No government boondoggle in the history of man comes close to the
cost of the Black Hole of Boston. Insight has learned that, for years
now, key Massachusetts officials and a world-famous
engineering-construction firm are alleged to have labored industriously
to hide from the American people the true cost of building a gargantuan
highway-construction project through the heart of the city. The scandal
is so enormous, insiders say, that it is likely to make this capital of
political liberalism a national laughingstock by the time the Democratic
National Convention meets here in 2004.
With a corruption-fighting Republican governor about to take office, Big
Dig and government officials responsible for auditing the project are in
bunker mode, with their propaganda machine on highest alert. Of course
political dishonesty has been part of the national polity since the
memory of man runneth not to the contrary, and it hardly is surprising
when estimates of the cost of public works prove to have been
overstated. But Insight has learned the eventual cost of the Big Dig is
likely to be 500 percent higher than the $2.56 billion estimate that
received federal approval in 1985. Its projected price tag now is at
least $14.6 billion.
One local writer calls it the "Big Lie." Another suggests the
politicians themselves, the enablers of this mess, give it another name,
such as the U.S Government's Enron or the Big Deception. Picture King
Henry VIII eating voraciously in front of a table groaning with food and
you get the idea. It is the ultimate case study, critics charge, of how
elected officials, designers and engineers will deceive the public and
one another to keep feeding on federal money. And, incredibly, the
project already is more than 40 years old. The planning began in the
1960s, construction in 1991, and it is scheduled to be mostly finished
So what is it, a borehole through the earth's magma all the way to
China? Not on your life. Boston's Big Dig is a road and renewal project
designed to replace an elevated highway that runs through the heart of
the historic old city founded in 1630, and connecting its north and
south shores and Logan International Airport across Boston Harbor. It
repeatedly is described as the largest public construction project in
U.S. history, whatever that means. To achieve this the engineers are
engaged in constructing a highway tunnel directly underneath and
parallel to the elevated highway, the city's main artery, while keeping
it continuously open.
Through the use of slurry walls, where liquid is poured into a hole to
harden, engineers have managed to support the elevated highway while
cutting away its support beams to remove the dirt underneath. The
designers and engineers of the joint venture -- called B/PB -- are San
Francisco's Bechtel Corp. and New York City's Parsons Brinckerhoff Quade
& Douglas Inc.
And some of the wonders they have performed are, well, wonderful. As the
downtown innards of the city have been dug out, and a third tunnel
constructed under Boston Harbor, traffic flow continually has improved
as construction progresses. While drivers often find they must follow
new paths to their destinations, which temporarily angers them, most say
that once they learn the new route they find it easier and with less
traffic. Even Boston's notoriously cranky cabbies say overall traffic
flow has improved, especially since the opening of the harbor tunnel,
albeit peppered with a few spots of increased congestion. Boston is open
for business and functioning well.
Also important, this gargantuan project claimed very few buildings in
the historic metropolis. No private homes were razed, as construction
was staged from parking lots and unused lands adjacent to railroad
But as astonishing as the engineering and construction of the Big Dig
appear to be, the history of its financial management leaves observers
slack-jawed. Politically sophisticated Boston, sated in lore of theft
from such public-works boondoggles as the Boston Common Garage, can't
believe that even the Washington clout of Democratic Sens. Edward
Kennedy and John Kerry can keep such sums moving from the federal purse
into the local black hole.
Not that it has gone unnoticed. The spending in Massachusetts is "out of
control," roared Rep. Frank R. Wolf (R-Va.), a member of the House
Appropriations Committee who helped cap the federal government's share
of the costs at about $8.5 billion in June 2001. Wolf's efforts were
highly warranted, but simultaneously disdained in Massachusetts. "The
spending was just terrible," he says. "This can be used as an example of
how not to build a project."
