Dive Brief:
- The former president of a Michigan asphalt paving firm has pleaded guilty for his role in a bid-rigging scheme for asphalt paving contracts in the state, according to a news release last month from the U.S. Department of Justice.
- Timothy Baugher, former president of Pontiac, Michigan-based Asphalt Specialists, also known as ASI, conspired with Clarkston, Michigan-based F. Allied Construction, along with employees at the enterprises, to rig bids in each other’s favors, according to the plea agreement.
- Under the terms of the conspiracy, the co-conspirators coordinated each other’s bid prices so that the agreed-upon losing company would submit intentionally non-competitive bids, per the release. Baugher participated in the scheme from July 2017 through May 2021, according to the DOJ.
Dive Insight:
Baugher’s guilty plea is the tenth in the Justice Department Antitrust Division’s ongoing investigation into collusion in the Michigan asphalt paving industry, according to the release.
ASI and another former ASI executive also pleaded guilty for their participation in the conspiracy with Allied in January 2024. Allied Construction and two of its executives previously pleaded guilty in August 2023 for their participation in the conspiracy.
As part of the deal, Baugher pleaded guilty to one count of violating Section 1 of the Sherman Act, established in 1890 as a key piece of antitrust legislation in the U.S. He faces a maximum 10-year prison term and $1 million criminal fine, per the release.
A sentencing hearing will be scheduled for a later date, according to the DOJ.
“Fair and open marketplace competition is essential in providing consumers and taxpayers the integrity expected in procuring contracts funded with public dollars,” said Anthony Licari, special agent in charge from the DOT’s Office of Inspector General, Midwestern region, the release said. “Corporate executives who collude to fixing prices and rigging bids will be held accountable.”
An ASI spokesperson told Construction Dive that the company’s founders no longer control the company and have no operational role. The firm said it has invested in a variety of backstops that include a new CEO, CFO, general counsel and chief compliance officer, alongside more stringent bidding integrity processes and associated trainings, a strengthened legal reporting structure and more rigorous compliance policies.
“ASI today is not the company it was when these practices occurred, and they are inconsistent with our core values,” the firm said in its statement. “ASI is committed to moving forward with a clear focus on serving our customers and doing well by doing right.
Timothy Baugher and his lawyer did not respond to Construction Dive’s requests for comment. F. Allied Construction declined to comment.
