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Shaw Construction

The Shaw Group Inc. was founded in 1987 as a fabrication shop in Baton Rouge. Since then, they have evolved into a huge engineering, construction, fabrication, enviromental and industrial services organization with over 19,500 employees in locations around the world. [2]

Contents[hide]

History

The group was founded in 1987 by Jim Bernhard, the Chairman and Chief Executive Officer, and two individuals as a fabrication shop. The company was originally known as Shaw Industries Inc. The company grew by acquiring stock of Alloy Piping Products, Fronek A/DE, Inc, Naptech, Inc., Pipe Shields Inc., United States Crafts, Inc., Merit Industrial Constructors, Inc., Cojafex B.V., Prospect Industries plc, joined with Entergy Corporation to create EntergyShaw L.L.C., Stone & Webster Inc., The IT Group, Inc., Envirogen, Inc., MWR, Inc., Badger Technologies from Washington Group International, and Energy Delivery Services from Duke Energy Global Markets, Inc. In 2006 the company acquired a 20% interest in the Westinghouse Electric Company. The company has grown by 18,000 employees in 18 years.

Power portfolio

The Shaw Group did not own any power plants in 2005. However, Shaw's subsidiaries are currently developing a number of power projects, including the Cash Creek Generation project and the Taylorville Energy Center project.[3]

Defense contracts

The Shaw Group is active in many areas of construction in the global market. As well, their services are called upon by the Department of Defense, ranking 83rd overall between 1998-2003 with a total of $1,139,031,714 in defense contracts. [1]

On January, 22, 2004, Shaw Group subsidiary, Shaw Enviromental & Infrastructure, won a $75,749,910 contract for renovations at the Al Kasik military base in Iraq.

Katrina

After Katrina hit, the Shaw group hired the former head of the Projects and Contracting Office in Baghdad, Charles Hess, who also had experience working at FEMA and the Army Corps of Engineers. [2]

As well, Shaw is one of several companies who won contracts from FEMA who are represented by former FEMA head, Joe Allbaugh. Other clients include Fluor Corporation and Kellogg Brown and Root. [3]

Shaw has been awarded seven contracts to assist in the post-Katrina recovery:

[

DISASTER PROFITEERING:

Will They Do for the Gulf Coast What They Did for Iraq?

Funds to rebuild the areas of Alabama, Mississippi, and Louisiana hit by the storm are flowing quickly. Congress has already approved $62 billion for disaster relief, and the total price tag is expected to exceed $100 billion. "They are throwing money out, they are shoveling it out the door," according toWashington lobbyist James Albertine (John M. Broder, "In Storm's Ruins, a Rush to Rebuild and Reopen for Business," Washington Post, September 10, 2005).

Normal contracting rules have been suspended, so the majority - if not all - of the contracts for hurricane relief and rebuilding will be awarded on a no-bid, cost-plus basis. This is a recipe for fiscal disaster. As Danielle Brian of the Project on Government Oversight has said, this process is likely to attract greedy, self-interested companies: "This is very painful. You are likely to see the equivalent of war profiteering - disaster profiteering." 

Among the politically connected firms that have already received contracts related to Hurricane Katrina cleanup and rebuilding include Vice President Cheney's former company, Halliburton (to rebuild military facilities affected by the storm and to help repair the breach in the levee); Bechtel, Fluor, CH2MHill, the Shaw Group, and Dewberry Technologies to build or repair housing in the region; and the private military company, BlackwaterAssociates, allegedly to guard local buildings. The majority of these firms have been active in the rebuilding of Iraq, where poor performance, overcharging, and outright fraud have been regular occurrences.

Lobbyists have also hit the ground running in an effort to help their clients secure contracts.  Most prominent among them is Joe Allbaugh, who flew to the region before many FEMA officials made their way there.  Among his clients are Halliburton and the Shaw Group, both of which have rebuilding contracts already in hand....

http://www.worldpolicy.newschool.edu/wpi/projects/arms/updates/091305Katrina.html ]

Growth

Formed Shaw Nass Middle East, WLL, a partnership with Abdulla Ahmed Nass, a Bahrainian entity, to operate a fabrication facility in Bahrain.Formed Shaw-Formiconi, CA (now known as Manufacturas Shaw South America, CA), a partnership with Formiconi CA to operate a fabrication facility in Venezuela.Acquired Shaw Sunland Fabricators, Inc which put the company's employee base just below 2,000.Changed name to the Shaw Group Inc and went public with 3.125 million shares on the NASDAQ at $14.50.

