HAMMOND: Otho Lyles III lied to federal agents, indictment says
NWI Times
Jan 23, 2004
nwitimes.com/news/local/hammond-otho-lyles-iii-lied-to-federal-agents-indictment-says/article_509f6680-952c-5824-a3ae-3e17e89829c8.html
HAMMOND -- Former Republican party chairman Otho Lyles III was charged Thursday with lying to federal agents in connection with the U.S. Attorney's investigation of political kingpin Jewell Harris Sr.
Lyles, 51, owns Northlake Construction of Gary and is president of both the city's Sanitary District Board and Gary/Chicago International Airport Board.
On Thursday, he sat stiffly before U.S. Magistrate Andrew Rodovich, who advised him of a potential five-year prison term and a fine of $250,000 if he is convicted of making false statements to the FBI and the IRS about the following:
* Harris' involvement awarding or recommending any contracts by the city of Gary, or its departments, or in influencing or determining any business contracts.
* Lyles' own involvement with Harris to receive business or contracts with the city of Gary.
Rodovich ordered Lyles to turn over his passport. He released Lyles on a $20,000 bond and sent the case to federal court in South Bend for Lyles' arraignment.
The one-count indictment charges Lyles denied ever having talked with Harris about business contracts, when in fact Lyles had "frequent conversations with Jewel Harris" involving hauling and demolition contracts that would benefit Harris' trucking company, Enterprise Trucking, and would benefit Lyles' own business contracts with Gary's Redevelopment Department.
Lyles has served as demolition inspector for the city's redevelopment department and demolition manager for the school city's demolition projects.
In December, federal agents blanketed the city with subpoenas for records from city hall, the school district, the sanitary district and the businesses owned by Harris and Lyles.
The Public Integrity Task Force, directed by First Assistant U.S. Attorney David Capp, also issued search warrants and conducted interviews.
Weeks ago, Lyles acknowledged agents took demolition and excavation records from his company and the sanitary district dating back to 1998, but said he was certain he was not a target of the probe. He said he was not worried, because he had nothing to hide and was honest with federal agents.
"If they find one minute thing (or something you overlooked) it can hurt you," Lyles said several weeks ago. He added that his records were impeccable, as all of his contracts were approved in a public arena.
Lyles had no comment Thursday.
Numerous sources said they found it curious that Lyles would deny ever having spoken with Harris.
"The average citizen who walks down the street knows about the theory you can't do business in Gary unless you go through Harris," said one source.
Another surmised that Lyles' charge is being used as a way to reach others suspected of government corruption.
"They're squeezing him," he said.
Harris, who served as a state representative in the mid-1970s, was the architect of King's 1995 mayoral victory. Campaign manager for the mayor ever since, Harris also is a managing partner of the Gary Steelheads basketball team, which he and King helped bring to Gary's Genesis Center in a deal that cost the city millions.
Harris also operates Enterprise Trucking and Waste Hauling Inc., which has done close to $2 million annually in demolition work for the city the last three years. In May 2003, Harris landed a disposal contract despite the fact his $28.50 per ton bid was nearly twice that of another low bidder, Nelvin Reagins. Harris' firm also was paid more than $1.5 million in hauling and disposal fees over a five-week period in 2002.
Political insiders noted that Lyles' contracts and appointments to boards perhaps were because of the political clout he wielded while serving as the Republican party chairman in Gary, a power similar to that once held by former East Chicago GOP Chairman Robert Cantrell.
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