Congress probe: U.S. military landlord put families at risk even after fraud plea

By Joshua Schneyer and M.B. Pell

(Reuters) - Balfour Beatty (OTC:BAFYY) Communities, one of the U.S. military's largest private landlords, continues placing the health of service members and their families at risk even after pleading guilty last year to defrauding the U.S. government and being levied a $65 million fine, a Senate investigation being released Tuesday found.

During their eight-month probe, Senate investigators said they found evidence of environmental hazards at two military housing communities, including mold, faulty gas furnaces, roofing leaks and asbestos concerns, according to the report released by the U.S. Senate’s Permanent Subcommittee on Investigations.

Senate staff also said they unearthed inaccuracies in documentation of military housing maintenance by Balfour Beatty, like the earlier ones identified from 2013 to 2019 in a Department of Justice case that resulted in the company pleading guilty to defrauding the U.S. government last December.

At the bases examined in the congressional probe – Army Fort Gordon in Georgia and Sheppard Air Force Base in Texas – Balfour Beatty’s housing management practices have continued to “put the health and safety of military families at risk,” the report said.

On Monday, Balfour Beatty said in a statement that the company had not yet seen the Senate report and was unaware of any recent improper practices. The company has enacted a new incentive fee compliance program and new mold prevention procedures as well.

“The company always responds to maintenance requests promptly,” the statement said.

In 2019, Reuters described how some Balfour Beatty employees falsified maintenance documents at Air Force bases to help the company qualify for lucrative incentive fee payments. Service members were exposed to asbestos, vermin, mold and raw sewage.

The Reuters reports prompted an investigation by the Air Force and Justice Department.

The subcommittee findings were released ahead of a hearing scheduled for Tuesday, “Mistreatment of Military Families in Privatized Housing,” at which senators including Jon Ossoff, a Georgia Democrat who chairs the subcommittee, plan to hear from military members and question company executives including Balfour Beatty Communities president Rick Taylor.

Service members are expected to describe their experiences in Balfour Beatty housing and health problems they believe were triggered by mold and other hazards. The subcommittee is scheduled to call on Balfour executives to testify under oath, according to a hearing witness list.

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The subcommittee said its investigation relied on visits to military bases and 11,000 pages of records, including work order data and internal company communications, a dozen interviews with military families and interviews with 11 current and former Balfour Beatty employees. The company operates 43,000 homes at 55 Army, Navy and Air Force installations across the United States, the report said.

Balfour Beatty Communities is a unit of British infrastructure conglomerate Balfour Beatty Plc (BALF.L). It is one of several major housing companies that serve as landlords on U.S. military bases under a decades-old housing privatization program.