Fort Bend Could Get Money Back In Wake Of Embezzlement Scandal

Bob Dunn, Sep 24, 2006

A Florida engineering consultant, which reached a $5.3 million settlement with the state of Texas after admitting to overcharging for construction projects, may be giving money back to Fort Bend County, too.

Miami-based PBS&J said it discovered and reported to authorities a $36 million embezzlement scheme allegedly hatched by the company’s chief financial officer, Scott DeLoach, and two subordinates. Last Monday, DeLoach was formally charged in the embezzlement.

According to a report in the Engineering News-Record, the company spent much of the past few months repaying 12 to 15 state departments of transportation for reimbursed overhead expenses from 2000 to 2005 that were inflated, as part of the embezzlement scheme.

One of those state departments was the Texas Department of Transportation, which suspended PBS&J from bidding for Texas contracts in May. PBS&J, which did $43 million in business in Texas in 2005, agreed to a settlement by which it paid TxDOT $5.3 million. In return, TxDOT dropped all claims against it and, in July, allowed the company to begin competing for contracts again.

On Friday, Fort Bend County Precinct 1 Commissioner Tom Stavinoha said the county had been a 20% – 80% participant in at least three transportation projects along with TxDOT, in which PBS&J was either a contractor or subcontractor.

The county engineer’s office “has been working with TxDOT to find out what projects” the county has in which PBS&J participated, Stavinoha said. “We’ll get some money back on all this. But it will take time.”

In Florida, the FBI and U.S. Attorney’s Office began investigating DeLoach’s alleged embezzlement scheme, and in the course of doing so began an investigation into PBS&J political campaign contributions.

A federal grand jury has been investigating whether the company reimbursed its employees for tens of thousands of dollars in campaign contributions. Using employees – or any other individuals – as “straw man” contributors is against the law.

As the investigation unfolded, a check of Texas Ethics Commission reports from PBS&J showed the company gave money to political campaigns of Fort Bend County Commissioners Court members 11 times since 2003.

Six of those contributions – which PBS&J reported that it made to County Judge Bob Hebert and county commissioners Stavinoha, Grady Prestage and Andy Meyers – don’t show up on the local officials’ campaign contribution reports.

Hebert’s campaign treasurer – his wife, Pat Hebert – said her records show Florida engineering consultant PBS&J asked to sponsor a table at an Hebert fundraiser early this year – a $2,500 commitment – but never paid for the table.

In TEC campaign contribution reports, the company’s Texas political action committee, PBS&J PAC, reported making a $2,500 contribution to Hebert’s campaign on March 6, 2006.

Pat Hebert said campaign records show no such contribution ever was received.

Stavinoha said earlier this month that PBS&J’s Glenn Graham “made a committment” to give Stavinoha an $800 contribution, at a February 2006 fundraiser, “but we never got paid.”

However, TEC reports from PBS&J PAC show Stavinoha supposedly received an $800 contribution on March 6, 2006 – the same day on which the company said it contributed to Hebert and Meyers. None of the three commissioners reported receiving such contributions.

On Friday, Stavinoha said Graham had visited with him, and also plans to meet with Hebert and the other commissioners individually “to explain what’s going on with the overcharges” on some county construction projects.

After Graham’s visit, Stavinoha said he discovered he had received the $800 contribution from PBS&J after all. But he didn’t receive it until July – after his last Texas Ethics Commission report was filed. He said he deposited it in his campaign account on July 21.

The check, he said, was dated March 6.

Meanwhile, in Florida, the Miami Herald reported that in addition to the embezzlement charges, DeLoach has been charged in the contribution of $11,000 to the campaign of Florida U.S. Sen. Mel Martinez through ``strawmen.’’

Attorneys for DeLoach and two other former employees charged in the case told the Herald they will plead guilty.

The Miami paper called the charges “a first step in an unfolding scandal at one of South Florida’s biggest companies, with almost 4,000 employees. The case also carries national implications because PBS&J does business with and contributes to politicians across the country.”

One lawyer involved in the case told the Herald other company officials – and perhaps PBS&J itself – may be indicted before the investigation is concluded.