Shortly after John W. Lyon officially took charge of Excavation Construction Inc. in 1969, things began to boom for the firm.
Lyon, once a poor boy from West Virginia, is now described by friends as a monument to the free enterprise system. He has built his construction and excavation company into one of the area's larger businesses of its kind with $60.1 million in contracts in 1977.
In the early 1970s, Lyon invested $3 million in a fleet of 110 air-conditioned Mack dump trucks and had them painted red, white and blue, hailing them as the "greatest looking" truck fleet anywhere.
The company always seemed to have plenty of money, plenty of equipment, plenty of whatever it took to win a job and do it well, according to contracting officials and construction industry sources.
Now the firm has plenty of trouble. Federal grand jury investigations both here and in Baltimore are focusing on Excavation Construction.
Lyon, who also manages the city's largest parking concern, Parking Management Inc. (PMI), and serves on the board of the National Bank of Washington, appeared himself yesterday in the federal courthouse here, where he had been summoned to appear before the grand jury.
That grand jury is investigating allegations that D.C. Superior Court Judge Robert H. Campbell repeatedly suspended or revoked fines for hundreds of over weight truck tickets issued to Lyons' Excavtion Construction firm.
In Baltimore, another federal grand jury investigating charges of labor racketeering, including allegations that officers of Excavation Construction traded favors with Teamsters officials in return for concessions from the union on the firm's jobs.
The Baltimore investigation also involved another firm. Interstate Bridge. The president of Interstate Bridge, Robert L. Miller, was shot to death last May in a Rockville motel after he was subpoenaed as part of the Baltimore investigation. The murder is still unsolved.
Interstate Bridge sometimes worked with Excavation Construction and may have some common ownership, according to sources.
Investigators in both Baltimore and Washington, who trying to determine the extent of Lyon's holdings, have been interested in relationships among Excavation Construction and 20 to 30 other firms. Some of the firms are said to be owned by Lyon and Larry Campbell, whomanages Excavation Construction. Others are said to be owned in part by ICE Inc. of Nevada.
ICE Inc. which apparently has no offices or employes, is headed on paper by a young Maryland attorney, Michael J. Richardson.
Richardson, who defers to Lyon when he declines to comment, parked cars for PMI when he was in college. Later, he worked for Excavation Construction as an in-house lawyer. Richardson now has a firm of his own but still represents Excavation Construction in some cases.
Another firm that has been closely tied to Excavation Construction Inc. over the years is R & W Construction. "I've always heard that R & W was spun off to take advantage of minority contracting provisions," said one contracting official, repeating a frequently raised allegatioin.
R & W is owned by Raymond L. Rice, who is black, according to Metro's records. R & W was started in 1975 by Rice and Jesse Williams , who had both worked for Excavation Construction, according to industry sources.
The firm has been certified as a minority business by Metro. "If you go over and look at the operation, it's a totally black operated company," said Charles A. Dowdy, Metro's former director of the office of minority development. "Expertise has to come from somewhere. I think over the years they've shown the ability to get the job done."
Questions about R & W authenticity as a minority firm have been raised in Baltimore, where R & W has applied to work as a subcontractor on subway construction there. R & W was certified provisionally, but later that certification was suspended pending further evaluation, said Stewart W. Smith of the Maryland Mass Transit Administration. No final decision has been made.
R & W has received similar lenient treatment for its overweight truck tickets by Judge Campbell as Excavation Construction has, according to court records. On one day in April 1977, R & W pleaded guilty as charged for 62 tickets. But the firm paid nothing, after Campbell imposed a fine of $1,500 and then suspended the fine.
Excavation Construction has grown over the years with jobs in the city, Maryland and Virginia, and numerous jobs for Metro, for which the firm has built subway stations and parking lots.
In early 1976, the company estimated that by the end of that year it would have completed $22.5 million worth of work for Metro. Later that year, the firm won another contract for $41.9 million, in a joint venture with Traylor Brothers Inc. to work on Metro's Benning Road Station and tunnel.
The company also helped build the Rhode Island Avenue, Arlington Cemetery, Fort Totten, Takoma and Silver Springs stations and worked on parking lots at the Pentagon North Mall and Rhode Island Avenue stations.
Cost overruns on work Excavation Construction has done for Metro have averaged about 34.3 percent, compared to a systemwide average of about 10 percent. The worst overrunscame on the Fort Totten, Takoma and Silver Spring stations, where they totaled $9.2 million - 43.3 percent. Most of the overruns were for items beyond the company's control, however, according to Metro officials. One of the items was $2.2 million for elevators for the handicapped that Metro was ordered to install by a court.
On two of the contracts that Excavation Construction won from Metro in 1973, the company was not the initial low bidder.In both cases, the award was made first to a firm called D-B Construction Co. of New Market, Md., a subsidiary of Interstate Bridge Co. In the case of the Arlington Cemetery contract, D-B had given an incorrect corporate registration number, listing Interstate's number as D-B's. D-B's apparent low bid of $5,998,978.10 was rejected and a higher bid by Excavation Construction was then accepted.
D-B had also submitted what appeared to be the low bid for the Fort Totten, Silver Spring and Takoma stations until a $2.3 million error was found. When that amount was added to the original D-B bid, Excavation Construction's bid was lower.
In Maryland, Excavation Construction dredged the Dundalk Marine Terminal near Baltimore. In Virginia, the firm worked for three years widening about 13 miles of the Beltway for $52 million. The company also did $16.8 million worth of work on the District's Blue Plains sewage treatment facility in the early 1970s.
Government and Metro contracting and constrution officials generally speak well of Excavation Construction's ability to do the jobs they undertake. "They don't lack for the right thing to do the work," said Edward M. Halley Jr., director of engineering for the city's Department of Environment Services. " They go after the work. I can't fault them on their work," he said.
According to several sources, Larry Campbell, who is said to be Lyon's brother-in-law, handles the day-to-day operations of Excavation Construction. " Things had to be very uptight before Mr. Lyon showed up " on the Blue Plains job, said Halley. His impression, Halley added, was that " Lyon is consulted on the decisions that involve big money."
Lyon has been closely associated in business with multimillionarire developer Dominic F. Antonelli Jr., who is president of PMI. While the two men share many investments, sources say and the records reflect that Antonelli has little involvement in Lyon's construction businesses.
Like Antonelli, Lyon has a reputation as a fierce competitor and a good businessman. Still wearing a crew cut, Lyon is said to be conversative in both his dress and his business operations.
" I always thought the man was a real example of American get-up-and-go. I felt he personified the spirit of American enterprise," said one former personal associate.
In a similar vein, parking business competitor Leonard B. Doggett Jr., wrote in a 1976 reference letter:
" Not once in my 26 years with Mr. Lyon, in a highly give and take competitive atmosphere, have I ever found him to conduct his business in any manner other than highly ethical and honorably, truly a tribute to the American concept of Free Enterprise."