[Congressional Record Volume 147, Number 84 (Monday, June 18, 2001)]
[Senate]
[Pages S6381-S6384]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SETTING THE RECORD STRAIGHT ABOUT J.A. JONES CO.
Mr. HELMS. Mr. President, the distinguished Senator from Virginia
(Mr. Allen) last week emphatically called the hands of various media
for having inaccurately reported the Senator's position on the World
War II Memorial and the American firm (and its German parent company)
selected to build the memorial.
I feel obliged to comment as well, not only to commend the able
Senator from Virginia for speaking out, but to emphasize that the lead
contractor for the World War II Memorial is a distinguished North
Carolina company.
J.A. Jones Construction Company is a 112-year-old Charlotte
enterprise which deserves better than to have bitter fringe groups try
to impugn the integrity and historic citizenship of such a well-
established firm.
Business is business, and it's understandable that losing bidders on
any project will be disappointed. But for such a prestigious U.S.
company as J.A. Jones to be unjustifiably criticized certainly is an
inappropriate exercise on the part of the losing bidders.
For the purpose of rejecting the activities by fringe groups, I feel
it appropriate that the Congressional Record reflect the specific role
that J.A. Jones Construction Company has played in supporting the
United States and its national defense during the 112 years that J.A.
Jones Company has been in business.
While this is not a complete list, it is sufficiently detailed for me
to make clear the kind of corporate citizen J.A. Jones Construction
Company has been:
The construction of nine American military bases that trained U.S.
troops for World War II;
The construction and operation of the Navy Shipyard in Panama City,
FL, and the operation of the Navy Shipyard at Brunswick, GA. Between
the two facilities, J.A. Jones employees built more than 200 Liberty
Class warships during World War II;
Selection as one of the first American companies to work in a war
zone, constructing air bases and other facilities in and around Saigon
during the Vietnam war;
Construction of the Washington Mall Reflecting Pool, the West Wing of
the White House, the East Wing of the National Gallery of Art, the East
and West Fronts of the Capitol, the Smithsonian Air and Space Museum,
the Natural Museum of History addition and renovation, and the National
Gallery of Art Sculpture;
The continued involvement in building and maintaining military bases
and facilities across the country; and
The current reconstruction of the two U.S. Embassies in Africa
destroyed by terrorist bombings.
Considering the circumstances, I feel it only fair that a statement
issued by the president of J.A. Jones Construction Company be made a
part of the Record at this point. President John D. Bond III identified
significant aspects of his company's service to America.
Mr. President, I ask unanimous consent that the statement be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Statement of John D. Bond III
J.A. Jones' 112-year history is an important and classic
case study in corporate patriotism and dedication to a free
world. In the military buildup in the 1930s before the U.S.'s
involvement in World War II, J.A. Jones built nine military
bases, from the ground up, in Alabama, Georgia, Mississippi,
North Carolina and South Carolina. These bases provided
everything our troops needed to prepare for their crucial
role in saving the world.
During the war, J.A. Jones built and then operated the Navy
Shipyard in Panama City, Fla., and took over operations of
the Navy Shipyard at Brunswick, Ga. At these two crucial
locations, J.A. Jones employees built more than 200 Liberty
Class warships at an incredible rate of 12 per month. In 1943
and 1944, workers donated their time on Christmas Day to
continue working and get the ships to the Allied and U.S.
Armed Forces who so desperately needed them to win the war.
Scores of J.A. Jones employees served in the war, including
Edwin Jones, Jr., who would later become chairman of the
company after serving with the Marines and taking part in the
deadly fighting at Iwo Jima.
J.A. Jones' commitment to our nation and its men and women
in uniform has continued over the years. In Vietnam, J.A.
Jones was one of the first American companies to actually
work in a war zone when it built air bases and other
facilities in and around Saigon. J.A. Jones' close ties with
the U.S. military remain just as strong today as our
employees continue to build and manage bases and facilities
around the world.
