Balfour Beatty said it promptly and effectively addressed the family’s concerns and apologized for the inconvenience. The family said it took four weeks for the landlord to find them new lodging. The company, they added, did not submit work orders to remedy the mold and insects; while they waited, the company placed the family in a hotel and then temporary base housing, which also had roaches.

At the Texas base, Balfour Beatty has a history of maintenance problems. On any given day in 2015 and 2016, it routinely had hundreds of unfinished maintenance requests open, records show.

Persistent leaks plagued residents and workers alike. Staff logs documented the woes: “roof leak thru vent in son’s room,” “kitchen light fixture leaks when it rains” and “water pouring thru smoke detectors.” Other times, homes sat vacant for months or years, magnets for rodents, reports show. The company said it has demolished some homes and is targeting others in “due course.”

When Balfour Beatty filed maintenance reports to the Air Force, any open, late and unfinished jobs most always disappeared from the records. Quarter after quarter, the Air Force bestowed performance bonuses and, many times, praise on the company.

Balfour Beatty Communities, a unit of British infrastructure conglomerate Balfour Beatty plc, is among the U.S. military’s largest housing providers. The company runs housing at 21 Air Force bases as well as 34 Army and Navy bases.

It and other private real estate firms run 98% of military base housing in the United States. Many can earn “performance incentive fees” by meeting quarterly and annual goals, such as quickly responding to resident repair requests. The fees, based on reports submitted by the landlord, are a major source of income, generally worth about 2% of the total rent payments from base service families. At Lackland, the rate is 2.25%, records show.

There, from 2009 through 2018, Balfour Beatty received up to $3 million in management incentive fees. The Air Force department in charge of base housing oversight gave the company high grades in reports, applauding its “openness of honest communication.”

In reality, Balfour Beatty was cooking the books, Reuters found in a review of company records and emails, and through interviews with former staffers.

Every quarter, company leaders pressed on-base staff to hit the quotas so Balfour could collect incentive fees. Often, management demanded staff take whatever steps necessary to obtain the bonuses, including using loopholes to improve the numbers.

Former manager Nelson said she relayed pressure from above to her own staff. Email correspondence document some of the exchanges. “It's not only my ass on the line because of these WO's [work orders], but my boss AND her boss!!!” Nelson wrote to Anderson and other staff in May 2016. “Close the ones that need to be closed - TODAY! I don't care what it takes.”

Five months later, she was fired. The company said it dismissed Nelson for poor performance and that, since her departure, one metric of success, occupancy numbers, has improved from 89% to 98%. Yet records show the occupancy rate actually ranged from 95-97% under Nelson’s watch in early 2016.

Nelson said she tried to balance the need to make her bosses happy by securing the incentive fees, and residents happy by making fixes. She said she lacked the manpower or budget to fully do either.

“I was devastated when I was fired,” she said. “I thought everything I was doing was right; yes I was falsifying documents, but I was telling them, ‘You need to fix this.’ ”

From ‘magical’ to woeful

A former Marine, Nelson took her first job with Balfour Beatty in 2011 at Vandenberg Air Force Base in California. She found Vandenberg housing in good condition, and said Balfour Beatty provided resources to keep it that way. “It was magical,” she said.

In 2013, a Balfour Beatty vice president asked her to take on Lackland, one of the company’s problem bases. She quickly saw a much different picture in Texas. She found unpaid bills, she said, some more than a year old. Local contractors were wary of working for the company, she said. Employees weren’t always qualified to do the work they were assigned, like replacing toxic freon in air conditioners.

Balfour Beatty struggled to convince families to live on base, Nelson told a friend in an email. One in 10 of the 900 homes on base often sat empty, internal occupancy-rate reports say.









“My intention was to fix it,” Nelson said, leading to long days.

The quest to hit maintenance goals never eased. Lackland had eight to nine maintenance technicians, one for every 100 homes. By 2016, each tech was responsible for finishing 15 work orders a day; reports showed as many as 466 open work orders on a given day.

The number of maintenance workers per home is standard for the industry, but the number of open work orders was high, Balfour Beatty said in a statement. Another company base, the Fort Carson Army base in Colorado, had similar rates of open work orders in 2016, internal company records show.

In December 2014, after facing heat from a regional manager asking about unclosed repair requests, Nelson wrote an email to staff: “ARE YA’LL TRYING TO GET ME FIRED?!!!”

Company emails and reports from the first quarter of 2015 show how the records were massaged.

In March 2015, Balfour Beatty was far from hitting its Lackland goals, finishing only 69% of routine work orders on time, according to an internal company maintenance report obtained by Reuters. To pocket the full bonus, it needed to respond to and complete 95% of requests on-time.

Rick Cunefare, a Balfour Beatty area manager, emailed Nelson and others shortly after the close of the quarter. He wanted better numbers.

“We need to get this completed and ensure response and completion scores are over 95%,” Cunefare told Nelson and the managers at four other Air Force bases, including Vandenberg and three bases now under investigation by the FBI – Tinker, Travis and Fairchild.

Cunefare, who is no longer with Balfour Beatty, declined to comment.

Nelson said she knew changing the scores was wrong but was desperate to keep her job and medical benefits. She had just been diagnosed with multiple sclerosis, a potentially disabling disease of the brain and spinal cord for which she was prescribed injections three times a week and routine assessment by neurologists. Her non-verbal, autistic son required costly therapies.

