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Executives talk, but PBS&J walks in campaign scheme

John Zumwalt, PBS&J chairman and chief executive

John Zumwalt, PBS&J chairman and chief executive

By Dan Christensen, browardbulldog.org

Political gridlock in Washington has let one of Broward’s biggest government contractors off the hook for any liability in a decades-long scheme to win contracts by shoveling out illegal campaign contributions.

PBS&J was not charged with a crime two years ago when its two immediate past chairmen pleaded guilty in federal court in Miami to running the fraud and trying to conceal it from authorities. Instead, prosecutors sent the case to the Federal Election Commission for civil enforcement.

The case was high-profile. A crew of influential politicians received illegal contributions from PBS&J executives, including former U.S. Senators Mel Martinez, a Florida Republican, and Max Cleland, a Georgia Democrat – and PBS&J had projects with cities and government agencies throughout the state.

This year, Broward County chose PBS&J to help lead the design engineering team for its $810 million airport runway expansion.

In a September report made public last week, FEC investigators concluded that “political contributions were an important part of PBS&J’s business strategy,” and that “the practice of making illegal campaign contributions involved officers at all levels of the company and was not limited to a few rogue employees.”

Investigators also reported to the six-member commission that “numerous witnesses,” including current chairman and chief executive John Zumwalt, “directly admitted” that checks “made payable to them by a PBS&J subsidiary were reimbursement checks for political contributions.” Such reimbursements are illegal.

The staff report, which also found that PBS&J made nearly $200,000 in illegal contributions to state and local candidates across the country, recommended the company be fined an undisclosed amount.

The cited federal violations: using falsified expense reports to reimburse more than $30,000 in contributions made by officers and directors, and making nearly $10,000 in illegal direct corporate contributions.

But in a surprising Oct. 20 decision that cleaved along party lines, and was also made public last week, commissioners failed to pass a motion to approve the staff recommendations. The 3-3 vote, and the closing of the case, means the FEC will not enforce the law in the PBS&J case.

Three Democrats voted to approve the recommendations; three Republicans voted to kill them – the latest in a string of partisan deadlocks that have raised doubts about agency’s ability to function.

On Thursday, former South Florida U.S. Attorney Alex Acosta, a Republican appointee whose office referred the case to the FEC, called the FEC’s inaction “disappointing.” He declined further comment because he had not reviewed the decision.

Benson Weintraub, a Broward lawyer who represents a former company official who blew the whistle on the scheme after she was caught embezzling, said the FEC had acted contrary to evidence of “PBS&J’s gross abuse of the political process.”

“The decision promotes corporate criminality and undermines the deterrence of white collar crime by corporate America,” Weintraub said.

PBS&J welcomed the FEC’s decision.

“We are pleased to finally have this matter formally closed after all this time,” said PBS&J spokeswoman Kathe Riley Jackson. She said the company had “cooperated fully with the investigation.”

“I have nothing to add,” said PBS&J’s Washington attorney, Robert Charrow of Greenberg Traurig. “The record speaks for itself.”

PBS&J, with 3,900 employees in 80 offices nationwide, is an employee-owned engineering, planning and construction firm. It moved its headquarters from South Florida to Tampa in 2007.

In Broward, PBS&J has done business with many municipalities over the years. Along the way, it has contributed tens of thousands of dollars to the campaigns of Democrats and Republicans. In Florida, such direct corporate contributions to politicians are legal.

The FEC’s inaction has spared PBS&J further embarrassment from a scandal that was outed in the wake of a $36 million embezzlement against the company orchestrated by its now imprisoned former chief financial officer, William Scott DeLoach. It may also serve to help PBS&J keep and attract new government contracts at a time of heightened public concern about public corruption.

DeLoach, who pleaded guilty to the embezzlement and the illegal reimbursement scheme, told FEC investigators his decision to steal from the company was influenced by the long-running campaign contribution fraud.

