No grass growing in this pasture – that’s for sure. Here’s Moultrie’s Motion to Dismiss filed today and picked up by eagle-eye bellesouth. The Motion is inclusive of a supporting memorandum of law. The Project Management Agreement was filed as an exhibit to the Motion.
Both documents are posted under USA v Moultrie in the left sidebar.
I’m going to finish reading and hope that Sop gets to his computer and puts comments up first!
Obviously, Sop’s not back at his computer so here goes…
- First, clarification of the intent of the motion:
Pursuant to Fed. R. Crim. P. 12(b) (3) (B) and 7(c), defendant, Robert L. Moultrie (“Mr. Moultrie”) moves this Court to dismiss Counts 2 through 16 of the Superseding Indictment. The Superseding Indictment contains fatal defects in each Count, since, as a matter of law, it misstates and mischaracterizes the “Project Management Agreement” (the “Agreement”) in allegations in paragraphs 15 and 36 of Count 1, paragraphs 4(b) [on page 49] and 12 [on page 51] of Count 2 (all of which are incorporated by reference into Counts 3- 16).
IOW, Moultrie is seeking dismissal of the selected counts of the superseding indictment indicated in the text above.
- Next, the Motion claims a lack of clarity and/or ambiguity related to the Counts.
Anyone who reads the contract and the indictment together would be mystified as to how there can be $2,000,000 of overcharged services in a contract that required payments of at least be $2,500,000.00 for services and no more than $3,021,00.00. Furthermore, anyone who reads the indictment with its allegation of fraudulent billing for costs and then turns to the contract to learn what costs can be billed is left with an even greater question, because the contract is ambiguous as to what costs could be billed
The importance of this issues is highlighted by another motion before this Court: The Daubert motion as to Sean Carothers’s testimony. Carothers’s testimony is premised on the same misreading of the contract as that in the Superseding Indictment, disregarding the actual language in page 9 of the agreement and using the phrase “at cost” in place of the actual contract language. See Defendants Motion To Exclude Testimony from Putatitve Expert Sean Carothers at 10-12 (Document Number 90) (discussion Carothers’s purported opinion on this issue and why it is both an improper reading of the Agreement and an improper subject for expert testimony).9.
These ambiguities go to the heart of the charges of fraudulent billing in the Superseding Indictment. With clarity lacking as to what is an appropriately billed cost, the line between a properly billed cost and an improper one is unclear.
- Lastly – Nowdy said as she stepped off the edge of the cliff – after giving these documents a look, I can understand why Moultrie would file the motion.
They’re all linked for you; so, print them out and compare.
I don’t see much coming fom any of these filings Nowdy. In fact Moultrie lawyer Tom Freeland does not address the heart of the givernment case, that campaign contributions to Ronnie Musgrove were billed back to the project through labor charges.
This case will boil down to the jury believeing their “lying eyes” over the bob and weave of poorly constructed wordsmithing over whether paragrpah 15 of the superseding indictment is misleading.
I am continually amazed many of the same crowd that publically stomped on Dickie Scruggs are all cuddled up with a bigger crook in Ronnie Musgrove. That bit of hypocrisy is amusing and ignores the fact Musgrove had to have known the source of the money coming to his campaign from his new Georgia based friends at the Facility Group.
sop
Wouldn’t Ronnie Musgrove have to know that the donations were being billed back through labor charges before being found culpable?
Ronnie Musgrove has not been charged Belle. He is mentioned in the indictment as the unnamed public official who took the campaign contributions.
I think you’re right on what the feds would have to prove in order to charge and convict Musgrove.
If anyone has the key to get him, it would be Robert Moultrie.
All that said when Musgrove started getting sizable checks from TFG employees certainly he made the connection to the beef plant project. Involving politics and political giving with obtaining work appears to have worked for TFG a number of times in Georgia and the Carolinas.
You just gotta shake your head and wonder why the state dems backed a crook in Musgrove with all his baggage against an otherwise very beatable opponent in Roger Wicker.
sop
I’m guessing Freeland is trying to whittle this thing down to bite-size, Sop so he can get to the heart of the case.
You’re right about the contrast here with treatment of Scruggs; but, if Musgrove gets pulled into it, I think he’ll get “Scruggsed” as there is this isn’t his first rodeo either!
I plan to print out some of the documents and read a little more carefully – but I think the Motion has some merit, myself.
What motion would that be Nowdy? The one where Freeland implies salary reimbursed campaign contributions are “indirect labor”?
This case sounds as though it is strictly follow the money; in this case from the Mississippi taxpayers to the Facility Group and into Ronnie Musgrove’s pockets.
