Tuesday, October 3, 2017

Former Contracting Officer Accused of Accepting $3 Million in Bribes

For the past 10 years, the U.S. Army has been upgrading Camp Humphreys to be its new flagship installation in South Korea. The bulk of U.S. forces and civilians stationed in South Korea, including those stationed at the current Eighth U.S. Army Headquarters in Yongson (Seoul) will be relocated to Camp Humphreys once the upgrades are completed. This will allow U.S. Forces to consolidate its footprint from more than 100 installations throughout South Korea to less than 50. Camp Humphreys has the added benefit of being located beyond the range of most of North Korea's 14,000 artillery pieces.

To call this project an upgrade significantly understates the scope of what is happening. The cost has been publicly acknowledged at  $13 billion but probably exceeds that by a significant amount. Its size exceeds that of Washington D.C. It will house 36,000 service members, dependents, civilian employees and contractors. It's an entire city with hospitals, schools, shopping, and recreation facilities including a golf course.

With a cost projected at $13 billion there are plenty of opportunities for fraud, waste, and abuse in and among contractors working on the project and the Army Corps of Engineers in charge of the project and related contracts. The Justice Department just announced charges in one case.

A former contracting officer for the Army Corps of Engineers and a former officer in the Korean Ministry of Defense were indicted for their roles in a scheme to direct over $400 million in DoD construction contracts to a South Korean construction company in exchange for $3 million in bribes. One has to believe that the expected profit on $400 million had to be significant in order to offset more than $3 million in bribes.

The former Corps of Engineers contracting officer, currently living the good life in Hawaii, has been charged in a nine-count indictment with mail and wire conspiracy, bribery, wire fraud, conspiracy to commit money laundering, and making false statements.

Between 2008 and 2012, the contracting officer solicited bribes from a large Korean engineering and construction company in exchange for directing contracts to the company related to the relocation and expansion of Camp Humphreys.

The former COE contracting officer hid the bribe money by purchasing real estate and putting it in bank accounts in the names of others, including two girlfriends. He quit his job with the Corps in 2012 and began lobbying the DoD for construction projects on behalf of the company that paid him the bribes.

You can read more in the Justice Department press release here.

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