Thursday, August 09, 2007

"The settlement came 3 days after PBS&J chairman and chief executive H. Michael Dye pleaded guilty to charges of violating federal campaign laws."

Fort Bend County, PBS&J Engineers Reach Settlement For Contract Overcharges


by Bob Dunn,
Copyright 2007

It’s taken 10 months, but Fort Bend County finally is getting money back from an engineering consultant that has admitted to overcharging by millions of dollars on construction projects across Texas.

Fort Bend County Commissioners Court members approved without comment on Tuesday a $34,424 settlement agreement with Miami-based PBS&J Inc. as compensation for overcharges the agreement says came “as a result of incorrect reporting of PBS&J’s overhead rate.”

The settlement came just three days after former PBS&J chairman and chief executive H. Michael Dye pleaded guilty in a U.S. district court in Florida to charges of violating federal campaign laws.

One of the nation’s largest consulting engineering firms, PBS&J has been embroiled in financial and political scandals since 2005, when the company said it had uncovered a $36 million embezzlement scheme hatched by former chief financial officer Scott DeLoach and two subordinates. The three pleaded guilty to related charges and were sentenced to federal prison in July.

After the discovery, PBS&J repaid 12 to 15 state transportation departments for inflated “overhead” contract charges, which reportedly were a part of the embezzlement scheme.

One of those state departments was the Texas Department of Transportation, which suspended PBS&J from bidding for Texas contracts in May of 2006. PBS&J, which did $43 million in business in Texas in 2005, agreed to a settlement by which it paid TxDOT $5.3 million. In return, TxDOT dropped all claims against it and, in July, allowed the company to begin competing for contracts again.

Other government entities in Texas set about last year to collect on similar overhead charges. For instance, Hays County commissioners approved a $32,000 settlement with PBS&J in October 2006, according to news reports.

In the Fort Bend County settlement agreement approved Tuesday, the county agreed to release PBS&J from any further claims, and agreed that neither PBS&J nor the county “admits liability to any other party.” The agreement was signed by PBS&J Vice Presicent Keith Jackson and dated July 25.

Fort Bend County Precinct 3 Commissioner Andy Meyers said Thursday the “overhead rate” overcharge to the county “was a direct result of the embezzlement scheme to defraud PBS&J and not an action by the company to overcharge its clients. He said PBS&J has now repaid the overcharges.

In Florida, an investigation of DeLoach’s embezzlement scheme by the FBI and the U.S. Attorney’s Office branched into a second probe involving PBS&J political campaign contributions. A federal grand jury began investigating whether the company reimbursed its employees for tens of thousands of dollars in campaign contributions. Using employees – or any other individuals – as “straw man” contributors is against the law.

As the political investigation unfolded, a check of Texas Ethics Commission reports from PBS&J showed the company gave money to political campaigns of Fort Bend County Commissioners Court members 11 times since 2003.

A check by FortBendNow in September 2006 found that six of those contributions – which PBS&J reported that it made to County Judge Bob Hebert and county commissioners Tom Stavinoha, Grady Prestage and Meyers – didn’t show up on the local officials’ campaign contribution reports during the same period in which PBS&J said it made them.

A few days later, Stavinoha, and Hebert’s wife, Pat, who keeps his campaign books, said their campaign records reflected that PBS&J made contribution commitments – but didn’t follow through with the money.

But the next week, after visiting with a PBS&J official, Stavinoha said he discovered he had received a political contribution from PBS&J after all. While the Florida company said in state filings that it made the contribution in March 2006, Stavinoha said he didn’t receive it until July 2006. The check, he said, was dated March 6, 2006.

Meyers said he was told by a PBS&J official that the company had written the contribution checks in March, but delayed mailing them until June “to ensure the contributions complied with state and federal laws.” He said his check arrived in July 2006, and thus was reported on his January 15, 2007, campaign finance report.

© 2007 FortBendNow Inc. :

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