A Chicago lumber company that continued to receive city contracts after its owner admitted to attempting to defraud the city in 2007, was permanently debarred from doing work with the city on Dec. 1. The debarment was made public on Monday, the same day the Chicago Tribune published a report detailing how Arrow Lumber Co. continued to receive contracts with the city, even as late as last month.
The Tribune reported that according to the city's Web site, the company was debarred for submitting "fraudulent invoices to the city and delivering materials in amounts smaller than the invoiced amounts." Arrow Lumber has not decided whether they will appeal the decision. The company has already billed the city for over $300,000 this year and debarment will cost the company millions of dollars in city contracts, the Tribune reported. The city began the process of debarring, or blacklisting, Arrow Lumber from doing work with the city in September.
The newspaper's review found that Arrow Lumber continued to gain city contracts, with one worth $500,000, following the fraud admission by owner Donald Beal. He made the admission during testimony against former City Trades Supervisor Kevin O'Gorman. Beal said he participated in a scheme with O'Gorman to divert building materials, purchased with taxpayer money, to O'Gorman for personal use. O'Gorman was acquitted of the fraud charges last January and Arrow Lumber has since paid back the cost of the diverted material.
