Dive Brief:
- A former official in the California Department of Veterans Affairs and seven other people have been charged with bid-rigging related to public construction projects, according to the Associated Press.
- Prosecutors allege that Eric Worthen, former assistant deputy secretary of the state VA, and an associate took $12,000 to help an FBI informant — posing as a developer — secure two state construction contracts.
- Six contractors were charged with fraud in relation to the bidding process for renovations on a U.S. Department of Energy building at Lawrence Berkeley National Laboratory in Berkeley, CA.
Dive Insight:
Whether it's called pay-to-play, bid rigging or bribery, the practice of offering up financial incentives to public officials in exchange for lucrative construction projects is a nationwide problem in the construction industry.
In February, federal prosecutors hit two Atlanta contractors with an assortment of bribery and fraud-related charges for allegedly paying city officials to help them win contracts. Charles P. Richards Jr. and Elvin "E.R." Mitchell Jr. allegedly paid $185,000 and more than $1 million, respectively, to one person in the city contracting office with the expectation that the individual would then pass that money along to others who could influence the award process.
A year ago, in a case related to the U.S. Department of Veterans Affairs, a judge sentenced a Washington, DC, architect to 33 months in prison for bribery. Authorities said Mark Farmer, an employee of architecture firm CannonDesign, paid a former VA official for information that would help the company secure VA construction projects. CannonDesign paid a $12 million settlement to settle federal liability for its alleged role in the scheme.
On the international construction stage last year, Brazilian authorities accused five of the country's largest contractors of conspiring to overbill for work they performed on soccer stadiums for the 2014 World Cup. One of the contractors also provided evidence that the contractors engaged in bid-rigging on at least eight of the 12 stadium projects.
