Witchita's Choice for Airport Work Has Troublesome Past

The firm that Wichita city staff has selected to manage the building of a new airport terminal is part of a network of companies involved in an ongoing federal and state corruption investigation at Los Angeles International Airport.

Until they were contacted by The Eagle, officials with the city of Wichita didn't know the company was linked to the probe, in which investigators seek to find whether political donations affected millions of dollars in construction contracts at LAX.

"Sounds serious," said City Manager George Kolb when he learned of the investigation. "It could change our recommendation."

Kolb headed the committee that selected DMJM Aviation, a division of Los Angeles-based AECOM Technology Corp., as the most qualified applicant to oversee the $150 million project to replace the 50-year-old main terminal at Mid-Continent Airport.

A company official told The Eagle that the Los Angeles investigation has no bearing on the Wichita contract.

The city staff has negotiated a tentative contract with the company. That contract is being reviewed by the Federal Aviation Administration and eventually will come before the City Council for approval.

DMJM Aviation is one of 13 operating units of AECOM, which has 18,000 employees worldwide and $2 billion in annual revenue.

Raymond Holdsworth has been president of AECOM since 2000. For seven years prior to that, he was president of Daniel, Mann, Johnson & Mendenhall, better known as DMJM.

The Eagle found that, in addition to the Los Angeles investigation, DMJM-related companies have been involved in at least three other ethical issues in the past five years, including:

A federal trial scheduled for June 21 on allegations that DMJM officials falsified reports in an effort to obtain $21 million in federal earthquake-relief funds to rebuild an abandoned apartment building at a California state university.

A 2000 rebuke by the House Ethics Committee against then-Rep. E.G. "Bud" Shuster, R-Pa., who improperly accepted payments from DMJM and from a billboard trade group for a Caribbean family vacation.

A 2004 New York State Ethics Commission finding that a New York City subway construction manager violated state law by accepting a $2,500 party ticket, golf and a dinner from DMJM+Harris, an AECOM company.

This has raised concerns among some Wichita City Council members about whether they should do business with DMJM Aviation.

"Frankly, it makes me sick," said council member Jim Skelton. "Who in their right mind would do business with somebody who has repeatedly violated ethical and moral standards across the country? We should have nothing to do with them if that's the case.

"If these (cases) are substantiated by city staff, we should run from them."

Inquiries to Florida-based DMJM Aviation were referred to a spokeswoman with AECOM in Los Angeles.

Alexandra Spencer said the company would not respond to questions about individual cases, but did issue a statement to The Eagle on behalf of DMJM Aviation.

"DMJM Aviation was selected for this (Wichita) project based on its extensive experience in the industry and superior performance on aviation related projects," the statement said. "Yes, a few of our sister companies have been mentioned in relation to the matters you asked about. However, it is noteworthy that they have not been the target of a criminal government investigation. Rather, in some of the matters, they were asked to assist the government in its investigation of public officials and they did so."

"None of the matters you asked about involve DMJM Aviation itself or are in any way related to our performance," the statement said.

While Spencer defined DMJM Aviation as an independent operating unit, Holdsworth has said in published reports that all of the AECOM companies work together.

In a June 2001 interview, Holdsworth said that when DMJM Aviation was selected to help American Airlines build its new gateway terminal in New York, five other AECOM companies were involved in the project.

"We presented the proposal as 'DMJM Aviation an AECOM company,' supported by the others and then worked out the roles and responsibilities," he said.

Retired Wichita airport director Bailis Bell said DMJM Aviation's access to the other divisions' expertise was included in their sales pitch to the city.

"That's part of their presentation," said Bell, who did not vote in the selection process but did sit in on the meetings.

Kolb and interim airport director Tom Nolan said city staff selected DMJM Aviation after hearing its presentation; having a consultant prepare an independent cost assessment for the services specified in the contract; and checking the company's references.

"When I say references, (it's) looking at their projects that they've done, people that they worked with, I mean, all of that to help us make a decision," Kolb said. "And, yeah, they are a good company to work with. I mean, they have done some successful projects."

DMJM Aviation has managed construction at some of the nation's biggest airports, including Hartsfield-Jackson Atlanta International Airport; Washington Dulles International Airport and Ronald Reagan Washington National Airport; O'Hare International Airport; Phoenix/Sky Harbor International Airport; Denver International Airport; and Los Angeles International Airport.

In Los Angeles, prosecutors are investigating whether political contributions from AECOM and two of its DMJM companies influenced airport management to take work away from URS Corp. and award the contracts to them.

A federal grand jury has subpoenaed records of the transactions from Los Angeles World Airports, the city's airport authority.

According to records obtained by The Eagle from the Los Angeles City Ethics Commission, DMJM+Harris, DMJM H&N and AECOM gave a combined $50,000, and its subcontractor HNTB gave $100,000, to LA United. These contributions came before the companies were awarded contracts for work at the Los Angeles airport.

LA United is a political group created by Mayor James Hahn to fight a 2002 ballot measure that would have split Los Angeles into two cities.

URS officials said airport officials requested that they donate, but they refused to do so.

DMJM Aviation is a major player in the Los Angeles airport project.

