Engineering firm fined $1M for illegal donations

A major New Jersey engineering firm admitted Thursday that it made illegal campaign contributions, was fined $1 million and was banned from working on government contracts in the state for 10 years.

Birdsall Services Group entered guilty pleas in state Superior Court in Toms River to money laundering and making false representations for government contracts.

Prosecutors had charged the Eatontown firm made hundreds of thousands of dollars in corporate political contributions through its employees to evade New Jersey's pay-to-play law. The firm got millions of dollars in public contracts for which it should have been disqualified.

"This is a victory for the public and for all who believe that government contracts should be awarded fairly and openly, not handed to politically connected firms that pay for the privilege with campaign contributions," said First Assistant Attorney General Thomas Calcagni.

"Justice demanded that this company not continue to profit from years of criminal conduct that unlawfully skewed the public contracting process in its favor," added Elie Honig, director of the state Division of Criminal Justice.

The deal also obligates the firm to cooperate with an ongoing prosecution of individual defendants. Seven company executives or shareholders including former CEO Howard Birdsall, face conspiracy and money laundering charges and have entered not guilty pleas. Two former employees of the company's marketing department previously pleaded guilty to participating in the scheme and are awaiting sentencing.

Birdsall previously agreed to pay the state $2.6 million to settle a civil forfeiture action filed by the attorney general in connection with the criminal case. The $1 million Birdsall must pay under the plea agreement is in addition to that settlement amount.

The company filed for bankruptcy in response to the state's forfeiture action, and the settlement, which was approved by a bankruptcy court judge, included a requirement that the firm set up a $1 million fund to pay any fines, penalties and restitution arising from the criminal case.

A spokesman for the attorney general's office would not say whether any of the recipients of the illegal donations could face prosecution.

On June 5, the bankruptcy judge approved a sale of Birdsall's assets to a California-based engineering company, Partner Assessment, for $5.6 million, which the judge will use to pay Birdsall's obligations.

Prosecutors allege that instead of Birdsall Services Group making corporate political contributions to campaigns and political organizations that would disqualify it from public contracts awarded by government agencies, shareholders and employees made personal contributions of $300 or less, which do not have to be reported.

The state claims multiple personal checks were bundled together at Birdsall Services Group and sent to the campaigns or political organization. The shareholders and employees were then illegally reimbursed by Birdsall, directly or indirectly, through bonus payments. The firm also omitted the illegally reimbursed contributions in documents filed with the Election Law Enforcement Commission and with government agencies that awarded the company contracts.

The attorney general's office said the scheme continued for more than six years.

The fine and ban on government work will become official when the company is sentenced Aug. 30.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC