AECOM - Consultant to 195 Project Has Paid $100M in Federal Fines and Penalties

Friday, August 31, 2018

 

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AECOM had revenue of $18.2 billion in 2017.

The consulting firm that conducted the data analysis on the I-195 project that led to the closing of lanes and traffic nightmares is tied to more than 70 violations and more than $106 million in penalties for a range of offenses, according to reports.

The violations range from over $73 million in violations tied to violations of false file claims, $20 million in fraud charges, more than $7 million in wage and hour violations, to name a few, according to Violation Tracker. AECOM is a massive construction firm and realized $18.2 billion in revenue in 2017, according to the company.

Rhode Island Department of Transportation Director Peter Alviti had already admitted that AECOM's 2015 report is under fire.

“That’ll all be part of what we’re looking at,” said Alviti earlier on Tuesday, in response to a question from WPRI about the possibility getting a refund. “We will be revisiting to see ... where the responsibility lies.”

It is unclear what the resolution will be in Rhode Island, where AECOM has received payments in excess of $11.4 million in fiscal years 2016 to 2018 and an additional $1,037,365.02 so far this fiscal year, according to Rhode Island records.

In total, AECOM has been paid more than $12.4 million in just over three years. 

Troubles Around the Country

“On November 23, 2016, the contractors Bechtel National and AECOM entered into an agreement with the U.S. Department of Justice for $125 million to settle the case against them. The whistleblowers alleged Bechtel National and AECOM, both contractors to the Hanford nuclear reservation in Washington state, illegally used tax dollars to lobby Congress for ever more tax dollars to fund the designing and building of the Hanford vitrification plant that began in 2002,” reported the National Law Review.

Additionally, Bechtel National and AECOM allegedly used taxpayers’ money to buy defective materials [steel] that are now installed in the plant. The U.S. Department of Energy is withholding more than $15 million of Bechtel’s incentive pay for 2013-2015 due to concerns about the vitrification plant’s construction quality, said the National Law Review report.

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Governor Gina Raimondo's office defends the procurement process.

Governor Gina Raimondo’s office defends the procurement process.

"Governor Raimondo does not have direct involvement in contract negotiations or vendor selection. All state contracts go through a rigorous and competitive process which includes a thorough review of a vendor’s qualifications,” said Mike Raia, of Governor Raimondo’s office.

“Each year, purchasing awards thousands of contracts worth hundreds of millions of dollars. We have confidence in our process and don’t plan to make any changes to our rigorous review,” said Raia.

AECOM’s Director of Media Relations Jason Marshall did not respond to email and or phone calls.

Governor Raimondo's campaign did not respond to inquiries. AECOM executives have donated $21,600 to Raimondo -- and of the 36 individual AECOM donations to Raimondo, only seven were made by AECOM officials who live in Rhode Island.

Investor Lawsuit

In addition to the issues emerging in Rhode Island and more than $100 million in penalties paid by AECOM, the company is facing an investor lawsuit.

Starting in 2016, AECOM was hit with an investors securities lawsuit.

“The complaint alleges that throughout the Class Period, AECOM made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) AECOM engaged in fraudulent and deceptive business practices (ii) AECOM lacked effective internal controls over financial reporting; (iii) AECOM overstated the benefits of the URS Acquisition; (iv) AECOM overstated the Company's free cash flow per share; and (v) as a result of the foregoing, AECOM's public statements were materially false and misleading at all relevant times,” said the law firm Pomerantz, LLP, who is represent the investor group.

 
 

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