Hamilton was supposed to pay workers $40.66 an hour. But did he?

Workers employed by Oliver Hamilton’s private construction company on a city housing authority job in 2012 were shocked to learn that federal law required them to be paid more than $40 an hour, according to a former union official.

The workers, who spoke no English and carried no identification, learned about the news through an interpreter, said John Gould, who was the prevailing wage compliance officer for the Carpenter’s District Council of Greater St. Louis.

“When we informed the workers of the proper pay rates, you could see the disbelief in their eyes,” said Gould, whose job it was to make sure employees, even those in the country illegally, received the proper hourly pay on federal jobs as mandated by the Davis-Bacon Act.

Gould said he and his boss, regional union representative Dan Barger, were concerned that Hamilton was taking advantage of workers in this country illegally by paying them the federal minimum wage of $7.25 in cash instead of the $40.66 an hour they were legally entitled to receive.

Hamilton, who is the East St. Louis Township supervisor, is charged with making more than $40,000 in personal purchases on a township American Express card, including airline tickets to Las Vegas. Hamilton was the subject of a Belleville News-Democrat investigation that reported he spent more than $230,000 in public money over four years on questionable purchases, including car washes, meals, trips and construction materials.

Hamilton is expected to plead guilty Dec. 1 in U.S. District Court to federal wire fraud charges. He has declined to comment and referred questions to his attorney, Clyde Kuehn of Belleville, who could not be reached for comment.

Hamilton, who owns Hamilton Contractors, had aroused suspicions when he won the contract in 2012 to install drywall in housing authority units by underbidding his nearest competitor by half, Gould said. The union was not aware at the time that Hamilton fathered a son with the woman who ran the housing authority’s contracts division.

Housing authority contracts to Hamilton’s company exceeded $600,000 over five years, according to public records.

Gould explained that for several months he and Barger investigated the Hamilton drywall job site and pored over job payroll records. He said they regularly sent their findings to the Chicago office of the Racketeering and Fraud Division of the U.S. Department of Labor.

“They promised to raid the job site but on the day of the raid they called and said it was off. I never learned why. I never found out what happened,” Gould said.

Barger, who is still a union official, could not be reached for comment.

Besides Gould and Barger’s own investigation, federal housing authority job site inspector Leroy Estes interviewed workers and reviewed payroll records and sent written reports to the housing authority. Estes died in 2014.

The East St. Louis Housing Authority released copies of Estes’ reports to the News-Democrat under the Freedom of Information Act. However, Mildred Motley, the housing authority director, declined to call Estes’ field reports an official investigation.

A spokeswoman for the Office of Inspector General for the federal Department of Labor in Washington, D.C., also declined to say whether an official investigation into Hamilton Contractors’ $99,838 contract had ever been conducted.

Gould and Barger and Estes found:

▪  Employees who were supposed to be paid were not actually at the work site, according to field reports filed by Estes and job site sign-in sheets.

Elizabeth Tolliver, who was then the housing authority director, sent a letter to Hamilton stating her records showed that over a period of 30 separate work days, Hamilton directly received $38,456 in wages to distribute to employees listed on certified payroll sheets that Hamilton signed as accurate.

Tolliver requested that Hamilton provide documentation that the workers were actually on the job. A housing authority official said no copies of the documentation requested were found.

▪  Estes and Gould were concerned that many Hamilton Contractors workers were working at night when no inspectors were on duty and sign-in sheets were not required. Estes sent at least two reports to local housing authority officials about the practice.

▪  On-site worker interviews by Estes showed that Hamilton Contractors workers said they did receive the $40.66 an hour, but when asked whether they received pay stubs as proof, all responded they did not.

▪  Estes reported that a dozen of Hamilton’s workers gave their address as 3414 Louisiana Ave. in St. Louis, which at the time was being rehabilitated by Hamilton’s son, Oliver Hamilton Jr., according to a city building permit. Hamilton Jr. could not be reached for comment.

▪  A spokesman for the Illinois Department of Employment Security declined to say whether Hamilton Contractors contributed worker deductions to the state for the housing authority work.

Gould told the News-Democrat he also found payroll records with names that were misspelled and with payroll deductions that were exactly the same to the penny for workers who worked the same number of hours at the same $40.66 hourly rate. He called this “an impossibility” because the workers were from Illinois, Missouri and Kentucky and would have varying payroll deductions and different state income tax rates.

“Comparison of payroll records and sign-in sheets revealed many occurrences where workers were not reported on certified payroll records, but they had signed themselves in on site,” Gould said. This led him and Barger to suspect that “... the certified payroll records were simply letters and numbers on a piece of paper and that all of the workers were being paid cash under the table.”

The workers, who were said to be from Honduras, refused to cooperate with Gould and his interpreter, possibly out of fear they could be arrested for being in the United States illegally, Gould said. This forced him to turn to job site records to carry out his investigation.

“Unfortunately, none of the workers chose to speak out or assist us in pinpointing what the actual pay rate of Hamilton employees was,” he said.

The BND was able to locate and interview three former workers who were listed on the field reports. They declined to be identified for fear of retaliation, but all said they were paid at an hourly rate well below $40.66.

When asked whether he received the prevailing federal wage, one worker, an East St. Louis man in his late 60s, said, “Hell no. I think I got $25 a day.”

Another man in his 40s from St. Louis with an Hispanic surname said, “I have never made that kind of money.”

A third man from St. Louis with a common Hispanic name told Estes in 2012 that he made $40.66 an hour. He recently told reporters, “No. No. Much less.” A copy of the field report showed he used an “X” to sign his name.

This story was originally published November 18, 2016 at 3:25 PM with the headline "Hamilton was supposed to pay workers $40.66 an hour. But did he?."