June 20th, 2012
Front busting and fraud detection in Indiana
Harry C. Alford
So here we were at a crossroads in the state of Indiana. I had just successfully detected, reported and busted a construction fronting scheme. Huber, Hunt and Nichols, the largest construction firm in the state, was now banned from state contracts for five years. The word to the white owned construction community was: it is a new day unless we fight back. Oh, how stubborn they can be defending what is wrong because their greed gets in the way of common sense. Thus, I had to begin a series of front busting and exposure until the goons finally relented and started contracting on a level playing field.
The Maintenance Hub for United Air Lines at the Indianapolis Airport was a $1 billion project and United was determined to build this structure “Chicago Style” (using fronts all the way and void of true Black contracting activity). We weren’t going to have it and put them on notice. When their first minority participation reports came out I destroyed any doubt that it was fictitious. Steel supplier? I got confessions from the alleged Black business that it was a lie. Plumbing supplier? The following is the report I did on this situation:
“Fudge Report Number 3, The Misrepresentations at the UAL MOC II - Another example of the many misrepresentations of minority business participation at the United Airlines Project can be found in two bid packages entitled “Central Plant Plumbing” and “Hanger 1 Plumbing”. The bids were awarded to Frank E. Irish, Inc. and the alleged MBE participant is Indianapolis Pipe & Valve.
The report shows Indianapolis Pipe & Valve selling product worth $258,222 and $599,117 respectively for a total of $857,339. This amount is listed both as MBE participation as well as Indiana Business Enterprise Participation. This claim is false!
The fact is that the material is being purchased from Rovanco Corp. of Illinois. Attached are the final quote pages from Rovanco that list the exact dollar amounts as above. In essence, this is a pure transaction between a white owned Illinois firm and Frank E. Irish, Inc. There is no MBE or IBE participation.
For the use of its name and, if needed, a creation of a paper trail Indianapolis Pipe & Valve will receive a 2% fee ($17,146.78). This company never provided a bid to Frank E. Irish, Inc.
The above scheme was easily detected by the HMCC (Hoosier Minority Chamber of Commerce). All should be assured that there are many other examples that will be exposed.
Being that United Air Lines nor any of its agents never bothered to contact Indianapolis Pipe & Valve to monitor or even verify this large claim they can be classified as either incompetent or duplicitous. The minority business community of Indiana is not amused.”
We became relentless in exposing the fraud and white contractors were starting to get nervous about their names being out there. The only alternative they had was to do the right thing or stay out of the project. One the other hand, United Air Lines started to dig in and play a game of character assassination on me. They were so foolish! Here I was documenting everything and convincing the public that the fronting allegations were fact.
Eventually, United asked the HMCC for a proposal to monitor the minority participation and provide consulting.
We sent a three year proposal which amounted to staffing and totaling an overall cost of close to $1 million. The next thing I knew was that the front page of the Indianapolis Star had a story, “United alleges Harry Alford tried to extort them for $1 million.” Nobody believed that but I learned my lesson: These people were low down and evil - don’t trust them!
UAL also told members of my organization that they had to resign from the HMCC or else they would not get any contracts. That was stupid! They weren’t going to get any contracts anyway unless the HMCC would make UAL do it. Their loyalty remained in tact as we built a city wide consensus.
It all came to a head when principals of United Air Lines decided to tell a lie on State Representative Crawford. They claimed he tried to hit them up for money - like they did me. What a terrible mistake. Representative Crawford was one of the most powerful figures in the state of Indiana and they proved to him that they were evil and dishonest. He joined forces with the HMCC. Victory was certain! United Air Lines had to “eat crow” in Indianapolis, IN. $200 million in contracts went to the local Black business community as a result of this fight.
Mr. Alford is the co-founder, President and CEO of the National Black Chamber of Commerce.