The FBI is investigating one of the state`s biggest road building and construction firms for possible fraud on two Chicago-area highway repair projects, state officials said Wednesday.
Federal agents are seeking to determine whether Palumbo Brothers Inc. of Hillside, working in concert with employees of the Illinois Department of Transportation, cut corners on $15 million worth of work on 1st Avenue in Maywood and on Golf Road in Schaumburg, the sources said.
A state source familiar with the probe who asked not to be identified said the investigation centers on the use of substandard material.
Though several IDOT workers have been interviewed, the investigation has focused on two from the agency`s Chicago-area headquarters in Schaumburg who were involved in oversight of the projects at the time they were under way last summer.
One of the men, who had direct responsibility for monitoring the work, has retired.
The other, the first worker`s supervisor, committed suicide late last year. But government sources said that preliminary indications have suggested he was not involved in any wrongdoing.
Richard Adorjan, an IDOT spokesman in Springfield, confirmed that a Chicago-area employee took his life in December, but he declined to name the worker, citing concern for the man`s family.
The $7.7 million 1st Avenue project included pavement reconstruction, widening and bridge rehabilitation from River Road to Lake Street.
The Golf Road project, costing $7.4 million, involved reconstruction between Basswood Drive and the Woodfield Mall shopping center.
Authorities are investigating the possibility that construction materials may have been diluted with ”auto fluff,” a substance made from ground-up, non-metal car components such as upholstery and batteries.
IDOT auditors, in the course of a review of the projects, ”discovered discrepancies, uncovered inconsistencies,” the state source said.
The Illinois State Police were called in late last year and conducted a preliminary investigation, and Gov. Jim Edgar`s office was informed of the probe, the sources said.
”It`s not appropriate to discuss this because it is part of an ongoing investigation,” said John Pastuovic, a state police spokesman.
Because federal money paid for much of the work, the U.S. attorney`s office also was notified, and the FBI is now spearheading the investigation, sources said.
Under IDOT policy, samples of concrete and asphalt used in road projects are spot-checked by state employees at the plants where the materials are produced. In the case of asphalt, additional checks are made on-site to ensure proper application.
But not all loads of the construction materials are examined, and it was not learned whether spot-checking was done specifically on the Maywood and Schaumburg projects.
Attempts to contact Joe Palumbo, president of the contracting firm, were unsuccessful.
Palumbo Brothers, which helped build the Congress (now Eisenhower)
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Expressway in the 1950s, has won hundreds of millions of dollars worth of government contracts over the years. It is one of several companies hired to take part in the $490 million venture to widen the Tri-State Tollway, a two-year project that begins in earnest this spring.