Management

Political connections

Contact details

The Shaw Group Inc

4171 Essen Lane

Baton Rouge, LA 70809

Phone: (225) 932 2500

Fax: (225) 932 2661

Website: http://www.shawgrp.com/

Articles and resources

Related SourceWatch articles

References

  1. ↑ 1.0 1.1 Shaw Group Inc., BusinessWeek Company Insight Center, accessed Aug. 2008.
  2. ↑ [http://www.shawgrp.com/about "Who We Are: Overview," Shaw Group Inc., accessed September 2008.
  3. ↑ Existing Electric Generating Units in the United States, 2005, Energy Information Administration, accessed April 2008.
  4. ↑ Press release, "Former NRC Commissioner Moves through the Revolving Door," Project on Government Oversight, September 25, 2007.

External resources

External articles

Wikipedia also has an article on The Shaw Group, Inc.. This article may use content from the Wikipedia article under the terms of the GFDL.

Categories: Climate change | Coal Issues | Energy | Companies listed on the New York Stock Exchange | Corporations | Power companies and agencies in the United States

Palast vult pic: Harvey Wasserstein columbus OH ; Gates asked for 1.1b$ for war, snuck in $9b for 2 nuke power plants p 20-

TEPCO and Shaw (A/E).

chevron backed America's Wetland, climate sustanability sponsor, also shell, API, exxon;  shaw 152  dr cyanide robert twilley  LSU hurricane ctr closed

ln Nofziger set up crew to manip Nuc Reg agency 297 (around time of iran contra?)

shaw jindal biggest contrib; am wetland only backer of berm idea

**Tokyo Electric to Build US Nuclear Plants The no-BS info on Japan's disastrous nuclear operators**

Monday, March 14, 2011

*for Truthout/Buzzflash

*by Greg Palast

*But what will Obama plead?  The Administration, just months ago, asked Congress to provide a $4 billion loan guarantee for two new nuclear reactors to be built and operated on the Gulf Coast of Texas — by Tokyo Electric Power and local partners.  As if the Gulf hasn't suffered enough.

Here are the facts about Tokyo Electric and the industry you haven't heard on CNN:*

The failure of emergency systems at Japan's nuclear plants comes as no surprise to those of us who have worked in the field.

Nuclear plants the world over must be certified for what is called "SQ" or "Seismic Qualification."  That is, the owners swear that all components are designed for the maximum conceivable shaking event, be it from an earthquake or an exploding Christmas card from Al Qaeda.

The most inexpensive way to meet your SQ is to lie.  The industry does it all the time. The government team I worked with caught them once, in 1988, at the Shoreham plant in New York.  Correcting the SQ problem at Shoreham would have cost a cool billion, so engineers were told to change the tests from 'failed' to 'passed.'

The company that put in the false safety report?  Stone & Webster, now the nuclear unit of Shaw Construction which will work with Tokyo Electric to build the Texas plant, Lord help us.

There's more.

Last night I heard CNN reporters repeat the official line that the tsunami disabled the pumps needed to cool the reactors, implying that water unexpectedly got into the diesel generators that run the pumps.

These safety back-up systems are the 'EDGs' in nuke-speak: Emergency Diesel Generators.  That they didn't work in an emergency is like a fire department telling us they couldn't save a building because "it was on fire."

What dim bulbs designed this system?  One of the reactors dancing with death at Fukushima Station 1 was built by Toshiba.  Toshiba was also an architect of the emergency diesel system.

Now be afraid. Obama's $4 billion bail-out-in-the-making is called the South Texas Project.  It's been sold as a red-white-and-blue way to make power domestically with a reactor from Westinghouse, a great American brand.  However, the reactor will be made substantially in Japan by the company that bought the US brand name, Westinghouse — Toshiba.

I once had a Toshiba computer.  I only had to send it in once for warranty work.  However, it's kind of hard to mail back a reactor with the warranty slip inside the box if the fuel rods are melted and sinking halfway to the earth's core.

TEPCO and Toshiba don't know what my son learned in 8th grade science class: tsunamis follow Pacific Rim earthquakes. So these companies are real stupid, eh?  Maybe.  More likely is that the diesels and related systems wouldn't have worked on a fine, dry afternoon.

Back in the day, when we checked the emergency back-up diesels in America, a mind-blowing number flunked.  At the New York nuke, for example, the builders swore under oath that their three diesel engines were ready for an emergency. They'd been tested.  The tests were faked, the diesels run for just a short time at low speed.  When the diesels were put through a real test under emergency-like conditions, the crankshaft on the first one snapped in about an hour, then the second and third.  We nicknamed the diesels, "Snap, Crackle and Pop."

(Note:  Moments after I wrote that sentence, word came that two of three diesels failed at the Tokai Station as well.)

