WEST PALM BEACH -- For three years, the worst drought in half a century held Florida in its grip. It wilted crops and drained lakes, turned forests into tinder and threatened the water supply for millions of residents.

It also brought a deal worth $1.9-million to a water-pump company owned by Gov. Jeb Bush's former business partner.

The pump contract was hastily awarded to MWI Corp. of Deerfield Beach in September 2000, after the board of the South Florida Water Management District agreed to waive its rules requiring competitive bidding.

The nine-member board, which included six Bush appointees, did not give the contract directly to MWI. Instead, in another departure from normal procedure, the board left that decision to its staff, which:

Asked MWI to help design the project and write the specifications.

Drafted a memo saying MWI would get the work a day before MWI quoted a written price.

Sought quotes from other pump suppliers after saying MWI would get the contract.

Water district files and interviews produced no evidence that Bush, who as a private citizen made $648,250 promoting MWI pumps, tried to influence the decision to award the state contract to MWI.

Through a spokeswoman, the governor said this week that he never talked to anyone at the company or in state government about contracts for MWI.

Joseph W. Taylor, former deputy executive director of the water agency who oversaw the unusual pump contract in 2000, said he knew of no political pressure to steer business to MWI. But he said his staff frequently appeared to give MWI favored treatment.

Whenever the South Florida water agency was in the market for pumps, "MWI seemed to be the district's provider of choice," Taylor said.

MWI is owned by J. David Eller, a prominent Republican Party activist and longtime political supporter of Jeb Bush and his family. From 1988 to 1994, Bush and Eller co-owned a company to market MWI equipment overseas.

"Neither the governor, nor anyone associated with him, had anything whatsoever to do with purchasing decisions made by the South Florida Water Management District," spokeswoman Katie Muniz said. "The governor has not influenced in any way, shape, or form, directly or indirectly, these district purchasing decisions."

Most district board members contacted by the St. Petersburg Times said they didn't recall details of the no-bid pump deal or any other transaction involving MWI. Several said they never heard of the company or Eller. But several voiced concern.

"This probably isn't going to look good," said Michael Collins, a Bush appointee who was chairman of the board at the time of the no-bid vote. "We need to get to the bottom of this."

A spokesman for MWI, whose executives have given generously to Bush's campaigns for governor, said the project was "extremely successful." In fact, he said, MWI "came to the rescue" of thirsty South Florida.

A contractor for the district for decades, MWI has been dogged in recent years by negative publicity about a 1992 deal to sell pumps to Nigeria with the help of a $74-million loan from a U.S. export agency.

As Eller's partner in a marketing firm called Bush-El, Bush twice traveled to Nigeria to promote MWI's pumps. He says he refused any commission in the Nigerian deal because of the appearance of a conflict of interest: The money was a federal loan and his father was in the White House.

In June 1999, former MWI employees revealed to the press that the FBI was investigating how the company handled the U.S. loan in the Nigerian deal.

Last month, the Justice Department filed a civil complaint against MWI and Eller, saying they improperly funneled one third of the $74-million to a Nigerian agent as commission money. In turn, the complaint says, the agent and other company officials paid Nigerian government officials who then bought MWI pumps.

The federal complaint also says that Eller twice flew suitcases of cash to offshore tax havens to hide his assets.

MWI has denied wrongdoing and called the allegations against Eller false and "shameful."

The complaint does not mention Bush. Asked if Bush and Eller are still close friends, the governor's spokeswoman replied, "Not relevant."

Waiving the rules

Founded by Eller's father before World War II, MWI has profited from government contracts for decades.

MWI's business with state and federal agencies flourished in the 1980s, after David Eller and other company executives helped bankroll political campaigns, notably those of Ronald Reagan and George Bush.

One loyal customer was the South Florida Water Management District.

Since the 1960s, district employees say, the agency has bought or rented dozens of MWI pumps to help balance the extremes of floods and droughts that come with South Florida's subtropical climate.

The South Florida Water Management District is a huge state bureaucracy with growing responsibilities and a mushrooming budget.

An engine of the South Florida economy, the water agency doles out tens of millions of dollars in contracts to help manage the water supply for 6-million people and millions of tourists in 16 counties from Orlando to Key West. The district also oversees a massive Everglades restoration project, expected to cost $11-billion over the next 20 years.

The unusual contract with MWI in 2000 grew out of the state's worst dry spell since 1938.

By September 2000, the drought was especially severe in South Florida. Lake Okeechobee, the hub of most of South Florida's water supply, had dropped to 11 feet, 3 feet below normal. If it fell much more, the lake would be too low to flow into the canals that feed the area's insatiable thirst.

