Bypassing Procedures and Favoritism with Contractors

Anonymous allegations of kickbacks and favoritism of contractors were levied against an executive of a publicly-traded international transportation company who was responsible for major capital projects at the company. The company turned to Axium to investigate the concerns. Axium performed a review of accounting data relating to the suspect contractors and capital projects and identified that certain contractors had received significant amounts of work and that the invoices for the work, which were approved by the executive, lacked supporting detail required by company procedures. Through extensive email review and interviews of many employees, we established that the executive had close personal relationships with high-ranking representatives of the suspect contractors, including outside investments with some of them. We found that, in connection with work awarded to these suspect contractors, the executive bypassed the company’s procedures relating to bidding, project approval, and invoice review, as well as failing to disclose conflicts of interest. Our interview of the executive further substantiated these findings.