» Reports & Investigations Ms Sparky

Contractors resist US disclosure effort

August 30, 2010 — Forseti

Database lists fraud and shoddy work

Bryan Bender, Globe Staff - August 30, 2010 – WASHINGTON — Defense companies and other major industries are hoping to block disclosure of their own fraudulent or substandard performance in federal contracts, despite a mandate this year by Congress that such potentially embarrassing information be released to the public.

Sensitive to concerns raised by the companies, the White House has delayed enacting the little-known disclosure provision while it studies the issue, officials said.

The controversy highlights the extent to which efforts to make the government more transparent often garner bipartisan support but then stall in the face of powerful interests seeking to limit public disclosure.

The White House, in a statement, acknowledged that “there will be legal and practical issues’’ that have to be addressed before the new law can be implemented.

“But we intend to do that as quickly as possible, in keeping with the administration’s commitment to increasing transparency in government contracting,’’ said Meg Reilly, a spokeswoman for the White House Office of Management and Budget.

At issue is a database that is currently kept secret, called the Federal Awardee Performance and Integrity Information System. Companies are required to fill the database with information about their failures on federal contracts, including civil, criminal, and administrative findings against them.

The database was established in 2008 for the private use of government officials who oversee contracts, but was not intended to be made public.

Contractors complain that disclosing all that information could lead to the unfair use of damaging information by watchdog groups, the media, and their rivals.

But Senator Bernard Sanders of Vermont, an independent who managed this summer to win a disclosure provision in a war spending bill that was signed by President Obama, said the public has a right to know when taxpayer dollars are improperly used or criminally misspent.

“We hand out over $500 billion a year to federal contractors, many of which have well-established histories of systemic illegal, fraudulent, and incompetent behavior,’’ Sanders said in a statement. “We cannot let these corporations continue to rip off American taxpayers. I strongly expect that this new public awareness will go a long way toward putting an end to handing out taxpayer-financed contracts to corporations with a history of fraud.’’

(Read the rest of the story here…)

Posted in GOV. CONTRACTORS, Politics, Reports & Investigations, Senate & House Committee Hearings. Tags: FAPIIS, Professional Services Council, Project on Government Oversight, Senator Bernard Sanders. 1 Comment »

The Struggle to Police Foreign Subcontractors in Iraq and Afghanistan

August 29, 2010 — Forseti

Billions at Stake, but U.S. Investigators Stymied by Murky Rules, Enforcement Obstacles

By Nick Schwellenbach – August 29, 2010
To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.

But a host of investigations underscore the perils in the murky world of subcontracting with foreign firms, and the difficulties in making sure taxpayer dollars are well spent. Among the current and recent probes by the Pentagon, congressional panels, and federal investigators:

Up to $300 million in subcontracts in Iraq and Kuwait were allegedly tainted by a Saudi-based subcontractor employee’s kickback scheme;
Subcontracted security forces in Afghanistan are suspected of bribing both Taliban and Afghan government officials;
U.S. money for a trash collection program in Iraq, administered by a bewildering array of subcontractors, has allegedly ended up in the pockets of insurgents; and

A former contractor employee alleged that Middle Eastern subcontractors, trying to sway the award of more subcontracts, were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.
Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency — most likely the Defense Department, State Department, or U.S. Agency for International Development — will award work to a “prime” contractor. That prime contractor, usually a large American company like Kellogg, Brown and Root (KBR) or DynCorp International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.

(Read the rest of the story here…)

Rogue jurors, indictments, plea deals etc.. – the news

August 29, 2010 — Forseti

Employee of Federal Contractor Charged with Disclosing National Defense Information to National News Reporter
August 27, 2010 – WASHINGTON – A federal grand jury in the District of Columbia has returned an indictment charging Stephen Jin-Woo Kim with unlawfully disclosing national defense information to a reporter for a national news organization and making false statements to the FBI.

The indictment, which was unsealed today, was announced by David S. Kris, Assistant Attorney General for the National Security Division; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and Shawn Henry, Assistant Director in Charge of the FBI Washington Field Office.

