Two of the city’s biggest general contractors have lied about their hiring of women-and-minority-owned subcontractors for some of New York’s biggest project, including the Fulton Stree Transit Center downtown and the Croton Water Treatment Plant in the Bronx, both multi-billion dollar undertakings.
According to The Times, prosecutors from Brooklyn are approaching a $20 million settlement with the Schiavone Construction Company of Seacacus, while Manhattan attorneys continue to investigate Skanska, one of the nation’s 10 largest general contractors. The case could lead to an even larger settlement. And while other projects have not been directly implicated, the Daily News reports that both firms’ work on the Second Avenue Subway, 7-Train Extension and Metro-North’s Harmon Yards in Westchester are also under investigation.
Most government construction contracts require a portion of the work be done by minority-and-women-owned enterprises, also known as MWBEs. In this case, MWBE firms were hired and listed as doing the work, but served primarily as shell companies through which funds were funneled to pay Skanska and Schiavone’s non-MWBE workers. The Times reports that in at least one case, Skanska may have been using a mob-connected carting company to haul away material from the Fulton Street Transit Center.
Surprising or not, the practice may be even more widespread than this. As The Times notes:
Taken together, the two cases underscore what some law enforcement officials and analysts say is the systemic abuse of similar city, state and federal programs put in place in an effort to level the playing field for companies owned by minorities and women and those certified as disadvantaged.
In New York State, billions of dollars have flowed through this patchwork of programs in recent years, although precise figures are hard to compile.
Looks like there’s still a ways to go cleaning up the construction industry.