On September 14, 2017, Pacific Architects & Engineers Incorporated (PAE) settled a whistleblower lawsuit alleging the company did not follow proper vetting procedures for its personnel that performed and billed work to the U.S. State Department. The $5 million settlement resolves allegations without any determination of liability of contract violations.
PAE is a company originally incorporated in California in 1955. The company first served the rebuilding of Japan after WWII and has since grown to participate in projects and government contracts globally. In 2007, already a contractor with the U.S. State Department, PAE was assigned the task of training U.S. personnel in Afghanistan and conducting extensive background checks and documentation for those in high-risk positions. Reporting the names, nationalities and background information on contract employees in these positions was a requirement of the contract for work between PAE and the U.S. government.
After its investigation, the U.S. Justice Department alleged that “PAE was aware of these contractual requirements but did not comply with them for extended periods.”
Robert Palombo, the former PAE manager, filed this whistleblower lawsuit against his employer alleging that this was the case and that PAE continued billing for work done under the contract.
PAE, however, contends that “The invoices specifically identified the names of employees for whom the lawsuit alleges that requisite notice was not made. The employees whose background investigations were allegedly inadequate were not involved in any security incidents or injuries. The services called for under the contract were provided in full.”
Without admitting fault or liability, PAE has decided to settle these allegations of improper vetting by paying the U.S. government $5 million, $875,000 of which whistleblower Robert Palumbo is entitled to receive.
This post was written by Tycko & Zavareei Whistleblower Practice Group of Tycko & Zavareei LLP © 2017
For more legal analysis go to The National Law Review
