I-Team: Contractors With Criminal Histories, Fatalities Still Eligible for Government Contracts

The I-Team analyzed 25 of New York City's biggest public construction projects

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    Hundreds of millions of dollars in government contracts are going to firms with criminal histories and serious safety violations, NBC 4 New York's I-Team has found. (Published Thursday, May 10, 2012)

    Hundreds of millions of dollars in government contracts are going to firms with criminal histories and serious safety violations, News 4's I-Team has found.

    The I-Team analyzed 25 of New York City’s biggest public construction projects by dollar value.

    Data from the Mayor’s Office of Contract Services show 10 of those jobs went to construction firms that have criminal convictions, criminal settlements, or serious safety violations on their records.

    One corporate offender is Skanska, the international firm currently in charge of the $508 million Brooklyn Bridge renovation.

    Before winning the bridge project, Skanska pleaded no contest to criminal charges related to the mishandling of asbestos in California. Last year, Skanska paid $19.6 million to settle charges it defrauded the federal government in a scheme to win contracts intended for minority-owned businesses. 

    Richard Kennedy, co-chief operating officer for Skanska USA Building, stressed the asbestos charges were expunged from the company’s record in 2007. With regard to the federal fraud settlement, he said the firm admitted no guilt.

    “We didn’t believe we did anything wrong, but we decided, given the context of the investigation, it was an appropriate settlement,” Kennedy said.

    Another company that won a city contract despite disclosing a criminal record was Worth Construction. The Connecticut-based firm is in charge of a $13 million renovation of Queens Borough Hall.

    Before winning that bid in 2011, Worth pleaded guilty to tax evasion. The former owner of the company also admitted to giving an illegal kickback to a public official.

    Worth Construction did not return a request for comment.

    The corporate disclosures about criminal and administrative investigations come from the city’s Vendex Caution List. The list is supposed to give government department heads background information about the hundreds of firms that bid for public projects each year.

    In response to the I-Team findings, Manhattan Borough President Scott Stringer said the city should reform the way it uses the Vendex list.

    “If a contractor violates the rules three times, I think they should be out,” Stringer said.  “When you have a bad actor time and time again, you have to have the strength to turn around and say alright, enough is enough.”

    The New York State Department of Labor maintains a “Debarment List.”  The only agencies that can place a firm on the list are the state Department of Labor, the city comptroller's office, the state attorney general's office, or a county district attorney.

    Often, construction firms under criminal investigation cut deals with prosecutors that allow them to continue bidding and working on public works projects. As part of Skanska’s $19.6 million settlement on fraud charges, the firm struck a non-prosecution agreement with the U.S. attorney in Manhattan.

    "People shouldn't be allowed just to pay a fine and walk away, and do the same thing over and over again," said Joseph Graffagnino Sr., whose firefighter son died in 2007 while responding to flames on the demolition of the former Deutsche Bank building, which was operated by contractor Bovis Lend Lease.

    Despite being tagged with multiple OSHA violations, the firm -- now called Lend Lease -- cut a non-prosecution agreement with the Manhattan District Attorney.

    And last month, Lend Lease agreed to pay $56 million and accepted responsibility for an unrelated scheme to cheat taxpayers by overbilling on multiple construction projects.

    The firm avoided criminal charges by cutting a deferred prosecution agreement with the U.S. Attorney for the Eastern District.

    Despite the history of safety and fraud violations, Lend Lease remains eligible to bid on government contracts in New York City. Lend Lease did not respond to a request for comment on this story.

    Graffagnino is suing Lend Lease for its role in the fatal fire that killed his son. He says bloodshed could be avoided if corporate offenders were banned from government work.

    “People don’t need to die on these projects,” Graffagnino said.   

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