Two firms that won border wall contracts were previously convicted of defrauding the U.S. government

A third company admitted in court filings to subcontracting an undocumented worker

Despite projected costs in the tens of billions, U.S. Customs and Border Patrol are moving forward selecting contractors for a new border wall along the entire U.S./Mexico Border. Department of Justice records show that two of those firms selected are connected to criminal financial fraud cases brought by the U.S. government.

In a case that reached the Supreme Court of Mississippi, another bid winner was revealed to have used an undocumented worker who was injured on the job.

Estimates vary widely depending on who is doing the talking, but one Senate Democrat projected the total cost of the border wall be as high as $67 billion, while the Department of Homeland Security puts the figure at $21 billion. In this initial phase of construction, Customs and Border Patrol awarded six contractors a total of $3.6 million to build a prototype out of the border wall. The winning vendors are tasked with building a prototype out of either concrete or “alternative” materials.

Pretending to mentor an American Indian business for federal aid

Caddell Construction is a construction firm based in Alabama that has a long history of contracting with the United States government on major projects--they have built military barracks, federal prisons, and recently broke ground on a nuclear training facility for the Navy.

In 2013, the firm paid $2 million to the Department of Justice to settle a criminal case alleging that they defrauded the United States government a decade prior.  According to the Department of Justice, Caddell pretended that they were collaborating with a Native American-owned company on a construction project so as to receive federal reimbursement for supporting minority-owned businesses.  

In connection to the case, the company’s then-small business director Mark Hill was found guilty of making false statements to the federal government. He was sentenced to one year of probation and an additional fine of $100. Caddell paid another $1.5 million in civil penalties.

"The impact of such investigations has resonated throughout the Agency and the government, and served to drive significant improvements in the way agencies spend the public’s money," said a US General Services Administration report describing the Caddell investigation.

Caddell Construction says they are not commenting on the border wall contract.

Writing off personal expenses

Fisher Industries, or Fisher Sand and Gravel, is another bid winner specializing in the manufacturing, mining and delivering of “aggregate products” for highways and bridges. According to court documents, the firm has an excess of $100 million in annual sales.

Under the Obama administration, Fisher Industries has repeatedly been subject to civil fines for environmental or workplace violations. The Environmental Protection Agency and the Department of Justice found that the company’s sand and gravel facilities near Phoenix failed to control dust pollution, which can be harmful to breathe.

The U.S. Equal Employment Opportunity Commission said that the company had also retaliated against two women who complained about sexual harassment in the office. In both of those cases, Fisher Sand & Gravel was subject to a civil fine of $150,000.

State officials in Nevada and Wyoming have both rejected construction bids filed by Fisher Industries because of criminal investigations connected to the company, according to a recent report in Reveal News.

Former Fisher Industries owner David Fisher was sentenced to ten years in prison in a 2005 child pornography case. In 2009, the Department of Justice accused then-president Michael Fisher of having employees write off his personal expenses as business expenses–a practice Michael and Tom Fisher openly engaged in, according to a judge who sentenced Michael, despite family members’ express concerns.

The sentencing judge in the case wrote that the Fisher brothers “chose to also ignore their sister's concerns and thumbed their noses at the federal government, a tactic no reasonable person would ever understand in light of the annual net earnings of the corporation.”

Michael Fisher pleaded guilty to charges that he defrauded the United States government and the IRS and was ultimately sentenced to 37 months in prison.  His brother, Tom was never charged and currently serves as one of Fisher Industries’ presidents.

The company did not return messages, but told Reveal News that “we are extremely excited and grateful” to work on the border wall.

A court decision about undocumented workers

The press office at Customs and Border Patrol has not yet responded to questions about its choice of contractors. But lucrative as the contract may be, bid winners can also expect major geographic and legal obstacles and widespread protests. The owners of several Hispanic-owned businesses who submitted bids said they received death threats, while local governments are proposing boycotts of any firms that bid on the border wall. Other companies have reportedly submitted bids as a form of protest against President Trump’s immigration policies.

The political implications of the border wall can also pose a logistical problem for construction firms. Undocumented immigrants often find work in the construction industry. It’s a tactic, immigrant right groups' say, that employers use to their advantage to cut corners on costs and worker safety.

Bid winner W.G. Yates & Sons, or Yates Construction, a major firm based in Philadelphia, Mississippi, is tasked with building two prototypes of the border wall, one from concrete and the other from “alternative” materials.

While building a new hospital in Mississippi, Yates Construction hired a subcontractor of their own to pour the concrete, something that isn't uncommon in the construction industry. But the design wasn’t right and, as the workers poured concrete,  the scaffolding collapsed. A group of injured workers sued Yate Construction, the hospital and the project’s architecture firm in 2010.  

Yates, along with the hospital, countered in court documents that one of the injured workers “allegedly was not an American citizen and was therefore not lawfully employed.” It is unclear from the court documents when Yates discovered that the firm they had subcontracted used an undocumented worker. (The company has not yet returned messages).  

The case reached the Supreme Court of Mississippi, which ruled that Yates was protected from lawsuits because of their workers’ compensation policy. But in the same ruling, the court did decide that, generally, undocumented immigrants are still entitled to sue after workplace injuries. “...if an undocumented  alien were prevented from bringing an action against his employer for negligence, it would even encourage employers to hire undocumented aliens,” the court reasoned.

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