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Romney plans changes in Big Dig cost panel

By Raphael Lewis, Globe Staff, 3/27/2003

   
 THE SERIES

PART ONE
Bechtel's mistakes drive up cost overruns, and company profits.

Graphics
Bechtel's fee overruns
Map of major conflicts
History of the contract
Contract modifications
Cross section of roadway
Construction cost overruns


PART TWO
State officials overlook and excuse Bechtel's mistakes for a decade.

Graphic
Cost recoveries initiated


PART THREE
Powerfull allies help protect Bechtel and its bottom line.

 FOLLOW-UPS

This series has generated strong response from the state, the public, and Globe columnists.
More Globe coverage

 GLOBE DEFENSE OF SERIES

On Feb. 20, 2003, Bechtel/Parsons Brinckerhoff issued a document disputing the findings of the "Easy Pass" series. Globe editor Martin Baron responded with a defense of the Globe's reporting.
Read Bechtel's statement
Read the Globe's statement

 PHOTO GALLERY

Building a reputation
Bechtel has never shied away from big construction projects, but worldwide achievements are accompanied by controversy.
See past Bechtel projects

 FROM THE ARCHIVES

2001
Review cites flaws at Big Dig
Cerasoli charges Big Dig coverup
$1.4b overrun known in '99
Firm rejects call to offset costs
'99 memos warned of tunnel leaks

2002
Officials disclose more defects
Lawsuit raises Big Dig questions
State to reopen deal with Bechtel
Big Dig hires quality manager
US knew of hidden expenses
Big Dig overrun just plain big
SEC probers to target Big Dig
Big Dig review to target overruns
Turnpike, firm set deal on leak cost

2003
Contracts to be reviewed

 RELATED LINKS

Central Artery/Tunnel Project
www.bigdig.com

Bechtel
www.bechtel.com

Parsons Brinckerhoff
www.pbworld.com

State Inspector General reports
On the history of the Central Artery/Tunnel project's finances:
www.state.ma.us/ig/publ/cat01ex.htm
On the Central Artery/Tunnel project's attempts to recover money for mistakes:
www.state.ma.us/ig/publ/catcrex.htm

About "Scheme Z" bridge design
libraries.mit.edu/rotch/artery/

State oversight of the Big Dig
www.state.ma.us/catocc/

Mass. Turnpike Authority
www.massturnpike.com

The Artery Business Committee
www.arterybusiness.com

 ONLINE CHAT

On February 11, 2003, Globe reporter Raphael Lewis chatted with Boston.com readers about the Bechtel series.
Transcript of chat

 CONTACT THE GLOBE

Any tips? Let us know.
Phone: 617-929-3379
E-mail: bigdigtips@globe.com

 MORE BOSTON.COM COVERAGE


Beyond the Big Dig   What happens to the ribbon of land being created by the depression of the Central Artery? A joint effort between The Boston Globe, MIT, and WCVB-TV explores.
A special report


Progress updates on the Big Dig. Info
 


After moving to control efforts to recover millions of dollars lost to Big Dig design and management mistakes, Governor Mitt Romney now has made overtures to several state and federal agencies that were chafing at being left out of the process.

The strategy shift, coming just days before climactic legislative hearings about cost overruns on the project, may finally clarify a confused situation in which the Massachusetts Turnpike Authority, the Legislature, the Federal Highway Administration, and others have been jockeying to grab a share of the political credit.

In February, after the Globe ran a series of articles detailing failings in the Big Dig's cost-recovery mechanism, Romney said he would create a panel of lawyers, accountants, and engineers to oversee a private firm that would work on commission to ferret out costly errors and seek reimbursement.

The plan, however, required cooperation from the Turnpike Authority -- an independent entity that Romney has promised to dismantle for cost-saving purposes. Romney also needed the Legislature, which would have to pass a statute giving him the legal authority to proceed, but stood to gain no political capital if money ultimately was recovered.

Still, according to several Beacon Hill officials with knowledge of the administration's cost-recovery plans, Romney forged ahead confidently, asking retired Bank of Boston CEO Ira Stepanian to chair the cost-recovery panel. Also asked were Cathy E. Minehan, president of the Federal Reserve Bank of Boston, former transportation secretary Frederick P. Salvucci, and Elliot M. Surkin, a real estate lawyer with Piper Rudnick. All either declined to comment to the Globe or did not return calls.

Legislators, however, have expressed concern about the idea of private-sector oversight because of the potential for conflicts of interest. Stepanian is an unpaid member of an advisory board to Intercontinental Real Estate Corp., a private equity firm, along with Thomas P. O'Neill III, who also owns the lobbying firm hired by Bechtel/Parsons Brinckerhoff, which manages the Big Dig. And Salvucci created the commission that selected Bechtel for the Big Dig back in the late 1980s.

Now, the administration appears to be modifying the panel to include a wider array of public entities. In an interview with the Associated Press on Tuesday, state Transportation Secretary Daniel Grabauskas said the administration wants a panel of representatives from the Federal Highway Administration, the governor's office, and the state auditor's and inspector general's offices.

Grabauskas did not offer details of the proposal, but Beacon Hill insiders said yesterday that, in a quiet agreement between House Speaker Thomas M. Finneran, Senate President Robert Travaglini, and Romney, Finneran and Travaglini would nominate the state auditor and the state inspector general to the panel. The federal highway agency would appoint representatives, and Romney would provide state development chief Douglas Foy and perhaps other panelists, including some or all of the private-sector people he'd already picked for the job.

However, state Senator Marc R. Pacheco, who runs the powerful Post Audit and Oversight Committee, and who will chair next week's cost-overrun hearings, said he was assured the Romney administration would not move forward publicly on the cost-recovery issue until after the hearings.

Steve Bailey of the Globe staff contributed to this report.

This story ran on page B5 of the Boston Globe on 3/27/2003.
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