AJC archives: New activism defines road builder C.W. Matthews’ efforts

Transportation snarl motivates state's largest contractor; growth brings political clout

Original run date: May 17, 2009 -- In the frenzied final week of the 2008 legislative session, Lt. Gov. Casey Cagle broke away to take an urgent call from a key player in a highway funding debate.

The caller wasn't the governor, or the transportation commissioner or a lawmaker. It was Bill Hammack, president of C.W. Matthews Contracting Co., Georgia's largest road builder.

Hammack feared a complicated bill before the Senate would not raise a dollar to solve the state's traffic problems. He told Cagle, the Senate's presiding officer, he'd prefer no bill to the one at hand.

Before the week was out, the Senate killed the bill.

Hammack acknowledges placing the call, but contends it alone did not trigger the bill's demise. Cagle has said he favored the measure, and pushed it for a vote. Nevertheless, it is clear that, unlike others involved in the issue, Hammack had access to a critical figure at a critical moment.

The episode underscores the Matthews firm's sway in transportation policy in a state from which it has won contracts worth billions of dollars. Legislators and other officials say they don't blindly accede to the company's wishes. But large campaign contributions, discreet lobbying and a reputation for high-quality work have given Marietta-based Matthews a voice, if not the final word, on transportation issues approaching that of Georgia's top elected officials, an examination of the company's work shows.

Matthews opposed basing new taxes for transportation on regional votes rather than a statewide referendum. Twice, the proposal has failed.

Matthews wanted the state to let private firms build public toll roads. The idea was approved.

Matthews criticized rail transit plans as too expensive. Those plans, already unpopular among lawmakers, stalled.

The company's prominence will be measured this week when officials open the first bids on nearly $1 billion in projects paid for by the federal economic stimulus package. Matthews hopes to win a share of that business.

With state law requiring that road jobs go to the low bidder, the firm's success cannot be attributed simply to lobbying and political donations. Rather, it has thrived by advocating policies that follow a straightforward proposition: What is good for C.W. Matthews is good for Georgia.

"You would hope it would let you promote what you believe is a viable solution to transportation issues --- to get your foot in the door, " Hammack, a company employee since 1971, said in an interview. "And there is nothing sinister about that."

He added: "It's amazing what we get blamed for. Because we're the big target when something happens. 'Oh, C.W. Matthews did that.' We're just a natural target."

Perhaps because of its size, or its unflagging zeal to build Georgia out of traffic gridlock, Matthews has made plenty of enemies.

"They are big-money players, " said Mike Evans, a former chairman of the state Transportation Board. "The way the process works is the big companies and big-money players have more voice."

Although Matthews executives and board members deny it, Evans said the firm "orchestrated and played a part in" the board's recent firing of his wife, Gena Evans, as transportation commissioner.

Others say the genteel demeanors of Matthews executives mask a tough approach to a tough business. They have built and rebuilt a company that prospered in post-World War II Cobb County; survived a bid-rigging probe in the 1980s; became the dominant road builder in a region infamous for clogged highways; and today operates as sort of a transportation department-in-exile, looking for money for new road projects that could rescue Matthews and other contractors endangered by a severe downturn in state business.

"They appear to be Southern gentlemen, " said Patty Durand, state director of the Sierra Club, which favors mass transit over highways. "They don't throw their weight around. They do it behind the scenes."

From ponds to interstates

C.W. Matthews has built or repaved every interstate in metro Atlanta. It constructed the high-occupancy vehicle lanes on I-75 and I-85 and the fifth runway at the Atlanta airport. The new 14th Street Bridge interchange on the Downtown Connector is a Matthews project. The 17th Street Bridge spanning the north end of the connector? Matthews built that, too.

"They are a good competitor, " said David Snell, vice president of E.R. Snell Contractor, one of Matthews' rivals. "Any work they get with the Georgia DOT is because they were the low bidder."

The state paid Matthews $522 million in the fiscal year that ended June 30 --- more than one-third of the $1.48 billion that went to the 12 largest highway contractors, and more than any other vendor. Its nearest competitor in road building earned $225 million that year.

The firm's rise parallels the transformation of the quiet towns surrounding Atlanta into booming suburbs populated by commuters and their cars.

Credit: Bita Honarvar

Credit: Bita Honarvar

In 1946, Charles William Matthews took a tractor and two dump trucks and founded a company that graded earth for ponds. When Cobb County began turning unpaved roads into highways, Matthews moved into the asphalt business. By the 1960s, the firm was going after state road-building contracts. Public works projects now account for about 85 percent of Matthews' business. Its biggest customer --- "by a mile, " Hammack said --- is the Georgia Department of Transportation.

For a brief time in the early 1980s, however, the company lost the right to seek state contracts.

A nationwide investigation found that Matthews and other contractors had colluded in the 1970s to rig bids on state road work. The company's president, the founder's son Robert Matthews, pleaded guilty to federal and state charges and spent three months in custody. The company paid a $3 million fine.

"Back then, they had some folks that I probably wouldn't turn my back on, " said Harold Linnenkohl, a former state transportation commissioner. But he said the industry's culture has changed and Hammack has built a stellar reputation. "I put him at the top for integrity and doing what they said they're going to do."

C.W. Matthews died in 2007. Robert Matthews, 66, is now company chairman.

Political imprint 

The company's growth gave it the means to do more than build roads for the government. It also could try to influence the election of officials who shape the government's road-building policy.