In the US, we supposedly fixed our diesels after much complaining by the industry. But in Japan, no one tells Tokyo Electric to do anything the Emperor of Electricity doesn't want to do.

I get lots of confidential notes from nuclear industry insiders.  One engineer, a big name in the field, is especially concerned that Obama waved the come-hither check to Toshiba and Tokyo Electric to lure them to America.  The US has a long history of whistleblowers willing to put themselves on the line to save the public. In our racketeering case in New York, the government only found out about the seismic test fraud because two courageous engineers, Gordon Dick and John Daly, gave our team the documentary evidence.

In Japan, it's simply not done.  The culture does not allow the salary-men, who work all their their lives for one company, to drop the dime.

Not that US law is a wondrous shield:  both engineers in the New York case were fired and blacklisted by the industry.  Nevertheless, the government (local, state, federal) brought civil racketeering charges against the builders. The jury didn't buy the corporation's excuses and, in the end, the plant was, thankfully, dismantled.

*Am I on some kind of xenophobic anti-Nippon crusade?  No.  In fact, I'm far more frightened by the American operators in the South Texas nuclear project, especially Shaw. Stone & Webster, now the Shaw nuclear division, was also the firm that conspired to fake the EDG tests in New York. (The company's otherexploits have been exposed by their former consultant, John Perkins, in his book,Confessions of an Economic Hit Man.)

If the planet wants to shiver, consider this:  Toshiba and Shaw have recently signed a deal to become world-wide partners in the construction of nuclear stations.*

The other characters involved at the South Texas Plant that Obama is backing should also give you the willies.  But as I'm in the middle of investigating the American partners, I'll save that for another day.

So, if we turned to America's own nuclear contractors, would we be safe?  Well, two of the melting Japanese reactors, including the one whose building blew sky high, were built by General Electric of the Good Old US of A.

After Texas, you're next.  The Obama Administration is planning a total of $56 billion in loans for nuclear reactors all over America.

And now, the homicides:

CNN is only interested in body counts, how many workers burnt by radiation, swept away or lost in the explosion.  These plants are now releasing radioactive steam into the atmosphere. Be skeptical about the statements that the "levels are not dangerous."  These are the same people who said these meltdowns could never happen.  Over years, not days, there may be a thousand people, two thousand, ten thousand who will suffer from cancers induced by this radiation.

In my New York investigation, I had the unhappy job of totaling up post-meltdown "morbidity" rates for the county government.   It would be irresponsible for me to estimate the number of cancer deaths that will occur from these releases without further information; but it is just plain criminal for the Tokyo Electric shoguns to say that these releases are not dangerous.  Indeed, the fact that residents near the Japanese nuclear plants were not issued iodine pills to keep at the ready shows TEPCO doesn't care who lives and who dies whether in Japan or the USA. The carcinogenic isotopes that are released at Fukushima are already floating to Seattle with effects we simply cannot measure.

Heaven help us.  Because Obama won't.

***

Greg Palast is the co-author of Democracy and Regulation, the United Nations ILO guide for public service regulators, with Jerrold Oppenheim and Theo MacGregor. Palast has advised regulators in 26 states and in 12 nations on the regulation of the utility industry.

Palast, whose reports can be seen on BBC Television Newsnight, is a Puffin Foundation Writing Fellow for investigative reporting.

==

SHAW

Fukushima: They Knew

palast

Monday, August 20, 2012

"Completely and Utterly Fail in an Earthquake"

The Fukushima story you didn't hear on CNN

by Greg Palast for FreePress.org

I've seen a lot of sick stuff in my career, but this was sick on a new level.

Here was the handwritten log kept by a senior engineer at the nuclear power plant:

Wiesel was very upset. He seemed very nervous. Very agitated. . . . In fact, the plant was riddled with problems that, no way on earth, could stand an earth- quake. The team of engineers sent in to inspect found that most of these components could "completely and utterly fail" during an earthquake.

"Utterly fail during an earthquake." And here in Japan was the quake and here is the utter failure.

The warning was in what the investigations team called The Notebook, which I'm not supposed to have.  Good thing I've kept a copy anyway, because the file cabinets went down with my office building ....

WORLD TRADE CENTER TOWER 1, FIFTY-SECOND FLOOR

NEW YORK, 1986

[This is an excerpt in FreePress.org from Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters, to be released this Monday.  Click here to get the videos and the book.]

Two senior nuclear plant engineers were spilling out their souls and files on our huge conference table, blowing away my government investigations team with the inside stuff about the construction of the Shoreham, New York, power station.

