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Clock runs out and company goes unpunished for illegal campaign contributions

One of Florida's biggest government contractors, Tampa-based PBS&J, has been making illegal campaign contributions since the 1980s, according to a lengthy investigation by the Federal Elections Commission.

The investigation found that at the company once known as Post Buckley Schuh & Jernigan, which has designed and overseen construction of such projects as the Suncoast Parkway, such illegal contributions "were an important part of PBS&J's business strategy."

Current and former employees of the engineering company told investigators that PBS&J funneled hundreds of thousands of dollars to politicians in seven states in order to "promote its presence in the community so that it could obtain more business," according to the report by the commission's general counsel, Thomasenia "Tommie" Duncan and three other attorneys.

The donations were "made with the expectation that (the company) would obtain access to important government decision makers."

But as of today, the company is off the hook. The statute of limitations has officially run out.

The elections commission deadlocked 3-3 last year on whether to pursue the case, which meant no charges for the company. However, the conclusion of the case meant documents from the investigation became public.

According to the report, the Democrats who benefited from secret PBS&J donations include former Sen. Bob Graham, U.S. Rep. Alcee Hastings and former President Bill Clinton. Republican recipients included Attorney General Bill McCollum, former Sen. Mel Martinez and the Republican Party of Florida.

There were also numerous contributions to candidates for state offices, the counsel reported. But since federal campaigns were not involved, she did not list those candidates' names. The report does not indicate whether any of the candidates knew they were receiving improper donations, and attempts to contact the ones still in office were not successful.

Because the commission dropped the case, "PBS&J never got the chance to put our side in evidence," spokesman Jorge Martinez said. "We believe that there was insufficient substance to the charges to warrant prosecution and that we would have prevailed in any adjudication."

PBS&J, founded in 1959 to build Sen. Graham's family's Miami Lakes development, now has 3,600 employees in 80 offices, including more than 350 in Tampa. In 2009 the company had $103 million in contracts with such federal agencies as FEMA and the Department of Defense. Its state contracts last year, totaling more than $63 million, were with the Department of Transportation and the Fish and Wildlife Conservation Commission.

Starting in the 1980s, PBS&J employees who donated to politicians were reimbursed via bogus expense report payments or as company bonuses, the report said. That way the company could avoid violating laws limiting how much could be donated.

The fake-donor ruse was so widespread that at one point in 2000, witnesses said, company chairman Michael Dye "instructed the officers and directors to bring their check books to a board meeting to write checks," using bonuses that he had already distributed.

"They nurtured a corporate culture of corruption," said attorney Benson Weintraub, who represents the longtime PBS&J employee who eventually told authorities about the contributions.

Through the 1990s, PBS&J also reimbursed its employees through checks written on a subsidiary, Seminole Development, the investigation found.

"Numerous witnesses, including CEO John Zumwalt, directly admitted that Seminole checks that were made payable to them were reimbursement checks for political contributions," the counsel's report states.

But the decades-long practice of making illegal contributions sowed the seeds of another crime. Three employees, one of them the company's chief financial officer, began embezzling millions from PBS&J. The CFO, William DeLoach, figured that if his bosses ever found out, he would just "remind them of their improper reimbursement activity and could say to them, 'What are you going to do? Call the authorities?' " the report says.

However, when caught in April 2005, DeLoach confessed. One of his co-defendants, Weintraub's client Maria Garcia, then informed federal prosecutors about the campaign contributions, which led to charges against some top executives.

Two former PBS&J chairmen, Dye and Richard Wicket, pleaded guilty and were put on home detention for six months and given probation. Prosecutors said the company itself would face no federal charges, which prompted Garcia to file a complaint with the elections commission.

However, there was a problem with the five-year statute of limitations. Duncan and the other three attorneys said that, under the law, the clock did not start running until the illegal contributions came to light in April 2005. That meant the statute of limitations would not expire until Thursday.

But the commission, created in 1974, has three Democratic and three Republican commissioners, and they split along party lines. The Democrats agreed with their attorneys, but the Republican commissioners — one of whom has been counsel to the National Republican Congressional Committee since 1999 — agreed with PBS&J's attorneys that because the illegal contributions had been going on so long, the statute of limitations had already run out.

