Public Corruption Probe Targets Trinity Guardrails, Federal Highway Agency: Sources

By | April 21, 2015

The U.S. Justice Department is conducting a criminal investigation into the use of a highway guardrail system linked to at least eight deaths, according to people familiar with the matter, signaling a new wave of potential woes for manufacturer Trinity Industries Inc.

Word of the inquiry comes weeks after Trinity appeared poised to move on from more than a year of scrutiny in courts and from states over the performance of its embattled ET-Plus, a product meant to blunt the impact of cars that crash headlong into guardrails. In March, Trinity’s system passed a closely watched series of crash tests ordered by the Federal Highway Administration, the government agency that certifies the safety of roadside hardware.

Now, federal investigators are interviewing potential witnesses about issues including Trinity’s relationship with the FHWA, according to these people. Investigators from a public corruption and special prosecutions unit of the Justice Department have subpoenaed documents from court battles involving Trinity’s ET-Plus on behalf of a grand jury, according to one of these people.

“Trinity has not been contacted by the Department of Justice,” Jeff Eller, a spokesman for Dallas-based Trinity, said in an e-mail about the U.S. probe. “Should they do so, we will respond openly to all requests for information.”

Design Changes

The investigation indicates that the most serious turn in Trinity’s guardrail saga could be yet to come, adding the specter of criminal wrongdoing to previous allegations of fraud and deadly design changes.

In October, a Texas jury ruled in a whistleblower lawsuit that Trinity had cheated taxpayers, who help foot the bill for roadside safety gear, of $175 million by changing certain dimensions of the ET-Plus in 2005 without telling the FHWA.

Those cost-cutting alterations caused the unit to malfunction, plaintiffs have said in more than a dozen lawsuits. The suits say the ET-Plus, which is designed to give way and absorb the shock when hit by a vehicle, is instead prone to seizing up and spearing vehicles and their occupants. The legal battle between Trinity and Joshua Harman, the whistleblower who says he discovered the undeclared and potentially deadly changes, was the subject of a June article in Bloomberg News.

Trinity has denied the units are flawed. It has said its failure to tell the FHWA about the modifications was inadvertent and that the changes didn’t detract from the system’s performance. There are about 200,000 Trinity units along U.S. roadsides, the FHWA has said.

Raised Questions

Transportation officials in several states began raising questions about the ET-Plus in 2012 to the FHWA, whose sign-off on the product’s safety has opened up hundreds of millions of dollars in federal money for states that buy and install it. The agency stood by its approval of the system, Bloomberg News reported in November, in an article that also described the close relationship between Trinity and the FHWA.

After the Texas jury verdict, the FHWA ordered Trinity to retest the unit. Those tests were successfully completed, the FHWA said in March. The agency has said its only concern in evaluating the ET-Plus is safety and “any suggestion to the contrary is ludicrous.”

Jane Mellow, a spokeswoman for the FHWA, didn’t immediately respond to requests for comment on the grand jury investigation.

Independent safety experts and lawmakers continue to raise questions about the ET-Plus and the FHWA’s continued support of the unit. In March, U.S. Senator Richard Blumenthal asked Transportation Secretary Anthony Foxx to investigate the FHWA’s actions over the past decade, during which it allowed Trinity systems to line U.S. roadways.

The Connecticut Democrat said the agency waited three years after it first heard about the changes to issue a public call for additional information. He described the latest crash tests as “rife with flaws” and governed by lax standards.

Boston Prosecutor

The FHWA has focused “on minimizing its own failings and, unconvincingly, continuing to stand by the devices and the manufacturer,” Blumenthal said in a March 23 letter to Foxx.

The federal probe is being handled by U.S. Attorney Carmen Ortiz in Boston and the Federal Bureau of Investigation, according to the people familiar with it. The Inspector General of the Department of Transportation, which oversees the FHWA, is also working with the prosecutor, the people said.

Christina DiIorio-Sterling, a spokeswoman for Ortiz, and Kristen Setera, a spokeswoman for the FBI’s Boston division, said their offices don’t confirm or deny investigations.

Eric Weems, a spokesman for the Transportation Department’s Office of Inspector General, declined to comment.

‘Cooperate Fully’

“I’m not at liberty either to confirm or deny the existence of a DOJ investigation, but to the extent there is one, Mr. Harman will cooperate fully,” Nicholas Gravante Jr., Harman’s lawyer, said in an e-mail.

Federal investigators often begin gathering information before naming their targets, and in this case the focus of the probe isn’t yet clear. Such probes have the potential to call out specific individuals, including company executives and government officials, for violations of federal law.

According to the Justice Department’s website, the unit handling the criminal investigation prosecutes “federal offenses involving public corruption” as well as “civil rights prosecutions, and other cases of particular sensitivity.”

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