Digging deeper
To research this story, the Dayton Daily News reviewed contract documents, campaign finance forms and a 130-page investigative report obtained using Ohio public records laws. Our reporters also viewed videotaped interviews between detectives and all three Miami County commissioners, former county employee Jarrod Harrah and other county employees.
A politically-connected Vandalia company doled out thousands of dollars in gifts to Miami County employees while securing millions of dollars in no-bid public contracts, according to a sheriff's office report.
Miami County Sheriff’s Lt. Steve Lord called that sequence “unsettling” in a written summary of his investigation contained within a 130-page report obtained by the Dayton Daily News.
Concerns over alleged gifts from Waibel Energy Systems were among many issues raised during the investigation, which also found a lack of oversight that may have resulted in the waste of hundreds of thousands of dollars of county money.
“Assets were not properly tracked, records as to expenditures were falsified, theft and unauthorized usage of county property occurred, gifts and gratuities were solicited and received from vendors, frauds were perpetrated by contractors, and questionable contract procurements were conducted,” Lord wrote.
The linchpin of the investigation was Jarrod Harrah, the former county facilities director and former Troy city councilman who last month was sentenced to one year in prison, fined $7,500 and ordered to pay the county $1,433 in restitution after he admitted to systematically stealing from the county and submitting false invoices to cover up his crimes.
Former county maintenance employee Bruce Ball also received five years probation after pleading guilty a theft in office charge.
County detectives scrutinized how Waibel Energy Systems in Vandalia came to be awarded a $2.45 million contract to replace the HVAC system in the Hobart county building.
No charges were filed, but the sheriff’s office referred its findings to the Ohio Ethics Commission and the Ohio Auditor’s Office. Clark County Prosecutor Andy Wilson, who prosecuted cases against Harrah and Ball, said his criminal case is closed.
“Those are issues that on our … initial review of the case did not raise to a criminal level,” Wilson said. “Right now, nothing seems to be criminal. There obviously are some anomalies. There are things that caused concern, and we forwarded the case to the ethics commission for their review.”
Electronics purchased by Waibel Energy Systems that Harrah said the company gave to him after he either asked for them or expressed an interest in them — an Apple iPad and a 32-inch flat screen television — remain in the Miami County Sheriff’s Office evidence room.
Harrah told detectives that the company also paid for tickets to sporting events, lunch for employees, and donated an HVAC unit worth at least $5,000.
Waibel company owner Dave Waibel is a contributor to two county commissioners’ political campaigns, investigators noted, and Harrah said commissioners encouraged him to do work with Waibel.
Commissioners declined interview requests for this story, and would not answer questions about allegations involving Waibel, citing the ethics investigation. The commissioners’ written response to a list of questions from the Daily News said there is no “culture of corruption” in Miami County.
“Without demeaning the seriousness of these events, it is important to remember that only two employees were found to have engaged in criminal conduct,” the statement reads.
Report: Company ‘gave gifts and gratuities’
During interviews with investigators, Harrah said several vendors gave him gifts and discounts on goods and services, “greasing the path” for future county business.
Of particular interest to the sheriff’s office was a $2,000, 70-inch television purchased by Waibel company officials that ended up in Harrah’s home.
In March 2012, Waibel project manager Rodney Rhoades bought Harrah and another county employee lunch at Skyline Chili before accompanying them to an area Best Buy, according to investigative records. There, Rhoades purchased the TV, as well as a laptop computer and a projector. Harrah drove the items away in his pickup truck.
After seeing the TV during a search of Harrah’s home in May, detectives tried to determine whether it was county property. County officials said they didn’t know anything about it.
Commissioner Jack Evans told Lord he “would never approve such an extravagance in a non-public area,” according to the investigative report.
Harrah returned the TV to Waibel after he learned of the initial sheriff’s investigation. He later told Lord that the TV was meant to go in a conference room in the Hobart Center for County Government as a “surprise gift” to the county commissioners, according to investigative records. Company officials disputed that it was a gift, saying the TV was meant to be used as a graphic interface with a new heating and cooling system.
Sheriff’s officials said the size of the TV made it “suspicious” that it had a legitimate business purpose, and questioned why Waibel would have Harrah install the television instead of doing it themselves. After the sheriff’s office began asking questions about the TV, the company switched it out for a smaller model. That 50-inch television remains mounted in the conference room today.
That wasn’t the first time Waibel Energy Systems had bought a television and given it to the county, Harrah said. The company, which was at that time performing a smaller job for the county, also provided a 32-inch flat screen TV for Harrah’s office sometime in 2011 after he complained about not having one, he told investigators.
When Harrah asked about that television’s cost, Rhoades told him “not to worry about it,” Harrah said. That television was meant to be a monitor for another air conditioning system that was installed as part of the project’s specifications, company officials told Lord and chief deputy Dave Duchak in an interview. The 32-inch TV is now being held as evidence.
Deputies found four Cincinnati Reds tickets from Waibel Energy Systems in Harrah’s desk. Harrah said Waibel sales representative Shay Moran also offered him Cincinnati Bengals and Detroit Red Wings tickets. Company general manager Dave Crosley told Lord and Duchak he had no specific knowledge about the tickets given to Harrah, but said giving them out was “routinely done by the business,” and that it was up to individual recipients to decide whether they could accept the tickets.
Other items Waibel gave to county employees, according to investigative records: a free HVAC unit and electronic thermostat worth at least $5,000 that remains in the county building where Harrah worked, and $100 worth of pizza.
Detectives also scrutinized a company-purchased iPad that detectives found in Harrah’s home. Harrah said the iPad was given to him after he admired one owned by a Waibel official, but the company eventually produced an invoice showing the county paid for the device. Company officials said the iPad, like the 70-inch television, the 32-inch television and two laptop computers, were graphical interfaces for heating and cooling systems. The electronics were never hooked up to that system, Harrah said.
