CIA Employees Nailed for Illegal Kickbacks

It looks like even the CIA will accept a little buttering-up once in a while.

Three companies that contract with the CIA have agreed to pay a total of $3 million after it was revealed that they had offered gifts to CIA members in order to secure contracting.

The companies—American Systems Corp., Anixter International Inc. (NYSE: AXE), and Corning Cable Systems LLC—were looking to provide services to the CIA, including cable and wiring, for a 2009 project.
But according to whistleblower William Jones, a former employee of Anixter, the companies had offered things such as free meals, sporting event tickets, and even trips to CIA employees in an effort to gain their favor, the Washington Post reports.

These offers were in violation of both the False Claims Act and the Anti-Kickback Act, and as a result the companies are on the hook for a combined $3 million. Jones will receive $585,000 from the lawsuit as a result of the whistleblower law.

From Reuters:

“Plying government officials with meals and entertainment to gain favorable treatment in the award of federal contracts corrupts the procurement process and will not be allowed,” Stuart Delery, principal deputy assistant attorney general in the Justice Department's civil division, said in a statement.

Jones first went to company officials before reporting the violations to the Justice Department, but his concerns were brushed aside.

“That's how we get and keep the business. You've got to spend money to make money,” an official from Corning said, as the Washington Post reports. But that's not how the Justice Department sees it.

Nine CIA employees are also under investigation for accepting the gifts. Todd Ebitz, CIA spokesman, wouldn't give any details on the employees or their positions in the company, but he assured the Washington Post that “appropriate action will be taken.”

Of course, the CIA plans to deal with these issues “internally” and has revealed few details to the public. We shouldn't bet on getting too many details in the future, either.