You may not have realized it with everything else going on, but President Trump has already started the work to build his long-promised wall on the border between the U.S. and Mexico. Prototypes have been developed and are being tested, and now, it’s been announced that the first construction contract has been awarded as well.
It being the Trump era, however, you know that there has to be a scandal involved with the deal, of course, and, sure enough, the Associated Press has discovered it.
The first contract associated with the wall is an $11 million federal deal to replace slightly over two miles of an existing fence in Calexico, California. While just a minuscule portion of the proposed wall, it is the first step in Trump’s grand plan, so one would think that it would be scrutinized closely by everyone in the administration to make sure that everything about the deal went well and was buttoned up properly.
The construction contract in the deal was awarded to SWF Constructors, a Nebraska-based firm that lists just one employee in its Omaha office. If this is starting to sound familiar, it may be that you’re being reminded of the infamous scandal about the contract to restore power to Puerto Rico Awarded to Whitefish Energy, a company based in the hometown of Interior Secretary Ryan Zinke that had just two employees on its books, and was eventually stripped of its contract for failure to perform its contracted work.
While SWF Constructors is a new and untested company, the owners of the firm are a well known and long-standing government construction contractor based in Edgewood, New York, Coastal Environmental Group. Why the bid was made in the name of the new subsidiary instead of the main corporation could well be related to the track record of Coastal Environmental Group which is laced with refusals to pay subcontractors and audits revealing questionable spending.
Such subterfuge is common in the construction business according to the AP as a way to avoid scrutiny of past practices and potential misdeeds that could lead to a loss of new business.
In 2011 Coastal Environmental Group was sued by the federal government on behalf of a subcontractor, Enviroworks Inc., for their work as part of a multimillion-dollar lead cleanup project at an EPA Superfund site in northeast Omaha. The lawsuit, which was settled out of court, accused Coastal of failing to pay Enviroworks nearly $400,000 in labor and equipment costs and of reneging on a profit-sharing agreement that cheated the subcontractor out of about $1.7 million. The failure to pay forced Enviroworks to lay off its employees, whom Coastal Environmental Group then turned around and rehired directly to do the same work at a lower cost to themselves.
In 2014 Coastal Environmental was again sued by the federal government this time over failure to pay more than $175,000 to subcontractor SF Marina Systems for construction of concrete docks at the U.S. Coast Guard facility at Fire Island, New York. The suit was also settled out of court for an undisclosed amount.
The U.S. Interior Department found $2 million in questionable spending in the company’s work in cleaning up two wildlife refuges after Superstorm Sandy. The audit found that Coastal billed the U.S. Fish and Wildlife Service for labor and material, subcontractors, lodging and meals, and miscellaneous items without the supporting timesheets, invoices, and receipts. The department eventually negotiated a settlement that required Coastal Environmental to pay back $200,000, but a required report flagging the company for its shoddy accounting that would warn other government agencies to avoid them was never filed.
The AP also reports that Coastal’s Omaha subsidiary, SWF Constructors:
“is not registered with either the Nebraska Secretary of State’s office or the Nebraska Department of Labor, which is required for any company doing business within the state. Labor department officials are investigating whether SWF violated state registration requirements.”
Given the Trump Organization’s history of stiffing contractors, it is not surprising that the first company hired to work on his vaunted border wall project is cut from the same cloth. Perhaps they all just expect subcontractors to submit their bills to Mexico.