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COLUMBUS Lawsuit filed by MSVD remains unresolved



Published: Sun, August 5, 2001 @ 12:00 a.m.



A judge's spokesman expects a ruling on several matters in 60 to 90 days.

By DENISE DICK

VINDICATOR TRUMBULL STAFF

COLUMBUS -- More than a year after a federal judge dismissed, then reinstated, a lawsuit to recover $2.3 million the Mahoning Valley Sanitary District paid for work that was never done, the case hangs in limbo.

Last June, Judge George Smith of U.S. District Court dismissed Ohio Attorney General Betty Montgomery's lawsuit against the Rhode Island-based Gilbane Co., saying Ohio Auditor Jim Petro doesn't have the authority to conduct special audits.

The judge declared that the attorney general's office needed to change the law to permit the special audits.

Montgomery's lawsuit seeking repayment of the $2.3 million paid to the company by the MVSD was based on Petro's 1997 special audit of the local water agency.

Reinstatement: About a week later, Judge Smith vacated his initial ruling and reinstated the lawsuit, saying he intended the ruling to apply only to the Gilbane case, then realized it would apply to all special audits by the state auditor.

The judge said he planned to have the Ohio Supreme Court clarify the law regarding the authority of the auditor's office, but 13 months later, the case hasn't been sent to the high court.

Bret Crow, a spokesman for the attorney general's office, said Judge Smith was to determine a few legal issues first.

"Your guess is as good as mine as to when that will happen," he said.

At issue: A spokesman for Judge Smith, Keith Mayton, said the judge must resolve the constitutionality of the state statute regarding the auditor's power to conduct special audits.

Another issue is the company's contention that no evidence of missing money exists.

Whether Judge Smith sends the question to the state Supreme Court will depend on his ruling on those issues, Mayton said.

Both sides have filed written briefs in the case, and Mayton said the judge is expected to rule in 60 to 90 days.

The judge's initial ruling said Ohio law limits the state auditor to conducting traditional audits of public agencies every two years.

Gilbane had sought the dismissal, contending that it did nothing wrong and that the law doesn't give Petro the power to conduct special audits.

The company was hired to manage a capital improvement project to improve the water treatment facility.

The attorney general's lawsuit, based on the special audit, contends the company was paid for construction management services related to projects that never were done.

Separate suits filed by Montgomery against former MVSD directors Edward A. Flask and Frank D. DeJute accuse the two men of approving the payments to the company.

Trials on those suits are set to start in the fall.

dick@vindy.com




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