A Virginia highway commissioner, who resigned two months ago for what Gov. John N. Dalton said were "technical violations" of the state conflict of interest law, had lobbied intensively and secured funds for a road project that his engineering firm was designing.
T. Ray Hassell III, a Chesapeake surveyor who served on the powerful commission for seven years, actively pushed the project, sponsored by the Chesapeake Industrial Development Authority, until shortly before his resignation. At times Hassell persuaded his nine fellow highway commissioners to bend policy in order to win quick approval for the work, according to internal highway department memos.
During his two-year lobbying effort, Hassell's surveying and engineering firm was receiving checks totaling $52,000 from the Chesapeake authority for its work on the road and other projects. Under agreements that Hassell pushed, the state highway department is obligated to reimburse the authority for 80 percent of the road's costs.
Although Hassell abstained on two votes relating to the Cook Boulevard project, state records show he participated in others and promoted the project behind the scenes even when he was abstaining. Hassell today declined to discuss his role in the contract, which is under investigation by the office of state Attorney General J. Marshall Coleman for possible criminal violations of the conflict of interest law.
"I don't have any comment on it," said Hassell, who was pressured to leave the commission after it was revealed he had failed to disclose contracts his business had with other public agencies.
Hassell played an active role in the Cook Boulevard project despite a warning he received from state Deputy Attorney General Walter A. McFarlane in October 1978 after Hassell had requested guidance on the conflict law. McFarlane told Hassell in a letter that neither he nor his firm could participate in any public contracts that received money directly or indirectly from the highway department.
The criminal investigation raises questions about the governor's previous repeated characterizations of Hassell as a victim of an overly complex conflict law. Dalton's press spokesman, Charles J. Davis, said today the governor was unaware of the criminal inquiry and stood by his previous statements.
Dalton again criticized the law yesterday when another commissioner, H. Delmer Robinson Jr. of Winchester, resigned for what the governor again called a "technical violation." Robinson is president of an equipment company and vice president of a gas company both of which did business with the highway department while he was a commissioner.
Three highway commissioners have resigned in the last four months because of violations of the conflict law. Robinson and Hassell followed William B. Wrench, the Northern Virginia commissioner who resigned in September after voting to locate a highway near property he owns in Fairfax County.
Hassell is a well-connected Republican whose business interests have grown with the rapidly expanding Norfolk suburbs. In addition to his surveying business, he is chairman of the People's Bank of Chesapeake and has interest in about 300 parcels of land in the area.
Hassell's affiliation with the Cook Boulevard project began in the spring of 1979, when the industrial authority selected his firm, Hassell & Folkes, to design an extension of the road in the Cavalier Industrial Park. The authority, whose chairman, H. Leon Hodges, owns land with Hassell, awarded the design work without competitive bidding and never drew up a formal contract.
Hassell's firm originally proposed charging $19,500 for work on the Cook Boulevard extension and one other project in the park. Some documents relating to the contract have since been destroyed, according to the director of the industrial authority. Canceled checks show Hassell's firm received at least $28,000 for work on the two projects and $24,000 on other sewer projects in the same industrial park between 1979 and 1981.
The road project was to be funded through the state highway department's $2.5 million industrial access program, which provides funds to localities that entice new industries on condition that access be improved. Chesapeake ran into a series of problems and delays during the next two years that threatened the road's completion, including an increase in its estimated cost from $22,000 to $172,000.
During those two years, while his engineer Myron G. Hatch was preparing cost estimates and drawings, Hassell made sure the proposal stayed on track in Richmond, despite competition from other communities seeking the industrial access funds. There is no evidence in state files that Hassell ever disclosed to the department his firm's interest in the Cook Boulevard extension.
In 1979 and 1980, Chesapeake failed to provide enough information to allow the commission to approve its request before June 30, the end of the state's fiscal year. Both times Hassell persuaded the commission to approve the appropriations anyway, thereby insuring that Chesapeake did not have to compete for money in the next year.
At the commission's June 19, 1980, meeting, Hassell mentioned that the Chesapeake request would be forthcoming, according to the official minutes. He then requested -- and the commission agreed -- that the project could be approved later by letter ballot when the information arrived.
Hassell's eagerness did not sit well with some department officials. An engineer in a Tidewater office pointedly mentioned in two memos to Richmond that his office had been excluded from deliberations on the road, and another official questioned the commission's actions.
"In the technical sense, this has the effect of anticipating industrial access funds from one year to another contrary to . . . Commission Policy," wrote A.S. Brown, chief secondary roads engineer, in a July 1980 memorandum to his superior. "I have discussed this in depth with Mr. Hassell and it is his desire to proceed to present the matter to the commission as originally requested by the City."
The commission approved the funding, and department officials received in December the information they needed on cost estimates and specifications -- in a letter from Hatch, the Hassell firm's engineer. The day after Hatch informed Chesapeake officials that he had sent the department that information, the industrial authority wrote Hassell's firm a $16,300 check for what an invoice described as "preparation of plans for road and utility improvements."
Early this year, the Cook Boulevard project ran into one more problem, and Hassell intervened again. The two industries that Chesapeake officials had said would move in if the road was extended had still not signed firm contracts, so the city tried to amend its agreement to allow any comparable factory.
Highway officials told Chesapeake a substitute would be illegal because the commission had approved the funding solely for the two industries. Two days later, after Hassell set up an 8:30 a.m. meeting with top highway officials, the full commission, with Hassell abstaining, approved a new resolution allowing the substitution.