The owner of the US Air Force falsified files to increase his income: documents

Whittington said that he knew that falsifying records put families at risk. A retired veteran of the Air Force, he declared that he was disgusted by his deeds. After struggling against his conscience and refusing to obey orders to change his records, he resigned.

"It's like they're running a bank robbery at the corporate level," Whittington said. "I got to the point of waking up in the morning and asking myself," Well, how many people am I going to have to screw up today? "

Whittington's statements are corroborated by numerous internal memos addressed to Balfour Beatty employees, explaining to them how to engage in deception. Reuters documented at least 65 cases in 2016 and 2017 in which Balfour Beatty employees backdated their repair requests, filled out documents claiming false response time exemptions, or closed unfinished maintenance requests.

Some Air Force personnel assigned to Tinker were familiar with these issues. For years, they have spoken to the air force of questionable preservation of archives and dubious living conditions. Still, their attempts to hold Balfour Beatty responsible were blocked by the Air Force Civil Engineering Center, or AFCEC, a San Antonio, Texas-based unit charged with overseeing private landowners.

At least 18 times since 2015, Air Force housing officials based in Tinker have warned that the Balfour Beatty maintenance logs contain false information suggesting that the company had responded quickly to service requests, according to reports from the Air Force. "We do not think that urgent, urgent and routine orders are properly recorded," said a periodic report on Balfour Beatty's performance.

Quarter-quarter, the Air Force Engineering Center minimized these concerns, granting the company a high memo and advising Tinker officials to abandon their complaints. "It does not matter whether they are in compliance or not, they would still be paid," wrote a local housing official at Tinker in an email in February 2018.

A conflict within the Air Force was at the heart of the inability to hold the owner Tinker accountable. On one side was the on-site Air Force Housing Office, whose main mission was to assist residents and to monitor daily Balfour Beatty. The other was AFCEC, responsible for developing and managing all privatized air force housing projects. Although the AFCEC also plays a supervisory role, it is also responsible for ensuring a long-term, harmonious relationship with the owners with whom it does business. Over the years, AFCEC has met several times with its partner, Balfour Beatty.

Presented with the evidence found by Reuters after years of misrepresentation, slow repairs and unsafe conditions in his homes, Balfour Beatty said the company had learned in 2016 that a Tinker employee had "hurt acted without giving any particulars. He described this as an isolated incident and said he had worked with the Air Force to strengthen his maintenance system. The company did not comment on the cases of falsification of registers, internal memos and other irregularities documented by Reuters before 2016 and after 2016 at Tinker and other bases.

Balfour Beatty said he has fully cooperated with the investigations of the Air Force and other government agencies as part of his activities. "As an organization, the BBC has absolutely not approved the falsification of documents," the company said in a statement.

In December, Reuters reported numerous cases of poor quality construction and security risks in new housing units, such as Balfour Beatty, built on bases in the United States. The Air Force says that since that report, it has been holding back company fees from Tinker, pending a review of the matter.

In response to new discoveries about the company, John Henderson, Assistant Secretary of Facilities at the Air Force, said in March that he had "real problems" with Balfour Beatty's performance at Tinker. But he added that he did not believe that housing companies had deliberately altered maintenance records to get incentive fees.

In June, after learning more about Reuters reports, he is waiting for the results of ongoing investigations to determine what happened. He stated that there were "discrepancies in maintenance records" and that the "allegations of fraud" involving Tinker and at least two other company bases had been referred to the Special Investigations Bureau of the United States. Air Force and the Federal Bureau of Investigation in 2017.

"We are confident that our private sector partners are acting in good faith," Henderson said. "When that does not happen, we have to hold those responsible accountable for better results so that we can continue to earn the trust of our airmen and our nation."

The Air Force Special Investigations Office does not discuss investigations, said Linda Card, the agency's chief of public affairs. But she added: "Discussions are still ongoing" with the US Department of Justice "about the ways (criminal or civil) – if any – that can be pursued against Balfour Beatty".

"I got up in the morning and wondered," Well, how many people will I have to screw up today? " "

Regardless of the outcome of this investigation, the Air Force is considering enhancing transparency by creating an automated maintenance request process that allows residents to view the status of a work order, Henderson said. It also plans to reorganize the incentive bonus system, details still being developed. He defended the work of the Air Force Engineering Center, claiming that he had taken the charges against Balfour Beatty seriously and had done an on-site job study at Tinker.

