Black on Black Crime

How Cleveland's black leaders rip off black workers.

Bradley Construction Choice Construction
The runway was a huge job, the biggest that Howard Bradley's little Glenville company ever tackled.

This wasn't just lending a hand to build a parking garage. This time, $9.4 million and 16,000 feet of runway at Hopkins Airport were on the line. The contract was worth more than twice Bradley Construction's annual sales. And the company didn't have the equipment or means to handle it.

But Bradley had no reason to worry. Anthony Allega Cement Contractor was on the job.

For 20 years, the two companies had teamed together, shoveling dirt and pouring concrete on government projects all over Cleveland. John Allega's white-owned company, located in Valley View, brought the equipment, materials, and knowledge. Bradley brought the pigmentation.

Under Cleveland law, any white contractor doing business with the city must try to sub out 30 percent of the work to minority-owned companies and 10 percent to companies owned by women. It's the city's way of making sure companies and workers of all colors and sexes get a piece of a public project.

But the city has never been big on follow-through. Rarely does it check whether the promises at bid are actually upheld on the job.

Take the runway. On paper, Bradley's company was being paid to supply and lay the concrete. Instead, it bought all the material from Allega's company, then used Allega's equipment. For serving as the minority front, Bradley's company got a small cut of the profits and credit for working the job. Allega's company fulfilled its minority requirement -- and got most of the cash.

It's a scam that contractors have been working for decades. Every few years, a new report exposes the violations. And every few years, city officials trot out a new round of excuses, then do little to stop it.

Though the program was designed to help black workers, they long ago stopped hoping to reap the benefits. Behind the scenes, it's black officials and their business cronies who are profiting -- and screwing their own in the process.

Forty years ago, a racial powder keg exploded in Cleveland. This segregated city, long content to be divided by the river and mutual distrust, suddenly got tired of pretending.

In 1966, fires ripped through Hough, as black residents vented their rage with smashed glass and lighter fluid. It took more than 2,000 National Guardsmen to quell the violence. By the time it was over, four people were dead, and the city was shaking with fear.

Two years later, a shootout between police and young black men in Glenville left seven people dead. It was followed by flames, looting, and police beatings.

When it finally ended, Carl Stokes, the first black mayor of a major American city, was left to pick up the pieces. He decided the best way to help his people was to give them jobs.

He pushed through a new law requiring that minorities get a piece of all city contracts. After decades of being barred from the corridors of power, black companies would finally have a chance to compete. Their newfound wealth would spread from construction sites to the streets of Central and Hough.

It was a noble goal, but its execution relied on honest people overseeing it. No one envisioned that the civil-rights leaders of the era would someday be replaced by officials of a different stripe -- those who spoke eloquently of race to get elected, but behaved as callously as any redneck when it came time to back up their promise.

Howard Bradley began scamming the program more than a decade ago. City officials knew about it -- they just had no intention of stopping it.

He and former Mayor Mike White were friends and neighbors in Glenville. Bradley even installed a lawn sprinkler system at White's East Boulevard home. Over the years, he rose from cement mason to owner of his own company. Business progressed from $5,000 driveways to major public works.

By the 1990s, as White's reign reached its peak, Bradley's name was linked with the biggest projects in Cleveland. His company worked on the Rock Hall, Gateway, and Browns Stadium. He won a $2.5 million contract to pour concrete at Jacobs Field. Bradley even got a $4.6 million subcontract to help build the Willard Park garage next to City Hall. But that would land him in trouble.

In 1995, Kathy Velkoff, an administrator in the city's Office of Equal Opportunity, wrote a seven-page memo asking very pointed questions about the minority companies involved with the garage. She wanted to know why Bradley had handed over 94 percent of its contract to white companies.

Yet this was the Mike White era, when virtually everything in the city was up for sale, as the FBI later discovered. White had no interest in illuminating Bradley's scam, lest it also bring to light the myriad others his closest friends were running. And city council, a collection of 21 fiefdoms, had no interest in looking too hard either, lest someone decide to examine their backyards.

So Velkoff's memo was simply ignored. Barry Withers, her boss at the time, would later tell reporters that he didn't remember getting the memo. Even if he had, there wasn't enough staff to investigate, he claimed.

Though Withers was in charge of equal opportunity, it was clear he had no interest in enforcing it.

And that was the beauty of the system. In his early years, White never hired enough people to oversee minority contracts. And when red flags arose, he simply pretended those flags didn't exist. This attitude made it very easy for companies like Bradley Construction to rip off the program for as long as they wanted.

In 1996, Bradley's company won another $4.6 million contract, this time to help build a parking garage at the airport. Three years later, it formed a partnership with Rysar Properties and Forest City, and the trio won $16 million in federal housing funds to build 420 homes in Central.

