Decade-Long Fraud In State Agency

A vast and sophisticated corruption scheme involving kickbacks, front companies and phony bids has for at least a decade been the modus operandi in one state’s transportation department. 

An Ohio Inspector General report made public this week reveals that the state’s transportation department is a fraud-infested agency in which high-ranking managers rig bids and direct hundreds of thousands of dollars in state contracts to companies owned by relatives. 

So far, the ongoing investigation has led to the firings or resignations of seven transportation department employees—including a high-ranking official who helped mastermind the corruption—and referrals for criminal charges against many others.  

Much of the evidence for the report was actually obtained in a box of documents—referred to by investigators as “an encyclopedia of fraud”—stored in the garage of a former longtime Ohio Department of Transportation official in charge of purchasing.  

The files lay out the details of an operation in which the former purchasing manager (Dennis Kratochvil) directed more than $300,000 in state contracts to companies owned by his son and a businessman who paid for strip club adventures and a home remodeling. 

Kratochvil, who was fired in 2007, also collaborated with a separate businessman to submit phony bids for several hundred thousand dollars to the transportation department for work on demolition and installation of trench drains and underground storage tanks. 

Last fall a separate Ohio Inspector General report revealed that transportation managers in other offices awarded $11 million worth of contracts to vendors that subsequently repaid them with fishing trips, vacations and sex with strippers.