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Contractor Guilty in Tribal Pay-to-Play Scheme

Tuesday, November 29, 2016

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The president of a Montana-based construction company faces up to 20 years in prison and thousands of dollars in fines for bribing tribal officials in order to receive lucrative contracts on the Rocky Boy’s Indian Reservation, authorities have announced.

Following a four-day trial, a federal jury convicted Kevin David McGovern and his company CMG Construction Inc., of Billings, of conspiracy, wire fraud and bribery arising from a pay-to-play scheme, U.S. District Attorney Michael Cotter announced.

jury seats
© iStock.com / jimkruger

Prosecutors said McGovern’s company was awarded sole-sourced, non-competitive and unadvertised contracts for projects funded by the federal government, including the Federal Emergency Management Agency. In return, McGovern paid kickbacks to tribal officials.

“The community expects that public officials and contractors handle federal funds with great care,” said Cotter. “When those lines are blurred, and federal funds are abused in the process, the integrity of the political system is in danger. That is why we will continue to vigorously prosecute public corruption in the District of Montana.”

McGovern’s attorney told media outlets that he was disappointed with the verdict and noted that his client was considering his options. U.S. District Court Judge Brian Morris scheduled sentencing for Feb. 16, 2017.

Tribal Official Serving Time

The U.S. Attorney says the scheme, which dates to December 2010, involved Tony James Belcourt—a former representative in the House of Representatives for the State of Montana, the CEO for the Chippewa Cree Construction Corp., and the Incident Commander for FEMA during the floods of 2010.

Also a Chippewa Cree Tribe official, Belcourt was in care, custody, and control of more than $85 million, most of which were federal funds. He and others required contractors to pay kickbacks and bribes to tribal officials in order to receive contracts and contract payments on the Rocky Boy’s Indian Reservation, according to the prosecutors.

Belcourt was previously convicted for accepting bribes and is currently serving a 90-month sentence in federal prison.  

Preferential Treatment

McGovern and his company, CMG Construction, was said to have received $2.5 million in contracts on the Rocky Boy’s Indian Reservation without being required to submit bids to the Chippewa Cree Construction Corporation.

In exchange, McGovern and CMG Construction funneled almost $1 million to Belcourt through a company called MT Waterworks LLC, prosecutors said. Belcourt never provided any services to the company.

McGovern faces a maximum of 20 years in prison and a $250,000 fine, reports said. The company faces a maximum $500,000 fine for each conviction. The jury acquitted McGovern and the company of one count that involved bribery of another tribal official.

Federal courthouse
JC Shepard / Panaramio / CC 3.0

CMG Construction's portfolio includes work on the new $80 million James F. Battin Federal Courthouse in Billings.

McGovern and his other company, MC Equipment Holdings LLC, are set for trial in a different bribery scheme on Feb. 3, 2017, authorities said.

About CMG

CMG Construction, founded in 2004, provides site development, asphalt and concrete construction, structural pier foundations and heavy civil development services in the West and Midwest. The company also has a location in Liberty Hill, TX.

“The company was a subcontractor on the new $80 million James F. Battin Federal Courthouse in Billings and was hired earlier this year by Rocky Mountain College as the general contractor for its $10.5 million initial phase capital project to build a science building and enhance the Herb Klindt Field,” according to the Billings Gazette.

The company did not immediately respond Monday (Nov. 28) to a request for comment on the case.

Rooting Out Corruption

The conviction of McGovern and CMG Construction is the latest in a series of prosecutions and convictions relating to public corruption, fraud, and theft in federal grants, contracts, and programs brought by the investigators and prosecutors of the U.S. Attorney’s Guardians Project, an anti-corruption task force created in 2011.

The case was investigated by the Department of the Interior, Office of Inspector General; Health and Human Services, Office of Inspector General; and the Internal Revenue Service, Criminal Division. It was prosecuted by Assistant United States Attorneys Ryan Weldon, Bryan Dake and Tim Racicot.

   

Tagged categories: Business matters; Criminal acts; Ethics; Fraud; Government; Government contracts; Laws and litigation

Comment from Mark Lewis, (11/29/2016, 4:23 PM)

I wonder if he was convicted in the courthouse he helped to build.


Comment from Dick Piper, (11/30/2016, 8:29 AM)

It is important that he receive prison time not just a fine.


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