April 8, 2020 / 12:55 PM / 2 months ago

Military landlord, under fire following Reuters reports, issues improvement plan

NEW YORK (Reuters) - Military housing landlord Balfour Beatty Communities, the focus of a Justice Department inquiry following Reuters reports it falsified maintenance logs, said it has taken steps to prevent the practice and make its homes safer for service families.

FILE PHOTO: Homes that were constructed by Balfour Beatty are seen in a neighborhood at Tinker Air Force Base, Oklahoma, U.S. May 1, 2019. REUTERS/Nick Oxford

In an improvement action plan filed with the U.S. Air Force in December and approved in February, the landlord detailed a series of steps it said it has taken since coming under federal scrutiny.

Balfour Beatty changed its electronic maintenance system, making it more difficult for employees to falsify logs. It hired additional staff and outside health experts and began more aggressively resolving housing safety hazards. And, it restructured management.

“We have undertaken a comprehensive review of our military housing operations and saw clearly that our leadership structure – at the project, regional and corporate levels – was not adequately serving residents or the business,” said the company’s action report, obtained by Reuters via a Freedom of Information Request.

The company has already achieved a number of the objectives and is committed to meeting the rest, a company spokesperson said in a statement.

Balfour Beatty Communities, a unit of British infrastructure conglomerate Balfour Beatty plc, has also briefed the Army, Navy and members of Congress about its action plan.

The report says that, after a Reuters-CBS News story last June revealed how company employees falsified work orders at the Tinker Air Force base in Oklahoma, the Department of Justice opened an investigation. Later, the DOJ issued Balfour a Civil Investigative Demand, a pre-litigation tool used by the government to gather information related to an investigation under the False Claims Act.

“The company voluntarily brought the matter to the attention of the Department of Justice and has been actively cooperating with the investigation,” Balfour Beatty said in a statement.

Reuters described how Balfour Beatty falsified maintenance documents at Air Force bases to qualify for bonus payments worth millions of dollars, citing five former employees who said they falsified records, internal company emails, company documents and internal Air Force communications.

The company maintains the practice was not widespread and that it never sanctioned doctoring of records. Its improvement plan would make such practices more difficult.

The company now restricts when a maintenance work order can be cancelled, and such cancellations require approval from a company vice president. Before, base managers said the company often cancelled tenants’ work order requests when they could not be completed on time, so the delay wouldn’t count against potential incentive payments.

Similarly, Balfour Beatty now prohibits base staff from editing work orders after they are closed. Former staff said they sometimes changed work order completion dates to make it appear as if they were finished on time, helping the company receive bonuses.

Balfour Beatty said its outside counsel, Hunton Andrews Kurth LLP, and auditor PricewaterhouseCoopers are examining its bonus payments.

“If it is determined that we did not properly earn incentive fees paid to us, we will refund those amounts,” the report said. “If the investigation determines wrong-doing by any member for our staff, we will take appropriate action.”

At the Tinker Air Force base, residents say the company still has much work to do. Jana Driver, who lived in a moldy, leaky home at Tinker and now advocates for military families, said she is skeptical Balfour Beatty’s plan will improve housing.

“They all have important names and important titles and it sounds significant, but nothing is changing,” Driver said.

Reporting by M.B. Pell in New York. Editing by Ronnie Greene

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