The meeting was secret. Very secret. Their courage could destroy their careers: No engineering firm wants to hire a snitch, even one who has saved thousands of lives. They could lose their jobs; they could lose everything. They did. That’s what happens. Have a nice day.

On March 12 this year, as I watched Fukushima melt, I knew:  the "SQ" had been faked.  Anderson Cooper said it would all be OK.  He'd flown to Japan, to suck up the radiation and official company bullshit.  The horror show was not the fault of Tokyo Electric, he said, because the plant was built to withstand only an 8.0 earthquake on the Richter scale, and this was 9.0.  Anderson must have been in the gym when they handed out the facts.  The 9.0 shake was in the middle of the Pacific Ocean, 90 miles away.  It was barely a tenth of that power at Fukushima.

I was ready to vomit.  Because I knew who had designed the plant, who had built it and whom Tokyo Electric Power was having rebuild it:  Shaw Construction.  The latest alias of Stone & Webster, the designated builder for every one of the four new nuclear plants that the Obama Administration has approved for billions in federal studies.

But I had The Notebook, the diaries of the earthquake inspector for the company.  I'd squirreled it out sometime before the Trade Center went down.  I shouldn't have done that.  Too bad.

All field engineers keep a diary. Gordon Dick, a supervisor, wasn’t sup- posed to show his to us. I asked him to show it to us and, reluctantly, he directed me to these notes about the “SQ” tests.

SQ is nuclear-speak for “Seismic Qualification.” A seismically qualified nuclear plant won’t melt down if you shake it. A “seismic event” can be an earthquake or a Christmas present from Al Qaeda. You can’t run a nuclear reactor in the USA or Europe or Japan without certified SQ.

This much is clear from his notebook: This nuclear plant will melt down in an earthquake. The plant dismally failed to meet the Seismic I (shaking) standards required by U.S. and international rules.

Here’s what we learned: Dick’s subordinate at the nuclear plant, Robert Wiesel, conducted the standard seismic review. Wiesel flunked his company. No good. Dick then ordered Wiesel to change his report to the Nuclear Regulatory Commission, change it from failed to passed. Dick didn’t want to make Wiesel do it, but Dick was under the gun himself, acting on direct command from corporate chiefs. From The Notebook:

Wiesel was very upset. He seemed very nervous. Very agitated. [He said,] “I believe these are bad results and I believe it’s reportable,” and then he took the volume of federal regulations from the shelf and went to section 50.55(e), which describes reportable deficiencies at a nuclear plant and [they] read the section together, with Wiesel pointing to the appropriate paragraphs that federal law clearly required [them and the company] to report the Category II, Seismic I deficiencies.

Wiesel then expressed his concern that he was afraid that if he [Wiesel] reported the deficiencies, he would be fired, but that if he didn’t report the deficiencies, he would be breaking a federal law. . . .

The law is clear. It is a crime not to report a safety failure. I could imagine Wiesel standing there with that big, thick rule book in his hands, The Law. It must have been heavy. So was his paycheck. He weighed the choices: Break the law, possibly a jail-time crime, or keep his job.

What did Wiesel do? What would you do?

Why the hell would his company make this man walk the line? Why did they put the gun to his head, to make him conceal mortal danger? It was the money. It’s always the money. Fixing the seismic problem would have cost the plant’s owner half a billion dollars easy. A guy from corporate told Dick, “Bob is a good man. He’ll do what’s right. Don’t worry about Bob.”

That is, they thought Bob would save his job and career rather than rat out the company to the feds.

But I think we should all worry about Bob. The company he worked for, Stone & Webster Engineering, built or designed about a third of the nuclear plants in the United States.

From the fifty-second floor we could look at the Statue of Liberty. She didn’t look back.

===

==

*corpwatch

Trailer Parks and Tarps: The Shaw Group and Fluor{nl}by Sam Finn Cate-Gumpert, Special to CorpWatch{nl}August 27th, 2007|

In a burst of optimism, residents of the country’s largest FEMA temporary trailer park for Katrina evacuees named their housing site "Renaissance Village." The virtual town of over 500 white trailers is run by the Keta Group on behalf of the Shaw Group, a major construction company based in nearby Baton Rouge, the state capitol. Set on a 62-acre field in Baker, Louisiana, it has a basketball court, a tent for community activities, laundry rooms and a playground. Carol Spruell of Catholic Charities called it the “Taj Mahal” of FEMA parks.(42)   

But two years later the “renaissance” that residents dreamed of has yet to materialize. Many feel isolated, abandoned and simply want to return home. During the first year after Katrina, residents were already speaking of an oppressive prison-like atmosphere. The site is surrounded by a chain-link fence and protected by armed guards. Residents had to wear identification badges at all times, while security guards blocked all outsider access to the camp and prohibited residents from giving interviews.(43)   

