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Feds: 4 charged in Iowa contractor bribery case

January 30, 2014
Associated Press

IOWA CITY, Iowa (AP) — Two former executives have pleaded guilty and two other men have been indicted in a longstanding bribery scheme involving an Iowa contractor and a former Bettendorf city official, federal prosecutors announced Wednesday.

Employees of Brown Traffic Products Inc. provided cash, vacations, sporting tickets, cigars and expensive meals for years to influence then-Bettendorf city electrician Robert Webster and reward him for steering business their way, the U.S. Attorney's Office said.

Former Brown Traffic Products CEO David Schiltz and former vice president of marketing Daniel Fuchs pleaded guilty to their roles in the scheme last year and agreed to cooperate with investigators. Details of their cases were unsealed Wednesday. Webster and retired company executive Robert Budd Jr. were charged in a 13-count indictment alleging bribery and conspiracy after an investigation that has spanned more than three years.

Brown Traffic Products, which is based in Davenport and provides traffic control systems to municipalities, received nearly $2 million in business from Bettendorf between 2004 and 2011 for supplying traffic poles, lights, cable, cabinets and goods and services. Webster, who was responsible for the design, purchase and installation of traffic control devices, had the authority to approve purchases up to $5,000 on his own and entered into a series of transactions with the company for that amount, the indictment said.

Webster solicited and accepted money, airfare, lodging, tickets to racing events and other items to benefit himself, his wife, family and friends between 2001 and 2010, the indictment said. The bribes included airfare to places such as Florida, Texas and Nevada, lodging expenses at hotels and resorts, tickets to numerous NASCAR events in Chicago and Las Vegas, meals, drinks, cigars, golfing fees and more, the indictment says.

Some of the checks were drawn from an account named "Budd Industries." Under Iowa law, Webster was not supposed to accept anything worth more than $2.99 from a vendor.

Federal agents arrested Budd at his Bettendorf home Tuesday, and he pleaded not guilty later in the day during an initial court appearance, said his attorney William Schick. He was released on bond, pending a trial scheduled for April. Budd was director of a Brown Traffic Products subsidiary, the Traffic Systems Solutions Company, until his 2009 retirement.

Webster is expected to appear in court later this week. It was unclear whether he had an attorney, and there was no phone listing for him.

Bettendorf city administrator Decker Ploehn said Webster was placed on paid leave in October 2010, when the city learned of the FBI investigation, and retired the next month.

Brown Traffic Products said the charges stem from an FBI investigation into "gratuities reportedly being sought by, and provided to, local public officials" responsible for acquiring and maintaining traffic control equipment. Brown CEO Joel Wright said no one involved remains employed with the company and that he was pleased the company itself is not facing charges.

Court documents show the company's generosity had been a routine practice to cozy up to municipal officials.

In pleading guilty to conspiracy to commit bribery, Fuchs admitted last year that he used his company credit card to pay for meals and entertainment for numerous employees of government agencies with which Brown Traffic did business. Fuchs said he took employees from Evanston, Ill., to Cubs games, from St. Louis to Cardinals games and paid for meals for employees in Nebraska, Minnesota, Missouri and Iowa.

In his plea agreement, Schiltz admitted that he approved such expenses. Fuchs and Schiltz are awaiting sentencing.

Schiltz, who was the CEO starting in 1996, directed the company to investigate and stop "improper activities" after learning of the FBI investigation, said his attorney, Mark Weinhardt. Schiltz cooperated with investigators and later left the company, he said.

"While he was not the instigator or driver of the activities described in the documents filed by the government, David Schiltz takes full responsibility for not putting a stop to those activities sooner and for his role in them," Weinhardt said.

 
 

 

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