Over the next two-plus years, the project quietly imploded and was resurrected in back-room negotiations, according to county officials involved in the deal. In the process, contracts worth millions of dollars were redrafted by the son of a state senator with close ties to a former Butler County commissioner, according to county records.
Architects of the deals, including former commissioner Michael Fox, have long claimed the county came out ahead when the smoke cleared.
But a federal indictment unsealed Thursday, Oct. 29, alleges that Fox took kickbacks and bribes totaling $460,000 from Robert C. Schuler, who purchased NORMAP when it was on the verge of collapse and oversaw the completion of the fiber system.
“He (Schuler) was presented as the savior. He could save the system,” said state Rep. Courtney Combs, R-Hamilton, who was a commissioner at the time.
The NORMAP contract
The county originally awarded a $2.75 million contract to build, own and operate the fiber optic system to NORMAP in 2001. At that time, the company was owned by Toledo-based SFT, Inc. The president of the company was Ronald Lutwen.
The agreement was that NORMAP would build and maintain a 96-strand fiber optic system stretching 100 miles through the county, connecting Hamilton, Oxford, Middletown and West Chester Twp., as well as the campuses of Miami University. The company would be paid 50 percent up front and the rest as pieces of the system came on-line, according to the contract.
NORMAP then contracted with Cincinnati Bell Technologies to have the telephone company subsidiary do much of the work for $2.1 million, according to county records.
The contract called for NORMAP to maintain the system for 20 years, at a cost of $400,000 per year. NORMAP was set to get 72 fibers, with 12 going to the county and 12 to Miami University.
Per the contract, commissioners paid Lutwen $1.37 million in July 2001.
Fox approaches Schuler
But work on the project stalled when SFT ran into money problems and was unable to pay its subcontractors, according to county officials involved in the project. Furthermore, NORMAP didn’t have a performance bond, though it was required in the contract.
The whole project was in peril.
This is when Fox has said in previous interviews that he approached Schuler, who created a company called Anwalt Fiber Holdings LLC and bought NORMAP from Schuler for $400,000, plus 12 fibers.
Schuler renegotiated the contracts so the county paid Cincinnati Bell directly to do the work, and so he would get the remainder of the original contract with Lutwen, now worth roughly $1.8 million. He also cut the maintenance agreement in half to roughly $200,000, paid directly to Cincinnati Bell.
This saves the county money over the 20-year maintenance agreement, Fox and others have contended, leaving the total cost of the project at about $10 million for the length of the contract.
The allocation of fibers among the parties involved has changed several times, including 12 Schuler donated to Butler County and claimed as a charitable contribution worth $2.4 million. He sold the company in 2004 for more than $1.5 million.
Furmon: ‘I had my suspicions’
Commissioner Charles Furmon on Thursday lauded the federal government’s efforts in the indictments.
“It’s extremely disappointing that there was this kind of behavior,” Furmon said. “It’s appalling that a trusted county official would do something like that. I had my suspicions from the beginning, but I’ve never been able to put my finger on it.”
Furmon was on the commission during the NORMAP deal and said last week he “went along with most of it because I thought it was going to be good for economic development.”
When he first joined the commission in 2004, Commissioner Gregory Jolivette has said, he requested that the county go after the money paid to Lutwen, but there was no consensus on the commission, which consisted of him, Furmon and Fox.
“I’m just floored by the things that were going on, and that Mike was doing,” Jolivette said Thursday.
Construction of the fiber optics system is ongoing, totaling $5.8 million the county borrowed for construction and roughly $200,000 paid annually for maintenance of the system.
“I had no thought of there being any impropriety (during construction of the system),” Combs said in a recent interview.
The fiber optics system entered the epicenter of scandal in 2004 when then-county Auditor Kay Rogers helped the company Dynus take out millions of dollars in illicit loans in the county’s name. Rogers and the company owner and president are awaiting sentencing on bank fraud charges.
Contact this reporter at (513) 820-2175 or jsweigart@coxohio.com.
About the Author