Dive Brief:

• Federal prosecutors in Atlanta have charged a second contractor with conspiracy to commit bribery in relation to an alleged pay-to-play scheme to secure construction contracts with the city of Atlanta, according to the Atlanta Journal-Constitution.
• Authorities allege that Charles P. Richards Jr. paid $185,000 to an as-of-yet unnamed city official with the understanding that the person would pass some of the money along to those with contract decision-making authority.
• Richards is a long-time associate of alleged co-conspirator Elvin "E.R." Mitchell Jr., and Richards' company, according to the Journal-Constitution, has used at least one of Mitchell's companies as a minority subcontractor on city jobs.

Dive Insight:

The U.S. Attorney's office in Atlanta charged Mitchell with bribery and money laundering in January, claiming that Mitchell paid more than $1 million to the same unknown city official for the same reason as Richards — to pass along to those who had influence over the construction contract award process. C.P. Richards Construction billed the city more than $10 million for construction work from 2009 to 2014, and other city records show that Richards and Mitchell worked together on at least one project, a $2 million streetscape project.

Mitchell's company, E.R. Mitchell Construction Company, is one of the biggest minority contractors in Atlanta and has worked on significant area projects, such as those at the massive Hartsfield-Jackson International Airport. Mitchell has already pleaded guilty to the charges, and Richards is expected to follow suit. Multiple media outlets have reported that they are waiting for the city to release more than a million pages of documents around Mitchell's and Richards' relationships with the city.

In another bribery-based case last year, federal authorities sent one employee of architecture firm CannonDesign to jail after he was convicted of bribing a U.S. Department of Veterans Affairs official for information that would help the company win VA construction projects. CannonDesign agreed to pay $12 million to settle allegations related to its role in the scheme. The company also consented to make approximately $2.5 million worth of fraud prevention policy changes.

According to the most recent Kroll report on fraud in construction, the industry saw a decrease in total incidents from 2015 to 2016, but the percentage of executives who reported such occurrences remained high at 70%. Those who participated in Kroll's survey said the most common type of fraud revolved around vendors and suppliers (28%), but 19% reported that bribery and corruption were issues as well, an uptick from 2015.