Christy Mihos, a fiscally conservative member of the Massachusetts
Turnpike Authority (MTA), and A. Joseph DeNucci, the longtime elected
auditor of Massachusetts, agree that billions have been wasted on the
project. A report of the U.S. Senate Governmental Affairs Committee
called the Big Dig one of the worst cases of government mismanagement in
recent history. "Bechtel, the project management and others have not
made cost containment and prudent financing a top priority," DeNucci
How bad could it be? As soon as Insight began investigating this story
our reporter was inundated with allegations of extreme corruption
involving several layers of the Big Dig construction and government
hierarchy. The indignant charges came from every direction, and some of
them seemed too fantastic to believe. But the research also was hindered
by strong resistance from Big Dig and government officials. Bechtel
spokesman Andrew Pavin hung up on an Insight reporter, and Federal
Highway Works Administration (FHWA) employees Carl Gottschall and
William N. Outlaw refused to respond to questions. Nor would Big Dig
officials provide documents they are required by law to make available.
The bodies here may be buried as deeply as Jimmy Hoffa, but the
Massachusetts attorney general and the Securities and Exchange
Commission have subpoena power and are investigating. Indeed, according
to Holly Sutherland, a Big Dig spokeswoman, "We are being investigated
by everybody." And according to a March 2001 report issued by the
Massachusetts Inspector General (IG), and all but ignored by the
Boston-proud local media, "Big Dig officials have withheld documents
under a claim of attorney-client privilege, and public data and
documents have reportedly been destroyed and other public documents have
been reportedly removed from Massachusetts Turnpike Authority offices in
early 2000. Thousands of pages of documents are missing. File cabinets
had been emptied and computer hard drives had been sandblasted so data
could never be recovered from them."
As if the alleged destruction of documents on this multibillion-dollar
project were not enough to send an army of federal auditors and
law-enforcement authorities to Boston armed with subpoenas and search
warrants, Mihos of the MTA recently went public on national television
to warn of fraud and corruption on the project. The price tag of the Big
Dig now is higher than the gross national product of Bolivia and the
cost of the Alaska pipeline, twice that of the construction of the
Panama Canal and 23 times more than what it cost to build the Hoover Dam
-- in today's dollars! If the cost estimate holds (an unlikely prospect,
according to insiders), it will come in at just under the $16 billion
required to build the 32-mile Chunnel under the English Channel to link
the United Kingdom with France.
Then there is the problem of Bechtel, an international engineering and
construction company founded in 1898, which has been paid about $2
billion so far for its role in the project. Bechtel, which manages the
Big Dig, has taken care to be politically connected at the highest
levels and has been involved with many projects in the United States and
throughout the world, especially in the Middle East. Two former top
Bechtel executives, Caspar Weinberger and George Shultz, served in
president Ronald Reagan's Cabinet during the time this project received
its most important congressional funding. During that period Bechtel was
struggling to reverse a significant decline in its worldwide business.
Although for years B/PB and Big Dig officials kept authorizing increases
in the cost of the project, both covertly and overtly, those responsible
for oversight expressed astonishment at the contents of a report, dated
Feb. 10, 2000, issued by the U.S. Department of Transportation Office of
Inspector General and at a subsequent report by the Massachusetts IG.
Since 1997, everyone connected with the project had been saying publicly
that it would cost $10.8 billion, a great deal more than the original
estimate, but said to be well worth it. Worse, the estimated cost was
raised overnight to a horrific $12.2 billion, and auditors for the Big
Dig admitted it had laid out $14.1 billion by October 2000. Washington
and Massachusetts exploded in anger.
The Massachusetts IG report states that "officials knew about large cost
overruns long before they submitted to Wall Street inaccurate
bond-disclosure documents" to finance that part of the project not being
paid for by the federal taxpayer. It also states that Bechtel officials
privately told then-governor of Massachusetts William Weld of the higher
costs as early as Dec. 1, 1994. Neither Bechtel nor Weld disclosed this
fact publicly. Deceiving the public is bad enough, but lying to Wall
Street is a crime.
The Massachusetts IG report says Weld and two other Republican governors
knew of the higher cost estimates, which the report puts at $18 billion
allowing for inflation -- significantly higher than the $14.6 billion to
which Big Dig officials now admit. The report also states that internal
B/PB documents say the real numbers were not released for fear of
potential "brutal press scrutiny."
According to the Massachusetts IG report, Big Dig officials fully
informed the local office of the FHWA of the project's true cost and
undertook a nine-month initiative between June 1994 and March 1995 to
decrease B/PB's total cost estimate from $13.8 billion to $8 billion.
