Donations Led to Fla. Indictments
Just days before Christmas 2003, Miami-based construction giant PBS&J filed its annual report with the Securities and Exchange Commission. In it, executives sketched out the company’s balance sheet and outlined recent acquisitions.
Most importantly, however, the company outlined the financial importance of the soon-to-expire $286 billion transportation bill — setting up a cautionary tale of earmarking and political gladhanding gone awry.
“The need to modernize and upgrade the transportation infrastructure in the United States has been a source of continued business for us through the last ten years,” states the company’s annual report on the transportation bill’s significance. The bill “has been extended through February 2004 and will likely be reauthorized through 2009 at similar funding levels.”
The report continued: “The demand for our construction management services has also been fueled by the legislation and industry trends that are driving the growth in our Transportation and Environmental business segments.”
About a year and a half later, President Bush signed the billion-dollar highway reauthorization bill into law. But by that point, H. Michael Dye and Richard Wickett, the two PBS&J executives who had helped run the company since the early 1990s, had taken to the hills — and with good reason, federal law enforcement authorities allege.
One week ago, a federal court in Florida charged the two men with a “long-term scheme to violate campaign finance laws” involving sham bank accounts, illegal reimbursements and banned corporate campaign contributions. Prosecutors claim the executives’ intentions were clear: curry favor with lawmakers and officials to ensure the earmarking gravy train continued to run on all cylinders.
“It was the purpose and object of the conspiracy for the defendant and others known and unknown to the grand jury to fraudulently conceal and disguise the diversion of PBS&J corporate funds from legitimate business uses to improper political donations, in order to increase the likelihood of procuring government contracts for PBS&J, despite the reasonably foreseeable risk of economic hardship to PBS&J shareholders from this diversion of funds,” according to Wickett’s charging papers.
Wickett started as the company’s treasurer in 1989, rising steadily through the ranks before becoming the head of finance in 1993. Roughly a decade later, he was chairman of the company’s board.
Dye began as PBS&J’s marketing director in 1985. He was elevated in 1991 to operational head for the nearly 4,000-employee company. By 1996, Dye was PBS&J’s top executive, and within four years he was picked to chair the company.
But, prosecutors allege, at the same time they were climbing the corporate ladder, the duo concocted an elaborate plan to funnel illegal corporate money to state, local and federal officials. In March 1990, prosecutors claim Dye and Wickett opened a bank account in the name of the company, but within months had the company’s name scrubbed from the account’s checks.
During the next 14 years, according to prosecutors, one or both of the company’s former executives drew on that and similar accounts for direct campaign contributions by themselves or others. Also, beginning in 2000, some company executives began receiving out-of-the-ordinary bonuses, gifts prosecutors claim were nothing more than veiled conduit contributions.
“In or about June 2000, Dye instructed certain PBS&J officers and directors who received the so called mid-year bonus that their bonus was for funding PBS&J political action committees,” according to the charging papers. “In or about December 2001, Wickett instructed certain PBS&J officers and directors that they could not spend the entire bonus, as $10,000 of the bonus had to go to PBS&J political action committees.”
Few company executives appeared to listen.
According to Federal Election Commission records, of the company’s nearly 3,900 employees, 14 individuals who listed the company as an employer handed over about $12,000 from Jan. 1, 2000, to Dec. 31, 2003. Rep. Don Young (R-Alaska), who then presided over the Transportation and Infrastructure Committee, received just $1,250 from a handful of company employees and executives. Former Democratic Georgia Sen. Max Cleland, who then sat on the Senate’s transportation panel, took in a little more than $2,000.
Wickett and Dye face a maximum of five years in jail for each count of conspiracy. Prosecutors also allege Wickett lied to prosecutors during the course of the investigation, which also carries a maximum sentence of five years in prison, and committed mail and wire fraud, punishable by mandatory fines.