The commission's failure to prosecute a case "where the facts are undisputed, the law is clear, and the conduct is egregious sends the wrong message to the public," two of the Democratic commissioners wrote. Now "as a corporate entity, PBS&J will never be held liable for its blatant violations of campaign finance law."

On Dec. 30, the company disclosed in a Securities and Exchange Commission filing an internal investigation into whether a subsidiary may have illegally paid bribes to officials in foreign countries in violation of the Foreign Corrupt Practices Act. The investigation is still going on, Martinez said.

In January Zumwalt announced his resignation as chairman. He accelerated his retirement date after shareholders voted him off the board. The company agreed this month to pay him $2.3 million for his early departure.

Zumwalt's replacement, Robert Paulsen, was identified last year by an Orange County grand jury as being part of the "culture of corruption" at the expressway authority there. The grand jury said the authority's chairman used Paulsen as part of "an organized shakedown" of other authority contractors to raise money for political candidates. Martinez pointed out that a state Ethics Commission investigation resulted in no charges.

Times staff researchers Caryn Baird and Shirl Kennedy contributed to this report, which contains information from the Miami Herald and Orlando Sentinel.

This story has been changed to reflect the following correction: The attorney who represented embezzler Maria Garcia is Benson Weintraub. The story that published March 31 gave an incorrect first name.ks.

Reimbursed contributions

PBS&J reimbursed $30,500 in political contributions made by employees, an investigation found.

ContributorCommitteeDateAmount
Michael DyeAmericans for HarkinFeb. 25, 1992$1,000
H.M. DyeClinton/Gore 96 Primary CommitteeJune 22, 1995$1,000
Walter

Karasiewicz
Friends of Bob Graham CommitteeApril 8, 1997$1,000
Jose

Gonzalez
Bud Shuster for Congress CommitteeJuly 18, 1997$500
Robert

Paulsen
Bud Shuster for Congress CommitteeJuly 25, 1997$500
John

Shearer
Friends of Bob Graham CommitteeOct. 29, 1998$500
John

Shearer
Bill McCollum for U.S. SenateNov. 29, 1998$500
William DeLoachLinda Chapin for CongressMarch 6, 2000$500
Judith

Squillante
Linda Chapin for CongressMarch 8, 2000$500
Richard

Wickett
Linda Chapin for CongressMarch 8, 2000$500
ContributorCommitteeDateAmount
Richard

Wickett
Linda Chapin for CongressSept. 5, 2000$500
James BrelandFriends of Max ClelandMarch 27, 2002$2,000
William DeloachRepublican Party of FloridaAug. 8, 2002$500
Larry

Boatman
Alaskans for Don YoungJan. 28, 2003$500
William DeloachErskine Bowles for U.S. SenateMarch 9, 2004$2,000
Richard WickettErskine Bowles for U.S. SenateMarch 9, 2004$1,000
William DeloachAmericans for a Republican MajorityMarch 9, 2004$5,000
William DeloachDemocracy BelieversSept. 17, 2004$5,000
William DeloachMartinez

for Senate
Oct. 5, 2004$2,000
Richard WickettMartinez

for Senate
Oct. 7, 2004$500
William DeloachRepublican Party of FloridaOct. 29, 2004$5,000


Source: Federal Elections Commission's general counsel report

PBS&J

. Formerly Post, Buckley, Schuh

& Jernigan

. 3,600 employees worldwide; more than 350 in Tampa

Partial list of who received contributions

. Former Sen. Mel Martinez $13,800

. Former Sen. Bob Graham $1,800

. Former Sen. Connie Mack (via his Adam Smith PAC) $1,000

. Then-U.S. Rep. Bill McCollum: $800

. Clinton-Gore campaign: $1,000

. U.S. Rep. Alcee Hastings: $1,800

. Republican Party of Florida $5,000

. Former U.S. Rep. Carrie Meek: $1,000

. U.S. Rep Lincoln Diaz-Balart (via his Democracy Believers PAC) $5,000

Clock runs out and company goes unpunished for illegal campaign contributions 03/30/10 [Last modified: Wednesday, April 7, 2010 6:46pm]
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