Since 2009, Waibel Energy Systems has received a total of $2.7 million in Miami County contracts, including the $2.45 million HVAC project at the Hobart building. The sheriff’s office identified another $2.1 million in planned county work expected to go to Waibel.
Most of Waibel’s contracts are to be financed by the sale of $4 million in bonds, which the commissioners approved in November 2011. The move followed years of budget shortfalls that forced cuts across county government including laying off sheriff’s deputies and shuttering a county jail.
The sheriff’s office did not find a direct link between gifts and contracts being awarded.
“In this case it is clear that Waibel Energy gave gifts and gratuities to Jarrod Harrah individually and to the county itself to benefit its facilities,” Lord wrote. “They in turn were given substantial contracts for public works projects. It is not clearly known that these gifts had a direct (effect) as to the awarding of these contracts, but the appearance alone is unsettling.”
Waibel Energy officials declined an interview request, and company general manager David Crosley did not respond to specific questions that were emailed to him. He instead emailed a written statement that said the company’s employees and leaders “have always been held to the highest ethical standards and are above reproach.”
In a statement to the sheriff’s office, a company attorney denied that the tickets, pizza and HVAC unit were given with the expectation of getting something back, and said they were made available to a group of employees, rather than any one person.
“Waibel appears to have been willing to say thank you, but not please,” the statement said.
Political connections
Harrah said Commissioner Evans first approached him about using Waibel Energy Systems more for county work, and they later determined Waibel would be the first contact in emergencies.
Harrah said commissioner John “Bud” O’Brien talked to Dave Waibel at a fundraiser about the company’s products and told Harrah to set up a demonstration for the other commissioners of Waibel products.
“The commissioner asked Harrah why he had not presented the system for review to the commission to which Harrah explained that with recent budget cutbacks, he felt it was not a matter that could be seriously pursued,” Lord reported.
Detectives reviewed campaign finance records, which showed Dave Waibel donated $1,300 to Evans in 2008, and has donated $250 to O’Brien. He has also donated $1,375 to the Miami County Republican Party, of which O’Brien is the chair.
In August 2011, Harrah said Waibel’s Moran offered a quote of $25,000 to repair the HVAC system at the county building, but suggested commissioners replace the system outright. County commissioners decided to hire Waibel to replace the system at a cost of $2.45 million.
Evans told Lord that commissioners did this so they could “do the job right” instead of a temporary fix. Evans and O’Brien both said they hired the Waibel company because of the quality of its work.
When Lord asked Harrah about whether there was a relationship between David Waibel’s status as a Republican political fundraiser and Waibel Energy Systems receiving multi-million dollar contracts, Harrah said he had no proof, but had his suspicions.
“You got this guy who lives in Miami County. He’s hosted statewide people, federal candidates. And you know, he contributes a lot of money,” Harrah said, according to a recording of an interview that took place after he had negotiated a plea deal with prosecutors.
No-bid awards questioned
As part of their investigation, detectives examined how Waibel Energy came to receive the $2.4 million county HVAC contract without local competitive bidding. They found that company officials walked commissioners through a process that allowed the county to award Waibel Energy Systems the contract outright.
The process involved enrolling Miami County in a purchasing cooperative that solicits bids for goods and services nationally, then allows local governments to hire the winning bidders.
Other governments use the same cooperative. For example, Montgomery County has used it three times in recent years, twice for contracts with Waibel.
Some construction industry professionals and critics allege governments use purchasing cooperatives to hand-pick preferred contractors while cutting out potential lower bidders. The cooperatives themselves say they provide the best — though not always the cheapest — contractors, and that it’s the responsibility of local governments to make sure they are following local laws.
County administrator/clerk Leigh Williams told Lord in July she didn’t understand the process very well, and that commissioners were awaiting more detailed legal guidance on the issue from the state.
The Daily News contacted the Ohio Auditor of State’s Office, which said it was unfamiliar with legal issues involving these organizations. The Ohio Attorney General’s Office has not issued a public legal opinion on the issue, a spokesman said.
Oversight failed
Commissioners say they were ignorant of Harrah’s illegal activities, but they joked that he was lavishly adorning the building that housed the maintenance department, referring to it as the “Taj MaHarrah.”
Without commission approval, Harrah moved his office from the county safety building into the historic power plant building across the street. Among the renovations to his office: the installation of a new bathroom and flooring, and a $5,000 heating and cooling unit that was donated by Waibel Energy Systems.
Harrah paid for the renovations by siphoning money from inflated purchase orders for other projects or through receiving gifts from contractors, investigators found. He received no permits for the work, nor had inspections done to make sure the work met building codes.
Commissioners never approved the work. They told investigators they thought Harrah used leftover materials from other jobs to outfit his new office. In a statement to the Daily News, commissioners said they were misled about the construction material’s origins.
A commissioners employee approved two nearly identical invoices handwritten by Harrah for $2,000 to a local business for non-existent work.
Investigators also questioned why Waibel and Tremco, a Cleveland-area company awarded $2 million in roofing projects since 2008, were able to design and execute no-bid construction projects. This could have led to higher prices for taxpayers, Lord said.
Waibel profited off these design contracts, as well. Records show that the company paid $38,000 for design studies and charged the county $150,000 to deliver them.
In a July interview with investigators, Evans said commissioners maybe weren’t as vigilant as they should have been, but that they trusted Harrah.
“It’s like at Ohio State and Penn State. Could we be accused of lack of institutional control? Yes, I don’t doubt that,” Evans said. “But I don’t expect that when I have a department head that I’m going to go out and count his weed-whackers and that sort of stuff.”
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