Subcontractor Requests Sub-tiers payroll records after sub-tier reported them to General for non payment .Is this legal?

Both subcontractor and sub-tier are licensed and insured minority contractors in Louisiana. This was on a federally funded city public works project. In lieu of a subcontract the subcontractor chose to treat the sub-tier as a vendor (the sub-tier provided rental equipment, operators (if needed) and additional crews of skilled laborers with supervision performing work on this project). The subcontractor failed to supply the contractor with a sublet for the sub-tier. The subcontractor had nefarious intentions from the start. They wanted to treat the sub-tier as a vendor because they felt disclosing that to their CGL, UL and WC insurance would make their insurance rates too high. They failed to 1099 sub-tier for previous payments. There's so much more. Basically, this subcontractor if very dishonest and pretty much only commits fraud from what I've noticed. Subcontractor failed to provide subtier with requested coverage on rental equipment etc etc etc.