FEC finds illegal campaign contributions to Florida officials made by PBS&J

sun-sentinel.com/news/elections/fl-pbsj-campaign-contributions-20091220,0,5470636.story
South Florida Sun-Sentinel.com
Contracting firm made illegal campaign contributions, FEC report says

By Dan Christensen, browardbulldog.org

8:58 PM EST, December 20, 2009
Click here to find out more!

A Federal Election Commission report made public last week says one of Broward County's biggest government contractors regularly made illegal campaign contributions.

In the report written in September, FEC investigators concluded that "political contributions were an important part of PBS&J's business strategy," and that "the practice of making illegal campaign contributions involved officers at all levels of the company and was not limited to a few rogue employees."

Investigators also reported that "numerous witnesses," including current chairman and chief executive John Zumwalt, "directly admitted" that checks "made payable to them by a PBS&J subsidiary were reimbursement checks for political contributions."

Such reimbursements are illegal.

The staff report, which also found that PBS&J made almost $200,000 in illegal contributions to state and local candidates across the country, recommended the company be fined an undisclosed amount.

The report cited federal violations: using falsified expense reports to reimburse more than $30,000 in contributions made by officers and directors, and making nearly $10,000 in illegal direct corporate contributions.

But in a surprising Oct. 20 decision that was made public last week, the six commissioners failed to pass a motion to approve the staff recommendations. The 3-3 vote along party lines means the FEC will not enforce the law in the PBS&J case. The case will be closed.

Three Democrats voted to approve the recommendations; three Republicans voted to kill them – the latest in a series of partisan deadlocks that have raised doubts about the agency's ability to function.

On Thursday, former South Florida U.S. Attorney Alex Acosta, a Republican appointee whose office referred the case to the FEC, called the commission's inaction "disappointing." He declined to comment further because he had not reviewed the decision.

Benson Weintraub, a Broward lawyer who represents a former company official who blew the whistle on the scheme after she was caught embezzling, said the FEC acted contrary to evidence of "PBS&J's gross abuse of the political process."

"The decision promotes corporate criminality and undermines the deterrence of white collar crime by corporate America," Weintraub said.

PBS&J welcomed the FEC's decision.

"We are pleased to finally have this matter formally closed after all this time," said PBS&J spokeswoman Kathe Riley Jackson. She said the company had "cooperated fully with the investigation."

PBS&J, with 3,900 employees in 80 offices nationwide, is an employee-owned engineering, planning and construction firm. It moved its headquarters from South Florida to Tampa in 2007.

In Broward, PBS&J has done business with many municipalities over the years. Along the way, it has contributed tens of thousands of dollars to the campaigns of Democrats and Republicans. In Florida, such direct corporate contributions to politicians are legal.

The FEC's inaction has spared PBS&J further embarrassment after a $36 million embezzlement against the company orchestrated by its now-imprisoned former chief financial officer, William Scott DeLoach. It may also help PBS&J keep and attract new government contracts at a time of heightened public concern about corruption.

DeLoach, who pleaded guilty to the embezzlement and the illegal reimbursement scheme, told FEC investigators his decision to steal from the company was influenced by the long-running campaign contributions.

"If his superiors confronted him about his embezzlement, Mr. DeLoach thought he could remind them of their improper reimbursement activity and could say to them, 'What are you going to do? Call the authorities?'" says the report.

The superiors DeLoach referred to were ex-chairmen Michael Dye and Richard Wickett. Both retired before the embezzlement was discovered, and later pleaded guilty to conspiracy to make false statements relating to fraudulent concealment and the diversion of PBS&J funds to make illegal contributions to federal candidates.

Each was sentenced to six months' home confinement. Dye was also fined $20,000; Wickett was fined $40,000.

In statements to prosecutors and the FEC, Wickett has said that before he became chairman he followed the orders of superiors regarding reimbursements, including chief executive Zumwalt.

Zumwalt denied Wickett's accusation.

Last year, Assistant U.S. Attorney Karen Rochlin told a judge in Wickett's case that there was no evidence Zumwalt was involved in the illegal reimbursement scheme.

Broward Bulldog is a not-for-profit online news site created to provide local reporting in the public interest. Call 954-603-1351.

Copyright © 2009, South Florida Sun-Sentinel