By Tara Hoke
Situation
A real estate developer purchases property in a newly revitalized district of a Southern California city, intending to relocate with his family to the area. The existing structure on the premises is inadequate for the developer in terms of size and aesthetics, so he plans to demolish the house and build in its place a home that better suits his needs.
Unfortunately for the developer, the allowable use of his property is governed by a strict affordable-housing regulation, which mandates that a home suitable for low-income households can only be demolished and replaced with another home at the same level of affordability. Because the developer’s plan would instead replace a modest home with a large luxury dwelling, his plan runs afoul of the district’s affordability requirements. Despite multiple appeals and all his personal connections with city public officials, the developer is unsuccessful in obtaining a demolition permit for his project.
Frustrated, the developer turns to another connection of his — a structural engineer specializing in excavations of existing structures. The engineer claims he can quadruple the square footage of the home while retaining most of its external structure by digging new floors into the hillside below. Moreover, to avoid any chance of opposition from building authorities, he agrees to work with the developer to conceal the extent of work being done on the home.
Over the course of the excavation, the engineer obtains multiple building permits for the home, each time characterizing the project as a minor bathroom remodel or other simple construction. This guise provides cover for the construction activity on site without triggering scrutiny from the city’s building agency. It also affords a considerable cost savings to the developer, who is not required to pay for the more extensive permitting, inspection, and notice requirements of a major excavation project.
The scheme proves so successful that the engineer offers similar arrangements to several other clients over the next few years. In each case, the engineer submits false permit applications to city authorities, expediting the approval process while undertaking work far beyond the scope of the approved permits.
And the engineer’s corner-cutting services do not end there. On one occasion, the engineer specifies a licensed contractor of record on a permit application, when in fact the work is given to a contractor whose license had been revoked some years earlier. On another project, the engineer alters documents from an earlier project to create the impression that an independent review of a current project had been performed.
Though much of the engineer’s dealings are literally concealed from sight, exposure of his schemes ultimately comes in a very public manner. The shoring prescribed by the engineer on an unpermitted excavation project proves insufficient to protect the structure: The foundation gives way, and a large portion of the home crumbles to the ground, landing in the street. No one is injured in the accident, but an investigation by government authorities quickly uncovers the engineer’s deceptive practices.
The city attorney files a civil suit against the engineer and several of his clients and contractors, seeking more than a million dollars in fees and penalties for building permit fraud, unlawful business practices, and creating a public nuisance. But the case takes a surprising turn when further discovery reveals the engineer has regularly given payments to a city building inspector in exchange for favorable inspections.
Both the engineer and the city inspector are promptly brought up on criminal charges as well. The engineer is sentenced to 20 months in prison for honest services mail fraud, a charge involving unlawful influence of a public official in performance of his or her “honest service.” As a result of the civil suit, the engineer is directed to pay nearly $200,000 for his role in the scheme. Finally, he surrenders his P.E. license following notice by the state board of a pending disciplinary action.
Question
What ethical lessons can be drawn from this case?
Discussion
If this case had involved an ASCE member, the Committee on Professional Conduct would find no shortage of language in the Code of Ethics from which to find fault with the engineer’s actions. Probable violations include section 1d’s instruction to “have zero tolerance for bribery, fraud, and corruption in all forms;” section 3b’s directive to “practice engineering in compliance with all legal requirements;” and section 3a’s call to “uphold the honor, integrity, and dignity of the profession.”
Worst of all, both the purpose and effect of the engineer’s actions was to circumvent government oversight of a hazardous endeavor, thus creating a circumstance that could have proved harmful to workers, building occupants, or other individuals. In at least one case, the engineer’s deception also thwarted a government policy aimed at preserving housing opportunities for the broader community. As such, the engineer’s actions also stand in stark conflict with section 1a’s mandate to “first and foremost, protect the health, safety, and welfare of the public.”
Yet the fact that these violations occurred at the direction (or at least, with the concurrence) of clients raises an interesting question about the engineer’s ethical obligation to serve as a “faithful agent” of a client or employer. The duty of faithful service is one of the foundational principles of the profession, and it is one of only two ethical canons to remain largely unchanged in ASCE’s code since it was first adopted in 1914. But what exactly does the duty of faithful service require?
One thing it certainly does not require is the obligation to make clients or employers happy at all costs. As evidenced by the current case, clients or employers may not always be the best judges of the risks involved in a particular course of action, and engineers who accompany them on a reckless path may find unwelcome consequences waiting for everyone.
But it is also an unfortunate fact that saying “no” to client or employer requests can bring its own share of unwelcome consequences. Recognizing that engineers may sometimes face tremendous financial or personal pressures to honor a client’s or employer’s directives, the drafters of ASCE’s current code made two express choices to define the ethical limitations of the engineer’s duty of faithful service.
First, the engineer’s obligations to clients and employers are found within section 4 of the code, placing them fourth on the overall hierarchy of ethical obligations. As noted in the code’s preamble, in cases of conflict between any two ethical imperatives, obligations must be honored in the order of precedence — meaning that engineers must never allow service to clients or employers to place themselves in conflict with the duty to protect the public, comply with the law, or uphold the honor of the profession.
Second, the drafters expanded the language of prior codes so that section 4a instructs engineers to serve clients faithfully but also “with integrity and professionalism.” This added language acts as a counterweight to the obligation of faithful service, clarifying that engineers cannot simply do what they’re told and escape accountability for a lapse of ethical judgment.
In light of these considerations, the obligation to act as faithful agents can best be understood as an instruction for engineers to use their wisdom and expertise to determine the best way to serve. In most cases, engineers satisfy this duty simply by offering unbiased counsel on matters within their technical expertise. But in cases in which clients are contemplating actions that cross legal or ethical lines, engineers may also find themselves needing to act as a moral compass, understanding that integrity is always in their clients’ best interests.
Tara Hoke is ASCE’s general counsel and a contributing editor to Civil Engineering.
This article first appeared in the November/December 2024 issue of Civil Engineering as “A Collapse of Principles.”
