Construction of the prototypes, slated for San Diego, is the first step in accomplishing President Donald Trump’s campaign promise to build a “beautiful” wall along the U.S.-Mexico border. | Pedro Pardo/Getty Images Border wall contractor once paid $3 million to settle federal fraud investigation

One of the four companies picked by the Trump administration this week for its Mexico border wall prototype paid more than $3 million to settle a Justice Department criminal investigation into whether it defrauded the U.S. government through its participation in a federal “mentor-protégé” program to help disadvantaged small business contractors, records show.

The firm, Caddell Construction Company Inc., a major commercial and industrial federal government construction contractor based in Montgomery, Alabama, did not admit wrongdoing in the 2012 case.


But it entered into a nonprosecution arrangement in which it agreed to pay $2 million and to provide unspecified cooperation with the federal government for two years, Justice Department filings and news releases show. It paid the rest of the money in what appears to be a related case, according to those documents and information contained in the Federal Contractor Misconduct Database of the Project on Government Oversight, an independent and nonpartisan group.

Caddell is a huge firm that has done a large volume of business with the federal government. But some government oversight experts warned that even one case out of many that involves substantial criminal fraud allegations raises additional concerns about a Trump administration project that seems destined for years of controversy, cost overruns and questions about how taxpayer money is spent.

“In the past when we’ve had these politically driven processes and they are moving quickly and you don’t have good contractor oversight, it can go off the rails,” said Laura Peterson, an investigator with the Project on Government Oversight. “Even with large contractors that have done a lot of work with the government in the past, there is always the potential for a bad apple to skew a process wrong.”

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Stephen Spivack, a D.C. lawyer who represented Caddell, did not respond to calls and emails seeking comment Friday afternoon. The Justice Department declined to comment, and representatives of the Mountain Chief Management Services firm of North Dakota, the designated beneficiary of Caddell’s mentorship, could not be reached.

According to the nonprosecution agreement, Caddell in 2003 entered into a contract to provide developmental assistance to Mountain Chief, which was certified as a Native American, woman-owned and economically disadvantaged small business, as part of the Defense Department’s Mentor-Protégé program. It then obtained reimbursement from the Pentagon for related costs.

The Justice Department ultimately concluded that Caddell submitted a large volume of requests for reimbursement for services that were either inflated, not performed or provided in connection with its work with Mountain Chief on other government contracts, according to Justice Department records.

The agreement recognized Caddell’s voluntary disclosure, its “self-investigation of the underlying conduct” and its full cooperation in the investigation, the the department said. But it also deemed the case substantial enough to warrant comment from Assistant Attorney General Lanny Breuer.

In 2013, Caddell paid the United States $1.15 million to settle allegations that it violated the False Claims Act by falsely reporting to the Army Corps of Engineers that it had hired and North Carolina, and Fort Campbell, Kentucky.

Caddell was one of four companies chosen by the administration to build concrete prototypes of the President Donald Trump’s much-touted border wall. Construction of the prototypes, slated for San Diego, is the first step in accomplishing Trump’s campaign promise to build a “beautiful” wall along the U.S.-Mexico border.