In discussing the relationship between Philipp Holzmann and
J.A. Jones, it also is important to look at history. The two
companies first worked together in the mid-1970s on U.S. Army
Corps of Engineers projects in Saudi Arabia. J.A. Jones was
looking to expand its global presence, and Philipp Holzmann
saw potential in the U.S. Philipp Holzmann bought J.A. Jones
in 1979. Edwin Jones Jr., the World War II veteran who fought
at Iwo Jima, was chairman of J.A. Jones at the time of the
sale.
We are in fact a global economy. The very fact that Germany
has become a free capitalistic country and trusted American
ally is testament to the United States' and post-World War II
Allied commitments to rebuilding the free world.
Unfortunately, in the discussions of where the World War II
Memorial will be built and who will build it, we have lost
sight of the true purpose of this project: to honor the
veterans who saved the world. I believe the history of J.A.
Jones Construction and its people makes it the ideal choice
for the historic project.
[[Page S6382]]
I am extremely proud that J.A. Jones will play an important
role in the building of the World War II Memorial. When we
break ground this summer, I will be there with my father, who
was paratrooper in World War II, and my son, whose generation
must recognize and understand the sacrifices that America's
Greatest Generation made for freedom. I could not look either
of them in the eye if I had any question about J.A. Jones'
commitment to American and a free world.
Today, I can say unequivocally that no company is more
committed than J.A. Jones to the principles that have made
America the leader of the free world.
Mr. HELMS. I yield the floor.
The PRESIDING OFFICER (Mr. Hatch). The Senator from Virginia.
Mr. WARNER. Mr. President, it is just by accident that I happened to
be on the floor to listen to my distinguished friend and colleague
recount the history of this really remarkable construction firm. But I
must say I have some concerns about the problem. I have not reached any
determination. I don't know if there is anything that this one Senator
or other Senators can do to try to clarify what I perceive as a
legitimate concern not only held by this Senator but many across the
United States for these reasons.
My dear friend and colleague from North Carolina has recounted the
history of J.A. Jones. I don't question for a minute the distinguished
patriotic service this firm has rendered to the United States, as the
Senator has recounted very clearly, from World War II to date.
It also brought up the Charles Tompkins firm here in Washington, DC.
I had some knowledge of that firm, and that firm also had an impeccable
record, so far as I know, of patriotic service and built many
structures here in Washington.
Indeed, if I may indulge, at one time I was a young sort of engineer
of types. After my last year of college before going to law school, I
worked in the construction business here in the Nation's Capital as the
supervisor of heavy concrete and steel construction. And all of us knew
about the Charles H. Tompkins Building Firm.
But I think it is important for the Record to show that these two
firms were then bought out--Tompkins was first bought by the Jones
Company, if I understand it, and then the Jones Company, the
controlling interest, was bought out by a German firm. Am I correct on
that, I ask my distinguished colleague?
Mr. HELMS. That is correct. But the presidency resides in the United
States.
Mr. WARNER. Yes. But what year, to refresh my recollection? I have
read it, but I simply don't have my papers here. But how many years ago
was it when the German firm bought this----
Mr. HELMS. I don't recall.
Mr. WARNER. I will place that in today's Record. But I think it is
important. I feel a duty to put in the Record also that this parent
firm in Germany has just recently concluded a resolution of what
appears to be a longstanding dispute about its record during World War
II as it related to certain persons in the European area and the use of
them as forced labor during the war, which, unfortunately, was
prevalent with a lot of German firms that have survived to this day.
Then just several hours ago I got a report that some evidence is
coming to the forefront--I will have to try to put this in the Record;
I am sorry I don't have my papers, but I think it is important--that
the firm just paid a penalty to the U.S. Government for some
settlement, again, of a claim between the U.S. Government and this
firm.