Kim, age 43, was an employee of a federal contractor who was on detail to the State Department at the time of the alleged disclosure. Kim made his initial appearance today in court in the District of Columbia. If convicted, he faces up to 10 years in prison for the unlawful disclosure of national defense information and up to five years in prison for the making of false statements.

According to the indictment, in June 2009, Kim knowingly and willfully disclosed information contained in an intelligence report classified Top Secret/Sensitive Compartmented Information (TS/SCI) to a reporter for a national news organization who was not entitled to receive it. The classified information related to the national defense, specifically, intelligence sources and methods and intelligence concerning the military capabilities and preparedness of a particular foreign nation. (Click HERE for article)

The Brooks trial: When jurors go rogue
Harnesslink -26-Aug-2010 – Andrew Cohen – It is by far the least surprising legal development of the year that there would be trouble inside the jury room in the corporate fraud trial of David H. Brooks, the titular head of the Perfect World Enterprises and Bulletproof Enterprises harness racing empire.

The white-collar case with the red-light tinge has been a circus, a freak show, and a mess since its inception. And I’m quite sure I’m not the only one who sees grand irony in the fact that Brooks’ jury might get hung up because one or more of its members may be cheating on the oath of service.

Brooks’ zany trial (involving two defendants, actually, allegations of hundreds of millions of dollars of fraud, and decades in prison as a potential sentence) was far too long. And long trials typically beget long deliberations. But it’s been three weeks or so and jurors should have been back with a verdict by now. Last week, the federal judge/zookeeper who presides over U.S. v. Brooks received a note from a juror who wrote that some colleague “sit there and read testimony that doesn’t relate to the charges we are discussing.” U.S. District Judge Joanna Seybert gently reminded the panel that they all needed to stay focused upon deliberations.

(Read the rest of the story here…)

Posted in GOV. CONTRACTORS, Indictments, Convictions & Arrests, Politics, Reports & Investigations. Tags: AEY Inc., Commission on Wartime Contracting, David H. Brooks, Derish Wolff, DHB Industries, Efraim Diveroli, FOB Shank, Louis Berger Group, Point Blank Solutions, Stephen Jin-Woo Kim, Stevan Nathan Ringo. No Comments »

Another KBR employee Daniel Freeman pleads guilty to taking bribes (updated)

August 26, 2010 — Ms Sparky

Daniel Freeman (photo courtesy of Facebook)

Updated: August 28, 2010 – The Federal Bureau of Investigation Department of Justice Press Release with more information.

Updated: August 27, 2010 – Bloomberg updated this article with KBR’s comments from Heather Browne verifying Daniel Freeman was in fact a former KBR employee. Click HERE for the updated version.

Note: Apparently Daniel Freeman did in fact work for KBR when he committed these crimes by accepting bribes from subcontractors. The below information was sent to me. It is reportedly from a KBR employee roster generated during the time he was committing his crimes. I redacted the date of birth. No matter what Heather Browne does or doesn’t say, which is bullshit either way, I’m convinced he worked for KBR. ~ Ms Sparky

Afghanistan Contractor’s Former Employee Pleads Guilty to Taking Bribes

By Patricia Hurtado – Aug 26, 2010 1:36 PM PT

A former employee of a U.S. contractor in Afghanistan pleaded guilty to accepting $200,000 in bribes in return for steering work to companies doing business with the U.S. military.

Daniel Freeman, 38, of Hempstead, New York, told a U.S. magistrate judge in Manhattan that from 2007 to 2009, he accepted the gratuities while working in Afghanistan for an unnamed U.S. military contractor. He also said he laundered the money he received by sending the cash back to the U.S. in concealed transactions.

“I accepted illegal cash payments from Afghan-owned subcontractors for awarding contracts,” Freeman told U.S. Magistrate James Cott in Manhattan. “I instructed and directed other people to bring the money back into the United States. They had no knowledge of how I obtained the money. I did it to conceal the way I received the money.”

Cott said Freeman could have faced as long as 25 years in prison if convicted after trial of two charges of money laundering and accepting an illegal gratuity. The magistrate said that according to a plea agreement between the defendant and the government, Freeman faces 51 to 63 months in prison when he is sentenced by U.S. District Judge Colleen McMahon, who is presiding over the case.

