Sunday, May 8, 2005

More Military Issues

In the post here, questioned was whether there was of a military compliance program to stop improper tactics by military recruiters or by supervisors who might be pressuring the recruiters.  Now questioned is whether there is a corporate compliance program focused on possible fraud within the military.

According to a DOJ Criminal Division Press Release here:

"Between 2001 and 2003, Powers served as the Deputy Commander and Civilian Executive Assistant for the United States Army, Depot Support Activity, Far East (DSAFE) for United States Forces, Korea. He was responsible for purchasing and contracting on behalf of the Army. Powers used his official position to violate Defense Department (DOD) contracting rules and sole-source several DOD contracts for truck parts, supplies and services to a Korean contractor in exchange for more than $20,000 in bribes."

Several questions:

1. The press release says "Korean contractor" but gives no further information.  Was this scheme reported by a company that did not receive the bid and was it a U.S. company?

2. Not that bribes should ever be tolerated, but was the total cost of the items more or less than if they had been processed through normal routes?

3. According to the press release the accused received a sentence of 26 months and also "was sentenced to three years of supervised release and ordered to pay $55,000 in restitution to the U.S. Army."  Why if the bribes were "more than $20,000" was the restitution $55,000?  Was this amount just agreed upon for purposes of the plea?

Most likely these questions have easy answers, answers that would not normally be included in a press release.  But one has to wonder if instances such as these could be avoided with a more "effective" compliance program.


Fraud | Permalink

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