But I say to my distinguished friend--and I have no better friend in
the Senate. Both of us served in World War II in the U.S. Navy. My
service was very modest, but I do remember that period of time very
well as a young 17-year-old sailor. I think it is important that at
least the Record state the facts. Then the people of the United States,
particularly those who served in World War II, and their families--
because this memorial is as much a tribute to the families as it is to
those who served, particularly the families who lost their loved ones
in that conflict.
As the Senator knows, there were over several hundred thousand who
lost their lives. There were many, many more hundred thousands who
suffered wounds. Then, of course, the Senator remembers the tremendous
unity here at home during that entire period between all citizens who
served their Nation in many ways.
But I just point this out. I think this Record should be complete. I
feel an obligation to do it. I do it out of respect for my colleague.
But I will put into the Record today additional facts relating to your
statement, Senator, because I think the Record should be complete, and
then the citizens simply have to make up their own mind on this. I do
not know that there is any action that can be taken or should be taken,
but the Record, in my judgment, should be complete.
Mr. HELMS. Mr. President, will the Senator yield?
Mr. WARNER. Yes, of course.
Mr. HELMS. I think the Record should be clear as to the German firm.
I don't know anything about that. But the allegations were made about
J.A. Jones Construction Company, and it is that North Carolina firm
that I came to defend this afternoon.
I welcome anything that the distinguished Senator from Virginia, who
has been my friend for a long time, can add about the German firm. But
I want the Record to be clear about J.A. Jones Construction Company.
That is the reason I came to the Senate Chamber this afternoon.
Mr. WARNER. Mr. President, I think it is important that you undertook
this because you do so not only out of loyalty to your State and to
your constituents, but, indeed, by your distinguished record in World
War II, having served in the Navy, and by your strong support
throughout your entire Senate career for all those who participated in
military conflict, and their families, and particularly for your
support for this memorial.
I thank the Senator for the opportunity to engage in a colloquy with
him.
Mr. President, I ask unanimous consent that I may have printed in the
Record certain additional material that could be pertinent.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. WARNER. I say to my good friend, so we will all know, our beloved
colleague, and former majority leader, Robert Dole, who has an
extraordinary record of heroism in World War II, was, indeed,
instrumental in the building of this memorial; that is, raising the
funds and putting the infrastructure in place financially for this
memorial to go through. There are some hundred thousand dollars that
have been raised--almost all of it in the private sector. I was
pleased, as a member of the Armed Services Committee, to bring to the
Senate an amendment of some $6 million of taxpayers funds which was
incorporated into last year's authorization bill and appropriated to
add to the many hundreds of thousands of gifts contributed towards the
building of this memorial so as to raise the final total to the $100
million to allow construction to go forward.
So I say to my good friend from North Carolina, again, I feel an
obligation, having instituted that funding requirement, and asking
colleagues to support--indeed, the Congress as a whole--I feel I have
an obligation to put in the Record such facts as I know about this
case. And I will include a communication I have just received from
Senator Dole which in many ways recites the history of the
distinguished firm to which you refer.
Mr. HELMS. Mr. President, will the Senator yield?
Mr. WARNER. Yes.
Mr. HELMS. I say to the Senator, I commend you for the position you
have taken. And I join you in making clear all of the relevant facts
about this matter, specifically those involving the German firm.
Mr. WARNER. Yes.
Mr. HELMS. But I want to separate the J.A. Jones Construction Company
from that. Incidentally, I talked to Senator Dole right here on the
floor of the Senate last week about it. And it was he who called me to
look into the matter and to come here today.
Mr. WARNER. Fine.
Mr. President, I thank our distinguished colleague, and I appreciate
the forbearance of our distinguished colleague from Pennsylvania, who
has been patiently waiting.
[[Page S6383]]
Exhibit No. 1
Washington, DC, June 13, 2001.
Hon. John W. Warner,
U.S. Senate,
Washington, DC.
Dear John: Enclosed are press statements relating to the
companies who were awarded the contract to construct the
National World War II Memorial. The General Services
Administration acting as the agent for the American Battle
Monuments Commission awarded the contract and the selection
was under the GSA Construction Excellence program.