The news of accounting irregularities by a major contractor comes as US lawmakers reorganize the Pentagon's family housing program. The defense spending bill for 2020 proposed by the Senate Committee on Armed Forces includes measures to prevent fraudulent work orders, committee staff told Reuters, in part because millions of dollars were spent fees had been paid on the basis of falsified maintenance records.

"Our military families deserve high quality housing throughout their service, which includes fair and equitable treatment of housing providers," said Jim Inhofe, Republican of Oklahoma, chair of the committee.

Incentive for profit

Starting in 1996, the military launched the largest acquisition ever by US federal housing corporations, transferring the ownership of more than 200,000 units of family housing to private developers and building managers. under 50 years old.

These lucrative contracts include bonuses, or incentive bonuses, that private owners can earn by meeting performance targets set with the military. To receive the fees, real estate companies must meet quarterly and annual targets, such as responding to residents' maintenance requests within a specified time period. Fees are payable quarterly and generally represent up to 2% of the total rent paid by families living on a base.

The Balfour Beatty Communities, located in Malvern, Pennsylvania, are leading the military housing unit of Balfour Beatty plc, a London-based infrastructure company that achieves an annual business turnover of 10.7 million. billions of dollars. The company is making an annual $ 33 million profit on its military housing operations, said Chris Williams, president of the Balfour Beatty Communities, at the Congress in February. Incentive fees on these transactions alone represent approximately $ 800 million over the term of the 50 year contracts that it holds for 43,000 homes on 55 Air Force bases. , navy and army all over the country, calculates Reuters.

In 2008, Balfour Beatty took over housing activities at Tinker. Since then, Reuters estimates that the company has collected here up to $ 2 million in incentive fees.

Signs of irregular reporting have been reported at other Balfour Beatty bases. In 2016, Air Force housing officials at the Travis military base in California claimed that the company's employees were using a second set of maintenance logs, a statement from the Air Force confirmed. In 2017, housing officials found that the company closed maintenance requests prior to processing and incorrectly classified the records, as shown by the quarterly housing performance records of the database. In the same year, housing officials at the Fairchild Air Force base in Washington State said that Balfour Beatty had submitted inaccurate maintenance data in his application in order to collect incentive bonuses.

The Air Force could not justify the allegations of Travis and Fairchild. But he stopped paying incentive bonuses to Balfour Beatty in both bases at the end of last year, pending a review, and sent the incidents back to investigators from the Air Force and the FBI.

Nevertheless, the Air Force never recovered the incentive bonuses paid to Balfour Beatty, said an Air Force spokesman. . The AFCEC has also not audited the maintenance records of the other bases managed by the company.

Big leaks, two sets of books

At Tinker, Reuters discovered last year that half of the nearly 400 new homes built by Balfour Beatty suffered from heavy leaks, sewer backup, rotten wood and severe mold.

From the end of 2015, Balfour Beatty has been inundated with maintenance demands in new and old homes. Roofs leaked, plastic water pipes burst and heating and air conditioning failed, said former Whittington director. Yet in the same year, the company recorded only 23 work orders late on 6,000 jobs, as reported by the internal data on work orders.

According to Whittington, early in 2016, senior management reduced the base's maintenance staff from six to five, with the London headquarters demanding greater profits for their military housing projects. This left about 132 homes for each worker, he said. Nevertheless, Balfour Beatty told the Air Force that he was responding quickly to maintenance requests.

Some Air Force personnel in Tinker felt the number of late responses was strangely low and that the incentive fees that the company earned were strangely high, according to Air Force e-mails. "It's funny that all properties are still 100%," said an Air Force employee in charge of Air Force housing in an email addressed to colleagues in 2016.

Then, in July 2016, during a chance conversation, Tinker's housing staff noticed a handwritten maintenance program on the desk of Balfour Beatty's FCC, Tina Brown.

Brown was responsible for handling telephone maintenance requests and scheduling technicians to resolve them. Since her first day, she told Reuters, she has updated a set of unofficial and handwritten maintenance logs, in addition to the official computerized records communicated to the US military. ;air.

