[Congressional Record (Bound Edition), Volume 147 (2001), Part 8]
[Senate]
[Pages 10935-10939]
[From the U.S. 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.

[[Page 10936]]

  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.
       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 a 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.

[[Page 10937]]

  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.

                             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,

[[Page 10938]]

     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 a 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 
     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

[[Page 10939]]

     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.

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