By Tara Hoke
In this column, a sampling of cases drawn from the news media demonstrates the importance of ethical standards in preserving the public trust, illustrating the great personal and professional costs of abusing this trust for selfish gain.
Situation
Following a period of expansive growth in its research funding efforts, a mid-Atlantic university’s federal grant spending passes the $500,000 mark, triggering a legal requirement to conduct a formal audit of its grants program. The audit reveals evidence of questionable spending by a grant recipient from the university’s civil engineering faculty. This faculty member has billed several thousand dollars to a federal grant for research equipment and materials, but the receipts substantiating these expenses describe items with no apparent connection to the funded research — among them, purchases of clothing, shoes, home furnishings, and personal electronics. Further investigation reveals similar transactions by the faculty member on an earlier research grant, bringing the total to more than $15,000 in suspect invoices over an 18-month period.
Elsewhere, the new finance manager of an East Coast engineering firm is troubled by credit card statements from a senior engineer’s company card. While the engineer’s job duties include client acquisition and relations, the manager feels the amounts charged by the engineer as “business development” or “entertainment” were excessive and not in line with company gift policies. The finance manager shares her concerns with a firm executive, who authorizes an internal investigation.
The investigation uncovers that the senior engineer had a secret romantic relationship with the firm’s previous finance manager, who was also responsible for reviewing the engineer’s credit card bills. Together, the engineer has made (and the former manager has approved) nearly $100,000 in purchases for personal travel, entertainment, and luxury goods over the past three years.
In another instance, a California-based engineering professor receives a federal grant of $250,000 to conduct research through his small startup company. The professor’s application states that funding is needed for research expenses and to support the work of his company’s eight employees, but in fact the company has no other employees and the professor conducts the work using university equipment. In addition, the grant award includes stipends for graduate students working with the professor, but the professor misleads his students to believe that they are required by university policy to pay a portion of their stipends back to the professor.
When an employee of the funding agency contacts the professor to request timesheets and invoices for a routine compliance check, the professor attempts to satisfy the agency with falsified documentation, but the subterfuge is unsuccessful. Federal investigators ultimately learn that most of the grant money has been applied to the professor’s home mortgage and other personal bills.
Finally, an assistant city engineer in the southern United States is charged with managing funds deposited by developers with the city during the permit entitlement process. While the city commonly requires developers to provide a performance bond to guarantee completion of a project, developers who wish to avoid the cost and trouble of procuring such bonds can elect to put down a cash guarantee instead. The city holds the cash deposit until the required work is finished, at which point the developer may apply for a return of their deposited funds.
Unfortunately, the city is suffering from a tremendous backlog in processing these refund requests, and the assistant city engineer concocts a scheme to take advantage of this backlog. He creates a series of shell companies, many with names similar to those of legitimate developers, and processes refund checks in the names of these shell companies into bank accounts that he himself controls. With the city believing the refunds have been issued, and the developers having no reason to question the continued backlog, the engineer’s scheme goes undetected for more than four years. By the time an anonymous tip to law enforcement finally exposes his scheme, the engineer has diverted more than $500,000 in developer refunds for his personal use.
Question
If the individuals in these cases were ASCE members, what would the code of ethics say about their conduct?
Discussion
In discussions of engineering ethics, much has been written about the importance of trust between engineering professionals and the clients, colleagues, and customers who rely on them. Because the practice of engineering involves highly specialized and potentially life-critical applications of knowledge, clients and users must place a great deal of trust in an engineer’s ability to deliver safe and reliable engineered structures, facilities, and systems. They invest this trust in large part because of the profession’s commitment to upholding high ethical standards — most notably, the profession’s commitment to “first and foremost, protect the health, safety, and welfare of the public,” as noted in Section 1a of the current code.
Of course, as the above cases demonstrate, engineering professionals are often entrusted with important financial decisions as well, whether by clients, employers, taxpayers, or others. Since clients and others rely on an engineer’s expertise to provide engineering solutions, it follows that they may likewise defer to the engineer when assessing the costs of these solutions. Moreover, since engineering projects often involve large contracts, complex financial transactions, and unique characteristics, it may be difficult — even when oversight is attempted — to assess whether an engineering professional has made judicious use of resources.
Recognizing the importance of trust in financial matters between engineers and the persons they serve, ASCE’s Code of Ethics has from its very beginning included language cautioning the engineer against the pursuit of personal profit at the expense of his or her ethical duties to others. Perhaps the most compelling statement about the ethics of financial stewardship can be found in the language of the 2006 ASCE Code of Ethics.
Fundamental Canon 6 of this code states, “Engineers shall act in such a manner as to uphold and enhance the honor, integrity, and dignity of the engineering profession and shall act with zero tolerance for bribery, fraud, and corruption.” Guideline a under that canon adds, “Engineers shall not knowingly engage in business or professional practices of a fraudulent, dishonest, or unethical nature,” while 6b directs engineers to “be scrupulously honest in their control and spending of monies, and promote effective use of resources through open, honest, and impartial service with fidelity to the public, employers, associates, and clients.”
While today’s code lacks the specificity of this earlier language, the ethical underpinnings of this duty of financial integrity can still be found throughout the code. For example, Section 1d of the current code directs engineers to “have zero tolerance for bribery, fraud, and corruption in all forms,” while Section 3a expresses the engineer’s obligation to “uphold the honor, integrity, and dignity of the profession.”
If the cases described above were reviewed under today’s code of ethics, it is all but certain that the Committee on Professional Conduct would find that these engineers had failed to adhere to zero tolerance for fraud or to uphold the integrity of the profession. Moreover, the CPC would likely deem their misuse of client, employer, and taxpayer money to have violated Section 4a’s stricture to “act as faithful agents of their clients and employers with integrity and professionalism,” and the CPC might even feel it represents a failure under Section 2’s directives to “use resources wisely” and “mitigate adverse societal, environmental, and economic effects” in their work.
The above cases also demonstrate that the decision to abandon financial integrity often entails an unwelcome legal cost as well as an ethical one. Each of the engineering professionals in these cases faced criminal prosecution for their conduct. The professor who bought clothing with his grant money received three years of probation, while the remainder served prison terms ranging from 18 months to four years. Each was also subject to criminal fines and ordered to repay the proceeds of their unlawful acts.
In sum, these cases reflect a powerful lesson about the engineer’s ethical obligation to be honest and transparent about spending. No matter how strong an incentive or pressure may be in the moment, a decision to chase personal profit at the expense of legal and ethical norms rarely yields gains that are worth the costs.
Tara Hoke is ASCE’s general counsel and a contributing editor to Civil Engineering.
This article first appeared in the September/October 2026 issue of Civil Engineering as “Fraud Comes before a Fall.”
