It should go without saying that making cash payments to a federal contracting official can bring stiff penalties. Yet every now and then we hear about criminal convictions of government contractors who can’t seem to resist the lure of gifts, gratuities, and other illicit payments to government officials.
Speaking of which, here’s one right now…
Berg Brothers Recycling was in the business of processing and recycling metals. In 2004, Berg apparently entered into an arrangement with an NSA employee who was a contracting officer’s representative on a waste removal contract in Maryland. The NSA official directed that metal recyclables at the jobsite be taken to Berg. Berg recorded the NSA as the customer, but secretly diverted payments to the contracting officer’s representative. Over a two year period, Berg paid the government employee $104,989.94.
The government caught wind of the scheme, and the NSA’s Office of Inspector General, the FBI, and the Defense Criminal Investigative Service all became involved in the investigation. Ultimately, Berg pled guilty and fined $234,989.84–$104,989.84 in restitution, plus an additional $130,000 penalty.
Adam Berg, the son of Berg’s owner, and Jeffrey Harmon, the company’s president, also pled guilty. Both were sentenced to prison: Adam Berg received six months, and Harmon a year. Each man also was fined and ordered to complete 100 hours of community service.
Robert Adcock, the contracting officer’s representative, received an 18-month jail sentence, and was ordered to complete community service, pay a fine, and make restitution.
Berg Brothers Recycling: another example of why the gift, gratuity and bribery rules must be taken very seriously.