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Engineers Must Avoid All Types of Corruption

Jan 1, 2018


Situation

The political corruption investigation that would infamously lead to the resignation of then-U.S. vice president Spiro Agnew in 1973 is said to have begun with an anonymous phone call to the Internal Revenue Service, stating that agents would find "interesting things" going on in Baltimore County, Maryland.

Initially, the investigation focused its attention on Dale Anderson, a prominent Democratic politician who had succeeded the Republican Agnew as Baltimore County executive. Under pressure from prosecutors, Anderson's county administrator, William Fornoff, pleaded guilty to a minor tax violation and agreed to co-operate with investigators in return for immunity from further prosecution.

Fornoff claimed that he had served for several years as a middleman between Anderson and local engineering and architecture firms, collecting payments for Anderson in exchange for preferential treatment in the awarding of no-bid county contracts. When confronted by investigators with details of Fornoff's claim, several of these design professionals readily accepted immunity deals of their own-offering in return testimony that they had made payments to both Anderson and his predecessor, Agnew, and that their payments to the latter official had occurred not only during Agnew's term as county executive but also through his two years as governor of Maryland and into his vice presidency.

One of the testifying engineers, an ASCE member and principal of a small Maryland firm, explained that his involvement in the scheme had begun when his firm first sought to branch out from its service to a strictly private client base. The engineer had hoped that a balance of public and private work would shield the growing firm from fluctuations in demand in either arena; however, the engineer encountered surprising difficulty in procuring even a single public contract for his firm. The engineer was repeatedly told that his firm was too small or lacked the necessary large-project experience to qualify for work.

While the principal had heard rumors of these schemes, he initially did not pay much heed to those rumors. But then his firm was invited by the county to compete for a large sanitary works project, an area of practice in which the firm held particular expertise. The engineer said that, after a strong proposal and series of fruitful meetings with officials from the department of public works, he felt sure the project was his company's-only again to be told that the contract had been awarded to another firm.

Soon afterward, the engineer was approached by a member of the county executive's staff with an offer to assist the firm in securing work from the agency. The engineer met with the county employee, and a deal was struck; the engineer would pay small sums of money to county officials in exchange for public contracts for his firm.

While his role in this scheme spanned nearly a decade, the engineer insisted that his participation had always been with great reluctance and with the belief that it was a temporary evil. The engineer claimed that only large firms and firms with unique specialties were able to resist the pressure to pay kickbacks and that it was his hope that his firm would eventually "mature out of" the need to take part in the scheme.

As reports of the investigation and trial blanketed the national news media, more than 100 ASCE members signed a petition urging the Society to take action against members named in the scheme. The petition was forwarded to ASCE's Committee on Professional Conduct (CPC), which opened a case.


Question

What provisions of the ASCE Code of Ethics were violated by this member's actions?

Discussion

When this case came before the CPC, articles 8 and 9 of the ASCE Code held that it was "unprofessional and inconsistent with honorable and dignified conduct and contrary to the public interest" for any member to "exert undue influence or to offer, solicit or accept compensation for the purpose of affecting negotiations for an engineering engagement" or to "act in any manner derogatory to the honor, integrity or dignity of the engineering profession"-two principles that are today captured in fundamental canons 5 and 6.

When contacted by the CPC, the ASCE member declined to offer any comment on his actions, claiming that his lawyers had advised against making any statements beyond those in the public record. As such, the CPC could only base its decision on the information provided in news coverage and in transcripts of trial testimony, and they found that these sources provided ample evidence of ethical transgressions by the member. Accordingly, the CPC held that the member had violated articles 9 and 10 of the code and recommended expulsion from the Society. In accordance with ASCE's rules, a hearing was held by the Board of Direction, which upheld the expulsion and directed that notice of the action be published in a Society publication. In fact, this member was one of four ASCE members expelled from the Society because of his involvement in the contract kickback scheme. (Read "Spiro Agnew Indicted in Engineering Contract Kickback Scheme" .)

While a common theme in pay-to-play cases such as this is that "everyone is doing it," it is important to recognize that many engineers can and do resist the pressure to participate even in the most widespread unlawful schemes. During his testimony at Anderson's trial, Fornoff was asked if there had been any engineers who refused to pay money in exchange for work. The official identified two engineers, William R. Kahl, P.E., of Rummel, Klepper & Kahl and William F. Neale, P.E., L.S., of Whitman Requardt & Associates. With regard to the former, Fornoff said that when solicited for payment, Kahl responded: "We won't work that way. We don't do business that way."

The stance taken by these engineers was not without cost. News reports published during the Anderson trial noted that the two nonparticipant firms still received public contracts despite their principals' refusal to pay kickbacks but not as frequently as those who were part of the scheme. In Anne Arundel County, a neighboring county whose administration was also implicated in the scheme, a local news investigation of county contracting found that Kahl's firm had been passed over on four contracts over a two-year period, despite the county department of public works' endorsement of their bids, while Neale's firm had been rejected for an additional five contracts. In all cases, these contracts had been awarded to firms alleged to have paid kickbacks.

These engineers and their firms escaped the heavy consequences ultimately faced by those who did take part in the scheme. Several of the engineers who testified against Anderson and Agnew lost their professional licenses, and a number of firms were barred from competing for public works contracts for a period of time. In addition, all professionals and firms implicated in the scheme suffered an incalculable degree of damage to their reputations and loss of public trust from the exposure of their involvement in political corruption.

The example offered by the engineers who resisted the pressure to participate in the Baltimore kickback scheme serves as a valuable reminder of the consequences arising from an ethical dilemma. While earning work by less scrupulous methods may yield attractive results in the short term, it is essential from an ethical and a practical perspective to weigh those benefits against the long-term costs that may arise when such activities are exposed to legal or professional scrutiny. While this case was considered more than 40 years ago, similar corruption cases are not uncommon, and ASCE substantially strengthened canon 6 of the Code of Ethics in 2006 to include "zero tolerance for bribery, fraud, and corruption."

--TARA HOKE


Tara Hoke is ASCE's general counsel and a contributing editor to. Hoke thanks J. Michael Potter, P.E. (retired), for sharing news coverage of the Anderson trial and for his recommendation that this column call attention to those who did not succumb to the pressure to take part in this scheme.

Members who have an ethics question or would like to file a complaint with the Committee on Professional Conduct may call ASCE's hotline at (703) 295-6151 or (800) 548-asce (2723), extension 6151.