New York City-based Skanska USA has confirmed that the government is probing subcontracting arrangements made by the company and other large contractors that may have involved phony certified minority and women-owned firms.
The New York Times also reports that Schiavone Construction Co., Secaucus, N.J., is a target of the investigation.
Neither firm has been charged with any crime.
The investigation, according to published reports involving unnamed sources, centers on contracting activity on the $2.8-billion Croton Water Filtration plant in Bronx, N.Y., and on Manhattan’s $1.4-billion Fulton Street Transit Center.
The alleged fraud is the subject of separate probes by federal prosecutors in Brooklyn and Manhattan. They are investigating whether the prime contactors used “front” companies to meet MBE and WBE requirements, according to published reports. A spokesman for the Brooklyn district attorney’s office says he cannot “confirm, deny or comment” on any probe by the office.
The main subject of the probe is Environmental Energy Associates, a minority-owned subcontractor based in Ridgefield, N.J. Environmental Energy Associates has not been charged with any crime, either.
The firm could not be reached for comment and does not appear to have its own website, but an online listing described it as an engineering services firm specializing in cleanup, decontamination and 24-hour emergency response.
The listing says the company was started in 1989 and has 20 employees and $2.3 million in estimated revenue.
Neither Schiavone nor its owner, Dragados-USA, would comment, says Olga Polo Gomez, general counsel for New York City-based Dragagos USA. The firm is a unit of Madrid-based Dragados, which acquired Schiavone in 2007.
“We are aware of a government investigation involving Environmental Energy Associates, a minority subcontractor used by Skanska USA Civil in New York, as well as numerous other contractors,” says a Skanska spokeswoman. “Skanska has used Environmental Energy Associates in the past as part of our commitment to support minority and women-owned business enterprises.”
The spokeswoman emphasized that it is “proud of its record in supporting minority business enterprises in New York and we have worked hard to ensure our businesses comply with our own strict DBE guidelines. Skanska has and continues to cooperate fully with the government in connection with this inquiry.”
“DEP is fully cooperating with the investigation,” says a DEP spokesman. He says that beginning in 2007, the agency hired an independent monitor at the plan “to ensure the integrity of the project.”
The spokesman says the monitor’s responsibilities “include auditing invoices, analyzing contracts and performing background checks on companies.
The city’s Metropolitan Transportation Authority, owner of the Fulton Street project, said in a Nov. 23 statement that it “hired an independent compliance monitor to be on the lookout for this and other types of fraud.”
According to the agency, “this development shows that the monitor performed exactly as expected. MTA staff worked very closely with the monitor for many months and provided pertinent information to the MTA Inspector General. We are cooperating fully with the investigation."