FOX UNDERCOVER - New allegations of bid-rigging are raising questions about how two Boston Water and Sewer Commission employees made a $600,000 windfall by flipping a West Roxbury plot of land they bought privately from the MBTA's realty company at the same time that their employer was working on their own land deal with the T.
The allegations, made in a lawsuit filed in Suffolk Superior Court by the losing bidder for the T plot, accuse Boston Water and Sewer Commission employees Mark Sheehan and Charles DiPrima of using their positions "to unduly influence and/or gain unequal footing in the bidding."
Sheehan and DiPrima bought the vacant West Roxbury lot in 2006 or $547,000, then sold the same empty lot four years later for $1.175 million. The deal more than doubled their money, a $627,296 profit, at a time when most property values dropped dramatically.
At the same time that the pair was buying the West Roxbury land from the T, the Water and Sewer Commission was also buying from the T a separate plot in Charlestown, paying $3.365 million for the land to build a new materials handling facility.
That facility was originally supposed to be built on city land. In January 2006, Sheehan was named project manager for the materials handling facility.
A few weeks after Sheehan's becoming project manager, the Commission decided to buy the T land in Charlestown instead of the city-owned property.
A few weeks after that Sheehan bid on the T land in West Roxbury.
The pair's hefty profit caught the attention of state and local investigators, who launched a probe, along with FOX Undercover.
Sheehan said "I have no comment for you" when approached for FOX Undercover's original story last year.
For that story last year, Boston Water and Sewer Commission spokeswoman Jeanne Richardson insisted the timing of the two land deals was just a coincidence.
"You have to admit, the timing seems odd?" FOX Undercover reporter Mike Beaudet asked her.
"People do what they do. I'm not aware of what everyone does. The timing had nothing to do with our proceeding to purchase land," Richardson said.
But that's not the only oddity in the process.
FOX Undercover examined the winning bid submitted by Sheehan for the land he and DiPrima ultimately purchased privately. We found the documents contain mostly originals, but not the bid sheet that lists the price the bidder was willing to pay per square foot. That sheet is photocopied and is also not notarized as required.
According to the lawsuit, this also caught the attention of the state Inspector General's Office.
"Upon visual inspection by the Office of the Inspector General, the bid submitted by defendants Sheehan and DiPrima appeared to have been improperly altered or tampered with," the suit says.
Mary Z. Connaughton, a former Mass. Turnpike Authority board member now with the Pioneer Institute, says a good bid process can help avoid problems like the one alleged in the lawsuit. Recording on video the opening of the bid process can help erase doubts about bid integrity.
"If there's not transparency, people can become suspicious?" Beaudet asked.
"Certainly," Connaughton replied. "If you do not have a transparent, open process, it leaves the door open for people to question what happened."
Mayor Thomas M. Menino has his own questions he wants answered.
"I take it very seriously. I've been mayor for 19 years. I haven't had any problems with my administration. I'm not going to start now. I want to see the facts and do the investigation. If there is wrongdoing we'll come to a head on that and remove those individuals from the position," he told FOX Undercover last year.
Since then, Boston Water and Sewer Executive Director Vincent Mannering, who is a close friend of Sheehan's, retired. But Sheehan and DiPrima still work there.
In court filings, attorneys for Sheehan and DiPrima denied their clients did anything improper. Sheehan's attorney declined to comment for this report.
DiPrima's attorney tells said DiPrima was not involved in the bid process, but added he has no reason to believe there was any impropriety.
The T is also being sued. T spokesman Joe Pesaturo could not explain why a photocopy and not the original bid sheet is in the file, but said in a statement, "The bids in this matter were submitted under seal and then opened in the presence of outside counsel, who was retained to ensure the integrity of the bidding process. The MBTA is confident that this sale was made to the highest bidder, in accordance with the published rules. Although the plaintiff was disappointed that he did not submit the highest bid this time, he's had past success in the very same bidding process that he now challenges."