Military housing company allegedly falsified records as families lived with roaches and black mold

New evidence of military housing fraud

A joint CBS News and Reuters investigation discovered new evidence of potential fraud inside the military's privatized housing program, where some military families live with roaches and black mold. A former employee at Lackland Air Force Base in Texas described the practices of falsifying reports in order for a housing contractor to qualify for big bonuses.

Teresa Anderson answered maintenance calls for Balfour Beatty Communities at Lackland Air Force Base in San Antonio for nearly five years. She said maintenance issues could take days or weeks to fix — if they were fixed at all. On paper, everything was above board, but she said the pressure to falsify records came from management, CBS News correspondent Omar Villafranca reports.

The allegations are similar to practices at an Oklahoma base that CBS News and Reuters investigated in June that is also operated by Balfour Beatty. The company manages 40,000 homes on 55 military bases across the country.

"I told them, I said, this is lying. It's not right," Anderson said.

"You had over 1,000 homes that you were responsible for. Did you have enough staff to cover that?" Villafranca asked.

"No," Anderson said. "We were only allotted to have nine technicians."

"How is that physically possible?" Villafranca asked.

"It's not," she said.

As work orders piled up, wait times grew. Yet, emails reviewed by CBS News reveal instructions from Anderson's supervisors that "completion times ... need to be adjusted" ... to "ensure" that records showed "over 95%" of work orders were resolved on time. Anderson said "it was always below" 95%.

By reporting a high on-time completion rate, Balfour Beatty remained eligible for big bonuses worth more than $2 million over the last 10 years at Lackland alone. The bonuses are paid from service members' pay checks.
 
"I kept telling them, we can't be closing out work orders that aren't complete," Anderson said. She said she thought about quitting but didn't because she "needed the money." 

Anderson said she felt pressure from community manager Stacy Nelson who wrote in one exchange from 2016, "It's not only me on the line ... but my boss AND her boss!!!" She then ordered Anderson and others to "close" out maintenance requests "TODAY!" adding, "I don't care what it takes."

But emails show orders to "fudge" the numbers came from Nelson's superiors and she described to Reuters the pressure she was under. "You either make these numbers match so we can get the incentive fees, or you may not have a job tomorrow," she said.

In response to questions from Reuters and CBS News, Balfour Beatty said they have ordered an investigation into fraud allegations and an independent accounting review. The company said both Nelson and Anderson were fired in 2016 for performance-related issues, and they are "conducting a comprehensive review of work order practices" across its Army and Navy bases.

Roxanne Roellchen, whose husband is a weapons instructor in the Air Force, and her family lived on four different military bases before moving to Lackland in June.

"Is Lackland Air Force Base the worst place you've lived?" Villafranca asked.

"Yes, and that's what's just mind-blowing," she said.

Roellchen said she saw roaches in her home the same day they moved in. Her tipping point, she said, was when she opened the cabinet under the kitchen sink, and there was black mold.
 
Assistant Secretary of the Air Force John Henderson told CBS News his office is referring the allegations of misconduct at Lackland for investigation and warned of "formal action" unless there's "prompt and substantial improvement" from Balfour Beatty.

"When you hear about falsification of records, what's your reaction knowing you're living in one of these homes?" Villafranca asked Roellchen.

"Disgust. How do you sleep at night?" Roellchen said.

Anderson said she felt bad about what Balfour Beatty was doing. "It wasn't right," she said. "To me it's not taking care of the residents who are in this military world where they're going out and fighting for us."

After the first CBS News and Reuters investigation, the Air Force suspended all bonus fees for all bases where Balfour Beatty operates. Right now, the Air Force is investigating allegations of fraudulent record keeping on at least five bases.