Handwritten books have allowed Brown and other employees to achieve two goals, according to Brown and others familiar with the operation. They could accurately track the job so they could finish it, but did so without triggering the stopwatch that was starting to time once a work order had been entered into the official electronic system. Facilities manager Tim Heath asked him to enter work orders in this way, according to Brown and Whittington. Heath did not return calls and text messages asking for comments.

Brown often communicated the requests to the official system the same day they were completed, not the day they were called. In so doing, the workers assured Balfour Beatty to meet the response time targets set out in his contract with the Air Force. : 30 minutes to start an emergency request, four hours for an urgent request and 24 hours for a routine case. The trick also allowed the company to fulfill its objectives: 24 hours in case of emergency and two working days for urgent and current items.

An example of 2016 shows how the configuration works. A page of Brown's unofficial handwritten records includes a work request from a family with a stove down, dated July 7, 2016. The official electronic maintenance log, captured in a screenshot of the Brown's workstation shows that the family's request was not entered until July 12th. 2016 – the day before the end of the works. Had the request been accurately recorded, the incentive requirements would have been missed.

After discovering Brown 's ghost books, Air Force housing officials in Tinker interviewed residents in the summer of 2016 and confirmed that Balfour Beatty did not respond to their requests when they called them. These conclusions are very discouraging, wrote a manager in July. Email 2016 to colleagues.

Balfour Beatty later sued the prosecution in a request for payment of an incentive bonus. He told the Air Force that he had discovered "inconsistencies in the data entry process at Tinker" and reacted quickly to make sure this did not happen again plus, in accordance with the royalty application filed.

About two weeks earlier, Balfour Beatty had fired Brown. When she was escorted out of the office, according to eyewitnesses, she shouted to colleagues that she had been fired for keeping false books under the direction of her boss, Heath. .

"They've thrown me to the wolves," Brown said. She filed a lawsuit for unfair dismissal against the company, which is still pending.

In his statement, Balfour Beatty did not name Brown, but said that only one employee had acted inappropriately.

Balfour Beatty's internal records show that the company has issued general instructions to employees to change the records.

This was the message contained in a 2013 work order directive sent by email to Balfour Beatty employees. "You will modify and" correct "these work orders so that they respect the response time of 30 minutes – 1 hour and a goal of completion of 24 hours for emergency work orders," says the memo.

Another internal memo 2016, shared by email, tells clerks to place maintenance requests in a red folder if "the workload is excessive and can not be planned immediately".

Whittington said Tinker never had enough maintenance staff to handle the 660 homes on the base. Meanwhile, said Whittington, Phoenix employees have pushed him to settle maintenance demands so the company can get incentive fees.

"The work orders were closed when they were not finished," Whittington said. "Again, it plays in the incentive bonus."

Whittington said he had been pressuring his staff to "change the numbers". In an email dated September 1, 2016, he directed two employees to close 119 resident-initiated claims in four hours. "The goal is to get ALL work orders open today!" He wrote.

Whittington said it was led by its regional director, Rebecka Bailey, and his vice president, Raul Martinez. Bailey is no longer with the company; Martinez and she refused to comment.

Hazards of asbestos

All these years, families lived with a range of risks – untreated sewer backup, vermin infestations and exposure to asbestos.

In the McNairney Manor area of ​​Tinker, all but one of the 262 homes have asbestos-containing flooring, said Whittington and two other former employees. Balfour Beatty has covered this material with soils or floating carpets for aesthetic purposes and for sealing asbestos tiles, a common and effective emission reduction strategy.

Much of the new flooring was cheap and poorly installed, however, according to Balfour Beatty's work order records. From 2012 to February 2019, residents of McNarney requested at least 350 maintenance requests to complain about the flooring, including buckling, warping and, according to a work order, "black material from ground".

In the case of Ippolitos, Balfour Beatty's interview records show that the company took the family into the house, knowing that the floor was in "bad" condition, as one newspaper put it, and that there was a risk of exposure to asbestos.

The company should have hired a specialist to safely remove asbestos or seal it properly, said Nick Ippolito, who worked for 12 years as a residential construction supervisor before joining the Navy. "But I guess it took them too much money," he said. In 2018, the couple left the navy.