“He’s accepted responsibility and he plans to live a law- abiding life,” John Meringolo, Freeman’s lawyer, said after today’s hearing. “He’s very sorry for what he’s done.”

Free on Bond

Freeman was allowed to remain free on a $150,000 personal- recognizance bond. Cott told him to return to court Nov. 18. No sentencing date was set.

While the contractor which Freeman worked for wasn’t named in court or in court papers, two people with knowledge of the case who weren’t authorized to speak on the record said Freeman worked for KBR Inc., the U.S. military contractor.

The company, the U.S. Army’s largest contractor in Iraq, provides services such as housing, meals, laundry, showers, water purification and bathroom cleaning.

Heather Browne, a spokeswoman for Houston-based KBR, didn’t immediately reply to a voice-mail message left at her office seeking comment. Another person at KBR, who wouldn’t give her name, said the company was preparing a statement.

The case is U.S. v. Freeman, 10-CR-00766, U.S. District Court, Southern District of New York (Manhattan). Click HERE for the original article)

Posted in GOV. CONTRACTORS, Indictments, Convictions & Arrests, KBR Contract, LOGCAP III - KBR, Reports & Investigations. Tags: Daniel Freeman, James Cott, John Meringolo, KBR Convictions. 21 Comments »

Viktor Bout – Coming to America

August 20, 2010 — Forseti

I see the Viktor Bout aka “Merchant of Death” and the alleged owner of the charter airline(s) used to transport KBR personnel and cargo in and out of Baghdad is finally being extradited to the US. Doing business with Viktor Bout or any of his airlines has been illegal by way of Executive Order 13348 of President Bush and United Nations Security Council Resolution 1532 and has been since March 2004 if not earlier. But that didn’t seemed to bother KBR and they contracted either directly or indirectly with Viktor Bout to transport personnel and cargo in and out of Iraq.

I hope Bout gets the chance to experience the same luxury accommodations aboard the ‘Elvis’ plane, that so many of us enjoyed. For more information on Viktor Bout and his business in Iraq click HERE ~Forseti

Thailand decides to extradite accused Russian arms dealer to U.S.

By John Pomfret – Washington Post – August 20, 2010
A reputed Russian arms dealer will be extradited to the United States, an appeals court in Thailand decided Friday, overturning a lower court’s rejection of a U.S. extradition request and ending concern that the man dubbed the “merchant of death” would be set free.

The court set a three-month deadline to extradite Viktor Bout, who appeared in court shackled in leg irons, the Associated Press reported. He cried upon hearing the verdict and hugged his wife and daughter.

“This is the most unfair decision possible,” his wife told reporters, speaking in Russian through a translator. “It is known the world over that this is a political case.”

The decision followed stepped-up pressure on Thailand by the Obama administration and members of Congress amid worries that the Bangkok government might free Bout.

The State Department called in Thailand’s ambassador this week to tell him of U.S. concerns about the potential release. And six senior members of Congress, three Democrats and three Republicans, issued a letter to the Thai government Wednesday contending that if Bout is freed, he would sell arms to groups that seek to kill Americans.

“We find the potential release of a man responsible for countless deaths of innocents in Africa and elsewhere simply astounding,” wrote the lawmakers, who included Reps. Howard Berman (D-Calif.) and Ileana Ros-Lehtinen (R-Fla.), the chairman and ranking Republican, respectively, on the House Foreign Affairs Committee.

Bout, 43, was indicted in federal court in 2008 for allegedly conspiring to provide weapons to the Revolutionary Armed Forces of Colombia, or FARC — which Washington has designated a foreign terrorist organization. The weapons were to be used, the indictment alleged, to kill Americans. Bout was subsequently indicted in January on separate charges of money laundering and sanctions busting in connection with gun-running activities to Afghanistan, Angola, Congo, Liberia, Rwanda, Sierra Leone and Sudan.

But Bout, through numerous transport companies he controlled, also worked for the United Nations in Sudan and at one point moved cargo for the United States into Iraq following the U.S. invasion of that country in 2003. (Read the rest of the story here…)