Over two days in August 2002, contributors connected to the Matthews firm gave $29,000 to Gov. Roy Barnes' re-election campaign. Like other governors, Barnes did not control highway spending. But, also like other governors, he said, he influenced the selection of state transportation leaders who did.

The company supported Barnes for other reasons, too: he is one of Robert Matthews' oldest friends. For the 2002 election, the company and its associates gave the Democrat $176,000.

State law allows a single contributor to give a candidate for governor no more than $16,000 over four years. Like other big donors, however, Matthews found a way to exceed that limit: 43 separate contributions from the firm, from subsidiaries, from executives and from executives' spouses.

"They're good folks, " Barnes said in an interview. "Bob Matthews is probably my best friend. But never in all the years I have known them did they ever ask me to do anything that was not strictly on a policy basis."

After Barnes' unexpected loss to Republican Sonny Perdue in 2002, Matthews found itself in an unfamiliar place: on the wrong side of power.

The company had given Perdue nothing. Quickly, it donated $10,000 to help pay off Perdue's campaign debt and another $10,000 for his inauguration. The firm gave Perdue's 2006 re-election campaign $14,488.

Those gifts apparently did little to ingratiate the company with the new administration.

Perdue pursued a transportation program early in his first term, "and then disappeared, " Hammack said. Perdue also pushed the state Transportation Board, which is chosen by legislators, to hire Gena Evans as commissioner. Her policies --- in particular, a change in accounting practices that slowed road spending --- squeezed Matthews throughout her 15-month tenure. By the time the Transportation Board fired Evans, over Perdue's objections, Matthews' state work had decreased so much the company had laid off one-fourth of its 2,000 employees.

"We certainly don't have the relationship with the current governor that we had with Gov. Barnes, " Hammack said.

Perdue didn't punish Matthews for its tepid political support, said Bert Brantley, the governor's press secretary. But, Brantley said, Perdue is concerned about the leverage the firm appears to exert over the Transportation Board --- including, perhaps, as it considered firing Evans.

"The hope is no one company has that much power to influence a decision like that, " Brantley said. "However, with all the effort and all the lobbying they put into developing relationships with board members, it's impossible to know how much influence they had."

Credit: Bita Honarvar

Credit: Bita Honarvar

Despite its low profile, the company has left a distinct imprint on the state's political landscape.

Since January 2006, Matthews and its associates have given $265,675 to Georgia campaigns, four times more than the next five largest road contractors combined, an analysis of campaign finance reports shows.

Much of it went to officials who set transportation policy and spending. For example, the company gave $5,000 to Senate President Pro Tem Tommie Williams, who in 2003 had sponsored legislation, backed by Matthews, that authorized private firms to build public toll roads.

Williams said he has taken positions contrary to Matthews' desires. But "the people that build our roads need to be heard from."

Matthews' favorite politician in recent years was Cagle. Since 2006, the firm and its associates have given $41,400 to Cagle's political benefit, including $20,000 for his aborted candidacy in the 2010 governor's race. Cagle has refunded gifts to his gubernatorial campaign, aides said.

Hammack said donations had no connection to his call to Cagle about transportation funding late in the 2008 legislative session.

"I certainly cannot tell the lieutenant governor what to do or what not to do relating to transportation, " he said. "You're giving me way too much credit for the outcome of that."

'A critical point' 

Advocates for mass transit and environment don't give Matthews credit so much as blame for legislators' failure to create new funding sources for transportation.

In 2007, as Atlanta business leaders predicted economic doom unless the state broke the area's traffic gridlock, Matthews joined a diverse coalition of transportation advocates called Get Georgia Moving. The group urged lawmakers in 2008 to let voters decide on regional sales taxes to pay for transportation projects in their areas. The legislation's details confounded even its backers, and Hammack said his company thought it would generate no new money. That's the proposal the Senate killed shortly after Hammack called Cagle.

This year, many members of Get Georgia Moving backed a similar bill. But Matthews' in-house lobbyist, Bobby Vickery, was among those who helped House leaders draft a different proposal: a statewide 1-cent sales tax for roads.

As Hammack describes it, the company's approach mixed altruism with self-interest.

The state has dramatically slowed new highway projects. Hammack and his allies contend current policy would leave motorists stuck in a perpetual traffic jam --- and road builders idled.

"This company and every other contracting business in the state of Georgia are on their knees and may not survive, " said Chuck Clay, a lobbyist for Matthews. "It is a fragile time."

The regional approach gained traction in the Senate, while the statewide tax drew support in the House. With neither side willing to give in, the issue remained unresolved as the legislative session's conclusion neared.

So Hammack accompanied Vickery to the Capitol --- "new territory for me, " he called it --- to urge passage of any funding bill.

His appeal for compromise went nowhere. The session ended without a vote on any transportation funding measure.

"It's almost like they got greedy, thinking they could make more money" from a statewide tax, said Lee Biola, president of Citizens for Progressive Transit, which advocates for mass transit riders. "And they're going to be punished the most for their actions in this case, because now we have nothing. And they have nothing."

By taking part in the debate, Hammack broke from Matthews' corporate culture of rarely calling attention to itself. With traffic worsening, and with state officials unable to agree on solutions, he said, he saw no alternative.

"This is the last place I want to be, " Hammack said of the spotlight that accompanies his new activism. But "we're at a critical point in the history of our state and our industry."

As he promotes new ways to pay for new roads, Hammack said, his company's interests don't deviate from the public's.

"C.W. Matthews Contracting Company, " he said, "is a friend of the state of Georgia."

-- Audience Specialist Mandi Albright assisted in the re-creation of this story for online.