Anyone who has little children (or can still remember their early childhood) probably remembers the song, “London Bridge is Falling Down.” We have no reason to believe that London Bridge is really falling down but many U.S. highway projects have been built with inferior steel. A recent criminal case in Philadelphia shows that some companies intentionally import mislabeled steel into the United States for use in government projects.
There are three separate federal laws that require U.S. steel in government funded projects or transportation projects such as bridges. The Buy America, Buy American and Surface Transportation Acts all require either U.S. made steel or a specific waiver. These laws were passed in part to help support our domestic steel industry but there is a safety component as well.
Not all steel is created equally. The steel used to support a bridge needs to be of a much higher quality than steel used in ornamental fences, for example. Each piece of steel sold at wholesale comes with a certification. The cert says not only where the steel was “rolled” or made but discusses its chemical properties and how it was made.
When a company mislabels steel, it is impossible to know of the quality. Although not all foreign made steel is of poor quality, some of the imports from China and certain other countries have a higher percentage of quality issues.
ECL Solutions, LLC, a British company, learned its lesson this week when pleading guilty in federal court from illegally importing Chinese steel and mislabeling it. Prosecutors say the company imported steel for storage racks and sold its products to the U.S. military.
According to the criminal charges, ECL employees removed Chinese identifiers from the steel and used labels that suggested the steel was not Chinese made. It also lied to the military when it claimed its products complied with the Buy American Act.
In a prepared statement, a Homeland Security agent said, “This type of crime not only creates a national vulnerability, it also robs Americans of jobs and their creative ideas, fuels crime, and creates serious public safety risks. HSI [Homeland Security Investigations] will continue work with other federal and local law enforcement partners to stop these criminals from exploiting our ports of entry.”
Recently some major bridge projects have elected to rely on tolls instead of federal funds in an effort to save money and use foreign steel. An investigation in California, however, suggests that foreign steel used in the new San Francisco – Oakland Bay Bridge may have defects and may cost hundreds of millions of dollars in cost overruns if the steel must be replaced.
Whistleblower Awards and Foreign Steel
Foreign steel cases qualify for whistleblower awards under the federal False Claims Act. That is because US transportation funding bills require infrastructure be constructed with US made steel. (For more information, visit our Buy America whistleblower page.)
If you have inside information about foreign steel being used on American transportation and other government projects, that information may entitle you to a substantial cash award. Awards are typically 15% to 30% of whatever the government recovers from the wrongdoer. Because the government is entitled to triple damages, whistleblower awards can increase quickly.
If you have information about foreign steel or other foreign made products being wrongfully used in federally funded projects, give us a call. We have helped our whistleblower clients collect over $100 million in awards.
MahanyLaw – America’s Whistleblower Lawyers