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Set in Concrete More of Mark Stiles’s Questionable Deals BY JENNIFER WONG Last month, the Observer reported that companies owned by Representative Mark Stiles have done more than $47,000 worth of business with the highway department since Stiles was elected state representative, in apparent violation of the Texas Constitution \(“The Highwayman,” TO additional research, the Observer has discovered that this finding was only the first chapter in the dubious tale of how Stiles conducts business, both at home and at the Capitol. REPRESENTATIVE MARK STILES, a four-term Democrat, is executive vice president and general manager of Transit Mix Concrete Company, the largest concrete company in Beaumont. He also owned stock and sat on the board of directors of American Builders Concrete, which went bankrupt last month. Although both Transit Mix and American Builders did business with the state, Stiles says his involvement with the companies does not constitute a conflict of interest. He maintains that since he did not manage the American Builders’ daily affairs, he could legally do business directly with the state. In fact, American Builders has had contracts with the highway department totalling more than $47,000. Stiles has said he wasn’t aware that Transit Mix had contracts with the state. Despite his claims to the contrary, documents obtained from the highway department indicate that Stiles played an integral role in the daily management of American Builders. The Observer has also learned that Stiles used American Builders to win state contracts that, under federal law, had been set aside for minority-owned businesses. For more than five years, American Builders was listed with the highway department as a Disadvantaged Business Enterprise for businesses owned by women and minorities. The designation gives businesses a competitive advantage, since all federal construction projects must contract at least 10 percent of the project out to DBE companies. To win the valuable DBE status, Stiles, who is white, and his white business partners simply created a minority-owned business out of an already existing company. On July 1, 1985, Vidor Ready-Mix, Inc. amended its articles of incorporation to become American Builders. The Vidor Ready-Mix/American Builders shareholders were many of the same people who sat on the Transit Mix board of directors and later assumed executive positions with the company. They include: Warren Goehringer, president; Mark Stiles, vice president; Walter J.Crawford, chairman; and D.P. Wheat Jr. Three-and-a-half months earlier, on November 14, 1985, American Builders’ board of directors voted unanimously to give the majority share of stock to Joshua Allen, a black Beaumont property manager and realestate developer, and Famous Byers, a Native American Church of Christ minister and counselor. Not only were Allen and Byers awarded stock, but they were voted in as president and vice-president of the board, respectively. Neither Allen or Byers had ever worked for Transit Mix or Vidor Ready-Mix/ American Builders. On November 15, 1985 the very next day Allen submitted an application for DBE status. In his cover letter, he said it was “imperative” that the application be processed as soon as possible so the company would be eligible for the December bidding for highway department contracts. Seven days later, American Builders was duly granted DBE certification. American Builders’ DBE application includes the resumes ofAllen and Byers, as well as a personal statement from Stiles saying he would “be responsible, along with Josh Allen and Famous Byers, in the estimating activities” of the company. As evidence of the company’s expertise, Stiles’s 14 years experience in the concrete industry was cited. In identifying “those individuals who are responsible for day-to-day management and policy decision making,” Stiles was listed in four out of six areas: estimating, marketing and sales, purchases of major items and supplies, and supervision of field operations. The only other people mentioned under this management category are Allen and Byers. In annual recertifications of the company, Stiles was named in at least half of the management areas. When questioned about his inclusion in these categories, Stiles said it was the first he had heard of it. n December 31. 1986. the U.S. Department of Transportation’s Office of Inspector General received an anonymous letter of complaint. The letter accused American Builders of acting as a “front” organization that “somehow passed through the certification procedures” of the highway department because it listed its plant at 2525 Dollinger, which is the address of one of the Transit Mix plants. “This DBE company has received a contract to provide concrete on the Interstate 10 project in Beaumont … [worth] $4 million,” the letter stated. The U.S. Department of Transportation referred the matter to the state highway department in January 1987. Three months later, highway department inspector Daniel J.Madison, tried to call American Builders Concrete, Inc. to set up a DBE review. In a memorandum, Madison said he was connected with an answering service which answered “Highland Business Offices.” The service then transferred him to Katherine Blanchett, who explained that she “handles things for Mr. Allen when he is out of town.” Allen returned the call later that day and confirmed the review date, but asked that the meeting be held in his office rather than the job site. Madison explained that he still needed to inspect the plant, and Allen deferred. O 10 APRIL 5, 1991