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U.S. Terms City's Inspection Of Costa's Work Unacceptable


By JEFFREY B. COHEN | The Hartford Courant

January 29, 2009

The city had a "totally unacceptable level of inspection" at the multimillion-dollar Park Street construction project done by city contractor Carlos Costa, whose alleged deeply discounted home improvement work for Mayor Eddie A. Perez has led to bribery charges against both men.

In letters obtained from the city, federal officials say that the city did not properly inspect Costa's problem-plagued Park Street work. They also say that Costa's company did not meet hiring goals required for certain "disadvantaged" businesses an oversight that the federal government says will cost the city $767,000.

City officials and Costa's attorney dispute the interpretation of both state and federal officials and say they are working with them to resolve the matter.

Perez's relationship with Costa surfaced more than a year and a half ago, and since then it has become a central focus of state prosecutors investigating allegations of political corruption at city hall.

Costa and Perez, a Democrat, were charged this week with bribery, fabricating evidence and conspiring to fabricate evidence.

Costa has said he did not intend to get paid for the $40,000 worth of work he did on Perez's home for which he charged the mayor $20,000 and said the mayor did him a "big favor" by keeping him on the Park Street job when city officials wanted to yank him. Perez says he erred by hiring Costa for his home renovations and that he always intended to pay Costa for the work. Perez says he intervened on Park Street to save the city money.

The bribery charges came at the same time that city officials and Costa's attorney are working to finalize a mediated settlement on Park Street and end years of finger-pointing on outstanding claims. Perez asked the council to consider the settlement last month, but his spokeswoman has said he played no role in the negotiations.

According to one city councilman, that settlement could bring Costa $500,000 to close out the Park Street project. But now that Perez and Costa have been arrested, any settlement could face steep political hurdles.

"I didn't feel comfortable [giving] $500,000 to a guy who our own department of public works said did shoddy work and who was under an 18-month-long grand jury investigation," city Councilman Matt Ritter said of recent settlement discussions. "I was public about [my position] after the fact that you would never settle a case with a man under investigation. And it turns out, a month later, Carlos Costa was arrested."

Costa's company won the largely federally funded $5.3 million contract to remake Park Street in 2003, when he was the low bidder by more than $1 million. Engineers estimated that the project would cost more than $7 million. Among other things, Costa's job was to install new light posts and build new sidewalks.

In September 2008, officials from the U.S. Department of Transportation's Federal Highway Administration expressed concern about the work done on Park Street in a letter to state transportation officials.

In that letter, Division Administrator Bradley Keazer wrote that the federal government was concerned earlier in 2008 about the way the city had inspected the Park Street project. The city should have had a full-time inspector working on the job, but, for much of the project it only had a part-time inspector, the city said Wednesday.

After those initial concerns were raised, the federal department's Office of Inspector General did a review that showed Costa's company, USA Contractors, did not meet hiring goals the federal government outlined for "disadvantaged" businesses defined as "small business concerns where socially and economically disadvantaged individuals own at least a 51 percent interest and control management and daily business operations."

The office also found "a lack of analysis" by the city when it came to meeting this goal.

That analysis would have been done by the city's office of human relations, in which former employee Edward Lazu worked overseeing the Park Street project. Lazu was also arrested Tuesday and charged with bribery in connection with a driveway Costa began building for him at his Hartford home.

Federal officials say the city's lax oversight of the Park Street project means the city won't get the full federal reimbursement, a loss of $767,000.

City attorney Carl Nasto said the federal objections were vague. He and Timothy Corey, Costa's attorney, say that the city and Costa did, in fact, meet all of their contractual requirements. Corey said city inspectors signed off on all of Costa's work daily.

Costa and the city brought in a mediator last fall to try to resolve the matter without political influence, Nasto said. Now, if a settlement makes business and legal sense, he'll offer it back to the city council, he said.

Meanwhile, in the aftermath of Perez's arrest Tuesday, some on the city council moved to strip his close ally, city council President Calixto Torres, of the leadership role. Torres, as council president, is next in line to be mayor in the event that the position becomes vacant. Although a meeting of the council scheduled for tonight to discuss the matter has been canceled, several Democrats on the council say there is general consensus that there will soon be a new direction.

"I think that there's support for a change in leadership," Councilman Pedro Segarra said.

Council Minority Leader Larry Deutsch, of the Working Families Party, says he has heard from two sources he trusts that Torres is willing to step aside "instead of forcing a vote or a meeting."

But Torres wouldn't go that far Wednesday.

"I was elected to be a councilman," Torres said. "The titles on council, they have some function, but they don't have a heck of a lot."

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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