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Whistleblower Suit Yields $3 Million False Claims Settlement From CIA Contractors
By David Stout | March 8, 2022 12:59 pm

Three companies that wooed employees of the Central Intelligence Agency with trips to sporting events, meals at restaurants with full-figured waitresses and other enticements to win CIA contracts have agreed to pay the government $3 million as a result of a lawsuit brought by a whistleblower, United States Attorney Neil MacBride has announced.

MacBride’s office said American Systems Corp., Anixter International Inc, and Corning Cable Systems LLC agreed to settle the allegations that they violated the False Claims Act and the Anti-Kickback Act in bidding on a contract with the CIA. An employee of the CIA allegedly provided inside information to the companies to help them get agency business.

The case was initiated by a lawsuit filed in the Eastern District under the qui tam, or whistleblower, provisions of the False Claims Act by former Anixter sales representative William Jones, MacBride’s office said. Under the False Claims Act, private citizens may sue on behalf of the United States for false claims and share in any recovery, meaning that Jones will receive $585,000.

“Improper gifts and gratuities paid to government officials are a corrupting influence on government contracts,” MacBride said. “Combating this type of conduct is a high priority in the Eastern District of Virginia.”

A Washington Post account of the case depicts CIA workers seemingly trying to live down any image of the agency as a funless place full of frowning men in dark suits and trenchcoats. On the contrary, the Post said. The employees who gave in to temptation enjoyed trips to Mexico and Myrtle Beach, S.C., fishing excursions, outings to football and baseball games, deer hunting and golf, courtesy of the eager companies.

The Hooters restaurant chain, renowned for comely servers as well as beer and cheeseburgers, was a favorite destination of the CIA project manager in charge of the programs at issue, code-named “Falcon” and “Buckeye,” the Post said.

“This settlement shows that the United States will protect the integrity of the federal procurement process from the wrongful activities of unscrupulous contractors,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice Civil Division.  “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.”

CIA Inspector General David B. Buckley was similarly outraged. “This case clearly reflects that the CIA will respond effectively to allegations of fraud affecting agency programs,” he said. “My office treats contract fraud and related employee misconduct as one of our top investigative priorities, and we work closely with agency employees and the Department of Justice to ensure that illegal acts are addressed in an effective manner.”

The Post said nine CIA employees who allegedly received the illegal gratuities are named in the suit. “CIA spokesman Todd Ebitz said the case is under internal review and said it would be inappropriate to comment on the specific individuals’ status with the agency,” the Post said.

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