Balfour Beatty refused to discuss specific family cases. He added that he was not aware of the flooring issues prevalent in McNarney homes.

The policy of "the exception"

After Tina Brown's layoff in mid-2016, Whittington said, the company's executives asked Tinker employees of Balfour Beatty to stop retaining a second set of handwritten maintenance logs.

The number of late orders soared from eight in the first half of 2016 to 377 in the second half, according to an analysis of Reuters' Tinker work order data. The company processed 12% of its late maintenance calls, which would have been too much to receive the full amount of its incentive bonus. The company did not report these numbers to the Air Force.

Instead, in its 2016 third quarter incentive application, Balfour Beatty once again released stellar numbers, indicating that it had achieved between 96% and 98% of maintenance calls on time . The company claimed $ 41,536, representing 100% of the incentives it was eligible to receive during the quarter.

Air Force housing officials in Tinker expressed disbelief. "We have received numerous complaints from residents in each category that work orders were not completed on time," Tinker's housing office wrote to another outside contractor, recommending not to proceed. benefit from incentives this quarter.

They were right to be wary, Whittington said. Following the dismissal of Brown, Regional Director Bailey directed him to ensure that the maintenance numbers met the objectives of the incentive bonus by massaging the records. The company began to leverage a technology known as the "exception policy for work orders" in order to continue earning incentive fees, according to Whittington and documents.

In Pentagon housing contracts, when a maintenance request can not be completed in time due to extenuating circumstances, homeowners can request an "exception" so that the order is not taken into account. Examples include ordering special parts, multi-stage work or residents requesting a repair window after the fixed response deadline.

Whittington explained that he had sifted the late maintenance requests and had modified the records to include exceptions to the response time strategy.

"Shamefully, I obeyed," Whittington said.

The following spring, on April 17, 2017, eight residents requested maintenance work and, according to official records, they requested that the work be done later than necessary, on April 20, according to an email exchange with the Tinker Housing Office. Without these exceptions, the eight jobs would have been late, depending on Balfour's incentive objectives.

As recently as last year, Balfour Beatty still relied on exceptions. Tinker had about 1,850 work orders late in 2018; more than 1,100 fell under a time policy exception, records show.

The company stated that it often used exceptions at Tinker as of 2016. In 2018, Balfour Beatty said that she and the Air Force had put in place a new process to deal with. recording of work orders, including the use of exceptions.

The Air Force Civil Engineering Command, or AFCEC, stated that he was working with Balfour Beatty to correct the "challenges".

Melody Marsh, regional director of the AFCEC, defended the company. In May 2017, a resident invited a Tinker housing manager to her home to find a persistent leak. Marsh reprimanded the manager for entering the house without a Balfour Beatty representative. "It does not show a partnership approach," she wrote.

In August 2017, after the Tinker Housing Office had provided the AFCEC with evidence that Balfour Beatty was demanding false exceptions, Tinker staff urged a reduction in fees. Marsh has canceled the recommendation.

"The AFCEC does not agree that your answer validates a decrease in incentive bonus," wrote Marsh.

Marsh has not responded to a request for comment.

The warnings continued. In December 2017, the AFCEC agreed to reduce a small portion – 3.8% – of Balfour Beatty's incentive bonus for the second and third quarters of 2017.

Last November, the Tinker Housing Office asked Marsh and the Air Force Technical Center to investigate Balfour Beatty, with dire consequences if no action was taken. "With inadequate maintenance, our property will not withstand a 50-year life cycle," he writes.

Marsh declined the invitation, explaining in a correspondence that the investigations were "ineffective and extremely unproductive".

Some Tinker families continue to fight the owner. In May, neighbors gathered in Mundell Street to discuss the issues with a Reuters reporter.

Derek Rouse, a Navy engineer, said that he and his wife Jennifer had been asking Balfour Beatty for years to keep rainwater out of their homes. In April, Balfour Beatty marked a Rouses work order as being over time, claiming to have repaired the couple's back door by installing a new weatherstrip. The reporter examined the door. A new weatherstrip has not been installed.

"I finished flying at 4 am and at 6 am my wife called me to announce that the house was leaking again," Derek said. "I'm putting my life on the line and I should not have to deal with it."