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Senator to fight Big Dig aid cap

Overruns known years ago, he says

By Raphael Lewis, Globe Staff, 4/7/2003

   
 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
 


State Senator Marc R. Pacheco, armed with fresh evidence that federal officials apparently knew the Big Dig's true cost five years before a $2 billion overrun rocked the project, says he will seek to lift the federal funding cap that was imposed in the scandal's aftermath.

The cap set the federal contribution to the Big Dig at roughly $8.5 billion, or about 60 percent of the $14.6 billion price tag, leaving the difference to be made up by state taxpayers and tollpayers.

When the cap went into effect in June 2000, it was the first time in the nation's history that a state had been denied the 80 percent to 90 percent federal share of the cost of an interstate highway project. Congressional foes of the project demanded such a funding limit after a federal task force concluded that the state had acted "unconscionably" by "concealing" the true budget numbers from the Federal Highway Administration, or FHWA.

Since then, state officials have been trying to get rid of the cap, without success. But now evidence has been collected that appears to show the FHWA was indeed aware of the project's real cost.

In spring 2001, the state inspector general's office issued a report that concluded that the federal government had known since early 1995 that the Big Dig cost far more than what the public was being told -- and that local federal officials even helped the project conceal real costs and partake in questionable accounting.

The report also said that the project's managers, Bechtel/Parsons Brinckerhoff, told then-Governor William F. Weld in 1994 that the Big Dig's cost would be $14 billion -- when the publicly stated cost was about $8 billion.

When that report came out, former Governor Paul Cellucci quipped that it should be filed under "fiction," but the state's congressional delegation asked Kenneth Mead, the US Department of Transportation's inspector general, to look into the allegations.

On Jan. 29 of this year, Mead's office briefed the lawmakers, saying the inquiry had required 1,300 hours of work, 25 interviews that included "two former governors," and 125 boxes of documents. Mead's inquiry "found no evidence that FHWA was apprised" of the $14 billion cost estimate. It also "did not substantiate" that Bechtel officials told Weld of that cost figure.

At State House hearings last week, however, two sets of witnesses provided evidence and testimony, under oath, that both such allegations were well-founded.

C. Matthew Wiley, Bechtel's top official on the project, testified that the company's former head, Gary Bechtel, met with Weld in December 1994 with the sole purpose of informing him of the firm's potentially disastrous cost estimate. Wiley said it was his understanding that Weld refused to accept a document detailing the financial picture.

Bechtel's "management felt it appropriate to go to the highest level," Wiley testified.

As for federal officials having knowledge of that estimate, Wiley testified: "These numbers were shared with MTA [the Massachusetts Turnpike Authority] and FHWA."

In separate testimony, state Inspector General Gregory Sullivan displayed documents from the Cambridge office of the Federal Highway Administration, which showed that officials there, as early as 1995, aided the Big Dig's managers as they sought to exclude certain costs and reduce budget numbers. One such cost was for the razing of the elevated artery itself.

A hand-scrawled note from former district administrator Donald Hammer's file said, "Do we really want to introduce a substantially higher estimate of the cost to complete?"

"It's crystal clear from our review that local FHWA officials were fully aware that the cost of the Big Dig could exceed $13 billion, and the record substantiates that," Sullivan said in an interview.

"What bothers me the most was that they wouldn't tell that to Congress when we were being taken to the woodshed. They sat there and nodded their heads," he said.

David Barnes, a spokesman for Mead, said the federal inspector general's office stands by the findings of its inquiry.

"As you know, we did conduct the review at the request of the Massachusetts congressional delegation," Barnes said. "They were satisfied with the briefings and, to the best of my knowledge, consider the request closed."

FHWA spokesman Bill Outlaw also reiterated the agency's stance on the issue, saying, "The Federal Highway Administration was not aware of the $14 billion estimates in 1994 and 1995."

But Pacheco, a Taunton Democrat who chairs the state Senate's powerful Post Audit and Oversight Committee -- which held last week's hearings -- said he sees the testimony and documents as a new chance for the state to pursue desperately needed funds.

"Quite frankly, we've gotten enough evidence to at least believe that some members of the federal administration did know," Pacheco said. "It's certainly appropriate for the committee [to take this issue] to the federal delegation and advising them of the information that we are aware of. Whether or not they can be successful, I don't know, but it's certainly something we want to be sure they have.

"If they want to cap it [federal aid] because of the total dollar amount, OK, that's one argument, but that's not what was said when they put in the cap," Pacheco added.

US Representative Michael Capuano, Democrat from Somerville and member of the House Transportation Committee, said he applauds Pacheco's desire to do what's best for the state.

But as far as he and his congressional colleagues are concerned, asking the federal government to remove the funding cap would be futile.

"There is absolutely, positively no hope that there will be additional funding for the Big Dig, with all the cost overruns, regardless of who had a hand in it, no matter who's responsible," Capuano said. "It's still way over the original cost [of $2.6 billion], and it is a political nightmare for the Massachusetts delegation."

Raphael Lewis can be reached by e-mail at rlewis@globe.com.

This story ran on page B1 of the Boston Globe on 4/7/2003.
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