Government Contracts Monitor
Tumbling Dice: Employees Bribe Official to Score Government Contracts
February 1, 2013
By: Lindsay Simmons
The Justice Department just announced the entry of pleas by two employees of a machine products company in Georgia: Thomas Cole, the General Manager, and Fredrick Simon, a sales order processor. Cole and Simon pleaded guilty to bribing a public official working for Maintenance Center Albany (MCA), a military organization at the Marine Corps Logistics Base Albany, in order to get contracts for machine products. United States v. Thomas J. Cole, Jr., United States District Court for the Middle District of Georgia, Criminal No. 1:13-CR-4 (WLS); United States v. Frederick W. Simon, United States District Court for the Middle District of Georgia, Criminal No. 1:13-CR-5 (WLS).
During their guilty pleas Cole and Simon admitted to participating in a scheme to secure these contracts by undermining the competitive bid process. How? It was a simple scheme. Cole and Simon bribed the MCA purchase tech responsible for placing contracts (a public official) and the MCA purchase tech, in turn, told Simon how much to bid for each contract. The bids reflected inflated prices. Interestingly, the plan was suggested by the public official after Simon asked how his company could obtain business from the MCA.
Cole and Simon paid the MCA purchase tech a bribe of at least $75 for each of the more than 1,000 contracts MCA placed with their company. These contracts were extremely profitable, often exceeding fair market value, sometimes by as much as 1,000 percent. Not surprisingly, the MCA purchase tech increased his bribe demands as the scheme progressed.
In the end, Cole and Simon paid the public official approximately $161,000 in bribes. Why did Cole and Simon take the risk that caused them to tumble? Because Cole personally received about $209,000 from the scheme and Simon received about $74,500.
When it comes time for sentencing, Cole and Simon will face potential prison terms of up to 15 years and fines of up to twice the loss to the Government. The total loss to the Department of Defense from overcharges for the contracts placed during the scheme was approximately $907,000.
Bribery is a crime. As every government contractor and its employees should know, you cannot, directly or indirectly, give, offer or promise a thing of value to a public official with the intent to influence the performance of an official act such as the award of a contract – no mater whose idea it is.
Lindsay Simmons is the attorney responsible for the content of this article.