After pleading guilty to fraud for how it operated its military privatized housing, Balfour Beatty Communities continued to engage in the same practices that had landed it in legal trouble years earlier, according to a new Senate investigation.
The report, “Mistreatment of Military Families in Privatized Housing,” is the result of an eight-month study by the Senate Permanent Subcommittee on Investigations into Balfour Beatty’s operations at Fort Gordon, Georgia and Sheppard Air Force Base, Texas.
The findings are the subject of a subcommittee hearing scheduled for Tuesday when service members, a spouse and a military family housing advocate are expected to testify about living conditions in Balfour Beatty housing at Fort Gordon and Sheppard Air Force Base. Officials from Balfour Beatty are also expected to testify.
In December, Balfour Beatty Communities pleaded guilty to one count of major fraud against the United States, following a Justice Department investigation of the company’s practices from 2013 to 2019. The company was sentenced to pay $65 million in criminal fines and restitution, serve three years of probation, and work with an independent compliance monitor for three years.
“Instead of promptly repairing housing for U.S. servicemembers as required, BBC lied about the repairs to pocket millions of dollars in performance bonuses,” Deputy Attorney General Lisa O. Monaco said at the time of the sentencing.
According to the new Senate report, the subcommittee alleges those practices continue. Investigators “found that Balfour’s practices since 2019 at the bases it examined mirror Balfour’s practices between 2013 and 2019 that led to its December 2021 guilty plea for fraud,” the report states.
Subcommittee investigators reviewed more than 11,000 pages of records from Balfour Beatty, and additional documents from military families and former employees. They interviewed more than a dozen military family members. They reviewed medical records and analyses from physicians who treated military families, and information from 11 current Balfour Beatty employees, and received briefings from defense officials, Government Accountability Office officials and advocacy groups.
One finding was that the staff at Fort Gordon “frequently ignored or delayed responding to urgent requests from military families to address conditions such as mold and roof leaks that threatened the families’ health and safety,” according to the report.
The report describes the experiences of eight military families. One Army wife described her experience at Fort Gordon beginning in May, 2020 when the family noticed their roof was leaking and reported it to Balfour Beatty. The maintenance staff decided an outside contractor was needed, but the family waited for months. The leak continued, and caused a section of the ceiling in a hallway to collapse on Aug. 14, 2020.
On Sept. 29, she wrote an email to Balfour Beatty: “Four months later and still no contractors have yet to be sent to my home…. We are now 30+ days into having the ceiling cave in, …. And nothing has been done about it to date. I have yet to hear from the facilities manager in any capacity. I have called him multiple times and sent the video to him and the supervisor the night it happened. A leak is a life, health, and safety issue in and of itself, so I am pretty confident this hole falls into the same category.”
The Senate investigation began in August, when Sen. Jon Ossoff, D-Georgia, chairman of the subcommittee, visited Fort Gordon and heard from service members and families about issues in their housing, which is owned and operated by Balfour Beatty Communities. That company is responsible for housing at 55 Army, Navy and Air Force installations.
Officials from Balfour Beatty Communities have not received a copy of the report, a spokesperson said. But the company does “take issue with the suggestion that the problems that were the subject of the [Department of Justice] resolution have continued,” she said, in a statement to Military Times.
“The company has put in place rigorous new compliance and assurance procedures to prevent such behavior. In addition, it has implemented strict mold control procedures, and has devoted a great deal of time, effort and money to ensure that work orders are promptly entered into [the electronic maintenance work order system.]
“Finally, the company always responds to maintenance requests promptly.”
Although some other privatized housing companies have also been criticized for ongoing issues with military housing, no others were named in the report. Information was not available from the subcommittee on whether there will be similar investigations.
According to the Senate report, other families reported issues with leaks and mold, and the subcommittee found evidence of missing mold work orders and other inconsistencies. Balfour Beatty failed to ensure the accuracy of its work order data at Fort Gordon, the report alleges. The reality of families’ experiences is different from the work history of the homes, investigators contend. “These incidents appear to point to corporate oversight weaknesses where various parts of the business may not be adequately, effectively or accurately entering critical data” into the work order database, the report states.
The subcommittee investigators also found examples since late 2019 that failures to properly remediate mold growth in military housing “subjected medical vulnerable spouses and children” to mold exposure that was “deemed by their physicians to pose significant health risks.”
The focus of this report is to use the families’ stories “to shine a light to expose the continued practices of Balfour Beatty,” a subcommittee staff member said in a background briefing to reporters. “The company has continued to engage in very similar practices” that put families’ health and safety at risk, he said. This includes throughout the two years following the Justice Department investigation.
The report notes that while the investigation focused primarily on eight families at Fort Gordon and Sheppard Air Force Base, as a case study, the information gathered shows that many other families experienced similar issues. In addition the advocacy group Armed Forces Housing Advocates has helped 350 families deal with problems related to Balfour Beatty’s military housing operations, since May, 2021. Those problems range across the seven states where Balfour Beatty has those operations.
The report and hearing are the first steps in the process of investigating and holding Balfour Beatty accountable, a subcommittee staff member said. “This isn’t going to be an issue that goes away the day after the hearing,” he said.
Congress has been focusing on this issue for several years. In the fiscal 2020 National Defense Authorization Act, lawmakers mandated comprehensive reform provisions to address pervasive issues with mold, rodents and other health, safety and environmental hazards in privatized military housing.
Military families testified about frustrations over inability to get some of the private companies to fix the problems, and the lack of assistance from their military leadership on some bases.
Some military families have sued their privatized housing landlords over the last several years because of the issues of mold, rodents, water leaks, and problems with repairs.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.