Government investigators said they learned the companies' claims that they were small, minority-owned businesses were misleading, finding that they were part of a larger minority-owned firm and ineligible for small-business contracts, ProPublica reported Monday.
The U.S. Air Force and U.S. Army awarded the companies 112 stimulus projects, federal contract records indicated. The Air Force suspended the firms from new federal contracts Sept. 23, more than a year after the investigation started.
Air Force Lt. Col. Ann Stefanek told the New York non-profit publication stimulus projects were awarded by officers at military bases who wouldn't have known about any problem unless a contractor was suspended or debarred. Stefanek and Army Maj. Jimmie Cummings said the work had been satisfactory and neither branch planned to cancel the stimulus contracts awarded before the firms were suspended.
Scott Amey of the non-partisan Project on Government Oversight said the case highlighted a lapse in oversight in the $787 billion stimulus plan in particular and federal contracting in general.
"Was there any disclosure of the contractors' missteps prior to them receiving the stimulus money?" he asked.
Air Force documents indicate Craig Jackson, who owns Sanders Engineering in Yorba Linda, Calif., created several businesses that were owned by friends and family, but managed and controlled by him or his companies, ProPublica said. Over the years, 19 companies controlled by Jackson "received more than $700 million in government contracts to which they may not have been legally entitled," the Air Force said.