The Canadian Press - ONLINE EDITION

Federal fraud probe in nation's capital looks for sham partnerships in major building projects

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WASHINGTON - The Associated Press has learned that federal investigators in the nation's capital are looking for fraud in a program meant to bring local contractors into major construction projects in the District of Columbia.

Three people familiar with the probe tell The Associated Press that the FBI and the U.S. Attorney's office are scrutinizing partnerships between local companies and outside firms. These sources spoke on condition of anonymity to protect their business relationships in the city.

The District has tried for decades to spread tax dollars around in the community by giving bidders for multi-million-dollar government projects an edge on the competition when they partner with local contractors.

Critics complain that the money often goes to political cronies or dishonest businesspeople who know how to game the system.

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