The city of Denver wants to remove a steel-construction company from its minority contracting program, questioning its claim of former ownership by two prominent Latinos and pointing to loans it received from talk radio host Mike Rosen and a white businessman.
Denver officials say they cannot find evidence that Jim Martinez and Keith Montoya paid anything when they received ownership in Rocky Mountain Reinforcement in 2011, the same year the company applied for status as a disadvantaged, minority-owned enterprise.
The city claims Greenwood Village businessman Tom Ward actually controls the company, with financial backing from Rosen.
Martinez is a former deputy director of Denver’s Office of Economic Development and former chairman of the Denver Urban Renewal Authority. Montoya is a former member of Denver’s Latino Commission and former finance director for Ken Salazar when Salazar ran for Colorado attorney general.
Rocky Mountain, based in Aurora,
on Tuesday filed papers contesting the city’s findings. Officials with the company contend union officials are stirring up trouble because its workers have not unionized. A hearing officer will hold a hearing Jan. 27 on whether Denver can remove the company from its contracting programs for minority- and female-owned companies and disadvantaged and small businesses.
If Denver wins, Rocky Mountain will lose advantages that give it favorable consideration when submitting bids on local public construction contracts. The firm was a major player on area light-rail projects, the Union Station project and the Veterans Affairs hospital in Aurora.
The Regional Transportation District just over a week ago removed the company from a small-business contracting program.
Stronger sanctions
Labor union officials, who say they support minority contracting programs but fear Denver’s is being abused, are pushing for even stronger sanctions against Rocky Mountain.
“Unfortunately, we haven’t yet seen any financial penalties or legal sanctions, so there appears to be no deterrent to dishonest contractors misrepresenting themselves,” said Nghia Nguyen, a researcher with the iron workers union, which filed the complaint with the city. “The unqualified company may lose a certification it was never supposed to have been granted, but that’s been it so far. We believe the company and the individual applicants should be held accountable.”
Nguyen added: “In other parts of the country, people go to jail for this type of stuff, but nothing happens here.”
The controversy is hitting the company at a time when Denver’s minority- and women-owned contracting program has come under scrutiny. a report that said the program, designed to give minorities and women equal footing in construction contracting, is not meeting its goals.
In addition, on a $39.6 million contract for mechanical work on Denver International Airport’s hotel and transit center. Burgess Services, owned by a black woman who is certified as a construction manager, was not equipped to carry out the work. Burgess subcontracted $23.3 million of the work to RK Mechanical Inc., a large company that does not qualify as a minority contractor.
The latest controversy revolves around who truly had management and control of Rocky Mountain.
Chris Martinez, director of Denver’s Division of Small Business Opportunity, in a September letter to the company said that person was Ward, owner of the insurance firm Legacy Capital Corp.
The city’s letter stated that Rosen lent Ward and Rocky Mountain $851,610 from October 2012 to Feb. 8, 2013. The loans were secured by Greenwood Village and Beaver Creek properties owned by Ward with assessed values in excess of $3 million.
Rosen, who has a talk show on KOA-850 AM and writes a column that appears in The Post, declined comment, saying, “It’s a private financial matter I’d rather not comment on.”
“No evidence of payments”
The letter from the city further stated that Martinez and Montoya in April 2011 purchased ownership interests through $55,000 in loans from another company of which Ward was the registered agent, but “there is no evidence of payments” from Martinez and Montoya.
In December 2011, the company applied for certification with the city as a disadvantaged business enterprise, listing Martinez as having 45 percent ownership, Montoya having 10 percent and Robert Garcia Jr. having 45 percent. But Garcia had been fired months earlier, the city found.
In 2012, Martinez purchased additional ownership for $297,000, becoming an 89.11 percent owner, but the company failed to “provide any evidence that Mr. Martinez actually paid $297,000 in this transaction,” according to the city’s findings. Martinez then bought out Montoya for $5,000.
The city found that from December 2010 through March 2011, the company for which Ward was an agent lent $800,000 to Rocky Mountain. Ward also lent the company his American Express card for business transactions, ranging from $20,000 to $100,000 on a monthly basis, and Ward was paid $20,000 monthly for management services, the city found.
Evidence also showed that Ward shared employees, office space and vehicles with Rocky Mountain, the city found.
Garcia, who in an interview claimed to be the company’s founder, said he ended up seeking a line of credit from Ward. Garcia said Ward then took control of the company and brought in Martinez and Montoya, who Garcia said had no construction expertise.
When he was with the firm, Garcia said, Martinez came into the office just once or twice a week and “only to read the newspaper.” He added that Martinez became the public face of the company, one aimed at securing contracts.
“He couldn’t even say the word rebar; he called it rebarb,” Garcia said. “He would walk into a contractor’s office with a silk tie and a $1,000 suit trying to get business.”
Montoya declined comment. In an interview, Martinez said he ran the company for several years before relinquishing control due to ongoing harassment from labor unions. He contended he lost money and his health suffered, contrary to the sweetheart deal the city has outlined.
In an interview, Ward denied ever owning the company or having management and control of it. He said minorities ran the company.
“I’m nothing but a creditor,” Ward said. “It’s in my best interest to make the company succeed. If they fail, then all the money I loaned them is gone. I have no control over them. I’m nothing more than a lender.”
Ward added that he temporarily was paid for providing consulting services to the firm.
Interest sold in 2014
Martinez in 2014 sold his interest in the company to Christine Rumler, who is Latina, Ward said. Denver officials, though, have also found that transaction suspicious and not sufficient to establish Rumler as qualifying for disadvantaged, minority or female business consideration. The city found that Martinez sold his interest to Rumler for $11.
In addition, Rumler is married to the chief operating officer of the company, Trent Rumler, who worked there before his wife was affiliated with the company.
Ward and Trent Rumler said the city ignored the fact that when Christine Rumler took ownership interest in the company, she agreed to be responsible for more than $500,000 in debt. Trent Rumler said his wife doesn’t have extensive construction experience.
“Could she stand alone? No,” he said. “But does she have to do that to qualify for disadvantaged consideration? No.”
Christopher N. Osher: 303-954-1747, cosher@denverpost.com or twitter.com/chrisosher
