FBI investigates paving contract

The paving company's president recently testified in front of a federal grand jury.
By DAVID SKOLNICK
and PAUL WHEATLEY
VINDICATOR STAFF WRITERS
STRUTHERS -- The FBI is investigating a road paving contract awarded in 1995 by the city's board of control to a company owned by the then-secretary of a city councilman.
The FBI has interviewed at least five people, including the Struthers mayor, about the $132,000 contract to resurface State Street given to Tone Crack Sealing and Supply Inc., a paving company operated by Renee Smith, a clerical secretary at the Laborers International Union of North America Local 125.
At the time of the contract, Smith worked for Councilman Robert D. Carcelli, D-at large, who was secretary-treasurer of the local union. Carcelli has since retired from the union.
Smith said she recently testified in front of a federal grand jury, but "it wasn't about just" the State Street project. She declined to give specifics saying, "I've already been through enough."
The FBI is questioning Struthers officials about the involvement of Carcelli and his brother, Ron, the city's street foreman, in the project and if they received any benefits from the contract, The Vindicator has learned.
Reaction: Robert D. Carcelli acknowledged he and Tone Crack are being targeted, but says he did nothing wrong. His brother also denies any wrongdoing.
Robert Carcelli said he is bothered that federal authorities have not contacted him about the investigation.
"I think I deserve that courtesy," said the 20-year councilman who has served as the body's finance chairman for the past 14 years. "The feds were in city hall and accusations are being made directed at me. To go into city hall and throw my name up, that is totally uncalled for and unjust."
Carcelli said he was aware that Smith had a contracting company, but the international union said there was nothing improper about it because she was not an elected officer at Local 125. Carcelli said he has only been in contact with Smith once or twice in the past year.
"Yes, I knew she had a minority construction company," he said. "I didn't have anything to do with the company ... If they're saying I got her this job at city hall, they're so far off, it's pathetic."
He pointed out that city council merely authorizes the board of control to put out bids; he has no jurisdiction over such matters.
His brother, who also is a school board member, said he was recently questioned about the contract by FBI agents, but said he knew nothing about it. He said he had no involvement in the contract and he does not even know Smith. He also said he never personally benefited from the contract.
Ron Carcelli said this was the first time in his 29 years with the city that he was questioned by federal authorities and it came as quite a surprise to him.
Robert Carcelli said his brother, as street foreman, "had input on the project." Also, city records of the Sept. 1, 1995, board of control meeting at which Tone Crack's bid was opened showed the foreman was in attendance.
Questioned: Mayor Daniel C. Mamula, who sits on the city's board of control, which awarded the street contract to Tone Crack on Oct. 27, 1995, said he was asked about the Carcelli brothers during his interview with FBI agents.
"They asked me who they were, what their jobs were, what their roles were," he said. "They asked me all kinds of things."
Safety-Service Director John Sveda, a board of control member, said he did not know that Smith worked for Carcelli when the contract was awarded to Tone Crack.
Grant money: Most of the money for the project came from an Ohio Public Works Commission Issue 2 grant that required the contractor be a minority in order for the city to obtain the state money. Tone Crack, the only company to submit a bid for the work, listed Smith, who is black, as its president.
Sveda said he learned about the relationship after the contract was awarded and was concerned about it. But Sveda said he decided that "it was too late by then" to do anything about it. Sveda declined to comment specifically about his concerns, saying FBI agents asked him not to discuss the case.
Mamula said he found out about the Smith-Carcelli connection after the bids were awarded, but he was not overly concerned about the relationship.
"I didn't make any assumptions there," he said.
Andrew G. Arena, agent in charge of the FBI's Boardman office, declined to comment.
Traficant probe: The Struthers investigation appears to be an offshoot of the federal probe into U.S. Rep. James A. Traficant Jr. of Poland.
FBI agents questioned Struthers city officials about any influence Traficant attempted to use on them with regards to the State Street job. City officials told FBI agents that Traficant had no involvement.
"I was asked if I ever met with him or if I knew him," Mamula said.
Robert Carcelli said he is being targeted possibly because of his friendship with Traficant. He noted that he served as co-chairman of Traficant's 2000 primary and general election campaigns and has "been very close" to him.
A federal grand jury in Cleveland is hearing evidence against Traficant involving allegations of bribery, violations of the Racketeer Influenced and Corrupt Organizations statute, the Hobbs Act (extortion) and tax evasion.
Concern: Sveda said the paving proposal raised red flags at the time the contract was approved.
"My biggest concern was, 'Could she do the project?'" Sveda said. "I had never heard of the company."
Even though it was a paving company, Tone Crack did not own any heavy machinery or paving equipment, city officials said. The company is based out of the home of Smith and her husband, Willie M. Smith Jr., who is listed on 1992 incorporation papers with the Ohio Secretary of State's office as the company's agent in charge.
Tone Crack also was not certified by the state as a qualified minority business enterprise contractor when Smith turned in the bid, Sveda said. Without that certification, the company could not do the job and the project would have to be rebid, he said.
MS Consultants told city officials to give Smith additional time to get the state certification because the process was in the works, Mamula said. Smith obtained the certification about a month after the bid was opened, Sveda said. The delay forced the project to be postponed from the fall 1995 to spring 1996, he said.
Councilman Terry P. Stocker, D-4th and chairman of the general improvements committee, recalls concerns about qualifications of Tone Crack by city officials when the contract was awarded.
Jerry Shields, who was 1st Ward councilman when the contract was awarded, said the FBI has asked him not to discuss the case. But it was his understanding that the agency "is looking at certain things that were going on in Struthers in the past."
As was common with state minority business set-aside projects, a program that has been eliminated, the minority contractor relied heavily on non-minority subcontractors to do the work, Mamula said.
According to city records, Tone Crack paid $55,000 of the $132,000 contract to Hardrives Paving and Construction Inc. of Youngstown for asphalt and the use of the company's trucks.
"There's some problems the FBI wants to look into," Mamula said. "The FBI asked about our contracting procedures. We provided the FBI with how contracting and bidding are done."