Records/Reporting that led to the start of the

G.H. Construction criminal investigation and the

"cover-up" charge involving Siegelman's motorcycle

 

This Birmingham News photo, showing Lori Siegelman riding with her husband, was

a key piece of evidence used by prosecutors to convict Siegelman of "obstruction of justice."

 

What follows are a a few of the hundreds of records I used in reporting the G.H. Construction warehouse scandal; as well as records used by prosecutors

to convict Siegelman of obstruction of justice. Both the warehouse and the cover-up involved Waste Management consultant and Siegelman backer Lanny Young.

Below is an Alabama Secretary of State Corporations record showing that on Feb. 8, 2001, David Green and Bryan Broderick incorporated

G.H. ("Goat Hill") Construction. Broderick had done work on Lanny Young's house, and Green was Young's brother-in-law. The firm had been

secretly given a no-bid contract to build two state warehouses, with a total price, including construction and professional and financing costs of about

$21 million. As we reported in May 2001, the company was to be paid an astonishing 12 percent on top of every dollar spent on the project, including

professional costs like architectural work performed before Young was chosen. At trial, it was revealed that the bonding company refused to bond

G.H. Construction. The administration kept G.H. on the documents, meaning the company stood to make some $2.4 million on a project that it was not

going to be allowed to do any work on. The Siegelman administration refused to turn over the contracts, and only did so after the Press-Register's lawyer

got involved.

Below, the inside of G.H. Construction's office. No one was answering calls so I went to the office, the door

was ajar, and this all that was there was to it.

 

The following is the cover page from the state comptroller's office showing payment

on one of two invoices submitted by G.H. Construction for pre-construction work on the

warehouses. The company, if it can even be called that, submitted receipts from other

firms which had (and in some cases, not) performed work.

 

 

The receipt below, from a firm called Lucido & Oliver, was for a boundary survey of the land chosen for

the warehouses. The firm did indeed perform the survey.

 

 

       The following receipt is from an engineering company called CDG Engineers. It was included in G.H.

Constructions second submission of receipts to the state. When I looked up "Alta Survey" I found

it was another name for boundary survey. The Siegelman administration and those overseeing the

warehouse project were unable to provide any work product for CDG Engineers, for the boundary

survey or any of the purported work for which the state was billed and then paid $90,058 to G.H. Construction.

        The news was to get worse for Lanny Young, G.H. Construction and the administration. As it turned

out, the signature on the bill, by CDG Engineering VP Mark Pugh, was forged. At the bottom of the bogus

bill is his forged signature.

      Below that is Pugh's real signature on a state highway department contract.

 

 

 

 

 

On April 28, 2001, the Press-Register published the first of what was to become many stories on the G.H.

Construction (See below.)

The following Monday, the administration was to sell $20-million-plus in bonds to finance the warehouse project.

Siegelman's press office had asked me to hold off publishing my story until after the bond sale -- a request we naturally

refused.

I e-mailed the press office to let them know, among other things, that we were going to report apparent theft from

the state by the company (G.H. Construction) that was contracted to build the warehouses and be paid from investors

(bond buyers') money; that the administration was aware of those circumstances; and would possibly be engaging in securities

fraud by going through with the bond sale. Later that afternoon, e-mail, the administration announced that it was canceling

the bond sale. As a result, we had to report that a project not yet reported on was being canceled due to a story not yet

written.

Below is the start of that April 28, 2001 story reporting the cancellation of the warehouse project.

 

Now, for the obsturction of justice/cover-up portion of the case. Below is a check written in December

1999, near the end of Siegelman's first year as governor. It was for a new motorcycle.

 

 

The following are three checks, all written on the same day -- Jan. 20, 2000 -- and all for $9,200.

According to trial testimony, Siegelman had written a check that -- when combined with his purchase

of the motorcycle a month earlier -- would bounce. Rather than liquidate a fraction of his $1 million-plus

in stocks, the governor called in Lanny. The pair settled on the $9,200 figure.

Lanny cut the first check, then used that money to make out a cashier's check to Nick Bailey (see Lanny

Young as "name of remitter on check.") Bailey, at Siegelman's direction, then wrote a check for $9,200

to Lori Allen -- Siegelman's wife's maiden name. Siegelman cashed the check, deposited the $9,200

in his checking account, and avoided bouncing previous checks.

 

 

 

Fast forward to June 5, 2001. We'd published about a dozen stories on G.H. Construction

in the previous five weeks, and state and federal authorities had announced the start of a criminal

investigation into the warehouse deal. It was obvious that the FBI would be combing through every

check written by Lanny Young in the past several years and would almost surely come across

the series of $9,200 checks shown above. As testimony showed, Siegelman, Nick Bailey and

Lanny Young sought to create an explanation for the $9,200 payments that focused on Siegelman's

purchase of the motorcycle. The plan was to make it look like Bailey borrowed the $9,200

from Lanny Young to make a first payment on the motorcycle. The notation on this check for

$10,503 says "payment of loan plus interest."

 

 

Again, the ultimate theory to be sold to investigators was that Bailey bought the motorcycle from Siegelman

shortly after Siegelman bought it (even though Bailey did not ride motorcycles and was never in possession of the bike.)

Four months after the check from Bailey to Young, Bailey wrote the following check to Siegelman. At trial,

prosecutors showed this check to jurors then added it to the $9,200 check from January 2000 and arrived, to the dime,

at the $12,173 that Siegelman paid for the Honda.

 

 

The above check -- with the notation "balance due on M/C" -- was written by Bailey

and given to Siegelman during an October 2001 meeting with criminal defense lawyers for

both men. The "Motorcycle Bill of Sale" shown below was drafted at that meeting at Bobby Segall's

office. At trial, prosecutor Louis Franklin ridiculed Siegelman and the cover-up, memorably asking

jurors, “When have you ever needed two lawyers to draft up an agreement to sell a car or a motorcycle?”

 

Though Siegelman didn't testify, his lawyers offered jurors an explanation -- actually, several --

to explain the unusual series of checks. Chief among them: That Lori Siegelman was afraid of

motorcycles and would be terrifically angry with her husband were she to find he bought one.

Among the evidence prosecutors used to shoot this falsehood down was the picture at the top

of this page, which accompanied a Birmingham News story bearing the headline, “First Couple

Leads on Harley,” and published a week before the motorcyle sale meeting. “He’s very good or

I wouldn’t ride with him,” the First Lady told the News.