Digging up kickbacks in Connecticut construction

Masons, landscapers, electricians and drywallers, will nod and say it’s part of the business here in Connecticut and it can’t be stopped – kickbacks.

Exactly how big of a problem kickbacks are in the construction business here is unclear. Could be pretty small, but certainly, if it’s widespread, it could be one reason why wages for laborers are so low here, yet construction costs have been so high.

That it exists is clear. Several subcontractors, who won’t give their names for fear of reprisals, have said they’ve been asked to pay fees for jobs by some general contractors and property managers. And there are cases of government officials also doing this, but the FBI has been cracking down on that at least.

In the private sector, court cases are surfacing for other matters that have exposed the practice. Most recently, businessman Joseph Gabriele of Stamford was convicted Wednesday of inciting injury to persons. He was allegedly trying to hire a hitman to break the legs of a contractor who wouldn’t pay kickbacks for jobs. Gabriele intends to appeal the conviction.

More than a year ago, a Stamford mason was sentenced in federal court to more than a year in jail for tax evasion and structuring payments. He said he landed a job at a big Greenwich state and was told to keep getting jobs, he had to pay a kickback in cash.

It goes beyond a simple dinner, which the mason said he originally thought was an appropriate way to say thanks for the job. After lavishing an expensive meal on a property manager and the man’s wife, he said he was told it was an insult and the fee was 20 percent of  the job.

The problem is not isolated to just Connecticut, either and it sometimes leads to outright fraud.

The Defense Department Inspector General revealed Thursday in 2012, it investigated former U.S. Army Major Christopher West and a co-conspirator for receiving bribes from DoD contractors while deployed to Bagram Airfield, Afghanistan.
According to the report, West fraudulently verified the receipt of concrete bunkers and barriers that were never received in exchange for payments. The contractors fraudulently billed DoD for the undelivered items, and paid West and his co-conspirator a portion of the money.
West pleaded guilty to conspiracy to commit bribery, bribery and conspiracy to commit mail fraud. He  was sentenced to 60 months in prison and ordered to pay $500,000 in restitution.

Here in Connecticut, contractors are in a difficult situation. Jobs are not plentiful right now in the industry and paying the kickback could mean the difference in keeping your home and feeding your family.

Rob Varnon