The housing project offered a chance for black workers to build homes for their neighbors in the city's poorest section. It was projected to cost around $63 million and is still under way. But Bradley Construction -- though technically a partner in the development -- has done only $108,000 worth of work. (Howard Bradley refused to be interviewed.)

Soon, the scam that Bradley and others were running had become so brazen that city officials could no longer ignore it. In the summer of 2005, Mayor Jane Campbell hired an outside lawyer to investigate. That lawyer, Craig Owen White, produced a report on corruption at the airport, revealing that the worst fear was true: Allega and its biggest minority contractors had collaborated in a massive sham. Some companies, like Bradley's, did just enough work to cover their tracks. Others did almost no work at all, simply taking a cut to stay quiet.

But Mayor Frank Jackson did his best to cover up the report, refusing to release it for a year. In the meantime, Howard Bradley was free to lend his race to new projects.

He got work at the Cleveland Museum of Art and Case Western Reserve's new residential village. And though City Hall has known for at least a year that he was scamming its programs, it nonetheless granted his company another $286,000 contract last September for work near Rockefeller Park.

But Bradley is hardly alone in his success. Black politicians have been allowing companies like his to sell black jobs for more than a decade -- and city leaders have ignored it all along.

Choice Construction is the perfect example of how Mayor White used the minority program as his own Friends and Family Plan.

Owner Gail Perkins and her husband, Fred, were a well-connected pair. He was an assistant dean at Tri-C before entering construction in the late '70s. Over time, he forged close friendships with many politicians, including Congressman Dennis Kucinich, Louis Stokes, and Mike White. The Perkinses became a power duo, known for hosting fund-raisers at their Solon home. Their connections served them well.

In the 1990s, Choice got a piece of nearly every big project in town. Business was so good, Fred Perkins started calling himself The Godfather.

There were lucrative management contracts at Browns Stadium, the Willard Park garage, and the airport. There were smaller contracts at the downtown library, NASA Glenn, the Jennings Freeway, and the Rock Hall. Anything Fred Perkins wanted, White was eager to give.

This was extremely frustrating for legitimate black contractors. White's cronies were so greedy, they even swallowed up the little jobs that are the bread and butter of real builders. Once, Choice won a road-salting contract -- though it didn't even have trucks to handle the job.

"They took everything," one contractor remembers. "They took the crumbs."

By 1995, Choice's contracts with the city totaled $38 million -- more than any other company in the minority program. But while Choice was earning nicely for the Perkinses, it was doing little for black workers.

At the Rock Hall, a monitor discovered that Choice had subcontracted $250,000 in work back to white-owned Independence Excavating Inc.

The same thing happened at the new headquarters for Applied Industrial Technologies Inc. Port Authority monitor Bob Dean found that Choice did none of the demolition and trucking work detailed in its $447,000 contract. Instead, it leased equipment and hired workers from a white-owned company, Superior Demolition & Excavating.

In typical fashion, the White administration acted as if nothing was wrong. Linda Willis, director of the Office of Equal Opportunity, mysteriously decided that it was OK for Choice to sub out black jobs to white workers.

Choice kept getting contracts -- and moving on to bigger scores.

According to the FBI, the $1.5 billion airport expansion was the epicenter of an extortion scheme run by White ["The Sweetest Deal," April 5, 2006]. Contracts for everything from security to parking garages were won through bribes and kickbacks. "Ghost subcontractors" were used to hide the illegal money trail.

To get in, you had to go through Nate Gray or Ricardo Teamor, close friends of White.

Teamor was Bradley's lawyer during the White era. And Teamor's firm -- Forbes, Forbes & Teamor -- helped incorporate Fred Perkins' company. Soon, Bradley, Teamor, and Perkins were all at work on the airport project.

If anyone at City Hall had bothered to look, they would have known Choice was the last company to trust. By the late '90s, the feds were accusing it of regularly giving its jobs to whites.

In 1998, the feds filed a lawsuit accusing Choice of running the scam on at least seven road-construction jobs, from Cleveland to Fairlawn. Choice's name was on the contract, but employees from Kenmore Construction, a white-owned Akron company, did the work, claimed the government.

Two years later, FBI agents raided Choice's offices in Solon and NASA Glenn, seizing mountains of records. They were looking for evidence of widespread fraud.

James Craigo, an investigator for the U.S. Department of Transportation, laid out in stunning detail how blatant the scam had become.

In the 1990s, Choice won two NASA contracts totaling $25.4 million. But a confidential source told the feds that Choice was just a "pass-though" company, serving as a front for Precision Environmental.

Precision would front Choice the money needed to pay Precision's workers to do the job. Meanwhile, the white company's cut of the profits would be disguised in the books as equipment rental and material costs.

