Preston school subcontractor under scrutiny
CHARLESTON, W.Va. -- The family owners of a Pennsylvania-based construction company building a new school in Preston County were accused of operating their former business as a sweatshop, burning their creditors and putting their workers in danger.
American Erection, a steel erection company operating out of Pittsburgh, is working as a subcontractor on a project to build a new $19 million pre-kindergarten through eighth-grade school near the existing Tunnelton-Denver Elementary in Preston County.
Celeste Wilhelm is listed as the owner of American Erection. Her husband, Ed Wilhelm, owned and operated W&K Erection and W&K Steel and Celeste worked as head of human resources.
Chad Rink, a representative for the Iron Workers District Council, visited the West Virginia School Building Authority on Monday, saying he wanted to warn the SBA that they were using a company with alleged problems on a school construction site.
"They're being given more and more state contracts despite stiffing all of their creditors," Rink said.
Chad Rink claims that Ed Wilhelm reconstituted his problem-ridden W&K steel companies under the name of his wife to avoid paying his past creditors.
Both W&K companies were the subject of Occupational Safety and Health Administration violations and eventually bankruptcy filings. W&K Steel was even boycotted by its local County Council in Pennsylvania for allegedly mistreating workers.
The Allegheny County Council in Pennsylvania declared W&K Steel a "sweatshop" in February 2011 and the next month passed a resolution not to contract or do business with W&K Steel, according to council meeting minutes.
The council said the company's treatment of workers violated its "anti-sweat shop" policy. They cited W&K Steel's 14 OSHA citations since 2002 and quoted activists alleging that W&K paid foreign workers almost half of what they paid to American-born employees.
Ed Wilhelm told the Pittsburgh Post-Gazette the council was acting as a "kangaroo court."
Larry Parsons, superintendent of Preston County Schools, said he wasn't aware of any of the problems with American Erection's management until after the pre-bidding process for the school project in his county.
"After the successful contractor was awarded the bid then it became knowledgeable that there were some concerns about the steel erection subcontractor," said Parsons.
In 2009, Celeste Wilhelm, with the help of her husband Ed Wilhelm, formed American Erection, according to documents filed in the U.S. Bankruptcy Court for the Western District of Pennsylvania. The company received permission to operate in West Virginia in October 2011.
In May 2011, Ed Wilhelm filed for Chapter 11 bankruptcy for both W&K Steel and W&K Erection, which were formed in March 2002. He has been involved in at least six bankruptcies since 2001, according to bankruptcy filings.
Celeste Wilhelm's company, American Erection, still operates out of the former W&K Steel plant's address along Kittanning Pike in Pittsburgh.
All employees of W&K Erection, except for one part-time estimator, were transferred to American Erection, according to court documents.
"Not transferred with the employees were the fixed assets of W&KE or any liabilities of W&KE," according to the bankruptcy court documents. "Also not clear, is the financial condition of American and whether or not profits were diverted from W&K to American."
Mark Manchin, president of the SBA, said his are staff looking into the allegations against American Erection and hope to get some answers soon.
"If there's anything fraudulent about this company, we'll intervene," said Manchin.
Steve Burton, another SBA board member, expressed concerns about American Erection, based on Rink's presentation.
"When you've got a contractor that files bankruptcy in the beginning and is cited as a sweatshop, we better be paying attention," Burton said.
American Erection is a subcontractor of the company Massaro, a contractor frequently used by the SBA. American Erection is scheduled to set and erect steel at the Preston County school site.
Parsons said Massaro presented the lowest bid for the Preston County project and "the references on the company are very positive."
Parsons said that when he learned of concerns about American Erection, he contacted Massaro and they gave him a written reply saying they were satisfied with the subcontractor.
"That's about all I could do," said Parsons. "The decision to disallow someone would come from the SBA. We don't verify the work history of all of the contractors. That doesn't rest at the local level."
Reach Amy Julia Harris at firstname.lastname@example.org or 304-348-4814.