Drug use has become rampant with some trailers used exclusively as drug distribution centers. Furthermore, one resident, Michael Whins, told 225 magazine, a local Baton Rouge paper, that Keta employees took "the lion’s share of donations intended for park residents" such as kids' bikes.(44)   

And recently it turned out that the toxic atmosphere was a literal as well as metaphoric description. The trailers were recently reported to be contaminated with formaldehyde, a known carcinogen.(45) 

The Shaw Group provided services in the Gulf Coast under previously existing contracts with the U.S. Army Corps of Engineers, the National Aeronautics and Space Administration, Jefferson Parish and other local government agencies. Immediately following the hurricane, it won no-bid contacts from the Army Corps and FEMA to assist in the dewatering of New Orleans and to provide temporary housing for displaced families and individuals.(46) 

Shaw’s trailer park contracts are not the only controversial ones. In a May 4, 2006 memorandum, the U.S. House of Representatives Government Reform Committee – which looked at negligence, wastefulness and over-billing in several different kinds of work – singled out Shaw’s performance as problematic. 

The committee’s report examined the so-called "Blue Roof" contracts, where destroyed roofing was to be replaced with blue plastic tarpaulins. When the work was carried out at all, the committee found "consistently inflated charges and unsatisfactory supervision and oversight."(47) 

A month after Katrina hit, inspectors with the Army Corps showed up at one work site where Shaw was supposed to have replaced roofing with the blue tarpaulins, and found that "there was no blue roofing plastic installed despite the contractors assertion of completion." In another location, the Army Corps documents how Shaw "listed 4 times as many square feet covered than was actually covered." The Army Corps also reported that "[Shaw’s] failure to maintain adequate inspection and quality control procedures over its roofing subcontractors and crews has a compounded effect in potentially harming the government." All of the seven locations visited by inspectors were deemed entirely inadequate, and "scheduled for rework"

The company even billed for the same work another contractor, LJC, had done. Out of the 11 buildings auditors sampled, 50 percent showed overcharging. 

Critics say that it was Shaw's high-powered connections that helped it win lucrative no-bid contracts immediately after Katrina. The company’s chief lobbyist is Joe M. Allbaugh, of Allbaugh Company LLC, a former FEMA director (he retired right before the disaster) and long-time Bush supporter. Shaw Group executive vice president, Edward Badolato, was deputy energy secretary under both presidents Ronald Reagan and George Bush senior.

Perhaps that’s why Badolato sounded so confident when he addressed a group of lobbyists and corporate executives attending the Katrina Reconstruction Summit in Washington, DC. There was no need to worry about getting work in the Katrina-devastated South, he assured the eager contractors, "there’s going to be plenty for everybody down there."(48)   

Soon after that remark, Shaw was awarded an initial $100 million no-bid contract that was later expanded. Three other corporations (Bechtel, CHM2Hill and Fluor) won similarly lucrative contracts. Today each of those contracts is worth almost $1 billion.(49) 

The charges of possible cronyism and flawed work are vigorously denied by company CEO Jim Bernhard, who founded the Shaw Group in 1987. Bernhard has overseen the company’s growth from a small pipe fabricator in the energy and chemical industries to a major multinational with approximately 20,000 employees and 170 offices in strategic locations around the world. He argues that Shaw was the logical choice for this work, given the fact that the company specializes in disaster recovery and is the largest corporation in the state. 

At a November 2, 2005, hearing of the U.S. House of Representatives Select Katrina Response Investigation Committee, Bernhard told lawmakers: "These emergency response contract awards were not made without consideration of previous Shaw experience. …. Shaw had the capability, Shaw had the capacity. Shaw was participating in an ongoing solicitation process, but urgent circumstances demanded urgent acquisitions which resulted in the awarding of these contracts, which for the most part are being performed by local subcontractors under federal cost accounting standards and subject to the most stringent of audit requirements."(50) 

These four major contracts are now under investigation by the Department of Homeland Security inspector general. A final report on each company will released in two to three months [fall 2007].(51)

