Monday, March 08, 2010


Public-Private Partnership??

Sort of. But more exactly, Pay to Play Procurement.

Jacksonville company's shady dealings spanned globe, authorities say

Last spring, two years after the FBI began its investigation into foreign bribery, the sting began. Bistrong and an undercover FBI agent who posed as an African defense ministry official met with a series of military/law enforcement supply executives, seeking to award a $15 million contract.

In each of the meetings last May, as many as four a day in fancy hotels in Miami and Washington, Bistrong and the FBI agent offered contracts and made the same request, according to court documents: They asked that a 20 percent "commission" be added to each order and that the extra money be kicked back to them.

people representing 16 companies from Florida to California and the United Kingdom agreed to the scheme

By 2001, prosecutors contend, Bistrong and a British manager of an Armor subsidiary were bribing two United Nations officials for inside information on a contract for body armor for U.N. peacekeeping forces. The charges say Armor was awarded the contract after Bistrong's U.N. contact obtained a list of other bids from a U.N. procurement officer and instructed Bistrong to submit a signed, blank pricing sheet.

The same process repeated in 2003, federal prosecutors said.

Together, the contracts were worth $6 million, with Armor clearing a $1 million profit. Prosecutors say Bistrong and Armor paid his U.N. contacts more than $200,000.

At the same time as the U.N. deal [see article], prosecutors contend Bistrong and an Armor sales consultant used a similar scheme to win a pepper spray contract with the National Police Services Agency of the Netherlands. Using a Dutch intermediary, they obtained confidential information about a bid from a Rotterdam police officer who was working on procurement for the national police agency.

The officer made sure the specifications allowed only a type of pepper spray made only by Armor, the charges say. Armor won the $2.4 million contract in 2002 with a net profit of $480,000. Bistrong and the Dutch intermediary agreed to issue a fake $15,000 invoice for "marketing services" in order to disguise the money paid to the intermediary and the officer, prosecutors said.

Federal indictments and documents also report:

- Bistrong and senior employees at Armor hid about $4.4 million in bribes from 2001 to 2006.

- In 2004, the U.S. Army gave Armor subsidiary Simula Inc. $266 million in sole-source contracts to build 5,900 sets of armor for trucks and heavy equipment needed in combat zones. But much of the equipment had missing or unusable pieces, like truck kits with two left doors or no nuts and bolts, according to a Defense Department inspector general report.

- BAE also paid $30 million to settle Justice Department claims that Armor knowingly sold defective Zylon bulletproof vests to federal agencies and police forces before it stopped making the vests in 2005.

And there's much, much more where that came from. Read the article.

PS: Guambat takes note that this is the second procurement-related post in a row. So very sorry. There's another site for those sorts of issues.


House bans some earmarks amid ethics concerns
Top Democrats on the House Appropriations Committee said the new rules prohibit lawmakers from steering money to for-profit companies through the earmarking process, as Democrats seek to tamp down concerns over ethical violations and wasteful spending.

The decision will affect billions of dollars in federal spending on everything from daycare providers to battlefield weapons, but will not affect the lion's share of earmarks projects, which go to non-profits or local governments.

"It's a positive step forward," said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense. "For-profit earmarks are Ground Zero for pay-to-play and the concerns about corruption."



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