Supplier admits using lower-grade steel on Tukwila light-rail segment

A supplier for Sound Transit's light-rail project admitted in federal court Thursday that he misrepresented the strength of steel used in columns that support miles of elevated tracks through Tukwila.

David Appleby pleaded guilty to a single count of making and using false documents in 2006, when he was president of Appleby NW in Granite Falls. He could face up to five years in prison and a $250,000 fine when he is sentenced July 10.

Three engineering reports on the steel and columns declared them safe and able to withstand a major earthquake.

"The system is safe to operate and will operate as intended," Chief Executive Joni Earl said in a message to elected officials on Sound Transit's governing board.

This issue does not affect any steel used in the rebar, the thousands of rods embedded within the concrete to give it internal strength, said Sound Transit spokesman Bruce Gray.

Appleby was charged early Thursday and appeared in U.S. District Court in Seattle later in the day to plead guilty. The single felony count alleged he'd falsified documents for the steel, used to encase part of the column foundations underground. There are 153 such columns supporting elevated tracks along a four-mile area in Tukwila.

The crime is a federal offense because Sound Transit's $2.4 billion project is overseen and partly funded by the Federal Transit Administration.

Appleby provided 1.5 million pounds of steel for the project, according to court documents. He falsified 36 reports that were ultimately submitted to the Federal Transit Administration, which provided Sound Transit $500 million toward its construction.

The specifications called for the half-inch-thick steel to withstand pressure of 50,000 pounds per square inch (psi), but Appleby supplied Oregon-made steel rated for 36,000 psi.

Assistant U.S. Attorney Carl Blackstone said Appleby initially didn't realize the steel he approved for the columns was not up to specification. But once he realized the mistake, he forged mill certificates to say the steel could withstand greater pressures, Blackstone said.

Appleby's attorney, Irwin Schwartz, said his client admitted to falsifying the reports, using whiteout and a photocopier: "People panic and they cover up," he said.

The investigation began when a competitor, noticing Appleby was providing vast amounts of the higher-grade steel at a time when it was in short supply, reported that observation to the U.S. Department of Transportation. The department's inspector general and the FBI conducted the investigation and found the grade discrepancy.

Blackstone said Appleby confessed immediately and cooperated with the investigation.

Sound Transit is working to launch service in July from downtown Seattle to Tukwila, with an extension to Seattle-Tacoma International Airport by Dec. 31.

Sound Transit's design used a conservative calculation for steel strength, at 50,000 psi. Schwartz said his client ordered 36,000 psi, based on experience with other projects, and did not bill anyone for higher-priced steel.

Nonetheless, Sound Transit says it intends to withhold $48,000 from prime contractor PCL, which built the Tukwila segment under a $240 million contract, said Gray.

That's the amount of loss estimated by Sound Transit and includes the price difference between the higher- and lower-strength steel, plus follow-up engineering studies and staff time, he said.

Schwartz intends to argue there was no loss at all, given that Sound Transit has declared the 36,000-psi steel is safe.

Federal sentencing guidelines say the amount of loss is one factor that can be considered by a judge in deciding whether to send someone to prison.

Appleby no longer owns the company.

Charging papers said Appleby had an "oral contract" with a drilling subcontractor. That's a violation of Sound Transit requirements that companies use written contracts, said Gray.

He said the Tukwila case should place builders on notice that they had better spell out all the requirements and specifications, in writing.

Information from The Associated Press was included in this report. Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com.

Mike Carter: 206-464-3706 or mcarter@seattletimes.com