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go to endnotes

go to fact sheet

click here to download pdf version of report

wreck crew:

billions spent on preparedness poast911 did not help in kartina (gb praised Fema when running) Allbaugh cronie hired Brownie then left in charge; bronie opened a lobby shop for disaster releif (ef poison trailers?0 and iraq reconstr ! 142 FEMA absorbed by Homeland, 2/3 brass left for jobs w/ contractors or their lobbyists 143 post katrina no-bid contracts to allbaugh and CH2M Hill Fluor (fdr heritage) and bechtel also Ed badolato Shaw 143-4

russian site has (brides?) BS

*EDWARD V. BADOLATO,:{

Vice President for Homeland Security

The Shaw Group www.shawgrp.com

1717 Pennsylvania Ave., 9th Floor

Washington, DC 20006

Tel: (202) 261-1910

Fax: (202) 261-1948

E-mail:edward.badolato@shawgrp.com :{

Summary:Ed Badolato is the Executive Vice President for Homeland Security for The Shaw Group, a Fortune 500 corporation. He has a unique background in security, infrastructure protection, and risk management dating back over 30 years. His wide range of experience and contacts in these areas allows him to address a full range of security issues with major corporations, the US government, and foreign governments. He has been involved in numerous high profile programs dealing with security, protection of energy infrastructure, and counterterrorism operations. He has operated in the US and countries performing such activities as putting out oil well fires in Kuwait, protecting desalinization plants in Saudi Arabia, security for a nuclear plant in the Philippines, conducting port and cargo security operations in Indonesia, petroleum pipeline security in Colombia, security engineering of facilities for the Panama Canal, oil field security operations in Venezuela, transportation facility security in El Salvador, security assessments in South Africa, aviation security in Zimbabwe, and LNG risk management studies in Lebanon and Syria. 

(1960-1985) Served in the US Marine Corps with duty in nearly every country in the Middle East and Persian Gulf, including tours as the Military Attaché in Beirut, Lebanon, Damascus, Syria, and Nicosia, Cyprus, where he organized various special counterterrorism operations, other security activities. He has commanded Marine units at the platoon, company, battalion, and regimental level, and he served three combat tours in Viet Nam. He is a retired Colonel with extensive experience in protecting critical infrastructure facilitates under combat conditions.

(1985-1990) Deputy Assistant Secretary at the Department of Energy under Presidents Reagan and Bush) where he was the principal director of security, energy contingency planning and international energy security activities. In this capacity, he was the Secretary's key troubleshooter for security, energy emergency planning. He was the principal architect of the US Government's nuclear weapon's security programs as well as all of its conventional energy emergency preparedness activities for oil, coal, gas and electric power facilities. DOE highlights Include: 

● Led security vulnerability assessment programs at each of DOE’s 58 nuclear sites, and coordinated multi-billion dollar upgrades in nuclear facility security countermeasures. 

● Coordinated nuclear emergency response and planning activities. 

● Organized and led DOE's nationwide Transportation Safeguards Program, a $500 million enterprise with hundreds of truck, rail and air assets in an integrated transportation system that provided nationwide shipment of operational nuclear weapons and nuclear materials to military consignees. 

● Oversaw security of petroleum port and pipeline operations, such as the Strategic Petroleum Reserve where he was responsible for the security of the major oil terminal at St. James on the Mississippi.

● Headed DOE efforts to clean up the EXXON Valdez oil spill in Alaska and to prepare the “30 day Report” for President George H.W. Bush. 

● Led a national-level task force in September 1989 to prepare a report on “The Energy Emergency Lessons of Hurricane Hugo" for the State of South Carolina.

● Managed the assessment of the threat and vulnerability of the national power grids, and worked with industry to develop plans for the mitigation of damage to both electric power and natural gas infrastructures from natural disasters, terrorism, or sabotage. 

(1990-2002) President and founder of Contingency Management Services, Inc., an international energy security consulting firm. He led efforts to clean up the bombs and explosives in Kuwait's Umm Ghadir and Wafra oil fields for Texaco and Getty Oil Companies after Operation Desert Storm. In 1995 he was responsible for the security of a Zimbabwean-based cargo airline that provided relief supplies to Liberia. During this period he also conducted hundreds of security vulnerability assessments of critical energy and transportation facilities. 

(2002 to present) CMS was acquired by the Shaw Group in November 2002 and Ed Badolato became Shaw’s Executive Vice President for Homeland Security. The Shaw Group is a Fortune 500 company with worldwide responsibilities and widespread capabilities in the area of protection and response to threats to critical infrastructure systems from both physical and cyber threats. He deals with security programs involving major chemical, energy, and industrial process companies and state governments to prevent terrorist attacks. Some highlights follow:

● Led Shaw contract efforts with New York State Office of General Services (OGS) for conducting the surveys and assessments of selected chemical, toxic or hazardous substance storage facilities

● Led Shaw contract efforts with New York State Office of General Services (OGS) to perform a Survey of the Critical Energy Infrastructure in New York State

● Organized security vulnerability assessments, security planning, and security training for waterside petroleum, gas and electric power facilities 

Professional Organizations and Associations: 

● Chairman of the Board of Directors of the National Cargo Security Council (1995-1999)

● Appointed by the White House as Chairman of the FAA’s Air Cargo Security Working Group to investigate the potential for a terrorist bomb explosion in the crash of TWA 800 in Long Island Sound.

