PATH Contractor Investigated for Defrauding Taxpayers

A New Jersey construction firm that exploited its close ties to the Cheney-Bush Administration to win massive war contracts is under investigation by the Justice Department for over-billing taxpayers for work in Afghanistan and Iraq.  The company, the Louis Berger Group, is also a major contractor on the controversial, coal-by-wire Potomac-Appalachian Transmission Highline (PATH).  AP reports:

Louis Berger has been a major player in U.S.-funded reconstruction projects in Iraq and Afghanistan, now leading a $1.4 billion USAID infrastructure project to build roads and power plants in Afghanistan.

This has come to light because of a suit filed by the nephew of the company’s founder who claims he is being forced out by the federal prosecutors:

Prosecutors acknowledged their ongoing criminal and civil investigations in response to a federal lawsuit filed last week by Derish Wolff, chairman of Louis Berger’s parent company Berger Group Holdings. Wolff is attempting to block efforts to have his nearly one-third ownership stake in the company held in escrow following his resignation, which he argues was forced as part of the company’s negotiations to end the federal investigations.

AP notes that Louis Berger’s government service included “a $305 million diesel plant outside Kabul that tripled in cost and was delivered more than a year behind schedule…”

Louis Berger’s problems are not new:

Louis Berger’s performance on a 2002 USAID contract to build dozens of schools and health clinics in Afghanistan came under fire after some work had to be redone and the company was accused of submitting fraudulent work claims, according to an investigation conducted by Republican Sen. Tom Coburn’s staff.

The small difficulty is that if the Louis Berger Group were to be convicted of criminal wrongdoing, then they would be ineligible for federal contracts (“debarment”).  As a result, the company would probably go out of business because it has become so dependent on government handouts.  In turn, the U.S. government would lose its biggest “civilian” contractor in Afghanistan.  New York Construction reports:

“The mere allegation of wrongdoing could result in debarment,” which could force the company “to shut its doors,” Wolff claims.

Wolff wants to cash out his stockholdings which would drain the company of cash that federal prosecutors would like to recoup for taxpayers (remember the budget deficit?)

Meanwhile, back home, Louis Berger Group has its fingers in the three major parts of the coal industry’s much beloved Project Mountaineer: Susquehanna-Roseland, TrAIL, and PATH.  This is how the company describes its role in the PATH project:

The Berger Team is currently conducting route selection efforts, supporting the public involvement process, and coordinating local, state, and federal agency consultations for this project in West Virginia and Virginia. We are presently conducting permitting for this project.

In light of the Justice Department investigation, public officials might want to reconsider their ties to the Louis Berger Group.

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1 Comment

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One response to “PATH Contractor Investigated for Defrauding Taxpayers

  1. Excellent exposure of another gravy train opportunist!

    Why is there no oversight on the amount of money ratepayers are forking over to Louis Berger Group through PATH? Did PATH put the work Berger is doing out for bid before awarding them the contract? Louis Berger Group + PATH = Corruption.

    Interesting how Louis Berger Group claims to be “conducting permitting”. Did they apply for the permits? Are they representing PATH in the PSC cases? Of course not!

    If they are “supporting the public involvement process”, that would explain why PATH is in such trouble in the court of public opinion, wouldn’t it? But, it begs the question — what are we paying Charles Ryan Associates for if Louis Berger Group is single-handedly handling “public involvement”. Louis Berger’s idea of “public involvement” includes trespassing and lying to the public, and that reflects badly on the power companies. They sure know how to pick ’em! Does anyone at PATH ever think anything through?

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