They did this arbitrarily by reducing contract estimates, excluding all
money for management after 2002, and eliminating more than $1 billion
defined as "nonproject costs." They also started using 1988 (instead of
current) dollars and other devices, none of which was made public by the
So here were well-documented allegations by the IG of the commonwealth
of Massachusetts that three governors, B/PB and the FHWA knew about and
hid the true cost of the project for years, not to mention the
likelihood that full details also were in the hands of the state and
company auditors who calculated these increased costs. Investigators
tell Insight it is likely that every high-level Big Dig official and
political manager knew about all of this, though many now deny it.
Then there is the question of why this project has been so expensive.
Local observers are quick to place the blame on what one called the
sometimes bubble-headed project management of Bechtel, one of the
planet's largest engineering-construction firms. Others blame sloppy
oversight. Whatever the cause, on construction contract after
construction contract, say those who have seen the internal documents,
officials continually paid far more than the contract estimate.
Contractors would begin work, announce they had found conditions more
difficult than expected and ask for more money through a process called
"claims and changes." According to Bechtel's Pavin, engineers had not
provided complete information to contractors, sometimes not taking
enough bore samples, for example, skewing evaluations at every level of
design and construction.
Of course, in a port city almost 400 years old, in which ground often
has been filled and reclaimed, contractors are likely to find unmapped
underground surprises that add to excavation costs. But they should not,
according to many, find unknown conditions to the extent that Bechtel
and others claimed.
One of the most egregious claims and changes that was at least in part a
Bechtel responsibility involves a tunnel underneath a small body of
seawater called Fort Point Channel. Obtaining exact information about
this cost overrun, and almost everything else important to independent
evaluation of this project, proved an exercise in frustration as Big Dig
press representatives Sean O'Neill, Robert Bliss and Sutherland
responded to Insight with the litany, "I will get back to you on that,"
which they rarely did. This game of dodge 'em went on for a
But according to published reports, at least some of the surprises
developed because Bechtel ignored warnings from another engineering firm
for about a year that the soil was softer than Bechtel anticipated,
causing cost overruns estimated to be as much a half-billion dollars.
Persistent readers determined to know the exact figure are welcome to
call Big Dig headquarters themselves at (617) 951-6000, whistle-blowers
Another example of B/PB problems involves the mesmerizingly beautiful
bridge that crosses the Charles River from Cambridge into Boston.
According to published reports, for two years its prominent Swiss
architect, Christian Menn, wrote letters informing Big Dig officials
about possible construction problems he identified from photographs. But
B/PB says no one there noticed these safety problems -- not the design
firm, contractor, consultants or inspectors -- until a device called a
borescope came along. At that point, work on the bridge stopped, and
Menn says that B/PB ignored his repair solution that would have cost
perhaps $100,000 in favor of an alternative that cost three times as
much. Big Dig officials respond mysteriously that taxpayers will not
have to pay for the repair.
Then there is a Boston engineer named Dimiter Gorchev who is glad to sit
for hours and explain how Bechtel wasted large sums of money on a
ventilation system. And Mihos of the MTA says that he has been told by
engineers and builders that "Bechtel overbuilt everything. They
overengineered and overdesigned everything. It is a crime." Of course,
even among top professionals these things can be a matter of opinion.
The problem, says a Big Dig insider who talked to Insight on condition
of anonymity, is that with all these million-dollar construction
contracts being renegotiated with the Massachusetts Highway Department (MHD)
through claims and changes, the "Big Dig started paying off contractors
without really knowing what they were paying for." At one point in 2000,
"the MHD had about 3,500 outstanding issues with contractors that came
to $1.28 billion." This was because contracts went out with designs
"substantially incomplete," and B/PB "often made changes to contracts
after bidding, or when the work was in progress, because the original
design frequently did not work. They also occasionally moved portions of
one contract to another."
According to the source, many times walls would be completed, and then
they would "realize that" they did not include in the contract a request
for pipes to be placed in the walls. So holes would have to be drilled
in a newly finished wall to put in the pipes.
