So, we're getting $458 million from Bechtel/Parsons Brinckerhoff et al. $100 million is going to be spent immediately. The contractors are released from criminal liability, and not prohibited from working on MA projects in the future.
Obviously US Attorney Michael Sullivan and AG Coakley are going to spin this as a victory. Sen. Bob Hedlund may well have political reason to call it a capitulation. Another of the plaintiff's lawyers says the state got “snookered”:
TOM HEALEY: The Commonwealth and the citizens of the Commonwealth have been snookered. It's that simple.
THYS: Wellesley Attorney Tom Healey sued Bechtel for a construction accident that killed a worker when the Big Dig was being built. He settled for an amount he's not allowed to disclose. He says it would be normal procedure for Bechtel to review the designs and the project, and to figure out what could go wrong and how much it would cost.
HEALEY: They would not simply have offered 400 million dollars without getting some estimate or idea of potential errors and potential future costs. They've capped their losses at 400 million dollars. If the slurry walls fail, we may be looking at a one- to two-billion-dollar failure.
And I think I speak for many Massachusetts folks that
- $458 million sounds like a lot of money; but
- We have no idea how to evaluate if this is a fair and just settlement or not.
The Big Dig is an unprecedented project, and an unprecedented mess. What's fair? Anybody know? What are our criteria?
From the blockquote:
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p>From the Globe article:
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p>So, which is it?
…it seemed like a great deal to me, given that we’ve gotten essentially gotten bupkes in the past. But then, I don’t know much about these things, and I assumed the state wouldn’t have gotten that deal unless Bechtel could find it OK. Still, how much more do “the experts” think we should have gotten? The real question is whether the $414million is enough to pay for the repairs we need, which it sounds like it is.
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p> Still, this doesn’t inspire a lot of confidence:
What else could she possibly say?
She could say that, prior to accepting the settlement the costs and potential costs were evaluated by professional engineers who estimated the possibility of various failure scenarios.
Given that a P.E. looking at the system — not for free mind you — would be smart enough to estimate the probability in a range so wide as to be useless, we’d gain no new knowledge.
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p>You’d learn something like: the chance of a major catastrophe — one costing between $0.05 billion and $5.0 billion, causing injury and/or loss of life to 0-500 people, and causing the complete closure of one or more sections of tunnels from 0 to 1000 days has a probability of occurring between 0 and 30%.
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p>More to the point: if an engineer looked at the system and could justify a significant failure probability exceeding 1% [or perhaps even a tighter threshold], they’d spend lots of money investigating that scenario to more precisely estimate that probability. Even a 1% chance of failure would almost certainly be worth alleviating in terms of finances.
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p>I’m no P.E., but I suspect that if any engineer thought there was even a 1% chance of a significant failure, you’d have heard about it.
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p>
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p>You wouldn’t be any smarter, but it wouldn’t be free.
As a state Senate aide, I was charged at one point with reading every thing I could find on the costs and overruns and “robbing Peter to pay Paul” that was going on around the Big Dig.
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p>One of the claims made by Kerasiotes to rationalize the “on budget” claims was that the project was so safe and free of construction-related accidents that the state would get back 100% of $179 million in funds that had been set aside as a self-insurance fund to cover future liability claims. (This was actually a drop in the bucket compared to the overruns, and was also an example of the rationalizing that was going on.)
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p>I wonder where that $179 million is now?
I had only been employed on the Central Artery Tunnel Project JV for six months before I became aware of the size and scope of one of the largest rip offs in the history of the USA. Every day was another million(s) dollar revelation. The enormity,complexity and pervasiveness of the larceny was beyond belief. The Big Dig phone directory was a Who’s Who on Beacon Hill. Every pol seemed to have most of his family on the payroll. There were hundreds of “make believe ” jobs.
