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VA doubted winning contractor's statements in Butler County outpatient center project

| Saturday, Sept. 28, 2013, 12:06 a.m.

Federal investigators gave information to the U.S. Attorney in Cleveland about the aborted $75 million VA outpatient center in Butler County, Rep. Mike Kelly said on Friday.

The Department of Veterans Affairs stopped work on the center June 21, saying the VA inspector general's office found the developer made “misleading statements” in its project bid. The VA terminated the contract with Westar Development Corp. on Aug. 9.

Kelly said two officials from the inspector general's office, including general counsel Maureen Regan, briefed him on Thursday about the agency's findings.

“They were very open about it and said they were very disappointed in the things that happened,” said Kelly, R-Butler. “We have to find the responsible party and hold them accountable. If there was criminal wrongdoing, we have to find that out, too.”

Regan, in an email, wrote that she could not comment.

The VA verifies bidder information by using online and government databases, and bidders sign a statement that information they submit is correct, VA spokeswoman Genevieve Billia said.

“VA had no reason to suspect that an offer would contain the misrepresentations that Westar's offer allegedly did. If VA had knowledge of this when it evaluated Westar's proposal, the lease award would not have been made,” Billia said.

Mike Tobin, spokesman for the U.S. Attorney's Office in Cleveland, declined to comment.

Westar, which won the right in 2012 to construct the facility, is based in Aurora, Ohio. Westar formed VA Butler Partners to manage the project. The VA agreed to rent the center from Westar for 20 years at an average yearly rent of $7.6 million. The center was to open in 2015.

The Office of Inspector General alleged that Westar misled investigators about its track record in building large-scale projects. The office said Westar officials falsely claimed veteran-owned status.

Westar attorney John Climaco, who did not comment on Friday, has said the inspector general's memo is filled with errors and that it never accused Westar of impropriety related to work completed on the Butler project. He said Westar did not seek veteran-owned status.

The inspector general late Thursday released nearly 250 pages of documents from its review of the Westar contract. They show that VA officials questioned components of Westar's bid, including financing, after awarding the contract in April 2012.

In one email exchange, VA senior resident engineer Jerry Pifer told VA officials on Dec. 26, 2012, that Westar changed its general contractor from LDV Inc. in Cleveland to Marous Brothers Construction in Cleveland without notifying the VA.

A phone number listed for LDV is disconnected, and the company website was disabled. Marous did not return messages.

Scott D. Simpkins, an attorney representing Westar, responding to a May 9 subpoena for documents, wrote on May 24 that Westar representatives learned before the VA awarded the bid that LDV couldn't obtain a bond for the project and couldn't continue as general contractor.

The VA has said it needed to build a facility to replace one that is old and needs millions in renovations. It has said it intends to move forward with the project.

Kelly questioned why the VA selected Westar if questions arose about its qualifications. The project should remain on hold until questions are answered, he said.

“We have to re-establish the confidence of taxpayers,” he said.

Bill Vidonic is a Trib Total Media staff writer. Reach him at 412-380-5621 or

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