Former contractor executives plead guilty to conflict of interest charges
Defendants offered Army official $125,000-a-year job during negotiations.
Two former executives of a federal contractor have pleaded guilty to violating conflict of interest rules, U.S. Attorney for the District of Maryland Rod J. Rosenstein said Monday.
Young Y. Lee, former president and chief executive of Information Systems Support Inc. and Lorn J. MacUmber, former senior vice president of ISS, admitted to helping a former Army colonel break procurement rules by offering him a job while he was evaluating the company's contracting bids.
Lee and MacUmber repeatedly took former Army Colonel Richard J. Moran out to dinner and offered him a $125,000-a-year job while the company was bidding on awards for which he was responsible. Moran pleaded guilty in 2003 to conspiracy and bribery charges and is currently serving a prison sentence.
ISS, a Gaithersburg, Md.-based contractor that supplies information technology and other services to federal agencies, said the infractions only involved the two executives and did not indicate a problem with the company. In a statement, officials said the company had given its "full and complete cooperation" to the investigation and that prosecutors determined that ISS should not be charged as a result of the former employees' behavior.
According to documents submitted to the court, in 2001, when Moran was responsible for more than 17,000 military contracts in Korea, he told Lee and MacUmber that he was considering retirement. Lee and MacUmber bought Moran dinners at a Korean restaurant in Wheaton, Md., and a steakhouse in Tyson's Corner, Va., and discussed the possibility of Moran working for ISS.
During this time, Moran influenced the outcome of at least one contract, according to statements submitted to the court. After a team of military experts suggested the contract should be awarded to an ISS competitor, Moran intervened and eventually ISS received the contract.
In January 2002, MacUmber offered Moran a job as director of Western corporate support projects and a salary of $110,000, plus other benefits. Moran negotiated for $125,000 a year and accepted that offer, according to an e-mail MacUmber sent to Lee.
Moran's plans were interrupted when Army Criminal Investigation Command agents searched his house as part of an unrelated investigation. After discovering evidence of bribery, the agents arrested Moran and the Army relieved him of his duties the next day.
According to ISS spokeswoman Sylvette Barr, the company strengthened its policy on compliance with conflict of interest laws as a result of the case. It now has a compliance program and internal controls designed to avoid this kind situation.
Both Lee and MacUmber left the company for reasons unrelated to the charges; Lee retired to perform missionary work, Barr said.
Conflict of interest behavior regulations are outlined in several laws, including the 1996 Procurement Integrity Act, which prohibits contracting personnel from being paid by contractors for one year after being involved with a contract worth more than $10 million.
Scott H. Amey, general counsel of the Project on Government Oversight, a Washington-based watchdog group, said even allowing a contractor to take a federal employee out to dinner crosses ethical - and possibly legal - boundaries. "You don't want one contractor being able to influence the government's decision of where and how they grant government contracts," he said.