US law gives whistleblower £2.2m reward for sparking investigation into contract inflation.
Less than a week after being told it must pay out £10m for its part in the Hatfield rail crash Balfour Beatty has been fined in a US court for overcharging American rail firm Amtrak. Balfour Beatty, the Massachusetts Electric Construction Company and a number of other US firms have been fined a total of £14m for inflating the costs of installing an overhead system to provide electricity to trains on part of the network known as the Northeast Corridor.
Assistant Attorney General Peter Keisler said: “this settlement sends a clear message that the Justice Department will investigate and resolve financial fraud perpetrated by contractors of federal grantees.”
Ian Cartwright, the former Balfour Beatty employee who blew the whistle on the company, has been awarded £2.2m - under US law whistleblowers are given a proportion of the fines levied against companies under the False Claims Act.
Attorney Kevin J. O’Connor said that the provision gave a “powerful financial incentive” to employees who might otherwise be too intimidated to come forward with their suspicions.
The case was settled after a lengthy investigation by the Justice Department, the FBI and Amtrak’s Office of Inspector General. But despite being fined for the second time in less than seven days, Balfour Beatty appeared unabashed, describing the settlement as amicable and denying any wrong-doing. It said that it brought closure to the dispute and was “the appropriate course of action”.