Best wishes.
Bob Dole.
Enclosure.
[Press Release From the U.S. Agency for International Development, Aug.
18, 2000]
Washington, D.C.--Philipp Holzmann AG, a German
construction company, has pled guilty to participating in a
criminal conspiracy to rig bids on a USAID-funded
construction contract in the Arab Republic of Egypt, Everett
L. Mosley, Acting Inspector General, U.S. Agency for
International Development, announced today.
As part of its plea agreement with the Department of
Justice, Antitrust Division, Holzmann agreed to pay a
criminal fine in the amount of $30 million.
The one-count felony judgment was entered in the U.S.
District Court in Birmingham, Alabama. It charged Holzmann
and other unnamed co-conspirators with participating in a
conspiracy to suppress and eliminate competition on the U.S.
Agency for International Development (USAID) contract in
violation of the Sherman Antitrust Act.
Today's action is the first charge to arise out of an on-
going grand jury investigation in the Northern District of
Alabama conducted by the Justice Department's Antitrust
Division, Atlanta Field Office, working in concert with the
USAID Office of the Inspector General.
``This plea agreement is the first step in the unraveling
of a wide-ranging conspiracy involving several multi-national
corporations, which had targeted the USAID program for
exploitation,'' Mosley said. ``This investigation is part of
our continuing law enforcement effort to combat fraud in the
foreign assistance programs. Program integrity is essential
to maintain public support for the foreign assistance program
of the United States.''
Holzmann participated in rigging the bids so that its
American subsidiary, J.A. Jones Construction Co., which had
submitted a bid as part of a joint venture, would be awarded
the lucrative USAID contract for construction of a waste-
water treatment project at a highly inflated price.
The investigation is continuing until each co-conspirator
is identified and prosecuted.
This investigation was conducted by USAID's Office of
Inspector General.
The case was prosecuted by the Justice Department's
Antitrust Division, Atlanta Field Office.
____
[Media Advisory From the U.S. General Services Administration, June 13,
2001]
GSA Statement on Selection of Contractor for WWII Memorial
The General Services Administration (GSA), acting as agent
on behalf of the American Battle Monuments Commission (ABMC),
awarded a contract to Tompkins Builders and Grunley-Walsh
Construction to construct the National World War II Memorial
on the Mall in Washington, D.C. The joint venture of these
American firms submitted the highest quality proposal and the
lowest price, thus providing the best overall value to the
Government.
GSA management is sensitive to the issues raised in news
stories. The agency reiterates that Tompkins and Grunley-
Walsh are responsible firms.
Tompkins Builders, a U.S. company established in the
District of Columbia in 1911, and the third largest general
contractor in the Washington D.C. Metropolitan area, has a
reputation for quality construction. It is owned by J.A.
Jones Construction Company, founded in 1890 in Charlotte,
N.C., a subsidiary of J.A. Jones, Inc. Since 1979, the
Philipp Holzmann Company, a German construction firm, has
owned J.A. Jones, Inc.
Both Tompkins Builders and Grunley-Walsh have extensive
working relationships with GSA and other Federal agencies.
They have participated in many construction and renovation
projects in the Washington, DC area, including the:
Washington Monument; Jefferson Memorial; Franklin D.
Roosevelt Memorial; U.S. Capitol; National Air and Space
Museum; Food and Drug Administration's Center for Food Safety
and Applied Nutrition in College Park, MD, and Alexandria
Federal Courthouse in Alexandria, VA.
____
J.A. Jones Reaffirms Long History of Supporting U.S. Military
Charlotte, NC, June 12, 2001.--J.A. Jones Construction Co.,
whose subsidiary Tompkins Builders was chosen last week as
lead contractor for the prestigious World War II Memorial in
Washington, today reiterated its crucial role in supporting
the U.S. military and government during the company's 112-
year history.
