Military housing contractor ignored dangerous filth and misled Air Force, investigation shows

While U.S. service members risk their lives fighting for our country, many of their families live in dirty and dangerous homes. An investigation by CBS News and Reuters has found one of the military's largest housing contractors apparently misled the Air Force to qualify for millions of dollars in bonus payments. The FBI is now investigating.

Balfour Beatty Communities manages 40,000 homes on 55 military bases across the country, and its performance bonuses are estimated to potentially be worth about $800 million over decades-long contracts. At installations like Tinker Air Force Base in Oklahoma City, those bonuses are partially based on data provided by Balfour Beatty -- but documents show some of that data was falsified.

Paige and Nick Ippolito met while serving in the Navy at Tinker Air Force Base in 2015. The pair quickly moved in together, and chose a house on base managed by Balfour Beatty Communities.

"The house was a mess to begin with," Nick said, adding that "The floor downstairs was destroyed completely," and that doors wouldn't close properly. "You name it, there's probably something I could've found wrong with it," he said.

Internal records reviewed by CBS News and Reuters show that within a year, a leak caused a Balfour Beatty maintenance technician to document his concern that the couple's infant daughter could become sick from chewing on flooring tiles that contained asbestos.

"It's very upsetting to know that he was concerned for our child's safety but didn't tell us," Paige said.

"I mean, it's almost heartbreaking," Nick said, adding, "I mean, we already risk our lives everyday, you know, you think you've got your family home safe. And to find out that, you know, you got your kid eating asbestos floor."

Records also reveal that Balfour Beatty falsified its response time. The Ippolito's maintenance records show that the call was put in at 4:32 p.m., and that the task was completed by 4:52 p.m.

"It's a physical impossibility to fix something of that extent in 20 minutes," Nick said. 

At the time, Balfour Beatty employees at Tinker kept two sets of books. Employees first recorded calls on paper, and only entered them into a computer system monitored by the Air Force when a job was nearly completed. This made it appear like the company was responding quickly to residents' problems, and kept it eligible for millions in performance-based bonuses.

Balfour Beatty hired Tina Brown to schedule repairs at Tinker in 2014. Brown said the company "definitely" gave her express directions not to enter calls into the computer when they came in.

"The management was all concerned about appearances and collecting their bonuses and appearing right for corporate," Brown said.

Brown said she recognized that what she was doing was wrong – but that she "just did what I was told."

Balfour Beatty said in a statement that it "has not and does not condone the falsification of records in any way," and that allegations of misconduct at Tinker date "back several years." After being "investigated by the Air Force," the company said, "one employee was found to have acted improperly."

Brown, an hourly employee who received no performance bonus, was fired in 2016. No one else was reprimanded. Now, she's suing for wrongful termination.  

"Do you feel like you were the scapegoat?" asked CBS News correspondent Omar Villafranca.

"Yes, definitely. I know I was," Brown responded.

Balfour Beatty's Tinker base manager at the time told Reuters that the request to doctor maintenance records came from his superiors, and that company training documents instructed employees to "modify and 'correct' work orders" to comply with mandated response times.  

Since 2015, military housing officials at Tinker and two other bases issued more than a dozen warnings about Balfour Beatty maintenance logs. The Air Force only suspended incentive payments last year.

Assistant Secretary of the Air Force John Henderson told CBS News that his office "takes the health and safety of [...] Airmen and their families seriously." When inaccurate data was discovered, the Air Force placed Balfour Beatty "on a corrective action plan" and referred "allegations of fraud" to the FBI, Henderson added.   

The company says it has since worked to "strengthen" its "documentation process" at Tinker. But several families say maintenance and record-keeping problems continue.

When Amber Buckley found mold in the HVAC system of her home on Tinker, she said she called maintenance to report it. "In the beginning they denied that it was mold, they intimidated me - or they attempted to intimidate me, they told me that there's no way to test for mold," she said. "And then they decided that my family's health was their utmost concern, and they were going to fix the problem. So we're still waiting for that to happen."

"I'm a housewife right now. I shouldn't have to go crawling underneath the house to say hey, there's mold right here why don't you come fix this when they just had somebody out here in the same spot and nobody reported it," Buckley added. "My experience thus far has been if I don't look and take pictures and tell them about it, they're not going to do anything -- so there's a possibility that there's problems everywhere, but nobody's going to do anything about it unless I look."

Derek, a naval flight engineer who asked us not to use his last name, lives on base but is deployed more than half the year -- leaving his wife Jennifer and three kids to deal with frequent housing issues.

"The fact that they're actually making a profit, and being able to get their bonuses is just ludicrous," Jennifer said. 

"People need to be held accountable for these conditions, they need to be held accountable," Derek added.

Derek pays $1,400 a month for a house that's had mold, ant problems, and repeated water leaks. Balfour Beatty's maintenance records say all of his problems have been fixed.

There are ongoing investigations into similar record-keeping practices at Travis Air Force Base in California and Fairchild Air Force Base in Washington state, both also managed by Balfour Beatty.