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Ohio Inspector General: ODOT investigation centers on strippers, gifts, and alleged fraud

CLEVELAND — The Ohio Inspector General’s investigation into the local ODOT District 12 office in Garfield Heights released today has led to the firings or resignations of seven employees.

Those firings and resignations include Ohio Department of Transportation District 12 Facilities Manager Dennis L. Kratochvil.

The investigation, launched after an anonymous email was sent to ODOT District 12 in April, 2007, centered on questionable reimbursements and expenses connected to, among others, visits to Northeast Ohio strip clubs and “fishing trips.”

The April 2, 2007 email accused Kratochvil of accepting free Lake Erie fishing trips from Mark T. O’Donnell, owner of North Shore Commercial Door Company of Elyria, according to the Office of the Inspector General’s report released today.

A subsequent investigation by the OIG determined that these were not fishing trips but annual, daylong boating trips that included Kratochvil and District 12 Equipment Superintendent Terry Kosmata, ODOT vendors over whom Kratochvil and Kosmata had purchasing authority and dancers from two Northeast Ohio strip clubs.

OIG said it uncovered a massive, interlocking web of schemes in which Kratochvil and Kosmata had criminalized the entire purchasing and procurement apparatus in District 12’s Facilities and Equipment divisions.

“We found the two departments to be so riddled with fraud, corruption and depravity that few of the contract relationships the two men maintained with the dozens of vendors with whom they did business were arms-length or untainted by personal greed,” the report read..

The report also said: “the investigation confirmed that Kratochvil, Kosmata and Kosmata’s senior purchasing officer, Kevin M. Horrigan, had accepted a wide range of gifts and gratuities in exchange for steering contracts to preferred vendors. The gratuities included fishing and hunting trips in Ohio, Texas and Alaska; hotel accommodations and meals in Las Vegas and Cleveland; meals, drinks and lap dances at strip clubs; a membership at a private golf club; free or discounted garage door installations, electrical work, plumbing and other services; and cash.”

“In the latter case, we learned that Kratochvil had accepted more than $34,000 in ‘commissions’ from an ODOT vendor in North Royalton between 2000 and 2007, accepting wads of cash from the vendor until just a few days before Kratochvil was escorted from his office.”

The report continues: “Kratochvil’s greed was fueled by his infatuation with strippers, on whom he bestowed lavish gifts of jewelry, furniture, appliances and cash. He gave one stripper $4,000 for a breast augmentation; when she balked at going through with the surgery, he allowed her to keep $1,000 of the money as a birthday present. He also paid strippers for sexual liaisons, which took place during working hours at an Independence motel and in the back of his minivan inside the ODOT garage.”

“One of the strippers has continued to receive money from Kratochvil by duping him into believing that he is the father of her 4-year-old daughter.”

The investigation also documented: “approximately $390,000 in gratuities and other improper payments that were made to Kratochvil, Kosmata and Horrigan by nearly three dozen ODOT vendors. In addition, we have identified nearly $11 million in questionable or improper payments that were made to ODOT vendors as a result of bid-rigging or fraud, or due to the improper relationships that existed between ODOT purchasers and vendors.”

The OIG concluded: “As a result of this investigation, ODOT Director James Beasley has fired or accepted the resignations of seven employees, including Kratochvil, Kosmata and Horrigan. As a result of our findings, Director Beasley in March 2008 also launched a Purchasing Contract Administration Training program that has re-trained 1,200 employees, including all personnel who have purchasing authority and their supervisors.”

ODOT hosted 16 daylong seminars around the state, during which participants received training on the ethical principles of purchasing, contract administration and the use of ODOT credit cards.

“At ODOT’s invitation, (the OIG) was a participant on all 16 panels. Based on the results of our investigation, we have made 12 recommendations and are asking ODOT to respond to this office within the next 60 days with a plan explaining how these recommendations will be implemented. We also are forwarding copies of this report to the Cuyahoga County Prosecutor’s Office and to the Ohio Ethics Commission.”

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