Unfortunately for Freeland, since he didn’t make the indictment he doesn’t have the luxury of ignoring large parts of it in his legal motions. That is why this latest group of filings is “for the show” IMHO.
sop
Well, I missed that implication, Sop. I was looking at the terms of the agreement relative to the indictment and Carothers testimony – the “wordsmithing” as you called it.
It struck me as odd that with a fixed minimum service contract there would be any invoices to question. IOW, if the only spent $200, they were still entitled to $2million.
Seems to me he’s using basically the same strategy Scruggs lawyers had – filing motions specific to certain counts. Didn’t work for them so may not work for him either.
I think the devil is in the details – and, in some cases, lack thereof, in the Agreement. I still need to print and read but it seems like the Services portion was just a lump sum payment with enough to fill a lot of pockets. No doubt Musgrove’s at the front of the line.
Here is the problem Nowdy, their payment was in two components, one a flat $2.5MM fee and another cost plus that included a guaranteed minimum.
They were finishing the project and I think everyone knew they would hit the minimum. The unusual part would be building up a pool of reimbursable costs that included the campaign contributions.
The problem with cost plus is there is no big incentive on part of the contractor to control costs. In fact the oppposite is true.
Typically another contractor is brought in to finish a project only if the existing GC is insolvent. It will be interesting to hear why TFG was brought in, especially Carothers take.
sop
Interesting point about why TFG was brought in – that I don’t recall anyone addressing. It also seems to offset the argument that this deal was struck before they became involved – IOW, that’s true so how did they become involved.
It took a while to cut/paste in the payment but I’ve got it here along with question or two (or 20)
So, Sop, what is payment component 1 compensating them for?
and, is there a standard indirect cost rate in construction?
how do they get paid enough to cover general overhead or profit?
sop and nowdo,
I’m reading all of this, and guess dont quite understand all of the jargon.
just tell me that what Robert Moultrie/Facility Group was illegal and that he have to pay
“all of this” concerned is just a portion of the illegal conduct alleged in the indictment; so there’s plenty out there – way more smoke than you need to believe there’s fire – and, if convicted, he will indeed pay.
I’ve waited a while to answer hoping Sop will show up as he reads all of this with the expert eyes of a construction specialized CPA. You can read his earlier comments on this thread and get a pretty good idea that he would give a much stronger answer than I just did.
Component 1 is just for the pleasure of doing business with them Nowdo. Component 2 I read as the costs of construction reimbursement.
Nowdo the major indirect cost for a construction manager is indirect labor along with the loads. The scheme was to book the costs of the Musgrove campaign contributions as indirect labor and charge it to the project.
IMHO Nowdo whoever gave Mr Moultrie the idea of stuffing such costs into a construction contract should also be on trial with him. Perhaps that person is……..
I hope this answered your question Mr Citizen.
It’s all yours tonight Nowdo 😆
sop
In answer to several questions Component 1 as you call it is a lump sum fee. Component II is reimburable based on direct compensation and several other costs none of which are clearly defined by the contract. The big question mark is indirect labor cost. Indirect costs are by definition overhead. Without clear definition there is a wide range of costs that could fall into this category. Not to mention that it clouds the meaning in the contract of not allowing general overheads.
Reading the contract it says Facility Group provides a GMP for $43MM. This means they are at risk for $43MM. Component number 1 $3.547MM is a combined overhead and profit based on this risk. This is around 9%.
Thanks for coming to my rescue, pediddle.
What doesn’t make sense to me is that Component I is larger than Component II. In retailing, that’s a pretty steep mark-up but your “indirect” would be considered there.
The other thing I’m struggling with is that Component II had a guaranteed minimum – which would indicate to me that the sum of the direct costs could be lower and you’d still collect the minimum; so, why would you have to itemize? Particularly when it was paid on % of completion.
Seems to me the appropriate payment would be % of completion + x% for indirect.
Guess my third question is where was their risk for $43M if the State ended up paying the $54M owed the bank?
Is this a standard construction contract?
Component I is profit and overhead on the $43MM in at risk construction cost. Component II is the services contract for management and engineering cost. As for component II read Para 3.1 it states that both components are lump sum. This usually means a fixed price contract that you wouldn’t have to itemize. The wording in all of 3.1 mixes lump sum and cost reimbursable concepts. I’m not a lawyer but I don’t see how you could ever determine what the real intent was in terms of what was defined as cost.
I can’t comment on the $54MM. Based on the contract Facility Group could not collect more than $43MM for construn ctiowithout approved change orders from the “Board ” as stated in the contract. Was all of $54MM construction?
TFG was brought in to step in Carother’s shoes according to my read of the contract. The difference in the dollars may be in completed construction.
Agree on the unclear langauge in the contract. I don’t think it will make a difference here.
sop
Was this motion denied today?
I just put up a new post on the latest beef plant developments HD.
sop