New York contractor lost $4B of contracts in wake of bribery, bid-rigging allegations
- As its company executives prepare to defend themselves against bribery and bid-rigging charges at trial later this year, Engineering News-Record reported LPCiminelli has stopped acting as a general contractor and has moved forward with a program management and development program after losing nearly $4 billion in contracts.
- LPCiminelli executives were charged in 2016 with allegedly paying bribes to state officials in order to win the construction contract for the $750 million Tesla solar panel factory in Buffalo, New York. As rumors began to surface in 2015 about an investigation into the company, LPCiminelli immediately lost almost $1 billion in contracts, which increased to a total of $3.9 billion.
- Since the indictments, LPCiminelli, which appeared on ENR's 2016 Top 400 Contractors list, has auctioned off its equipment and tools, laid off 10% of its workforce and two Ciminellis, one of whom was charged in the case, have formed new companies. As part of the criminal case, other developers unrelated to LPCiminelli were charged as well. The LPCiminelli executives all have have pleaded not guilty to the charges.
In February 2017, attorneys for the three LPCiminelli executives charged in the case asked a New York City judge to dismiss all charges against their clients or at least move the trial to Buffalo where the crimes allegedly occurred and where many witnesses for the defense live. The trial, according to The Buffalo News, is still set to be held in the U.S. District Court in Manhattan.
The Tesla project in question is part of New York Gov. Andrew Cuomo's Buffalo Billion initiativeto draw $1 billion of investment into Western New York. The solar panel factory reportedly increased local construction employment by 1,500 jobs, and was part of the post-recession recovery that saw an additional 26,000 construction jobs in the Buffalo-Niagara area as of 2015.
While New York state and New York City law enforcement officials have made it a priority to combat fraudulent activity in the construction industry, charges against those who commit acts involving bribery, kickbacks and bid-rigging are being aggressively pursued by other states. For example, in June 2017, a Tennessee contractor was sentenced to three years in prison and ordered to pay restitution for giving kickbacks to a Kentucky state official in order to win, ironically, a jail expansion project.
Also, last April in California, several individuals, including a former state Veterans Affairs official, were charged in a case of alleged bid-rigging on a renovation contract for a U.S. Department of Energy building at Lawrence Berkeley National Laboratory in Berkeley, California.
- Engineering News-Record Bribe Charges Take Toll on NY Contractor
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