- Caddell Construction commits $35.2 million without admitting liability.
- Prosecutors allege workers were recruited in India via a New Delhi intermediary.
- Around 500 workers are to be regularized, and 270 will have residence permits recognized.
- The case against Caddell's Italian unit is expected to be dropped once payments are made.
CADDELL CONSTRUCTION, the Alabama-based company building the new US consulate in Milan, has committed to paying €30.941 million ($35.24 million) in an Italian investigation into the alleged exploitation of workers recruited from India, according to a document seen by Reuters.
Milan prosecutors and Italy's Carabinieri police have accused the company of hiring workers in India through a New Delhi-based intermediary and employing them on "exhausting shifts, underpaid, without safety protections and under the constant threat of dismissal."
Nearly €20 million of the total will go directly to workers. It covers overtime, reimbursement for housing costs and compensation for non-material damages, according to the document, which the company submitted to Milan prosecutors. Caddell did not admit any liability.
Two sources with direct knowledge of the matter told Reuters the agreement would also regularize the employment of around 500 workers. It would secure Italian government recognition of residence permits for 270 foreign workers and provide unemployment benefits for 60 workers who had been dismissed.
Company denies wrongdoing
In a letter to prosecutors signed by Caddell Construction executive officer Michael Angelo Ranieri, the company said its commitments did not amount to an admission of wrongdoing.
"Furthermore, they do not imply any acceptance of the legal and factual assessments made by the authorities involved," the letter said.
Caddell did not respond to a request for comment. In a June statement, it said it was proactively cooperating with judicial authorities and was "committed to treating and paying workers fairly."
The company's Italian unit was placed under investigation and put under judicial administration on May 29, a measure a judge upheld two weeks later. Caddell has also agreed to pay more than €7 million to Italy's social security agency, INPS, and almost €4 million to the Labor Inspectorate.
Case expected to be dropped
One of the sources said Milan prosecutors were expected to seek dismissal of the case against Caddell's Italian unit once the payments were made. Prosecutors are also expected to pursue plea deals with two company executives arrested in the investigation.
Construction of the consulate, a contract worth almost $210 million, began in 2022. It was originally due to be completed in 2025, but the date has been pushed back to 2028.
A State Department spokesperson told Reuters in June that US law enforcement was cooperating with Italian authorities and that "the US government does not tolerate labor exploitation."
The case is the latest in a series of labor exploitation investigations led by Milan prosecutor Paolo Storari. His probes have forced companies to grant fuller employment rights to more than 60,000 workers and helped authorities recover more than €1 billion ($1.1 billion). They have also fueled debate over whether Italy's judiciary is overstepping its role.
(With inputs from agencies)
