Stern

PROVIDENCE — Governor Carcieri’s lawyers are trying to keep new Superior Court Judge Brian Stern, a former head of state purchasing and chief of staff to the governor, from having to answer questions under oath in a lawsuit filed by the Shire Corp., a road and bridge building company that claims it was the victim of illegal bid manipulations by the state.

The $15-million lawsuit filed in late September accuses a number of unnamed officials in the “executive branch” of state government, which includes Carcieri and his staff, of playing key roles in either denying contracts to Shire or offering to award them if the company dropped embarrassing claims against the state Department of Transportation.

Stern, who was sworn in as a judge Oct. 5, is not named in the lawsuit, that a spokeswoman for Governor Carcieri has described as “entirely without merit.”

But Stern is named repeatedly in an Oct. 21 affidavit by Shire vice president Thomas Gammino that spells out his alleged role in the “coerced bid withdrawals.”

A week ago, Stern’s former colleague in the governor’s office, lawyer Daniel W. Majcher, asked the court to issue an order sparing Stern from having to submit to the deposition Shire’s lawyers requested.

“It appears,” Majcher argued in a memorandum filed Thursday, “that discovery involving Judge Stern, a high level government official, is premature and is not essential, necessary nor warranted at the present time.”

The Stern deposition had been scheduled for next Friday, but was delayed — after a chambers conference — pending the outcome of a Nov. 30 hearing by Michael A. Silverstein, the Superior Court judge overseeing the evolving case, on the state’s motions to quash the Stern subpoena and dismiss the case.

Gammino’s affidavit revolves around statements that Stern allegedly made to him and one of Shire’s former owners that dissuaded the company from bidding on a contract for the replacement of a bridge in Warren in 2005 under the belief that, as the low bidder, it had already won a $5.7-million contract to replace the Union Avenue bridge in Providence.

The state public bidding process requires that the job be awarded to the low bidder.

In the affidavit. Gammino said Stern, who at the time was in a top-ranked position at the Department of Administration, “directed” the company more than once not to bid on the Warren bridge contract “to ensure the award of Union Avenue to Shire” and “forestall any possible ‘political concerns.’ ”

He did not elaborate, but said Shire “followed Mr. Stern’s direction and did not submit a bid on the Warren bridge project.”

He said Shire agreed to the “the coerced bid withdrawals, and forgone bid opportunities under duress” because the company felt the state had it over a barrel at a time when it was in weakened financial position: the Union Bridge contract was in limbo because of alleged “funding issues,” and DOT was withholding payments on several projects, including the oft-delayed Barrington bridge replacement.

Based on these alleged repeated representations by Stern, Gammino said, he and his wife, Laura, purchased Shire Corporation in January 2007 from its previous owners, the Donatelli family.

But it was not to be. Their dealings did not end after Stern became the governor’s chief of staff in March 2007.

“At a Construction Industries of Rhode Island breakfast meeting in early 2008,” Gammino said, “a member of the governor’s campaign finance staff instructed Shire to talk to” Stern again about the Union Avenue contract, and soon after, Stern, who was by then the governor’s chief of staff, assured him again “that Union Avenue was still Shire’s project because Shire was the low-bidder.” (The campaign aide was not identified.)

Later, however, Gammino said, Stern told him if Shire were to drop a pending claim on payment for an unrelated bridge project, and accelerate the Barrington bridge construction under terms where the company would agree, in advance, not to charge extra for any delays or extra work ordered by the state, Shire would finally get a contract for which it was already the low bidder: rebuilding the Union Avenue Bridge in Providence.

When Shire did not agree to the terms, he said, “all discussions regarding Union Avenue were curtailed by Mr. Stern” and former administration director Jerome Williams, who is one of the defendants along with the current DOT director, Michael P. Lewis, and one of his predecessors, James R. Capaldi.

Majcher grounded his request for the protective order on the argument that Shire — which he describes throughout as a “disgruntled vendor” — went to court prematurely, before exhausting other administrative remedies, including an appeal to the state’s chief purchasing officer, and missed a critical deadline for filing a bid protest along the way.

Citing an earlier federal court case, Majcher said the rationale for the “essential and necessary” standard is “founded in the notions of the public’s interest in limiting unnecessary demands on the time of highly placed public officials.”

In the lawsuit, Shire demanded $15 million in compensation, saying that the DOT’s actions damaged its reputation and improperly cost it millions of dollar in contracts. Shire, however, has been temporarily barred twice by federal officials from federally financed projects, most recently last fall after one of its employees was charged with illegally rummaging through a DOT computer system.

The state is being represented by Marc DeSisto, who was hired by the attorney general’s office at a cost of $150 an hour because of a perceived conflict while pursuing the computer-fraud case.

kgregg@projo.com