But Choice had become so bold, it didn't even cover its tracks. It claimed to have 20 employees at NASA. Yet the agency requires security badges to get in, and just two Choice employees had been issued badges in the past decade.

At one point, a confidential source warned a NASA official that Choice wasn't qualified -- or even licensed -- to do the job. But even the space agency knew how things worked in Cleveland.

No problem, responded the official, "since the non-minority company would do all of the work anyway."

It took years for the feds to make their case. Eventually, Gail Perkins was forced to repay the government $311,000, plus interest. She also pleaded guilty to tax evasion and spent four months in federal prison.

Fred Perkins pleaded guilty to conspiracy charges, admitting that he used company funds to reimburse Choice employees for making $22,050 in illegal campaign contributions, including to his friend, Kucinich.

Over the years, Choice's court battles and raids were chronicled in pounds of public documents. It's impossible that neither White nor city council knew what the company was doing.

"That was not a secret that [the investigation] was going on," says former state Representative Jim Trakas. "It was very well known in the last term of Mayor White's administration that anyone associated with the airport was under investigation."

Yet through it all, Choice kept its airport contract. Even after it went out of business in 2004, it still managed to stay in the deal.

Turns out, Fred Perkins was also working for his son Mark's company, McTech Corp. So when Choice died, he just switched business cards. According to attorney White's report, "substantially all of [Choice's] assets and employees" were transferred to McTech, including the airport contract.

And just like that, a new opportunity for scamming was born.

Had white companies been running this scheme alone, the last decade would have seen a surge of protests, impassioned sermons, and demands that the offending racists be thrown in prison.

But call around to black Cleveland's most notable figures, and all you get is resounding . . . silence.

NAACP President George Forbes, a target in the federal investigation of the state's workers' comp fiasco, ignored interview requests.

So did the city's most powerful preachers, including the Reverends Marvin McMickle and Otis Moss Jr. Reverend Larry Macon was kind enough to call back, but only so he could refer questions to the Reverend C. Jay Matthews, president of United Pastors in Mission.

Matthews' secretary said he's not familiar with the scam. She asked for a list of e-mailed questions. Matthews never responded.

Black politicians have been equally elusive. Mike White picked up the phone at his Newcomerstown home, but hung up as soon as he discovered the call was from Scene.

Frank Jackson built his reputation on helping his people. Yet he too has been a man of inaction since taking office. A group of black contractors has asked repeatedly to meet with him, with no success.

Jackson's spokeswoman, Maureen Harper, politely listened to a reporter's questions, then never called back. Nor did Councilwoman Fannie Lewis, the venerable head of the city's affirmative action committee.

The white guys are just as mute. They watched year after year as black workers were robbed, but did nothing to stop it.

Council President Martin Sweeney had spokeswoman Katherine Bulava Samsa express his apologies. "He's not really comfortable talking about this issue yet," she says. "He wants to see how things unfold."

Even Councilman Michael Dolan, who lately has made headlines for protesting Allega's role in the airport scandal, is less eager to criticize Bradley.

"It's not necessarily improper for Bradley to buy Allega's concrete," he says, though admitting that "it seems a bit incestuous."

As usual, the only people raising a fuss are those with little power to change things.

East Side activist Art McKoy promises that 2007 is the year Jackson and other black leaders will stop being coddled by their constituents. "What Bradley and the others do, they're like vultures in the community," McKoy says. "What they're doing is, they're selling the black community out."

Norman Edwards, founder of the Black Contractors Employers Association, has staged protests at the Cleveland Clinic and the art museum, insisting that more black companies get jobs. But he's not the most reputable spokesman. Edwards has repeatedly been accused in court of shorting his subcontractors and participating in a kickback scheme for work on Key Tower ["Slave to His Past," April 5, 2006].

If he's the voice of black labor in Cleveland, the future looks very dim.

Last month, the latest front-company investigation became public. But it was little more than an afterthought.

Now that Jackson has finally released the report, he looks suspiciously like a man trying to cover for companies that screwed black workers.

Under his proposed punishment, only the white company, Allega, would be barred from city contracts for two years -- and forced to repay money meant for black companies.

But though Allega could not have run its scam without the aid of black firms, Choice and Bradley are not even mentioned in Jackson's proposal. His response seems eerily similar to that of Mike White: Just ignore it.

All of this gives fodder to critics who say the program should be killed. "Why do we still have minority set-asides when we've found time and again that these things are scams?" asks Trakas.

He may be right. But such grand pronouncements are of no help to black workers the program was designed to lift. They voted for the leaders who screwed them and are not pleased with the result. "We had a man in office for 12 years," says one contractor, referring to Mayor White. "What do we have to show for it?"

From the boarded-up storefronts of Kinsman to the abandoned apartment buildings of Fairfax, the effects of City Hall's failure are obvious.

All sit silently, waiting for their leaders to appear.

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