Key contributions include:
The construction of nine American military bases that
trained U.S. troops for World War II.
The construction and operation of the Navy Shipyard in
Panama City, Fla., and the operation of the Navy Shipyard at
Brunswick, Ga. Between the two facilities, J.A. Jones
employees built more than 200 Liberty Class warships during
World War II.
Selection as one of the first American companies to work in
a war zone, constructing air bases and other facilities in
and around Saigon during the Vietnam War.
Construction of the Washington Mall Reflecting Pool, the
West Wing of the White House, the East Wing of the National
Gallery of Art, the East and West Fronts of the Capitol, the
Smithsonian Air and Space Museum, the Natural Museum of
History addition and renovation, and the National Gallery of
Art Sculpture.
The continued involvement in building and maintaining
military bases and facilities across the country.
The current reconstruction of the two U.S. Embassies in
Africa destroyed by terrorist bombings.
The following is a statement from John D. Bond III,
president of J.A. Jones Construction:
Let me make this as clear as I can make it: Anyone who
questions the patriotism of J.A. Jones Construction Co., its
employees, and our historical commitment to a free world, is
misguided and misinformed.
J.A. Jones' 112-year history is an important and classic
case study in corporate patriotism and dedication to a free
world. In the military buildup in the 1930s before the U.S.'s
involvement in World War II, J.A. Jones built nine military
bases, from the ground up, in Alabama, Georgia, Mississippi,
North Carolina and South Carolina. These bases provided
everything our troops needed to prepare for their crucial
role in saving the world.
During the war, J.A. Jones built and then operated the Navy
Shipyard in Panama City, Fla., and took over operations of
the Navy Shipyard at Brunswick, Ga. At these two crucial
locations, J.A. Jones employees build more than 200 Liberty
Class warships at an incredible rate of 12 per month. In 1943
and 1944, workers donated their time on Christmas Day to
continue working and get the ships to the Allied and U.S.
Armed Forces who so desperately needed them to win the war.
Scores of J.A. Jones employees served in the war, including
Edwin Jones Jr., who would later become chairman of the
company after serving with the Marines and taking part in the
deadly fighting at Iwo Jima.
J.A. Jones' commitment to our nation and its men and women
in uniform has continued over the years. In Vietnam, J.A.
Jones was one of the first American companies to actually
work in a war zone when it built air bases and other
facilities in and around Saigon. J.A. Jones' close ties with
the U.S. military remain just as strong today as our
employees continue to build and manage bases and facilities
around the world.
In discussing the relationship between Philipp Holzmann and
J.A. Jones, it also is important to look at history. The two
companies first worked together in the mid-1970s on U.S. Army
Corps of Engineers projects in Saudi Arabia. J.A. Jones was
looking to expand its global presence, and Philipp Holzmann
saw potential in the U.S. Philipp Holzmann bought J.A. Jones
in 1979. Edwin Jones Jr., the World War II veteran who fought
at Iwo Jima, was chairman of J.A. Jones at the time of the
sale.
We are in fact a global economy. The very fact that Germany
has become a free capitalistic country and trusted American
ally is testament to the United States' and post-World War II
Allied commitment to rebuilding the free world.
Unfortunately, in the discussions of where the World War II
Memorial will be built and who will build it, we have lost
sight of the true purpose of this project: to honor the
veterans who saved the world. I believe the history of J.A.
Jones Construction and its people makes it the ideal choice
for the historic project.
I am extremely proud that J.A. Jones will play an important
role in the building of the World War II Memorial. When we
break ground this summer, I will be there with my father, who
was paratrooper in World War II, and my son, whose generation
must recognize and understand the sacrifices that America's
Greatest Generation made for freedom. I could not look either
of them in the eye if I had any question about J.A. Jones'
commitment to America and a free world.
Today, I can say unequivocally that no company is more
committed than J.A. Jones to the principles that have made
America the leader of the free world.
