Hiawatha Line Builders Pay $4.6M to Settle Dispute

According to the federal government, the joint venture that oversaw construction of the Hiawatha light-rail line claimed to have hired disadvantaged businesses to help with the project even though it didn't.

The joint venture that was in charge of the Hiawatha light-rail transit project has agreed to pay the federal government $4.6 million to resolve accusations that it falsely claimed to have hired disadvantaged businesses to help during construction.

The U.S. Justice Department said Wednesday that Minnesota Transit Contractors, Inc. (MTC), violated the federal false claims act by falsely claiming that it hired companies qualified as Disadvantaged Business Enterprises (DBEs) to work on the 11.6-mile light-rail line, which has been up and running since 2004.

The DBE program assists businesses owned by minorities, women, and socially and economically disadvantaged individuals by helping them find work on federal construction projects. When companies accept federal contracts-which MTC did in the case of the Hiawatha line-they are required to use some disadvantaged businesses, according to the Star Tribune. The light-rail project reportedly cost $715 million, including $424 million from federal sources.

MTC-which includes Granite Construction, C.S. McCrossan, Inc., and Parsons Transportation Group, plus some subcontractors-was the prime contractor on the light-rail transit project, which connects Minneapolis, St. Paul, the Minneapolis-St. Paul International Airport, and the Mall of America.

According to the Justice Department, MTC claimed that materials and services for the light-rail project were provided by DBEs when they were actually provided by non-DBEs. DBEs merely served as “extra participants to make it appear as if they were truly involved,” the department said.

The companies in the MTC joint venture denied the allegations, calling them baseless, according to the Star Tribune. “We settled these claims without admitting liability,” Dean Thomson, an attorney representing MTC and two of the joint venture partners, told the Minneapolis newspaper. “These allegations are contested. There were no charges. There were no lawsuits. This is a more than six-year investigation. The settlement is to avoid further expensive litigation.”

To read more in the Star Tribune about the accusations against MTC, the settlement, and the reactions from the involved parties, click here.