● Member of the White House Interagency Group on Terrorism

● President of the Counterterrorism and Security Education and Research Foundation.

● Board of Advisors for the US Merchant Marine Academy’s Global Maritime and Security Transportation School.

● Member, Transportation Research Board's Task Force on Critical Infrastructure Protection.

● Member, International Society of Industrial Security, the National Defense Industry Association, and the Association of Former Intelligence Officers.

● Board of Trustees of the Chemical and Biological Arms Control Institute.

● Senior energy consultant for the President’s Commission on Critical Infrastructure Protection (1999)

● Member, National Research Council’s Committee on Science and Technology for Countering Terrorism (2002)

● Received the Patriotism Award for Homeland Security Services at the 2005 Veteran’s Inaugural Ball.

References:

Honorable John S. Herrington

Honorable Edwin Meese III

Honorable James R. Schlesinger

}:}:*

'The Bribe Memo' and collapse of Stone & Webster
Lawsuit uncovers failed kickback scheme that dealt firm a huge blow

By Steve Bailey, Globe Columnist  |  March 15, 2006

In Houston we're getting an instructive inside look at just what happened -- and who is to blame -- in one of the most infamous corporate collapses of all time as a jury hears the mountain of evidence against Enron Corp.'s two former top executives, Kenneth Lay and Jeffrey Skilling. But before Enron there was Boston's famed Stone & Webster Inc., which collapsed the year before, leaving shareholders and employees just as empty-handed.

Stone & Webster was once a part of the bedrock of corporate Boston, a proud engineering company that built everything from the MIT campus to many of the nation's nuclear plants. When Stone & Webster finally expired in 2000, after years of mismanagement, well over 1,000 employees were fired, their savings in Stone & Webster stock lost. Other shareholders were also left with nothing.

The media spotlight has long since moved on -- as have the two top executives, Kerner Smith and Thomas Langford, who left Stone & Webster with generous severance packages. But the story of what happened at Stone & Webster continues to unwind in US District Court in Boston. The numerous court filings make for fascinating reading.

Start with what has come to be known as ''The Bribe Memo." The critical memo, written by lawyers for Stone & Webster, lays out in detail a previously unreported secret attempt by the company topay an illegal $147 million kickback to a relative of Indonesian President Suharto to secure the largest contract in Stone & Webster's history. When the kickback scheme finally fell apart, the project faltered, a huge blow to Stone & Webster.

Stone & Webster's outside law firm, the large New York firm of Baker & McKenzie, uses the ''C" word -- as in criminal -- in its 1997 report. Stone & Webster's participation in providing inaccurate data to the US Export-Import Bank, Baker & McKenzie wrote, ''has resulted in a violation of the Federal False Filing Statute and may constitute a part of a conspiracy" with the owners of the Indonesia project ''to defraud a US government agency." The firm said it believed Stone & Webster had also violated Securities and Exchange Commission requirements.

Attorneys for Smith and Langford say it was top management that investigated and rejected the kickback scheme. They also defend the accounting surrounding the Indonesia project, which has become the focus of a shareholders' suit. ''Stone & Webster senior management, under the direction of then CEO and board chairman Kerner Smith, employed exemplary corporate governance practices in responding to a potential violation of law, and he ensured that no foreign bribe was paid," says Jordan D. Hershman, Smith's Boston attorney.

Did a secret kickback scheme help sink Stone & Webster? A court will have to decide. Here's the untold story, according to the court records.

In 1996 Stone & Webster landed a bet-the-company project, a $950 million deal to construct an integrated ethylene and olefins complex in Indonesia, for a company known as Trans-Pacific Petrochemical Indotama, or TPPI. The catch, according to the Baker & McKenzie report: the demand by the project's owner, a relative of President Suharto for a kickback equal to about 15 percent of the project's cost, or $147 million.

First at a meeting in Houston in January 1996 and then in another meeting in Jakarta in July ''the owner made clear that he expected [Stone & Webster] to engage in an over-invoicing scheme under the contract to recycle to him the over-invoiced amounts," Baker and McKenzie wrote. Stone & Webster's general counsel objected, but a division vice president told other executives to ''find a way."

Smith also objected to the payment in a July meeting, the memo says. But the next month, the division vice president wrote the project's owner: ''We are actively exploring methods in which we can reimburse you for any payments in excess of our contract requirements."

