New Jersey Design Firm In Pay-To-Play Controversy
4/15/2013 | Construction Blog
Engineering News-Record is reporting that the large New Jersey design firm Birdsall Services Group is embroiled in a pay-to-play scandal that could cause significant additional damage to the company. Birdsall recently filed for bankruptcy and is working through the process of reorganization.public contracting
An April 1 Order by U.S. Bankruptcy Judge Michael Kaplan addressed concerns over the reorganization effort after it was revealed in an indictment approximately a week earlier that Birdsall was engaged in a 6 year long conspiracy and money laundering effort to make large donations to public officials of both parties. The scheme was accomplished by having employees make donations to designated public officials and then being reimbursed by the firm as if it was a business expense. Both the company and 7 former company executives have been indicted.
The issue before the bankruptcy court was whether the company should be shut down given the recent developments. Judge Kaplan concluded, however, that shutting Birdsall down would disrupt a good deal of crucial public municipal work and that it would harm employees of the company. The order followed after talks between the company and the state attorney general to determine whether and how the company would continue to operate fell apart.
This is a story worth following. Birdsall grossed $61 million of revenue in 2011 and has more than 300 employees. It is a major employer in New Jersey’s construction market and its demise could cause a “downstream” effect. It’s also likely that this could lead to changes in the state’s laws regarding transparency in public contracting.