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Guilty Plea in NJ ‘Pay to Play’ Probe

Tuesday, December 11, 2012

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A former New Jersey engineering executive is facing jail time after he admitted disguising illegal campaign donations to help his well-connected firm get around the state's "Pay to Play Law."

Philip Angarone, former director of marketing for Birdsall Services Group, pleaded guilty Nov. 30 before Superior Court Judge Wendel E. Daniels in Ocean County, NJ.

Angarone has told prosecutors that the illegal contributions were underway when he joined the company in 2008, and authorities say their investigation in the case is continuing.

'Corrupt Scheme'

"Mr. Angarone, whose former firm receives millions of dollars each year in goverment contracts, admitted he and others at the firm participated in a corrupt scheme to evade New Jersey's Pay-to-Play Law," said Attorney General Jeffrey S. Chiesa.

The identities of the favored politicians were not released. Birdsall, based in Sea Girt, NJ, did not respond to a request for comment in the case.The company, which dates to 1919, has a vast portfolio of government, municipal, educational and institutional clients in the Northeastern United States.


Philip Angarone pleaded guilty to helping his  company disguise political contributions.

Angarone pleaded guilty to an accusation charging him with third-degree tampering with public records or information and fourth-degree prohibited corporation contributions through employees.

Under a plea agreement, he faces up to 364 days in county jail. He also must forfeit $26,775 that was reimbursed to him by Birdsall Services Group for illegal contributions, as well as any additional contributions returned to him, and he will be barred from public contracts for five years, authorities said.

Sentencing is scheduled for April 26, 2013.

Pay to Play

Contributions by for-profit business entities that have or are seeking New Jersey government contracts—a practice known as "pay to play"—are subject to restrictions. Contributions made before the award of a contract may disqualify a business from receiving a contract, and businesses are prohibited from making certain contributions during the term of a contract.

Angarone told authorities that when he joined the firm in 2008, he participated in a scheme already underway to make illegal political contributions.

Angarone said that he and other shareholders and employees of the firm would make personal political contributions of $300 or less, which did not have to be reported to the Election Law Enforcement Commission (ELEC).

Instead of Birdsall making political contributions that could disqualify it from public contracts, Angarone said he and/or others at the company would then bundle together multiple personal checks and send them to the appropriate campaign or political organization.

Birdsall Services Group
Birdsall Services Group

Angarone said he and others at Birdsall Services Group "participated in a corrupt scheme to evade New Jersey's Pay-to-Play Law," said state Attorney General Jeffrey S. Chiesa.

"Illegal corporate contributions like those in this case undermine the fair and open public contracting process needed to ensure that government agencies strictly serve the public interest, not the interests of politcally connected firms," Chiesa said.

Angarone also said that he and the other shareholders had been illegally reimbursed by the company in the form of added bonus payments. The firm would falsely omit the illegally reimbursed contributions in documents filed with the ELEC and with government agencies that awarded it contracts, he said.

About the Company

On its website, BSG describes itself as a "trusted advisor" for design and engineering clients throughout New Jersey, New York, Pennsylvania, and Connecticut.

The company offers a broad range of services, including design, installation and operation of building systems; site development; energy and environmental consulting; and "turnkey construction administration services for public and private clients."

"Our capabilities include procurement, contractual agreements, inspection, requisition approvals, regulatory compliance monitoring, dispute resolution, field engineering, and project closeout," the company says.

"We have well-established relationships with the contracting community and can facilitate a fair and competitive bid process. We take pride in acting as a forceful advocate for our clients’ interests during the construction phase, and provide a valuable service when disputing/negotiating change orders and other unanticipated project costs.

'Bundles of Checks'

Every for-profit business entity in New Jersey that has received $50,000 or more in government contracts in a calendar year must file the Business Entity Annual Statement (Form BE) with ELEC to report public contracts it has received and reportable political contributions it has made.

"Our investigation into alleged illegal corporate political contributions made on behalf of Birdsall Services Group is continuing," said Stephen J. Taylor, director of the Division of Criminal Justice.

Angarone said that on the Forms BE filed for Birdsall, he and others at the company fraudulently failed to disclose the reimbursed political contributions.

He also said that the firm had filed numerous false Certifications of Compliance in connection with proposals submitted for public contracts, stating that it was complying with pay-to-play rules.

"This elaborate scheme continued for years and involved scores of purported personal contributions that were under the $300 reporting threshold,"said Taylor. "The reality was that the company was sending out bundles of checks to campaigns and political organizations."


Tagged categories: Construction; Criminal acts; Engineers; Government contracts; Politics

Comment from Tom Schwerdt, (1/29/2013, 5:34 PM)

Okay, so - which politicians were getting these illegal contributions, and diverting taxpayer money to reimburse the contractor? The story must go deeper.

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