5,000 truckloads of concrete at Big Dig were bad - managers plead guilty to fraud conspiracy

Two of six employees of Aggregate Industries NE have pled guilty in US District Court in Boston to being part of a conspiracy to rip off the Massachusetts Turnpike Authority by sending bad concrete to the Big Dig project. The six were indicted on US charges in 2006.

Gerard McNally, quality control manager and Keith Thomas, a dispatch manager, pled guilty to 12 charges, including 2 conspiracy counts, five fraud counts and five counts of filing false reports in connection with a federal highway project. A prosecutor says that as part of their plea agreements, both McNally and Thomas will cooperate, having agreed to testify against the other four men during their trial, which begins next week.

The four pleading not guilty include a general manager, a district operations manager, and two dispatchers. All six were terminated by Aggregate Industries. The company itself pled guilty to fraud in 2007 and agreed to a settlement in which they paid $50m compensation.

The $14.8b project which placed I-93 and an extension of I-90 underground through the central business district of Boston was plagued by huge cost overruns, design flaws, leakage and a ceiling collapse. It involved vast volumes of concrete, mostly poured in place in slurry walls, floors, and roofs or 'inverts' as they are called in the trade.  Superb in concept, taking major north-south and east-west highways underground, it was one of the worst managed construction projects in recent US history.

To gain proper strength concrete needs to be comprised of the correct proportions of stone aggregate, sand, portland cement, and water, and to be in place to "set up" within a specified time of being mixed.

The Big Dig was financed by a mix of federal grants, state grants and borrowings by the Turnpike Authority although it was never permitted to levy tolls to get user support for the project. In order to service the $2.2b debt incurred by the Turnpike Authority the state legislature recently increased the state sales tax from 5.0% to 6.25%. That is supposed to generate $100m/year for the Turnpike's Big Dig debt service.

Aggregate Industries says it has been in business for 90 years and is the largest supplier of ready mixed concrete in Massachusetts. They have eight plants in the Boston metro area. The company is part of the Holcim Group, a company headquartered in Switzerland with 85k employees in 70 countries. 

TOLLROADSnews 2009-07-08