____
Statement of the American Battle Monuments Commission Regarding the
Construction Contract for the National WWII Memorial, June 11, 2001
The joint venture of Tompkins Builders and Grunley-Walsh
Construction was awarded a $56 million contract last week to
build the National World War II Memorial on the Mall in
Washington, D.C.
The award was made by the General Services Administration
(GSA), acting as agent for the American Battle Monuments
Commission (ABMC). The agency conducted the general
contractor procurement and selection under the GSA
Construction Excellence program.
The selection was based on price, experience on comparable
projects, and past performance. The evaluation of all these
factors allowed the government to select the offer
[[Page S6384]]
representing the overall ``best value'' in terms of risk.
While price was not the sole factor considered, the joint
venture of Tompkins/Grunley-Walsh did submit the lowest
price.
Tompkins Builders, an American company established in the
District of Columbia in 1911, is the third largest general
contractor in the Washington Metropolitan area. The company
has earned a reputation for quality construction.
Tompkins is owned by J.A. Jones Construction Company, a
subsidiary of J.A. Jones, Inc., which is an American company
founded in 1890 in Charlotte, North Carolina.
J.A. Jones, Inc., in turn, is owned by the Philipp Holzmann
Company, a large German construction firm. In today's global
economy, international ownership relationships are common.
Three of the five largest construction companies in America
are foreign-owned.
Neither ABMC nor GSA has the authority to discriminate
against American firms based upon the nationality of parent
or grandparent corporations. Moreover, such discrimination
would be inconsistent with the principles for which the WWII
generation sacrificed.
____
[From the New York Times, Apr. 13, 2001]
Global Conspiracy on Construction Bids Defrauded U.S.
(By Kurt Eichenwald)
A group of international construction companies defrauded
the American government out of tens of millions of dollars
earmarked for Egyptian water projects undertaken as part of
the Camp David peace accords, according to government
officials and court documents.
One participant in the wide-ranging conspiracy, a unit of
ABB Ltd., the Swiss engineering giant, pleaded guilty
yesterday to its role in the scheme, agreeing to pay $63
million in fines and restitution.
The conspiracy, which lasted more than seven years,
involved the rigging of contract bids submitted in the late
1980's and early 1990's to the United States Agency for
International Development, which was financing Egyptian water
projects that resulted from the Middle East peace accords
reached during the Carter administration.
Contracts were supposed to be awarded through competitive
bidding. But the construction companies subverted the process
through payments of bribes and kickbacks to other possible
bidders, fraudulent billing to the government and the
laundering of cash through Swiss bank accounts, court records
in related cases show.
The conspirators included at least six international
construction companies, which collectively referred to
themselves as the Frankfurt Group, according to people
briefed on the case. At the time of the bidding, the
companies were either American or American subsidiaries of
European concerns. The name of the group came from the fact
that some of the largest companies were based in Frankfurt.
The investigation of the conspiracy began almost six years
ago, after a top financial officer at one company noticed a
series of improper wire transfers and other transactions.
That executive then brought those matters to the attention of
the Justice Department, which has been investigating ever
since.
According to court records, companies involved in the
conspiracy were able to obtain profits of as much as 60
percent on the Egyptian water projects--a return that would
be almost certainly impossible to obtain under competitive
bidding. Indeed, some of the companies went to great lengths
to hide their profits, charging fictitious expenses from
related companies to decrease the returns shown on their
books.
All told, about a dozen contracts have been awarded under
the program, totaling more than $1 billion. To date, three
contracts have been found to involve fraud, and the others
remain under investigation.
The investigation has already resulted in two other guilty
pleas, entered last fall by other construction companies. But
until yesterday the full scope and implications of the
criminal investigation were not publicly known.
In the plea entered yesterday in Federal District Court in
Birmingham, Ala., ABB Middle East and Africa Participations
A.G., a Milan-based subsidiary of the engineering company,
admitted to taking part in a conspiracy to rig the bid for a
project known as Contract 29. The original participant in the
conspiracy was SAE Sadelmi USA, another ABB subsidiary, which
was based in North Brunswick, N.J., and later became part of
the Milan subsidiary.
