials were keeping the public cost of the project artificially low.
Neither he nor the Turnpike Authority were fined as part of the settlement. The authority was spared because a fine would put an even greater burden on taxpayers and tollpayers, according to SEC district administrator Juan Marcel Marcelino.
Kerasiotes was not fined, Marcelino said, because he was a public servant trying to manage costs on a massive public works project.
"We're pleased to have this issue behind us," said Turnpike chairman Matthew Amorello. "It represented black days for the authority."
Kerasiotes did not immediately return a call from the Associated Press.
Joseph Savage, a lawyer representing Kerasiotes, said the settlement -- while criticizing Kerasiotes for not announcing the overruns -- acknowledged that the decision not to make those overruns public was part of Kerasiotes' management efforts to keep costs under control.
"We're glad to have this behind us," Savage said. "The commission concluded that Jim tried in good faith to save the taxpayers and tollpayers money."
The Turnpike's five-member board of directors unanimously agreed to the settlement during a closed-door executive session on June 26, according to Amorello.
Amorello said the Turnpike has already adopted steps to make sure that any future cost overruns are quickly made public. Those steps include monthly project updates and annual cost revisions.
The SEC probe began more than three years ago when Kerasiotes acknowledged that the highway project's costs would exceed its $10.8 billion budget.
Kerasiotes had long insisted the project could be finished for that amount. Critics said he should have revealed the cost overrun when state officials briefed bond rating agencies on the state's fiscal condition in 1999.
Under a deal agreed to by Amorello's predecessor at the Turnpike, Andrew Natsios, the agency and Kerasiotes agreed to a joint legal defense with the Turnpike picking up the legal tab.
To date, the Turnpike has spent about $3.5 million in legal bills defending itself, Kerasiotes and former project manager Patrick Moynihan, who was later dropped from the investigation, according to Turnpike general counsel Michael Powers.
Powers said the agreement prevents the Turnpike from trying to recoup any money from Kerasiotes.
Amorello estimated it could have cost another $3 million if the investigation had continued. The settlement concludes that investigation, including the deposition of Turnpike officials.
Also yesterday, Amorello announced that for the third year in a row the estimated cost of the project is remaining steady at $14.625 billion. The project is about 92 percent completed.
The Big Dig project is burying two miles of Interstate 93 underneath downtown Boston, replacing an elevated highway. It is expected to be completed by 2005, making it one of the largest and most expensive public infrastructure projects in U.S. history.
(Excerpt) Read more at milforddailynews.com ...
Bottom line: it was 76% complete on 1 October 2001; it is 92% complete today. At that rate, construction will be finished in May 2004. Add time for checkout, troubleshooting, approval and handover - tasks for which no project plan as yet exists, in spite of the urgent recommendations of the National Academies review - and you'll be lucky to see the thing open before mid 2005.
If Tip O'Neill wanted a legacy, couldn't he have just built a Great Pyramid?
Just more evidence of laws for them and laws for us.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.