To avert a potential crisis, the water management district's top executives decided to do something that had never been attempted before. They decided to install big electric pumps that could be hooked up underwater to make sure the lake would keep flowing into the canals.

That way, the district could continue irrigating farmland south of the lake and still provide water to towns and cities along the coast.

They also decided they needed those pumps in a hurry.

District officials acknowledge now that two senior managers, Matt Padgett and Zan Kugler, contacted MWI officials and asked them to help design the emergency pump project.

Padgett, a purchasing agent, said he had never met Eller. Kugler, a senior engineer, said he had met Eller once in a casual encounter while going over design specifications for a job. Both said they did not know of Eller's connections with the governor.

In a written reply to questions, Padgett and Kugler said that "it is not uncommon for engineers to contact manufacturers during the conceptual and design stage."

Frank Finch, then-executive director of the water agency, recommended that the district's governing board waive its competitive bidding rules so the pumps could be in place by Dec. 31, before the lake level fell too low.

The bid waiver passed on a unanimous vote, although some board members complained they did not know enough about the details, including where they would get the money to buy the pumps.

"The whole thing left a bad taste in my mouth," said board member Collins.

The board didn't name a pump supplier. But MWI had the inside track on the job from the start -- in part because MWI employees helped district staffers draw up the specifications.

"They were developing the specs jointly with the people who were writing the contract," said Taylor, a captain in the Navy's engineering headquarters before joining the water agency.

"In federal procurement that's a no-no . . . But the mood was, we needed to move rapidly."

MWI already was assembling price information from its suppliers on Sept. 14, the day the board voted to waive the bid requirements.

Then, a day before MWI quoted the district a price in writing, water managers drafted a memo stating MWI would get the job based on its years of experience.

"The selected contractor is MWI Corporation, Deerfield Beach," says a draft memo dated Sept. 18. "It has manufactured mobile and permanent pump equipment for governments in Africa . . . David Eller, owner of MWI, is a recognized designer in the pump industry."

Finch and Taylor say nobody on the district staff mentioned any FBI investigation into MWI's Nigerian pump deal.

"If people knew there was an FBI investigation of the company, I would have liked to know about that," said Finch, who led the agency from 1999 to 2001.

Instead, Taylor said, staffers "were telling me, 'Sure, MWI is going to be the fastest and the best.' " Padgett and Kugler said they didn't know about the FBI investigation, either.

The district's rules say that even when bidding rules are waived, officials should still call several suppliers to make sure they get the best price. Taylor said the staff "did a reasonable job of canvassing the world to see who could provide pumps of that size."

Padgett and Kugler say MWI did not have the job sewn up, because they sought quotes from potential competitors. But documents show the canvassing didn't begin until Sept. 20, two days after the draft memo had already named MWI as "the selected contractor."

Several firms reported they couldn't possibly provide pumps by Dec. 31. One company said it could supply the pumps that were specified -- after buying them from MWI. Another said it couldn't do the job, and forwarded the request to MWI.

A couple of firms said they could meet the schedule, but their pumps were too expensive.

One little-known company, Magnatech, said it could do the job for $123,550 per pump, about $6,000 less than MWI's quote of $129,160.50.

MWI wound up with the job anyway, after the district staff cut out the cost of electrical controls for the pumps, lowering MWI's per-pump price to $118,248. Although Magnatech's bid included electrical controls, the documents show the staff did not remove that cost from Magnatech's quote.

Padgett and Kugler deny that the recalculation was designed to give MWI an edge.

On Sept. 25, Finch officially awarded MWI the contract. Still, board member Michael Minton suggested they consider someone else. So, Taylor said, the staff held off sending out the contract in order to give Minton's suggested firm, Knight & Mathis of Vero Beach, a chance.

Knight & Mathis' president, Claud Mathis, said he received a fax asking for a price quote for the pumps on Sept. 27 -- and learned a day later that a rival firm already had the job.

"As far as South Florida goes, MWI is an automatic," Mathis said. "MWI is not questioned."

When the board first voted, the staff said they needed 12 pumps. But by the time the contract was awarded the design had changed so it became a 14-pump deal. The price of the work rose from $1,744,926 to $1,882,975.

Then, on March 15, 2001, district managers added a 15th pump, worth $105,754, again without bids.

Although the main reason for waiving the bid requirements was to get the pumps in place by the end of December, MWI's contract required the company to deliver only half the shipment by Dec. 15, and the other half by the end of February.

MWI missed both deadlines. The first set of pumps arrived in mid-January, the rest in March. MWI suffered no penalty, Taylor said, because enough rain fell to soften the drought's impact, buying the water district some time.

