The Rochester contractor Pike Co. will pay $125,000 in penalties to settle an allegation that it skirted requirements for hiring minority- or women-owned businesses while renovating Rochester schools; the last in a series of similar settlements engineered by the state Attorney General’s office.
The state accused Pike and nine other contractors of lying when they said they had procured supplies or labor from minority- or women-owned businesses (MWBEs). Instead, the company allegedly bribed MWBEs to serve as pass-throughs when the work was actually done by other companies.
In the case of Pike, according to Attorney General Letitia James, it certified to the state it had bought $846,000 worth of doors and hardware from Scott Construction, an MWBE. In actuality, according to the signed settlement, Pike bought $755,000 worth of the material from Rochester Colonial and had Scott serve as a pass-through.
Pike will pay $100,000 to the state and $25,000 to an anonymous whistleblower, and agreed to various training and oversight provisions.
It is the 10th and last company to come to a similar settlement with the state for a total of $1,379,000.
“Including minority and women-owned businesses in public projects is meant to give opportunities to communities that have been historically left out, not for contractors to work around them,” James said in a statement. “It’s a shame that the Pike Company and other contractors took the easy way out to minimize work with minority businesses. … I am committed to rooting out fraud and making sure that minority and women-owned businesses get their fair share.”
In a statement of its own, Pike broadly rejected the state’s accusations and said it was only settling the case to avoid protracted litigation.
“These are two contracts out of more than 100+ subcontracts and $220 million worth of construction completed many years ago,” the company wrote in its statement. “Our belief is that our actions fall squarely in the confines of what was required in the RMSP diversity plan.”
The alleged misdeeds by Pike and the other companies took place between 2012 and 2014 during the first phase of the Rochester Schools Modernization Program, one of the costliest capital projects in the city’s history. The third phase is now underway.
The full list of contractors, along with their settlement amounts, is below.
- Concord Electric Corporation ($350,000)
- Bell Mechanical ($200,000)
- Manning Squires Hennig ($200,000)
- Hewitt Young Electric, LLC ($160,000)
- The Pike Co. ($125,000)
- Landry Mechanical Contractors, Inc. ($117,000)
- Kaplan Schmidt Electric Inc. ($100,000)
- Michael A. Ferrauilo Plumbing & Heating, Inc. ($90,000)
- Mark Cerrone, Inc. ($25,000)
- Nairy Mechanical, LLC ($12,000)
The attorney general investigation took nearly a decade; a whistleblower first came forward in 2013. The first settlements came in 2016 under former Attorney General Eric Schneiderman.
Contact staff writer Justin Murphy at [email protected].
► From 2016: School modernization program’s diversity requirement under scrutiny