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p>I had a friend who was an engineer overseeing one contract. The prime contractor while mid contract went they to “plans and changes” to seek additional $$$$$ for additional steel (rebar) and concrete that was required to complete the job. 25 million dollars worth. My friend went down to the job site to specifically inspect this change order. It was entirely fabricated, a hoax, a fraud. When he balked, he was advised by the Comm. of Mass. “leg breakers” that he and his company would be gone at the end of the business day. He signed the approval. I went to the Comm of Mass. Inspector Generals office which was on the same floor as my office and related the entire story. She didn’t want to hear it. She didn’t want to know NOTH’N! I advised my friend that unless he wanted to be talking to a grand jury ten years hence he had better get out of there which he did. I resigned shortly after my conversation with the alleged chief of financial oversight AKA Office of the IG.
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p>The entire Big Dig was an ongoing criminal conspiracy. I don’t know if the governors were aware of it, but everyone in the legislature was aware and actively engaged in the pillage. US Attorney Sullivan knew it. Harshbarger, Reilly and Coakley knew it. They have as much blood on their respective hands as Bechtel does. It’s absolutely sickening. A trucking company on the south shore, who’s president and VP went to prison on another rip off had been stealing from the Big Dig for over ten years. The government knew it. Why is Coakely meekly making this go away? Because after they indict half the former and present legislature the trials would go on forever. No onein law enforcement did anything. Welcome to MASSACHUSETTS!
especially when they fall in line with your standard griping and claims.
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p>So, either produce some evidence or STFU. Seriously. You’ve made an enormous claim, and I for one am flabbergasted that you didn’t chase this more. Inspec Gen doesn’t want to hear about it? Contact Romney’s office. Contact your state rep/sen office. Hell, contact the Globe, Herald, NYTimes, WaPo, Washington Times, and the Wall Street Journal. For $25M worth of fraud, you’d likely be eligible for whistle-blower reward of what, $150,000?
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p>In short, either (a) you ought to be ashamed of yourself for ignoring your civic duty of following up further on the opportunity to save you and your fellow taxpayers $25 million, or (b) you ought to be ashamed of yourself for lying.
I’m not suggesting that there wasn’t fraud in that case or in other cases. I have no evidence one way or the other.
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p>I just don’t buy your story at face value.
I am a lot older and many times wiser than you at this point in time. I did my duty to God and country.I spoke to the IG representative and made a few phone calls and as a matter of fact even went to a media outlet. The response: “Oh ya, we’ll get right on it.” “Gee thanks Charlie, thanks for the info.” “We’ve been aware of this for sometime, we are looking into it.” Right. Remember who the senate president was?
STOMV—-you have got to be one of the most naive folks on this board. The government only investigates and prosecutes when it benefits them. Ergo the press conferences on Tuesaday morning with 24 hours advance notice, kleeg lights etc. Otherwise it’s a press release on Friday afternoon of a three day weekend, preferably Thanksgiving and they can stretch it into four days.
The bigger the rip off or calamity, the lesst the hoopla. Some nickel dime caper gets a brass band, politicians, prosecutors, hacks etc. This is why Coakely is like a whipped dog. 400 million dollar settlement and 100% absolution. Please. Martha Coakley is not Vincent Bugliosi.
The original question was why are they settling for peanuts. I gave you your answer. If you don’t like it. YOU express your indignation.
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p>When you graduate—-you plan on hanging around MA? BTW. Telling someone to STFU, when they weren’t urinating on your parade is gauche and uncalled for. You catch more flys with honey.
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p>
nt
Sorry, no. For my money stomv is one of the more erudite BMG commenters.
“The government only investigates and prosecutes when it benefits them.”
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p>I wish they did that with the IRS. If they did, the probability of an audit would go up with the amount of potential recovery. You’d think that if you cheated on your taxes and made millions it’d be more likely for them to audit you as when you cheated and made chump change. As it is potential recovery amounts don’t factor into audit decisions at the IRS.