“I had my son’s health to take care of and my own health to take care of,” she said.

Less than two hours after receiving her instructions from Cunefare, Nelson emailed Anderson, the work order clerk, instructing her to change the maintenance records.

“I know you’re really busy, but I’m getting pressure about the Quarterly Maintenance Report and all the results being over 95%,” Nelson wrote. “Will you please take another look at it and make adjustments to ensure we are at 95% response/completion times in all categories.”

“There’s a lot of pressure from upper management to meet those goals, and I guess you could say it doesn’t matter how they’re met.”

After receiving the email, Anderson dived back into the data and changed the completion dates and times to make sure 95% were on time, Anderson told Reuters.

A report submitted by Balfour Beatty to the Air Force states 95.9% of maintenance requests were completed on time during the first quarter of 2015. The Air Force paid the full potential bonus of about $75,000 for the quarter.

The story was similar in other quarters. Earlier, in January 2015, Nelson asked Anderson to change fourth quarter 2014 records, writing, “They need to be 95% or higher.” Later, in June 2015, she told Anderson, “Completion times in April need to be adjusted.”

Nelson was not the first base manager at Lackland to fudge reports, said Anderson, the work order administrator from 2012 until she was let go in October 2016. Anderson said she falsified records every quarter, either under the direction of the community manager or the facility manager, who could not be reached for comment.

Balfour Beatty said it dismissed Anderson for poor performance. Anderson said the company never told her that, telling her instead she was let go for failing to pay rent on the home she was living in at the base. When Reuters first asked the company about the dismissal, it said it was performance and rent-related; later, it changed its response, citing only performance issues.

Push from the top

Across the company, say former managers, the pressure to meet maintenance goals started with Balfour Beatty’s corporate leadership and worked its way down.

Jennifer Benski was Balfour Beatty’s community manager at Malmstrom Air Force Base in Montana from 2011 until 2017. She said regional managers and executives scrutinized maintenance data used to determine bonus payouts: the number of open maintenance requests, the number of late requests and other details. She said her staff regularly closed out maintenance requests as complete before they were finished.

“There’s a lot of pressure from upper management to meet those goals, and I guess you could say it doesn’t matter how they’re met,” Benski said.

For the managers of Balfour Beatty’s 21 Air Force bases and two of the company’s Army bases, the pressure often flowed from the company’s Phoenix regional office.

In June 2015, the administrator in charge of quarterly reports in Phoenix emailed instructions to base managers on how to get “a better completion %” on the reports used by the Air Force to award incentive fees. The instructions suggested base managers make use of so-called exceptions.

When a maintenance request cannot be completed on time because of extenuating circumstances, landlords can file an “exception” so the work order doesn’t count against them. Examples include having to order special parts, jobs requiring multiple stages of labor, or cases in which residents requested a repair slot after a deadline.

In June, Reuters and CBS reported that a regional manager, Rebecka Bailey, directed the former manager at Tinker Air Force Base in Oklahoma to use exceptions to help the company meet its goals in late 2016 and early 2017. Following the report, the Air Force suspended all incentive fees to Balfour Beatty pending the outcome of an independent audit. Bailey, who declined an interview request in May, did not respond to a request for comment for this story.

The Phoenix regional office also told local managers to expect a quarterly report highlighting maintenance numbers they needed to “clean up.”

In October 2015, the Phoenix office sent Nelson one such report, highlighting the response-time metrics that fell short of meeting incentive fee goals. She was asked to “start reviewing/working” them and provide “explanations to increase % complete.”

When base managers hit their goals, the company applauded. “Thank you – well done! All above 95%!!” the Phoenix office wrote Nelson in October 2015.

Work order clerk Anderson said no one at Balfour Beatty or the Air Force inquired to see how the numbers always worked out. “They never questioned me on it,” she said.

Warning signs

The Air Force had been warned of problems with Balfour Beatty’s maintenance documents.

In a 2012 report, the auditing firm JLL, working for the Air Force Civil Engineering Command, said the Lackland housing office had “difficulty validating … the maintenance data submitted by BBC for its quarterly Performance Incentive Fee.” Balfour Beatty staff had entered incorrect or incomplete data, the auditor told AFCEC, which oversees Air Force landlords.

The Air Force continued to pay Balfour Beatty bonuses. From 2012 through 2013, the company received at least a portion of its incentive fees each quarter, the Air Force said. From the fourth quarter of 2013 through 2018, Balfour Beatty received 100% of the bonus fees.

Had the Air Force conducted a relatively simple analysis, it could have spotted how Balfour Beatty was backdating maintenance records, said several former company employees familiar with the maintenance data system. That system allows users to identify when completion times and dates are edited, along with identifying who changed them.

Instead, JLL and AFCEC were generally positive, praising Balfour Beatty for its work order system and its cooperation with the Air Force, site visit reports from 2012, 2013 and 2016 show. JLL declined comment.

All the while, Nelson said she found herself lying to service families to cover up problems. “I cried in front of residents because they showed me the mold,” she said, “and I couldn’t believe I was in charge of the plight they were going through.”

Additional reporting by Joshua Schneyer in New York

Ambushed at Home By M.B. Pell Graphics: Sarah Slobin Photographs: Callaghan O'Hare Photo editing: Corinne Perkins Design: Catherine Tai Edited by Ronnie Greene