Minnesota Attorney General Hubert Humphrey filed criminal and civil charges against some of the state's top lighting-equipment reps in connection with an alleged scheme to fix prices on public works projects.
The firms and individuals involved refute the charges. "We regret that the attorney general did what he did. We've been in business 40 years and it's not our policy to break any laws or any ethical business principals. We operate lawfully. We deny all of the allegations, and we look forward to taking this to court and being fully vindicated," said Charlie Leavitt, an owner of Lighting Associates, Inc./Eon Lite, Inc., Maple Grove, Minn.
According to the attorney general's office, the alleged scheme was revealed when managers at Viking Electric Supply, Inc., Minneapolis, Minn., discovered that a lighting-quote specialist who worked for the distributorship was allegedly orchestrating the price fixing. Viking fired the employee, David George Osborne of St. Paul, and notified the attorney general's office. Osborne declined to comment on the allegations against him.
The dozen Minnesota individuals and businesses accused of involvement in a conspiracy to rig prices comprise a majority of firms that normally compete to sell lighting equipment to wholesalers on public jobs in the state, according to a court document. A year-long investigation ended in allegations that they raised bid prices on lighting equipment for more than 30 publicly funded construction projects throughout that state over a period of at least five years, causing damages that could exceed $1million. Projects include 23 school districts and the Hubert H. Humphrey Metrodome, according to the Attorney General's Office.
Charged in the criminal antitrust case are: Osborne; Thomas Powell, Plymouth, a representative for Jordano Associates Ltd., Brooklyn Center; Steven Eggert, Chaska, the representatives' quote person for Luma; William Hunt, president of Norwest Lighting, Inc., Crystal; Luma Sales Associates; Lighting Associates, Inc./Eon Lite, Inc.; Jordano Associates Ltd.; Norwest Lighting; and Patricia Stai, Edina, of P.A.S. Sales, Inc., Edina. Stai allegedly provided false information to help Powell establish a business that received public contracts targeted to women and minorities. Stai could not be reached for comment. Eggert and Powell declined comment.
The 12 defendants in the civil case, if found guilty on all counts, could each face penalties of $150,000, three times the financial loss to the state for all overcharges and payment of the state's attorneys' fees. Osborne, Powell, Eggert and Steven Hahn, Luma sales associate and a former owner of The Carnes Group, Minnetonka, all face civil allegations of price fixing, bid rigging and unreasonable restraint of trade. The following manufacturers' representative agencies face the same charges: Lighting Associates, Inc./Eon Lite, Inc.; Jordano Associates Ltd.; Luma; R.L. Mlazgar Associates, Inc., Eden Prairie; The Carnes Group; Norwest Lighting; TSR Lighting, Inc., Plymouth; and JTH Lighting Alliance, Inc., Eagan.