After guilty pleas, settlements, investigations, extra investments, more staff and promises to do better from contractors and the Pentagon, at least one military housing company is still failing to remediate hazards in service members’ homes and inadequately recording complaints made by those troops and their families.
Balfour Beatty Communities (BBC), one of the largest private military providers for the Defense Department, behaved similarly in the last two years to how it did from 2013 to 2019 when it was under investigation by the Justice Department and Congress, according to a new report from the Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations.
“The inquiry found numerous examples since late 2019 of poor conditions in Balfour’s military housing and disregard of safety concerns and environmental hazards that put military families at risk,” the report states.
Those conditions include failure to properly remediate mold growth in houses that were deemed health risks, putting families in houses with clogged HVAC vents and gas leaking from furnaces, failure to fix collapsed and punctured ceilings and ignoring concerns about asbestos.
“These poor conditions persisted well after Richard Taylor, one of Balfour’s two co-presidents, publicly pledged in testimony before Congress on December 5, 2019, to improve Balfour’s ability to monitor repairs and responses to conditions such as mold, to prioritize the health and safety of residents, and to prepare homes for move-ins,” the report states.
As of Monday, BBC said they had not seen the report
“We are disappointed that the report does not accurately reflect the company’s level of commitment to its military residents and their families or acknowledge the significant steps that have been taken to address the small number of complaints that were discussed,” a BBC spokesperson said. “The report includes multiple inaccuracies and mischaracterizations, which the company tried to correct before it was issued and will address again following the hearing. While we continually seek to improve, as an operator of 43,000 residences we are inevitably going to have to deal with challenges. The company remains focused on the safety, health and wellbeing of its residents and on providing quality homes supported by prompt and effective customer service and maintenance support.”
It’s been three years since lawmakers first started looking into the issue of substandard military housing on multiple bases nation-wide encompassing almost all of the private companies managing homes for DoD.
Those investigations have led to a tenant bill of rights, funding from Congress to hire more housing inspectors and at least one company completely bowing out and handing its contract over to a new company.
Last December, BBC pleaded guilty to one count of major fraud worth $33.6 million in criminal fines and entered into a $31.8 million restitution civil settlement.
“Instead of promptly repairing housing for U.S. service members as required, BBC lied about the repairs to pocket millions of dollars in performance bonuses,” said Deputy Attorney General Lisa O. Monaco in a statement at the time. “This pervasive fraud was a consequence of BBC’s broken corporate culture, which valued profit over the welfare of service members. Today’s global resolution sends a clear message to companies that if they do not maintain adequate compliance programs, voluntarily self-disclose misconduct, and fully cooperate with the government, they will pay a price that outweighs the profits they once reaped.”
Hunt Companies, another housing contractor, settled its fraud case with DOJ agreed to pay $500,000 to resolve similar issues. Hunt Companies did not admit fault as part of the settlement.
Still, despite the pleas and promises, the Congressional investigation found that BBC has not cleaned up its act.
“The types of improper behavior uncovered by committee at Balfour after 2019 bear striking similarities to the types of conduct which Balfour admitted to in its December 2021 guilty plea for actions it took between 2013 and 2019,” the report states.
What Congress will do about BBC’s actions is still unknown. BBC executives will testify before lawmakers on Tuesday.
Subcommittee officials told reporters that the report is just a first step in holding the company accountable and exposing the continuation of the issue.
One of the biggest problems in reining in the companies is that the contracts with DoD signed in the 1990s are as long as 50 years and often leave the Pentagon powerless to enforce much without completely withdrawing from the agreements.
Subcommittee officials noted that they are not traditionally bilateral contracts and therefore are much more complex in terms of pushing companies to meet certain standards.