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CEO of engineering firm for Broward’s $810 million runway expansion to step down amid scandals

By Dan Christensen, BrowardBulldog.org

John Zumwalt

John Zumwalt

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.”

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Latest comments

  • Great work, Dan. The hits just keep on coming…

  • ditto

  • Is he the son of the great Admiral Zumwalt? Is this yet another Idiot Son making a fortune on Daddy’s coattails?

  • You should check to see where their campaign contributions to Broward School Board went and how they were rewarded. While it may be true that their inspectors were not licensed and and their scheduling program is full of garbage, one should be fair when assessing their business acumen, at least they got paid.

  • One bad guy exposed. Vote 4 Amendment 4!

  • This behavior has taken place for better than a decade. Ask the company what they did with the International President? They buried him. According to the Annual Shareholders Meeting Material, Zumwalt was phasing out on his terms. No mention of the shareholders demanding his firing.
    This is a shame. The firm has a great reputation for engineering and the worst when it comes to leadership.
    he is going to be the chairman? Are you kidding?

  • I saw PBS&J’s response today…It is a joke. No way does a company like PBS&J make an announcement about succession plan and then start implementing it…They have the person on board, at least a year or so in advance and make the transition…They are doing damage control and not being honest about it…I guess that “culture” starts from the top…

    Keep at it…dig until you find the truth

  • Bulldog,
    The company hired a former employee named Walid Hatoum PE, to head up their International group. He came from Parsons Engineering. Shortly after he took the position in spring of 2009, he was made President and John Zumwalt gave up that role as the head of the international group.
    It was all over the company web site. Walid is the new president.
    Now that the unit is in trouble, you can not find his name and according to people who know, he is on some sort of leave. They have scrubbed their web site and if you look for him he is MIA. You won’t find his name mentioned.
    The spin is in play.

  • Trust me these guys are a joke.The stories I could tell you as a former employee would curl your hair.The waste and the attitude that they are untouchable are just a couple of reasons I left for another firm after the last incident.Everyone should be concerned because they are still being awarded contracts.Your tax dollars at work.Just ask Louisiana,Texas,Georgia and now Florida.It always has and always will be about payoffs and the good ole boy network with PBS&J.

  • John Zumwalt is history. They sent him packing and gave him 2 weeks notice. All of the spin coming from the PR firm for PBSJ was nothing more than another smoke screen.
    The stockholders meeting took place on Friday and it is announced today. John’s last day is March 1st.
    Very sad and a classic case of no accountability, a culture of working fast and loose and no leadership.

  • These commenters are a bit absurd and clearly uninformed. The author has been deceptive in the facts he has chosen to include, ignoring several critical elements of the FEC’s report on PBSJ. First of all, it should be noted that Commission did not approve the office of the general counsel to move forward, which effectively closed the investigation in December 2009. Second, the campaign contribution violations did not extend past 2004, so the insinuation that past violations had any impact on the firm winning the FTL expansion project is reckless and false. Whether Mr. Christensen wants to believe it or not, PBSJ wins work because we have an impeccable reputation for qulaity and client service that is unmatched by our peers. Third, Zumwalt was not implicated in the report published on December 17 – in fact, his name is not mentioned once as either a defendent or anywhere in the body. Sadly, Mr. Christensen is more interested in getting his stories picked up by the Herald than revealing any real truth.

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