By early 1997 Stone & Webster had developed a plan to funnel the payments to the project's owner through a British Virgin Islands company, Gates Commercial Co. Baker & McKenzie was hired to review the arrangement and found Gates was ''merely a conduit to funnel funds to the owner." The Gates scheme was rejected.

Next, Stone & Webster brought in a Korean company, Daelim, as a partner to assume a portion of the contract -- the portion that would include the kickback payment. The problem, however, was that Stone & Webster was aware that the project's financing through the Export Import Bank included the $147 million bribe to the owner. Wrote Baker & McKenzie: ''Inclusion of the $147 million as part of the total project cost in Ex-Im Bank submissions, directly or indirectly, is materially false and inaccurate."

Baker & McKenzie made a series of recommendations to extricate the company from its problems. ''It is, in our opinion, critical to the welfare of the company that these recommendations be implemented," the lawyers wrote. ''Otherwise, the company and certain of its personnel may be implicated in criminal activity. In this regard, we have received the support and endorsement of the CEO and the general counsel. The CEO has instructed the group president and project personnel to implement the recommendations. However, there have been instances where the group has not done so."

Stone & Webster eventually abandoned the kickback scheme, and the project was put on hold or was abandoned -- depending on who is telling the story.

In a lawsuit, the lead plaintiffs -- Ram Trust Services and Lens Investment Management, headed by activist Maine investor Robert A.G. Monks -- say the failure of the Indonesian project left Stone & Webster deep in the hole.

Smith and Langford, they contend, needed time to dig out the company so they claimed the project was merely on hold. And they continued to book hundreds of millions in revenue they never received, say the lawyers, Sidney Liebesman and Jay Eisenhofer in Wilmington, Del.

Monks says Stone & Webster should have more fully disclosed the depths of the problems and taken a charge for the Indonesian project then. But the company did not. Monk's lawyers cite a videotaped presentation that Smith made to employees in Denver in March 2000 in which he said the Indonesian project ''basically went bankrupt" in late 1997. ''Smith added that had S&W taken a charge at that time for canceling the contract as opposed to what it did -- treat the contract as merely suspended -- S&W would probably have gone out of business," the plaintiffs' lawsuit charges.

Like Enron and so many of the other corporate failure stories, the Stone & Webster dispute now playing out in US District Court is at heart about the accounting.

Plaintiffs' lawyers say shareholders who came after the failure of the Indonesian project lost everything. Stone & Webster's stock market value sank from $590 million in January 1998 to next to nothing by mid-May, when the company filed for bankruptcy court protection.

The lawyers cite the sale of 1 million shares of Stone & Webster stock for $15 million to the employee stock plan just a few months before the bankruptcy. ''This rapacious act, impairing the retirement funds of S&W workers, bordered on criminal misconduct," the plaintiffs say in court papers. They have targeted Stone & Webster's accountants, PricewaterhouseCoopers, and the insurers in the suit.

Attorneys for Smith and Langford say the executives acted absolutely properly. Smith objected to the kickback scheme when he was first told about it, lawyer Jordan Hershman says, and hired Baker & McKenzie to investigate when he learned his original orders had not been followed. Indeed Baker & McKenzie, while highly critical of others in the company, is supportive of Smith: ''The CEO has acted consistently in accordance with our advice."

Hershman and John Donovan, Langford's lawyer, defend the accounting as appropriate, and approved by the outside accountants. The proof, they say: The project was eventually built by the Shaw Group, which bought Stone & Webster's assets. That project, however, was in China and not Indonesia, and built by another owner. The plaintiffs' attorneys say it was a different project altogether.

Many of the themes in the current lawsuit echo those in a lawsuit the Shaw Group previously brought against Smith. In that lawsuit, the Baton Rouge, La., construction and engineering firm charged Smith ran the company ''right into bankruptcy," and challenged his severance package, which the suit said exceeded $10 million. That lawsuit was eventually settled.

Everyone lost in Stone & Webster -- some more than others.

Today Langford is an executive for a construction firm in Greece. Smith lives in a $2 million, 18th century home in Falmouth, with 5 1/2 baths and four fireplaces. He runs a consulting firm, Internet Power Inc., out of his home. Stone & Webster's employees, on the other hand, lost not only their jobs, but much of their retirement savings. The final bill: about $123 million in company stock in their 401(k) and employee stock ownership plans.

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902. READ ''THE BRIBE MEMO"The full text of the document is available at http://boston.com/business.

© Copyright 2006 Globe Newspaper Company.

 Read the 'bribe memo'

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