BRADENTON, Fla. – An Alabama investigation into corruption at the Birmingham Water Works Board led to the indictment of three people, including board chairwoman Sherry Lewis.
Lewis, Jerry Jones, a former vice president for Arcadis, and Mount Vernon Mayor Terry Williams, who also owns Global Solutions International, were arrested and charged with embezzlement on Wednesday.
Attorney General Steve Marshall and the Federal Bureau of Investigation said in a joint release that they investigated allegations of corruption at BWWB, which involved its independent engineer of record, Arcadis, formerly Malcolm Pirnie, and Global, a subcontracting firm used by Arcadis.
No details about the embezzlement scheme were released, including whether it affected the agency's finances. A Jefferson County special grand jury remains empaneled and the investigation is ongoing, according to Marshall and the FBI.
The BWWB has $1 billion of outstanding bonds. The senior bonds are rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings. The subordinate bonds are rated Aa3 by Moody's and AA-minus by S&P.
General manager Mac Underwood said the indictment of Lewis is “an unfortunate outcome of a lengthy investigation.”
“I am sorry to learn of the indictment,” Underwood said in a statement. “Incidentally, we must be mindful that being accused of unlawful conduct does not automatically make one guilty. However, we must let the legal process run its course.”
Underwood did not respond to questions about the agency’s finances, or if the incident would affect the payment of debt service. His statement said BWWB had no further information.
Prosecutors presented evidence to a grand jury on Tuesday resulting in the indictments on three counts each of violating the Alabama Ethics Act.
Lewis, 55, was charged with intentionally using her office to obtain personal gain for herself, her family, and the businesses with which she is associated, voting on or participating in matters in which she or a family member had a financial interest of gain, and soliciting or receiving something for the purpose of corruptly influencing official action.
Jones, 54, and Williams, 62, were each charged with violating the state ethics law by aiding and abetting Lewis’s unlawful use of office, aiding or abetting Lewis in voting on or participating in matters in which she or a family member had a financial interest of gain, and offering or providing something for the purpose of corruptly influencing official action.
If convicted, they face a maximum of 20 years in prison and fines of $30,000 on each of the three counts.
Investigators said no further information about the alleged crimes would be released at this time.
“The citizens of this state expect honesty and integrity from public servants at all levels of government,” Marshall said. “As attorney general, a top priority is to ensure that any person who violates the public’s trust will be held accountable.”
According to the Birmingham News, investigators questioned witnesses about money flowing from water works vendors to politicians, board members and their families, through cash, entertainment and no-show jobs.
“Both the FBI and the Alabama Attorney General's office have been investigating water works and city dealings in separate grand jury probes,” the publication said.
A spokesman for Arcadis said that once the company became aware of the allegations it immediately launched a “very thorough internal investigation” and cooperated with state and federal authorities. Jones was separated from the company for violating policies on Monday.
“Arcadis strives to operate its business in an honest and responsible way, working to the highest professional standards,” the company said in a statement. “The actions of one employee do not reflect the level of importance the company places on integrity.”
Arcadis said it “remains committed to providing exceptional engineering services on various projects” in the Birmingham and surrounding communities.
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Corrected December 14, 2017 at 3:28PM: The original version of the story had incorrect bond ratings for the board.