October 30, 2014

Engineering

Culture of Trust

Rocked by a $36-million embezzlement scheme, PBS&J finds the same corporate culture that got it into trouble may help it weather the storm.

Cynthia Barnett | 3/1/2007


No regrets: Tom Barry, a longtime Department of Transportation official who served as the agency's secretary from 1997 to 2003, went to work for PBS&J in 2003 as a senior vice president in charge of Florida transportation operations. He says in the wake of PBS&J's recent problems, old friends have asked him if he's sorry he took the job. "I tell them it's reinforced my decision to join the company," Barry says. "The way the company has handled this throughout the process and the transparency ... it's been a huge positive in my mind." Photo: Gregg Matthews

In November, with outside auditors digging into its own books, OOCEA decided to put longtime monopoly contracts out to bid, including the PBS&J contract that has earned the firm more than $82 million over the past quarter-century.

But overall, Clary and others say the quality of the firm's work and the trust it earned over nearly 50 years in business helped maintain goodwill with clients. The company also has been able to weather the financial blow, in large part thanks to the no-debt business philosophy carried forward from Budd Post, John Buckley, Bob Schuh and Alex Jernigan. "They always made sure they could pay the bills, even if it meant personal sacrifice," says Phillip Searcy, an independent board member who worked for PBS&J from 1972 until his retirement in 2001. The firm had in reserve accounts the nearly $60 million required to pay its lawyers and accountants and repay clients.

The biggest question mark that remains for PBS&J, its employees and clients is an ongoing FBI investigation into illegal campaign contributions at the firm that was sparked by the embezzlement probe. Federal officials found DeLoach illegally contributed to U.S. Sen. Mel Martinez's campaign in 2004 and asked four PBS&J employees to do the same. Employees and their spouses made contributions totaling $11,000, and DeLoach reimbursed them courtesy of PBS&J. Zumwalt says the practice is strictly forbidden at the firm and was part of the fraud. The FBI has declined to comment on its investigation.

While the damage to the firm's reputation and finances has been painful, PBS&J employees say the blow to the firm's culture hurt the worst. After becoming president in 2000, Zumwalt had redoubled efforts to keep the company close and community-oriented as it grew, with efforts such as "Leadership PBS&J" modeled after the Leadership Florida program. DeLoach was a graduate, and Zumwalt held him up as a model of the firm's commitment to succession planning and promoting from within.

Zumwalt also had opened the company's employee-ownership program to all full-time employees. The 45% who owned a piece of their workplace have watched their equity shrink in the wake of the embezzlement. "This was a very family-oriented company, where everybody knew everybody, and everybody was close," says Scott Lawson, senior vice president and national service director in PBS&J's Atlanta office. "It was just like finding out your own brother had done something to destroy the family."

"The way I see it is that we were in Camelot," says Zumwalt. "Now we are coming out of Camelot, and the real world is upon us."

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