Contracts sometimes almost doubled in cost, the source says. "Claims
often were negotiated with the contractor, so the discipline and
economic benefit to the public of the competitive bid is lost." Because
the MHD got bogged down in contractor requests for more money, and
contractors needed to be paid, the Big Dig started paying too many of
what are called "global settlements," one insider critic says.
A global settlement occurs when requests by contractors for additional
money are grouped together and treated as one. A percentage of the total
is then paid to the contractors, rather than figuring out what each
"There was sometimes inadequate documentation to justify the amounts
which Bechtel proposed to pay, even after the accountants went back into
the contractor's files and attempted to backfill with information and
documentation," says yet another source, "which resulted in sometimes
arbitrarily determining amounts to be paid. When the amounts proposed to
be paid by Bechtel in global settlements were audited, it was not
supported by the accountants. The claims-and-changes process was poorly
managed and got out of control. The fact that they were proposing global
settlements at all in the middle of the project, which is rare, and not
at the end, points to mismanagement."
In turn, many worry it may encourage contractors to inflate their claims
and changes because they know payment will be based on a percentage
rather than the actual amount, and their documentation, or lack thereof,
for determining how much extra pay should be awarded will be overlooked
to some extent, says a contract supervisor. Once the contractors learn
that global settlements are the order of the day they tend to give a low
initial price just to get their foot in the door because they know that
later there will be extra work in the contract on which the builder will
not have to bid. Under the ground rules, the Big Dig cannot put out to
bid a contract that is partly completed; it must go with the contractor
who started it.
"Bechtel and the Big Dig got bogged down with contractor claims,
resulting in many global settlements, which developed into a very cozy
relationship between Bechtel and the contractors," says another
experienced observer of such projects. William Edwards, a budget manager
for B/PB, admits to $2 billion being paid in contractor overruns.
Massachusetts has a consumer-protection law that prohibits contractors
from charging more than 10 percent of the original estimate. It has been
ignored in this project.
Meanwhile, any casual observer of the project who occasionally walks by
a Big Dig construction site must wonder on what basis these firms are
being paid, as workers frequently are seen standing around without
purpose or direction. In fact, another name for the project among locals
is the Big Stand Around.
On Sept. 6, a date arbitrarily chosen, Insight watched a Big Dig work
site with watch in hand, arriving during the lunch break at 12:15 p.m.
From the moment the break ended at 12:30, Insight's reporter saw 23 men
idling until 1:30, when eight workers appeared to be both talking about
work and socializing until 1:50. During this period, two men were
cleaning concrete barriers for perhaps 10 minutes, and no one helped
them. This might have gone on all afternoon, but the Insight reporter
had to leave the site for an appointment.
And because the construction unions bulldozed a projectwide labor
agreement with elected officials, ensuring union wages for all, even the
lowest-paid Big Dig construction workers -- the laborers -- earn a
minimum of $34.50 hourly with benefits. Kyle Meleski, a spokesman for a
local builder's organization, says if the Big Dig simply got rid of its
project labor agreement it would mean a savings of 10 to 15 percent.
Readers outside of Massachusetts might find another Big Dig boondoggle
downright humorous if it weren't for the fact that federal taxes are
paying for it. The Bay State is the only state in the nation that does
not allow civilian flaggers to direct traffic around construction sites,
instead requiring that such work be done by police officers who earn at
least $29 hourly. Traffic details also require padding police overtime
or private duty. During the Friday afternoon this reporter carried a
stopwatch on the Big Dig site he saw one police officer directing
traffic onto a dirt road over which only one vehicle crossed. Other than
standing by the entrance, the officer worked a grand total of 30 seconds
after coming back late from lunch. Again, the unions were increasing Big
Dig costs. All told, the cops got $50 million from working the Big Dig,
according to Sutherland, on top of their normal salaries and other paid
Projects of this size in major cities are not likely to be models of
efficiency, but there is little doubt among those monitoring and
auditing the Big Dig that a great deal of this waste and trouble
resulted from very poor planning. For instance, because the project
designs were not firmly vetted before construction began, a bridge
crossing the Charles River was redesigned midconstruction. The
Environmental Impact Statement approved by the administration of
then-governor Mike Dukakis was reopened by his successor under pressure
from community activists and real-estate interests. This resulted in a
four-year delay and a new bridge design. That in turn necessitated
construction delays and design changes on other parts of the Big Dig,
increasing the total cost by no less than $3 billion, says B/PB budget
manager Edwards. And the difference in cost just for the bridges alone,
excluding everything else, was only a small part of it.
