Federal Procurement Ethics
Defense Dept. IG: White House Email Stonewall Stalls Border Wall Contract Probe
After nearly one year of work, the U.S. Defense Dept.’s Inspector General can’t finish a congressionally-ordered probe of a $400-million U.S-Mexico border wall construction award last December to contractor Fisher Sand & Gravel because agency attorneys won't allow release of requested DOD and White House e-mails related to the contract, Acting Inspector General Sean O’Donnell said in a Nov. 30 report to Congress.
Rep. Bennie Thompson, (D-Miss.), House Homeland Security Committee chairman, requested the investigation shortly after the U.S. Army Corps of Engineers awarded the North Dakota-based contractor its first federal construction contract for 31 miles of wall construction in Yuma County, Ariz. The audit is set to determine if President Donald Trump and other administration officials may have improperly influenced the award to the firm. Fisher has subsequently won other contracts in Arizona and Texas for a total of more than $2 billion in federal border wall construction work
“The White House and DOD officials appear to unjustifiably be asserting privilege over many of the documents the Office of the Inspector General says it needs to complete its investigation.”
– Rep. Bennie Thompson, House Homeland Security Committee Chairman
“Given the president’s multiple endorsements of the company and the amount of taxpayer money at stake, I remain concerned about the possibility of inappropriate influence on the Army Corps’ contracting decision,” Thompson said in ordering the audit.
O’Donnell said the audit delay is tied to DOD’s process for reviewing presidential communications potentially covered by executive privilege. The IG requested the communications on Jan.16, but “as of Oct. 15, we had only received the majority of e-mails for one DOD official and the [department] had not started reviewing the emails with potential presidential communications privilege for 12 other key officials,” he said.
DOD has not said when it will complete the email review.
Contract Unwrapped
Fisher Sand & Gravel had never been a federal construction contractor, and while it was shortlisted in 2017 to offer a border wall prototype, its structure did not meet Corps or U.S. Dept. of Homeland Security specs, and was over budget, officials said.
Tommy Fisher, CEO of the family-owned company, had touted its wall design and construction abilities on TV news outlets known to be favored by President Trump after some earlier company bids for federal contracts were rejected. He had also invited Corps and U.S. border officials to view its smaller privately funded border walls on private land, including what is said to be property Fisher himself purchased, in Mission, Texas and Sunland Park, N.M. The private walls are not part of the federal border wall program. The stability of the Texas wall, built on the banks of the Rio Grande, has raised concerns in independent engineering reports and lawsuits.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
“The White House and DOD officials appear to unjustifiably be asserting privilege over many of the documents the Office of the Inspector General says it needs to complete its investigation,” Thompson said in an email to ENR. “It seems clear the Trump Administration is dragging its feet in cooperating with the investigation into the Fisher border wall contract.”
Jamie Tescher, a spokeswoman for Fisher Sand & Gravel, did not return an ENR request for comment on the IG probe.
The office of DOD General Counsel Paul C. Ney Jr., a political appointee confirmed in 2018, told the IG that after coordinating with the White House, it concluded that “presidential communications privilege” applies to e-mails and other contacts between the President and DOD officials as well as to those between White House staff and agency officials. The privilege also applies to Internal DOD communications related to information received from Trump or his staff. Ney’s office did not reply to a request for comment, but a spokeswoman told Bloomberg in a statement that she disagreed “with the IG’s characterization of events.”
More Contract Queries
Massachusetts Sen. Elizabeth Warren (D), a member of the Senate Armed Services Committee, in April wrote to Lt. Gen.Todd T. Semonite, the Corps commanding general at the time, seeking details on the Fisher Sand & Gravel contract award process. She also sought contacts between officials in the Corps and others in the administration, including the President, his son-in-law and adviser Jared Kushner and other White House staff.
Semonite, who retired in September, replied that “the content and details of any communications with the President of the United States or his staff are confidential.”
Warren disputed his contention that the communications she requested fell under exceptions to disclosure rules and sought a fuller explanation. Semonite’s staff responded that the Corps was not aware of any contacts between the agency and other federal agencies regarding the Fisher Sand & Gravel contract, but they would not comment on possible contacts with the Executive Office of the President.
In a joint letter last April, Warren and Thompson had asked IG O'Donnell to also review the Corps award of a $569-million contract to BFBC, a Montana-based unit of Barnard Construction, to build a 17-mile border wall segment in southern California.
Barnard Unit Contract Targeted
Referencing the Fisher Sand & Gravel award, they said a Barnard top executive was a major donor to the Trump campaign and that the contract award "raises serious questions about...the fairness of the procurement process." They also said the firm would be paid $33 million per mile under the contract, 50% more than the per-mile average in January, and asked the IG to determine "whether there is a pattern of favoritism" in the award of of border wall contracts.
Sen. Jack Reed, ranking armed services committee Democrat, also has ordered the U.S. Government Accountability Office (GAO) to include a focus on the Barnard awards in its audit since February of federal border wall contracts. Timothy J. DiNapolii, the review's director at GAO, said its analysis is looking at Corps support of the border wall program from 2017 to 2020 with "a more in-depth look at high value contracts and task orders," although he did not identify specific contracts or contractors being reviewed. GAO's report is expected out "in earely spring," he said.
The Corps of Engineers did not comment to ENR on the congressional communications or the IG report. In a previous media response related to the BFBC contract, an official said the firm received the award because it was already mobilized and working nearby. Barnard did not comment.
“The IG report says that DOD, at the direction of the White House, is refusing to cooperate, and the IG is telling Congress that because of these actions it can’t do its job,” an attorney familiar with government interactions told ENR. “What is the point of having the IG if its ability to investigate is limited?” he said, noting that privilege isn’t usually asserted for “exculpatory” materials, those that determine innocence.
When asked to confirm press reports that border wall construction is being fast-tracked in advance of President-elect Biden taking office, or whether arrangements were being made to end contracts at that time, Corps spokeswoman Raini Brunson told ENR that as a rule, contract terms permit the government to exercise its right to terminate the contract for its convenience, with the contractor entitled to submit a request for termination settlement costs.
The Corps “cannot speculate on the impacts of terminating border barrier construction contracts,” Brunson said. She added that unless a “suspension of work order” is issued, the agency “expects contractors to continue work as obligated under their contracts,”
Fisher spokeswoman Tescher also did not comment on whether Fisher has completed its construction work in Arizona.