“If his superiors confronted him about his embezzlement, Mr. DeLoach thought he could remind them of their improper reimbursement activity and could say to them, ‘What are you going to do? Call the authorities?” says the report.

The superiors DeLoach referred to were ex-chairmen Michael Dye and Richard Wickett. Both retired before the embezzlement was discovered, and later pleaded guilty to conspiracy to make false statements relating to fraudulent concealment and the diversion of PBS&J funds to make illegal contributions to federal candidates.

Each was sentenced to six months home confinement. Dye was also fined $20,000; Wickett was fined $40,000.

In statements to prosecutors and the FEC, Wickett has said that before he became chairman he followed the orders of superiors regarding reimbursements, including chief executive Zumwalt.

Zumwalt denied Wickett’s accusation.

Last year, Assistant U.S. Attorney Karen Rochlin told a judge in Wickett’s case that there was no evidence Zumwalt was involved in the illegal reimbursement scheme.

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  • Excellent reporting Dan, but you are too modest because the lengthy FEC report–despite its whitewash–necessarily relied and quoted extensively from your investigative reporting as events unfolded. Great job.

  • Amen

  • Yikes!!!! How can this be possible, PBS&J gets away without even a slap on the wrist, and then they get a county contract!!!! Who says crime doesn’t pay, in Broward County (and with the FEC) it certainly does!!!!!

    What does this say about the caliber of people we have as Commissioners at the Federal Elec-tions Commission. And, why did the federal prosecutors send the case to a civil board? Why not continue the criminal case and go after the other miscreants, after locking up the company’s chairman? What part of the word ILLEGAL do they have trouble with?

    What is additionally disgusting is that partisanship trumps good judgment. In this circumstance, it is the Republicans voting not to do something about this behavior. But, both parties are equal-ly guilty. Given slightly different circumstances, the positions would be flipped.

    Good and bad government crosses party lines. Both Republicans and Democrats are sleazy in going after campaign dollars and doing the bidding of developers. But the voters, of both par-ties, want good, ethical government, and are getting sick to death of hearing about the corruption.

    Along with reading about the latest elected felon, we are reading about all the cities, counties and states jumping on the “lets toughen the ethics laws” bandwagon. Yes, we should have strong ethics codes with big nasty teeth, and yes the codes should be set up so it doesn’t take a citizen’s complaint to start an investigation, that will help. But, politicians have big egos, Chris Megerian in writing for “Inside New Jersey” about New Jersey’s latest corruption sting said,

    “The arrests also renewed the age-old question of why politicians continue to do dirty deeds when so many of them are caught and sent to jail.

    “When opportunity presents itself, most people can’t turn down money,” says Louis B. Schlesinger, professor of forensic psychology at the John Jay College of Criminal Justice in New York.

    Taking money from a crooked developer is no different than walking into a 7-Eleven with a pistol in your pocket, Schlesinger says. It’s just a matter of convincing yourself that you can get away with it.

    “This has been going on and on and on, and nobody seems to learn,” he says. “They don’t think the law applies to them, because they don’t think they’re going to get caught.”

    Rejection of all incumbents will be the reaction of voters; with the futile hope that change will bring honesty. There is some validity to this hope, most newly elected official tend to take a while to become corrupt.

    Posted on my blog: http://blogbybett.blogspot.com/

  • I admire the valuable information you offer in your articles.I enjoying reading your post. You make 100% valid points in a concise and pertinent fashion, This is a really good read for me, many thanks to the author

  • I also happen to know, for a fact, that PBS&J hires unskilled workers based solely on the color of their skin, not how qualified they actually are.

    How do I know this? I am a Traffic Data collector in Nashville, TN. – PBS&J hired a sub contracting firm named Booker Engineering. The President of Booker Engineering has no previous experience in taking traffic data. After I got a job there, PBS&J began giving all the white people that worked there less work. 4 months later, they phased them out, all together.

    Thanks to PBS&J’s reverse racism, I’m now out of a job.

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