"We were in the mode of having the pumps when we needed them," he said. "That was our primary concern." Strict adherence to contract deadlines "was secondary."

MWI officials say their pump delivery did not hold up the project. "They arrived according to when the district wanted them," spokesman Kevin Boyd said.

In response to questions from the Times, Henry Dean, the man who replaced Finch as the water agency's executive director, said Monday that the district's inspector general had investigated several of MWI's pump deals and found no evidence of manipulation or favoritism.

But after the Times told Dean about the sequence of events leading to the award of the no-bid contract, he acknowledged he didn't know all the facts.

"I'm obviously going to have to go back and look at this in greater detail," he said.

Within an hour the inspector general, Allen Vann, called the Times and requested copies of documentation about the deal that reporters had obtained from the district's own files through a public records request.

On Tuesday, Dean said he had reviewed the no-bid pump deal and was concerned about the way it was handled, though he said the employees involved had adequate explanations for their actions. He said he plans to improve the procurement process.

Dean also said he is unaware of MWI receiving favored treatment on any other contract. "I have no evidence to indicate that they helped write the specs for any other bids," he said.

Playing favorites

Documents show that the Okeechobee pump deals aren't the only ones awarded to MWI without bids. Since 1999, district officials have bypassed formal bidding on a series of small pump rentals that went to the company.

MWI received rental deals worth $25,000 on July 3, 2001, $24,486 on July 31, 2001, and $44,250 on Jan. 23, 2002, records show.

While the amounts are small in the world of water contracts, such deals can be kept in one company's hands for years because they fall below a $50,000 threshhold for formal bidding.

Two other recent deals where MWI received work as a subcontractor also drew controversy.

In both projects, district officials discounted complaints from MWI rivals, who said they suspected that pump specifications were skewed to favor MWI.

Last year, when the agency put out a thick volume of requirements for a federally funded flood-control project near Miami International Airport, an engineer for Flowserve, a global pump manufacturer, questioned them. He asked why the district would require contractors to use a costly pump with an unconventional type of motor.

"Flowserve pump division . . . will not be able to bid the project, since the specs as written limit the pump suppliers to 1-2 bidders," Flowserve's John Ondrejack wrote.

On May 10, 2001, the water board handed the $3.1-million project to Murphy Construction Co. of Palm Beach, which named MWI as the pump supplier for the job. The payday for MWI: at least $492,655.14, invoices show.

Last month, it happened again. The water board commissioned a $3.5-million flood protection project in Miami-Dade County with some very specific pump requirements.

One potential bidder, Skip Dorton of Tampa-based Custom Pump & Controls, wrote: "The specification, if left the way it reads, will be, in a sense, a sole source specification that no other manufacturer will be able to compete with."

Another complaint came from FPI, a Pompano Beach pump manufacturer, which called some of the requirements gimmicky and a waste of money.

"It is blatantly obvious to us that the specification has been crafted verbatim by and for one favored pump manufacturer," wrote Robert Purcell, FPI's marketing director. "Your engineering staff has done everything but name their favored supplier."

Purcell is the former MWI vice president who blew the whistle on the company in the Nigeria deal, prompting the U.S. Justice Department to intervene.

When he complained, district engineers countered that all the specifications were appropriate. They awarded the contract to Widell Inc. of Fort Lauderdale -- which then hired MWI to supply the pumps.

When Taylor asked his staff why they repeatedly pushed MWI for various projects, he said the reply was, "These are the people we work with all the time."

Awaiting another emergency

Board member Collins said that if the board had known the $1.9-million deal for the Lake Okeechobee pumps was going to Bush's former business partner, he would have demanded going through the bidding process.

"That would've been a huge difference," he said. "It would've been a whole different level of scrutiny, in the opposite direction."

Despite an appearance of favoritism, Taylor said the pumps arrived when they were needed, did not appear to cost too much and worked just fine. Over several months they sucked enough water out of Lake Okeechobee that it dropped to a record low level of 9 feet.

"We pulled Lake Okeechobee down," Taylor said.

Several months after the pumps were installed, enough rain had fallen so that they weren't needed any more. These days, the pumps are in storage, awaiting use should there be another emergency.

But Taylor said plugging them in anywhere else might be difficult and costly: "They were manufactured so that they only fit on the gates at Lake Okeechobee."

What's more, the district must continue paying for the pumps, which were purchased with a five-year loan. With interest, the cost to the taxpayers will be $2.8-million.

-- Times researchers Kitty Bennett, Caryn Baird and Cathy Wos contributed to this report. Staff writer Craig Pittman can be reached at craig@sptimes.com or by calling (727) 893-8530.

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