Then there was the problem of mitigation. In this case, mitigation was a
result of concern about fish in Boston Harbor that local ecologists
thought might be vulnerable to underwater blasting. And so, according to
published reports, the masters of the Big Dig spent another $1 million
of taxpayer money to devise a "fish-startling" system to scare away any
sensitive finny friends before each blast. In another case, mitigation
meant buying $1.4 million worth of soundproof windows and an
air-conditioning system for artists and sculptors who live near a
construction site. And mitigation meant spending $250,000 to buy the
Boston Fire Department a new fire boat for reasons unimaginable. It also
required building a $750,000 memorial for the city of Boston. And paying
Harvard University, one of the wealthiest schools in the world, $270,000
to produce an official history of the Big Dig.
According to locals with whom Insight spoke, mitigation in this context
means mollifying communities, institutions or activist groups that feel
(or claim to feel) themselves adversely affected by construction or see
an opportunity to turn a complaint into a benefit. The idea is that if a
particular venue does not want a bridge in the neighborhood, or
organizes to complain about the noise or has the clout to make official
trouble, you build them a park or buy them a fire boat so they won't
slow or stop the project. This sort of thing added another $3 billion to
the final bill, Edwards says.
Massachusetts yielded to virtually every complaint. In addition, it
seems once the state's liberal politicians learned the federal
government would be paying about 90 percent of Big Dig costs, they saw
an opportunity to get Washington to pay to improve Boston's
neighborhoods at the country's expense. Or, as a former high-level Big
Dig official put it to Insight: "Many elected officials and neighborhood
groups saw the Big Dig as an opportunity to feed at the trough of the
Bechtel was hired to oversee and manage this project. Virtually every
major U.S. construction project has what is called an owner's
representative, a company engaged to look out for the interest of the
owner -- in this case the American people through their federal
government -- and to scrutinize, monitor and audit the manager, in this
case Bechtel. But this project never had any independent oversight until
very recently. Pavin of Bechtel says his company is the owner's rep, and
it would be a waste of tax money to hire yet another firm to watch the
A waste of money? Boston's Big Dig watchers wonder why Bechtel would
care how much more money is spent by the government. Could it be the
company just didn't want anyone watching it? Certainly the state
employees at the MHD did not want more oversight, critics say, since
they quickly became a significant part of the problem. And was it
Bechtel's political clout or something else that prevented Massachusetts
from engaging an owner's rep to audit the managers?
Meanwhile, some of those who have sought more oversight of Bechtel have
been attacked viciously by the lame-duck governor, Republican Jane
Swift. Both Mihos and Jordan Levy, another fiscally conservative member
of the MTA, were fired by Swift, they say, after trying to get Bechtel
to return some Big Dig monies to the government. They also had been
attempting to obtain an impartial group to provide oversight, and helped
institute a recently implemented policy of additional oversight of
contractor claims and changes that has saved upward of $1 million.
Both Mihos and Levy took their discharge to the Massachusetts Supreme
Court, which decided the governor had no right to cashier the pair. To
ensure Swift had enough Bechtel supporters on the MTA to outvote these
Bechtel critics, say the pair, she packed the board, increasing it from
three to five. Swift then appointed Matthew J. Amorello as chairman.
Mihos and Levy charge that as the former commissioner of the MHD,
Amorello did not sufficiently scrutinize the claims-and-changes process.
According to newspaper reports, meetings of the MTA have in recent
months become battlegrounds between Amorello and the two project
As the commonwealth of Massachusetts groans under this scandal, Auditor
DeNucci says the local media have been unwilling to publicize problems
lest the publicity add to the delays. And some have gone so far as to
attack officials who criticize the project. Asked about the growing
scandal, a spokesman for Sen. Kennedy tells Insight, "The senator won't
go near that."
John Pike is a free-lance writer for Insight.