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MUNCIE, Ind. — A key figure in the scheme to defraud Muncie sewer rate payers and line the pockets of top political leaders with bribes and kickbacks derived from rigged construction contracts has pleaded guilty to a federal charge of conspiracy to commit wire fraud.

Tracy Barton, the Muncie Sanitary District’s former supervisor of sewer maintenance and engineering, faces up to 20 years in prison and a $250,000 fine plus forfeiture of proceeds from the scandal that ran at least from 2015-2018.

In a detailed plea agreement negotiated with the U.S. attorney for the Southern District of Indiana, Barton confirms major allegations against Muncie’s former Mayor Dennis Tyler and Democrat Party kingmaker Phil Nichols, whose son, Craig, was sentenced to two years in federal prison for his role in the scandal.

The agreement alleges Barton was the middleman in helping select construction and demolition companies rig their bids for contract work related to Muncie sewer projects.

“The Scheme, known to some of the co-conspirators as “the Program,” was an illegal Agreement…to defraud MSD by presenting materially false and fraudulent claims reports (and) falsify the Paying Contractors’ quotes, bids, and invoices arising out of MSD public works projects during the conspiracy period,” reads the Change of Plea Agreement alleging that the co-conspirators, “accepted the cash bribes and kickbacks, benefits, or property, and used them for their own personal expenditures, or Nichols surreptitiously gave a portion of the illegal cash payments to the political party or members of the political party (and) to award MSD public works projects to those Paying Contractors who paid or agreed to pay Nichols cash bribes and kickbacks.”

Tyler, a Democrat and Muncie’s longtime mayor, was arrested in November of 2019 for his alleged role in the scheme.

“BARTON tendered Tyler…something of value from Person A, that is, $5,000, for…the awarding of contracts under Tyler’s influence or control to Company A,” reads the Plea Agreement. “On March 27, 2015, the demolition work for the Walnut Commons Project was awarded to Company A as a result of Tyler’s undue influence.”

In another deal, the agreement alleges, “Instead of awarding the Nebo Commons Project to the lowest responsive bidder, Tyler awarded the contract to Company A which was not the lowest, responsive bidder, and signed the contract with Company A on October 14, 2015. 

“On or about December 10, 2015, Person A withdrew $5,238 in cash from Company A’s bank account. Person A gave $5,000 of the cash withdrawal to BARTON, knowing that BARTON intended to give it to Tyler as a gratuity because Tyler had illegally steered contracts such as those related to the Walnut and Nebo Commons Projects to Company A. In December 2015, BARTON admits that he met with Tyler in a parking lot in Muncie, Indiana, and gave Tyler the $5,000 he received from Person A.  Tyler accepted the $5,000.”

Tyler was succeeded in office by Republican Dan Ridenour, who says his administration has turned a corner on transparency and budgeting.

“We’ve put in ordinances that make adjustments about how bids and quotes are done,” he said. “We made the whole process transparent. We’ve put in all new appointees, so not one person remained. We required ethics training for employees, and those did occur in 2020.

“We’ve put it in to where you can’t go over budget. We’ve put all of our documents, especially council proposals and those type of documents, online.

“We’ve done a lot less hiring out of contractors for jobs that are smaller, by smaller I mean $30,000 or less, and we’ve done a lot of that work ourselves.

“We took the politics out of paving our streets,” said the mayor. “We only pave the worst streets first. We don’t care who lives where. If somebody’s an elected official, it doesn’t matter. We’re starting at that bottom, and we’re working our way up. We’re trying to politics out of it completely.”