Under the terms of the illegal agreement, the ABB unit met
with other potential bidders on Contract 29 and agreed to pay
them $3.4 million to submit inflated bids for the project.
The ABB unit was then able to inflate its own bid on the
project, knowing the offer would still beat other
submissions. The value of the awarded contract, which was to
pay for building a wastewater treatment plant in Abu Rawash,
Egypt, was about $135 million.
``Although the construction work that is the subject of
this case was performed on foreign shores, the U.S.
government paid the bill and the U.S. taxpayers were the
victims of the scheme,'' John M. Nannes, acting assistant
attorney general in charge of the Justice Department's
Antitrust Division, said in a statement.
An ABB spokesman, William Kelly, said the company had been
cooperating with investigators since 1996, and first learned
that it was a target of the inquiry last fall. He said the
crimes were conducted by a small group of employees, all of
whom have since left the company for reasons unrelated to the
case.
``We deplore and deeply regret the behavior that led to
these charges,'' Mr. Kelly said. ``It stands in sharp
contrast to the high standard of business ethics practiced by
the great majority of ABB employees.'' He added that in the
year since the bid rigging occurred, ABB has expanded
internal compliance programs ``to let employees at all levels
know that ABB has zero tolerance for illegal or unethical
business behavior.''
According to court records in related civil cases, the $3.4
million payment was made to an unincorporated joint venture
formed by Bill Harbert International Construction, based in
Birmingham, and the J.A. Jones Construction Company, a
Charlotte, N.C., subsidiary of Philipp Holzman A.G. of
Frankfurt.
Phillipp Holzman pleaded guilty to a criminal complaint
filed under seal last August. A spokesman for Harbert did not
return a telephone call.
According to court filings by the government in related
cases, the Jones-Harbert venture was at the center of other
bid-rigging efforts involving the Egyptian water projects.
For example, American International Contractors Inc., a
construction company based in Arlington, Va., and owned by
the Archirodon Group of Geneva, pleaded guilty last September
to accepting payments in exchange for a commitment not to bid
on a project known as Contract 20A. That contract was awarded
to the Jones-Harbert joint venture, court records show.
Indeed, irregularities in Contract 20A led to the discovery
of the broader bid-rigging scheme. The irregularities were
first discovered by Richard F. Miller, who worked first as a
controller and then as treasurer of Jones from 1986 through
1996.
During the course of his work, Mr. Miller discovered a
series of improper transactions involving the joint venture
with Harbert, and pieced together that a bid-rigging scheme
had been used in Contract 20A, a $107 million sewer project
in Cairo.
Among the evidence eventually discovered by Mr. Miller,
according to court records from a federal whistle-blower suit
he filed, were wire transfers for $3.35 million from the
joint venture to a related company for fictitious
``preconstruction costs.''
The most complex transaction, according to the court
records, was a bogus ``sale-leaseback'' arrangement involving
a Jones-related company called Sabbia. Under the terms of the
deal, Sabbia was to purchase the construction equipment for
the project, then lease it back to the joint venture.
Yet while $14.4 million in lease payments were sent to
Sabbia, the $4 million to purchase the equipment was never
paid by that company. Instead, according to court records and
lawyers involved in the case, that money remained in a Swiss
bank account and was used as a fund to disburse payments to
other co-conspirators.
``This was an example of a transaction that was done to
reduce the apparent profitability of Contract 20A,'' said
Robert Bell, a lawyer from Wilmer, Cutler & Pickering who is
representing Mr. Miller in his whistle-blower suit. ``If you
skim almost $15 million off the top, it's easier to make it
look like the joint venture wasn't making all that much
money.''
The PRESIDING OFFICER. The Senator from Pennsylvania.
____________________