Thank you, MCRD for having the intelligence to see the truth. I tried once on this site to caution about the Big Brotherism that infects this kind of mentality ( cf. “Healthcare”) and was treated nastily by the host. It’s about time that they hear the truth about the “Big Dig.” Excellent post. May the truth finally come out.
The Dept of Defense has the best weapon ever created. It is a stamp with red ink that is labelled TOP SECRET!
This was no secret. It was brazen and out in the light of day! Nobody cared and if someone made noise they were fired. The primary problem was thean MassHighway, then the Turnike Authority were the client. Then the legislature went to Bechtel and all the subordinate contractors and started twisting arms for good jobs at great wages and then the corruption really started to take hold.
Sue ’em again, if there’s something they haven’t fixed already that falters again, I think this seems reasonable.
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p>The $50 million dollar+ nugget makes this a good deal for Coakley, IMHO.
Several things struck me when I listened to Martha Coakley on WBUR this morning. One point she made was that you can take a corporation to criminal court but even if convicted of manslaughter (or even murder) a corporation can not be put into prison and would only have to pay the maximum fine of $1000 for manslaughter.
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p>Another point was that Bechtel was so large and internationally active that even if Massachusetts barred them from doing other projects for MA – it wouldn’t make much difference to them.
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p>Another point – $400 mill. (or S458 mill.) would not break them – or even cause them to break a sweat. If not quite the cost of doing business, it’s a tiny amount compared to their $20 billion annual receipts (from Here and Now interview with Sean Murphy, Globe Reporter).
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p>There was a time in our history when corporations could be held to account by the state (or federal gov’t.) Charters were granted for a given amount of time and could be revoked. There were “public good” clauses in their charters.
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p>The fact that corporations have “personhood,” despite being a legal fiction, and claim the same constitutional rights as living, flesh-and-blood beings allows them to get away with murder – not to mention negligence, shoddy work, and manslaughter.
“Another point was that Bechtel was so large and internationally active that even if Massachusetts barred them from doing other projects for MA – it wouldn’t make much difference to them.”
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p>I wouldn’t dismiss this too quickly. Don’t underestimate the negative PR that goes with debarment.
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p>”Another point – $400 mill. (or S458 mill.) would not break them – or even cause them to break a sweat. If not quite the cost of doing business, it’s a tiny amount compared to their $20 billion annual receipts (from Here and Now interview with Sean Murphy, Globe Reporter).”
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p>On the other hand, what it did was essentially erase whatever profit was earned on this particular job and probably created a net loss. Think about it. One of your biggest high-profile job spanning almost two decades, but all that work gets you in the red.
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p>Totally agree about personhood, though. In the 100% free market system the incentives are to make profit at the expense of whatever else. Incentives for good corporate citizenship only exist as far as bad citizenship could hurt your marketing.
400 million? They can write out a personal check for 400 million. Now!
…
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p>You do understand the difference between a construction contract and a construction management contract, don’t you? The only way they made that much in profit on the job is if every single construction firm on the project operated as a subcontractor to Bechtel. Didn’t happen.
One, while one cannot throw a corporation into prison, it is possible to throw employees of said corporation into prison.
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p>Two, as a follow-on to the above, regardless of whether the corporation cannot be thrown into prison, it is possible to subject the corporation the analog of capital punishment: revoke the corporate charter(s). That would lift the “corporate veil” and subject the shareholders for the liabilities of the corporation.
I listened to Coakley say that she couldn’t get evidence sufficient to convict any specific individuals, though.
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p>A blot on an otherwise good post. I do believe the club that Coakley, et al, weilded was Federal disbarment. Meaning that they would not be able to work on any project in Massachusetts or anystate where the project was significantly funded by federal dollars. That’s a real hit to a company that does large infrastructure projects, most of which come with federal dollars (and strings) attached…
to this day to drive through it.
And “hosed” does not even begin to describe it.
that’ll show those bozos at Bechtel and Beacon Hill! Stick it to ’em!