By Dan Christensen, BrowardBulldog.org
The boss of one of Florida’s biggest government contractors has announced he’s stepping down. The news comes weeks after embarrassing disclosures about his personal involvement in a corporate pay to play scandal, and disclosures about possible corrupt payoffs overseas by company officials.
“After a decade of my executive leadership through the best of times and through difficult times it is now time to plan an orderly transition to a new CEO,” PBS&J chief executive John Zumwalt, 58, said in a prepared statement last week. Zumwalt will continue as chairman of PBS&J’s board of directors.
A company source told Broward Bulldog that Zumwalt was forced out by a group of unhappy employee-shareholders. PBS&J spokeswoman Kathe Riley Jackson denied it.
PBS&J is a major competitor for government contracts in Broward, where over the years it has passed out tens of thousands of dollars in campaign contributions to Republicans and Democrats.
At the same time, PBS&J has received public sector business worth tens of millions of dollars. The company currently leads the design engineering team for the county’s $810 million airport runway expansion project. At the Broward School Board, PBS&J has helped manage school construction projects.
Until last summer, Zumwalt was also president of PBS&J International – the subsidiary that’s the focus of an internal investigation into possible violations of the Foreign Corrupt Practices Act.
The act prohibits corrupt payments to foreign officials to obtain or keep business. Zumwalt was replaced as president by Walid Hatoum.
“Initial results of the investigation suggest that FCPA violations may have occurred. However, the investigation does not suggest that any violation extends beyond the international operations or that members of our executive management were involved in the illegal conduct,” the company said in its annual report filed with the SEC on Jan. 13.
PBS&J, which shifted its headquarters from South Florida to Tampa in 2007, has provided no details about what spurred the internal probe, nor has it named the country or countries where payoffs are suspected. The company’s website says its “global pursuits” have involved projects in the Middle East, North Africa, the Caribbean, Europe and Australia.
In a subsequent filing, the company said it expects to complete the investigation “in a matter of a few months, not years.”
PBS&J, whose shares are not publicly traded, first disclosed its internal investigation in public filings at the end of December. The Justice Department and the Securities and Exchange Commission were notified, the company said.
Broward Bulldog reported in December how political gridlock at the Federal Election Commission had let PBS&J off the hook for any liability in a decades-long scheme to win contracts by doling out illegal campaign contributions to politicians.
In 2007, Zumwalt’s two immediate predecessors pleaded guilty to criminal charges of running the fraud and trying to conceal it.
Federal authorities have said officers at all levels of the company were involved in making those illegal campaign contributions.
One FEC report said Zumwalt and others witnesses “directly admitted” that checks “made payable to them by a PBS&J subsidiary were reimbursement checks for political contributions.”
Such reimbursements are illegal.
In his message to shareholders, Zumwalt gave no reason for his decision to step down. He did note that succession planning was a priority in the company’s 2015 strategic plan adopted last year.
Zumwalt, who has worked at PBS&J since 1973, said he will continue as CEO until a replacement is found. In the interim, PBS&J president Robert Paulsen will “provide day to day oversight,” Zumwalt said.
“We anticipate that a new CEO will be in place no later than September 30,” he said.
Zumwalt said he will spend his final days as CEO on positioning PBS&J for future growth “and the strengthening and expansion of our core North American businesses.”