"DMJM Aviation/DMJM H&N are currently providing advanced planning for implementation (of) the largest master plan program in aviation history at LAX," the company Web site said.

The Los Angeles district attorney's office has transferred two lawyers to the U.S. attorney's office to work with federal prosecutors investigating the case, said Los Angeles district attorney's spokeswoman Sandi Gibbons.

The controversy has already forced the resignation of the airport board president and is an issue in the upcoming Los Angeles mayoral race.

HNTB, a Kansas City-based architectural firm, is also heavily involved in the Wichita airport project.

The firm performed the feasibility study that outlined the need for a new air terminal and was selected in December to serve as the project architect.

HNTB spokesman Jeremy McNieve said the company was not part of any political contributions for any contract deal in Los Angeles.

"We were awarded work based on our qualifications and ability to get the job done," he said.

He said the company donated to LA United because it has substantial business interests there and splitting the city would have harmed the economy.

"We support policies (based on) the best economic interests of our company and our employees," he said.

Also in Los Angeles, DMJM is facing a scheduled June 21 federal trial on allegations that it misrepresented or hid key facts to get federal money to rebuild an abandoned apartment complex at California State University--Northridge according to court documents obtained by The Eagle.

A former Cal State engineer, A. Amir Ali, has alleged that DMJM filed false claims with the Federal Emergency Management Agency for money to rebuild Cal State's University Tower Apartments after a January 1994 earthquake that caused massive damage throughout the Cal State campus.

FEMA funds were supposed to be used to rebuild structures that were occupied or only temporarily vacant at the time of the disaster, court records said.

The tower building had been abandoned as uninhabitable three years before the quake.

Meeting minutes show that Cal State officials decided before the earthquake that repairing the building would be too costly and decided to leave it vacant indefinitely.

The suit claims that DMJM officials knew of that decision but misrepresented the status of the building to get FEMA money to fix it up.

A FEMA official has testified in the case that he would not have approved the payments if he had known the building's true status.

Ali brought the case under the federal False Claims Act, through which a private citizen can sue on behalf of the federal government and collect a share of the damages if the case wins in court.

The case was dismissed by a district judge who ruled that Cal State and DMJM were covered by "sovereign immunity," which protects state agencies from false claims actions that stem from the performance of official government duties.

However, the 9th U.S. Circuit Court of Appeals overruled the lower court and reinstated the case against DMJM.

The appellate court agreed that Cal State and its officials were protected from the litigation but ruled that DMJM, a private company, was not.

"Although the district court noted there is no evidence that DMJM employees acted for their own benefit, presumably DMJM received compensation for the $21 million reconstruction... that it would not have received if FEMA had not funded the project," the appellate court opinion said.

Cal State spokeswoman Carmen Ramos-Chandler said the building has been torn down and the site is now a parking lot.

In Washington, DMJM's name was prominent in the congressional ethics investigation of Rep. Shuster.

One of the main findings against Shuster was that he improperly accepted payment from DMJM and the Outdoor Advertising Association of America for expenses from a 1995-96 Christmas-week trip to Puerto Rico.

At the time, Shuster was chairman of the House Transportation Committee and one of DMJM's largest projects was an urban train system for the Puerto Rican government.

"The record establishes that the primary purpose of this trip was recreational," the congressional report said.

"Your sponsors paid for not just a single hotel room but for lodgings that included both a four-bedroom villa and a two-bedroom villa."

DMJM and its agents paid about $5,000 for lodging, meals and other expenses for the trip, congressional records show.

Exhibits attached to the investigative record show that Holdsworth, then the president of DMJM, helped arrange the trip.

Shuster also was found in violation of House ethics rules for allowing his former chief of staff -- whom DMJM was paying $5,000 a month in consulting fees -- to lobby him less than 12 months after leaving government service.

Shuster's answer to the charges was one sentence: "I, E.G. 'Bud' Shuster, admit to the statement of alleged violations dated July 26, 2000."

He resigned from Congress in January, 2001.

Subway gifts

In December of last year, the New York State Ethics Commission fined the construction manager of New York's Second Avenue subway for accepting expensive gifts from AECOM's DMJM+Harris division.

Commission documents show that the company gave the manager, Anil Parikh, a $2,500 ticket to the 2002 New York Transit Museum Gala.

"You knew that the ticket you had received was provided by DMJM, a company doing business with MTA New York City Transit and for which you had official responsibilities," said an ethics commission notice to Parikh.

The company also treated Parikh to $200 worth of golf at a private country club and a $150 dinner, the records show.

In a settlement agreement, Parikh admitted violating New York's Public Officers Law and agreed to pay a $2,000 fine.

Wichita City Council members who have seen The Eagle's research say that they will be taking a close look at the contract with DMJM Aviation.

Mayor Carlos Mayans said he wants to know more about the company before approving the contract.

"We must always try to work with ethical partners," he said. "We want to have a qualified applicant, that conducts business in an ethical way."

Council member Sue Schlapp said, "I can't stand in judgment on any of that (information) at this point."

But she said she would expect a full report from the city staff.

"I'm under the assumption that's being done at this time," she said.