Border Wall Contractor Searching for New General Counsel

Sterling Construction Co. Inc., one of several companies contracted to build a key section of the controversial U.S. border wall with Mexico that President Donald Trump visited this week, is looking for a new top lawyer.

Richard Chandler Jr., a former Jones Day partner hired by Sterling in October 2017, will depart June 30. He had replaced Roger Barzun, who served as the Houston-based civil construction company’s legal chief for 25 years.

Sterling disclosed Chandler’s pending exit in a June 2 securities filing, which thanked him for his three years of service.

In an email to Bloomberg Law, Chandler said Sterling is currently searching for his successor as general counsel, chief compliance officer, and corporate secretary. Chandler said it was “just time to move on,” but he’s agreed to assist Sterling after his departure date to “fill in gaps as needed.”

Chandler said he’s open to “all opportunities that make sense.” He has no immediate plans for a new in-house job. Chandler currently owns almost $668,000 in Sterling stock, according to Bloomberg data.

Sterling said in its 2019 proxy statement that Chandler received more than $1.16 million in total compensation last year, including $799,770 in cash. The latter included an approximately $100,000 bonus that Chandler was paid for handling Sterling’s $400 million acquisition of suburban Atlanta-based specialty contractor Plateau Excavation Inc., which closed in 2019.

Prior to joining Sterling, Chandler spent a half-dozen years as top lawyer at Chicago Bridge & Iron Co. BV, an engineering and construction contractor now part of bankrupt McDermott International Inc. He previously served as general counsel for Smith International Inc. and M-I Swaco LLC, a joint venture between Smith and Schlumberger Ltd., in-house roles that Chandler held prior to spending about a year as a Jones Day partner. The Big Law firm has close ties to the Trump administration.

Sterling said publicly in May because of ”uncertain future Covid-19 financial impacts over the balance of the year,” it had withdrawn its financial outlook “until we have greater visibility.”

In a brief email exchange with Bloomberg Law, Sterling’s CFO, chief accounting officer, and treasurer Ronald Ballschmiede said Chandler’s role would be filled. He didn’t respond to further requests for comment about Sterling’s search process.

Building the Wall

Texas Sterling Construction Co., a Sterling subsidiary, was one of 12 contractors selected in May 2019 by the U.S. Army Corps of Engineers to compete for roughly $5 billion in federal funds slated for work along a key section of the U.S.-Mexico border.

The area includes border crossing stations near San Diego and Imperial, Calif., as well as Tucson and Yuma, Ariz., controlled by the Army Corps and the Department of Homeland Security’s U.S. Border Patrol. Trump visited Arizona Tuesday to sign a section of the wall and tout his border security efforts.

Homeland Security Acting Secretary Chad Wolf waived federal contracting and procurement rules in late February to expedite construction of 177 miles of border wall in Arizona, California, New Mexico, and Texas. The move raised concerns from government accountability experts, as the Army Corps chooses from the dozen contractors it selected last year to work on sections of the border wall.

In May, Sterling lost out to Dickinson, N.D.-based Fisher Sand & Gravel Co.—whose general counsel and chief administrative officer is Timothy Priebe—for a $1.28 billion contract to build 42 miles of border wall in Arizona. Fisher and Sterling were both awarded contracts in 2017 to create prototypes of a concrete border wall.

Bloomberg Law reported last year on Fisher’s unsuccessful attempt to reject a $789 million border wall contract awarded to a rival, one of several disputes involving the Army Corps. Funding has been a major issue in the Trump administration’s construction efforts.

Numerous environmental groups have sued the federal government for waiving certain environmental regulations and redirecting public funds for border wall-related projects. Those efforts have mostly been unsuccessful, although some cases remain pending.

In January, the Trump administration’s border wall plans received a boost when a federal appeals court in New Orleans lifted an order blocking the use of $3.6 billion in U.S. military construction funds. The U.S. Supreme Court, having rejected in late 2018 a border wall challenge by environmentalists, earlier this year received a new petition from green groups seeking to stall border barrier construction. Government lawyers urged the court to toss that case in May.

Border wall backers scored another win last year when the Supreme Court barred California’s bid to prevent $2.5 billion in military funds from being used on border wall projects. Private groups like We Build the Wall Inc., a Houston-based nonprofit chaired by Trump’s former chief political strategist Stephen Bannon, have also raised money for its construction.

We Build the Wall was among those sued by the government last year for potentially violating U.S. treaty obligations by clearing a tract of land along the Rio Grande River in Texas. The organization, whose general counsel is former Kansas Secretary of State Kris Kobach, a Trump ally, has since been dismissed as a defendant.