McHugh Const. to Settle Disadvantaged Business Suit for $12 Million

Century-old James McHugh Construction, Chicago, agreed to pay $12 million to settle a 2008 whistleblower lawsuit alleging corruption in disadvantaged-business contracting that prompted a joint investigation by federal prosecutors and the Illinois attorney general.

Project manager Ryan Keiser said his boss, Elizabeth Perino at Perdel Contracting Corp., promptly fired him when he questioned her demand to falsify purchase orders, labor hours and other paperwork to show that Perdel -- which was owned by a woman -- was doing jobs that were actually being handled by McHugh.

The investigation involved about $150 million in McHugh contracts on some of the biggest public works projects in the Chicago area going back to 2005. Disadvantaged-business laws required McHugh to subcontract about $40 million worth of that work to businesses owned by women or minorities.

McHugh admitted no wrongdoing with the settlement, and will not be barred from winning future government contracts.

(more on the McHugh disadvantaged business settlement . . . )