Last week, I reported that Munilla Construction Management (MCM), builder of the now famous collapsed bridge at Florida International University, also has a controversial record in Panama. Accounts in the Panamanian press and a local source told me company’s projects –including work on the Bridge of the Americas, which spans the Panama Canal — have been marked by cost overruns, contract extensions and questions about quality.
The source said the firm also has very close ties to Panamanian government officials — just like it did in Florida — which no doubt helped it win contracts in both places.
Now I’ve been told that Louis Berger, a U.S. firm that was supposed to conduct the independent peer review on the Miami bridge construction, also was involved in the Bridge of the Americas project in Panama, as well as a few other controversial developments there. The source there said the company was well known for being hired to “review” controversial construction projects and invariably rubber-stamp them.
Incidentally, Louis Berger was deeply implicated in the “rebuilding” of Afghanistan following the U.S. invasion in 2001, and in the corruption that was rife throughout it. In 2015 it pleaded guilty to charged involving one of the biggest cases of corruption in the history of foreign aid, according to this story:
One of the biggest infrastructure programs during those early days of US involvement in Afghanistan was the Rehabilitation of Economic Facilities and Services Program, or REFS, which was intended to rehabilitate infrastructure, strengthen public services, procure construction materials and build the capacity of Afghan construction companies.
Finding partners to manage and implement the project was not going to be easy. There were only a few companies in the world with the U.S. government credentials and implementation experience required to take it on and significantly fewer willing to accept the tremendous risk of working in Afghanistan.
But in October 2002, USAID awarded the general contract for REFS to New Jersey-headquartered engineering firm Louis Berger.
The contract award was a seminal moment for a company that, until then, had established a history of implementing smaller development projects backed by international donors around the world. REFS was big dollar, critical to the U.S. government mission in Afghanistan and had the potential to propel Louis Berger to new heights.
It would seem an opportunity too attractive to turn down, but looking back, REFS — as Louis Berger’s entryway into the world of high-risk, high-reward wartime contracting — triggered nearly a decade of legal troubles and corporate turmoil that is just now approaching some resolution.
After an intensive Department of Justice investigation and multiple court proceedings which uncovered large-scale fraud, Louis Berger settled with U.S. authorities for $69 million in 2010. In May 2015, Louis Berger’s former Chairman and CEO Derish Wolff was fined $4.5 million and sentenced to one year home confinement after pleading guilty to conspiring to defraud USAID.
It also got hit for charges related to over-billing for reconstruction work in Iraq.
So key companies involved in the bridge project have checkered work histories in various places known for fraud and abuse: Panama, Iraq, Afghanistan and — where corruption is probably most entrenched, Miami. Don’t ask me why, but something tells me the investigation is going to be interesting.