Projo 7 to 7 News Blog

Last week, Stern's former colleague in the governor's office, lawyer Daniel W. Majcher, requested a protective order, aimed at averting the Nov. 27 questioning of Stern that Shire Corp. requested and that was approved earlier this month by Judge Michael A. Silverstein, who is overseeing the evolving case.

"It appears,'' Majcher argued in a memorandum filed Thursday, "that discovery involving Judge Stern, a high level government official, is premature and is not essential, necessary nor warranted at the present time.''

The Stern deposition had been scheduled for next week. But following a chambers conference Friday, it has been delayed pending a November 30 hearing on the state motions to quash the Stern subpoena and dismiss the case.

The Gammino deposition revolves around statements that Stern allegedly made to him that dissuaded the company from bidding on a contract for the replacement of a bridge in Warren in 2005 under the belief that, as the low bidder, it had already won a $5.7 million contract to replace the Union Avenue bridge in Providence.

The state public bidding process requires that the job be awarded to the low bidder.

In the deposition, Gammino said Shire was "directed to not submit a bid'' for the Warren bridge contract by Stern, who at the point was one of the "executive directors'' in the Department of Administration and state purchasing agent, "to ensure the award of Union Avenue to Shire'' and "forestall any possible 'political concerns.''

He did not elaborate, but said this directive was repeated at a subsequent meeting with Stern and Carcieri legal counsel Kerry King.

Gammino said Shire "followed Mr. Stern's direction and did not submit a bid on the Warren bridge project'' because the company felt the state had it over a barrel at a time: it was in a weakened financial position with the Union Bridge contract in limbo because of alleged "funding issues,'' and with DOT withholding payment on changeovers and claims on several projects.

"Due to the extreme pressure being placed on Shire's revenue receipts buy the ever-widening RIDOT Barrington bridge delay," Gammino said in the deposition, "the coerced bid withdrawals, and forgone bid opportunities under duress, Shire, [then DOA director Beverly] Najarian and Brian Stern agreed that Shire would hold the original Union Avenue bid price for a reasonable length of time.''

"Unbeknownst to Shire at the time,'' Gammino said, DOT's chief of contracts, Christos Xenophontos, "sent correspondence to the federal highway administration in March 2006 requesting that the FHWA withdraw its concurrence in the award of Union Avenue.''

Around this same time, DOT returned the bond money Shire posted for the Union Avenue contract, but "Shire was subsequently told to return it to purchasing by [then] purchasing agent Stern, with the representation that the Union Avenue contract was still Shire's.''

Based on these alleged representations by Stern, Gammino said, he and his wife purchased Shire Corporation in January 2007 from its previous owners, the Donatelli family.

Their dealings did not end when Stern moved over to the governor's staff.

"At a Construction Industries of Rhode Island breakfast meeting in early 2008,'' Gammino said, "a member of the governor's campaign finance staff instructed Shire to talk to Brian Stern, who was now the governor's chief of staff, and that Union Avenue would be awarded to Shire.

"Shortly after,'' Gammino said, he "was told by Brian Stern that Union Avenue was still Shire's project because Shire was the low-bidder.'' (The campaign aide was not identified.)

In ensuing months, Gammino said Stern told him if Shire were to drop a pending claim on payment on an unrelated bridge project, and accelerate the Barrington bridge construction under terms where the company would agree, in advance, not to charge extra for any delays or extra work ordered by the state, Shire would finally get a contract for which it was already the low bidder, rebuilding the Union Avenue Bridge in Providence.

When Shire did not agree to the terms, "all discussions regarding Union Avenue were curtailed by Mr. Stern'' and former administration director Jerome Williams.

The accusations are contained in a $15-million lawsuit that names as defendants 10 present or former top Department of Transportation officials, including present director, Michael P. Lewis, and his two predecessors, James R. Capaldi and Jerome F. Williams.

The company has asked for e-mails and other correspondence between Stern, the Department of Administration, the state DOT, and the federal highway administration, and his calendars for 2005-2008.

Majcher grounded his request for the protective order on the argument that Shire - which he describes throughout as a "disgruntled vendor'' - went to court prematurely, before exhausting other administrative remedies, including an appeal to the state's chief purchasing officer, and missed a critical deadline for filing a bid protest along the way.

Majcher argues: "Because Judge Stern is and was a high level government official entitled to several privileges, any discovery, if allowed, should be absolutely essential and necessary...narrowly tailored and through the least intrusive means possible....Moreover, before allowing discovery the court would be required to address complex questions regarding executive, deliberative process and attorney-client privilege ''

Citing an earlier federal court case, Majcher said the rationale for the "essential and necessary'' standard is "founded in the notions of the public's interest in limiting unnecessary demands on the time of highly placed public officials.''

He said the purpose of requiring "disgruntled vendors'' to wage administrative appeals first is "to prevent actual and prospective vendors from waging disruptive litigation in cases involving state contracts.''

(The original version of this story was published at 1:20 pm. Friday.)