Burn Bag: If a T-wall tips over in Baghdad but there’s no media around to hear it, will it make a sound?

Posted: 10:31 am EDT
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Via Burn Bag:

“If a T-wall tips over in Baghdad but there’s no media around to hear it, will it make a sound?  What if it crushes a local national contractor working on a USG facility— will anyone mention the man’s death, or can we expect radio silence as usual?  It’s becoming clear that no one back home really cares about what’s going on over here….it’s like 2004 all over again.”

U.S. Soldiers of Headquarters and Headquarters Company, Brigade Special Troops Battalion, 3rd Brigade Combat Team, 82nd Airborne Division, guide a concrete barrier into a new position at Joint Security Station Loyalty, eastern Baghdad, Iraq, on May 17, 2009

U.S. Soldiers of Headquarters and Headquarters Company, Brigade Special Troops Battalion, 3rd Brigade Combat Team, 82nd Airborne Division, guide a concrete barrier into a new position at Joint Security Station Loyalty, eastern Baghdad, Iraq, on May 17, 2009. Photo by Staff Sgt. James Selesnick

Note: “T-Walls” or Texas barriers can reached upwards of 12 to 18 feet in height. Some of the tallest reach 24 feet. According to army.mil, t-walls of the larger variety became symbols of life in Iraq although several variations of shapes and sizes also abound around Iraq.  Read more here.

 

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Conspired to Defraud Uncle Sam? Be Very Afraid. We’re Gonna Put You in Home Confinement!

Posted: 9:40 am EDT
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Remember the USAID nonprofit contractor IRD? (See Dear USAID OIG — That Nonprofit Contractor Mess Really Needs a Fact Sheet). Well, here’s another one.  This is a case where the CEO of a major USAID contractor gets feather-slapped by the court.

A 2011 ranking of private USAID partners by devex.com lists LBG as the third largest USAID private-sector partner that has contracted some of the government’s largest post-conflict redevelopment projects in Iraq and Afghanistan. According to Bloomberg, Louis Berger International, a unit of Louis Berger Group, got about $736 million to modernize a power system and rehabilitate the Kajakai Dam in Afghanistan.  Whoa! We thought that dam only cost $305.5 million! Plus cost of fuel that  US taxpayers also had to shoulder.

What is missing from this announcement? How much was the total contracts that LBG received in the last 20 years? Who’s paying the independent monitor? And for heaven’s sake, what lessons are we sending to other reconstruction capitalists doing awesome work for love of god and country?

Via USDOJ:

The former president, chief executive officer, and chairman of the board of a New Jersey-based international engineering consulting company was sentenced today to 12 months of home confinement and fined $4.5 million for conspiring to defraud the U.S. Agency for International Development (USAID) with respect to billions of dollars in contracts over a nearly 20-year period, U.S. Attorney Paul J. Fishman announced.

Derish Wolff, 79, of Bernardsville, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging conspiracy to defraud the government with respect to claims. Judge Thompson imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Wolff, the former president and CEO of Morristown, New Jersey-based Louis Berger Group Inc. (LBG), and the former chairman of LBG’s parent company, Berger Group Holdings Inc. (BGH), led a conspiracy to defraud USAID by billing the agency on so-called “cost-reimbursable” contracts – including hundreds of millions of dollars of contracts for reconstructive work in Iraq and Afghanistan – for LBG’s overhead and other indirect costs at falsely inflated rates.

USAID, an independent federal government agency that advances U.S. foreign policy by supporting economic growth, agriculture, trade, global health, democracy, and humanitarian assistance in developing countries, including countries destabilized by violent conflict, awarded LBG hundreds of millions of dollars in reconstruction contracts in Iraq and Afghanistan as well as in other nations. LBG calculated certain overhead rates and charged USAID and other federal agencies these rates on cost-reimbursable contracts, which enabled LBG to pass on their overhead costs to the agency in general proportion to how much labor LBG devoted to the government contracts.

From at least 1990 through July 2009, LBG, through Wolff and other former executives, intentionally overbilled USAID in connection with these cost-reimbursable contracts. The scheme to defraud the government was carried out by numerous LBG employees at the direction of Wolff.

Wolff targeted a particular overhead rate, irrespective of what the actual rate was, and ordered his subordinates to achieve that target rate through a variety of fraudulent means. From at least as early as 1990 through 2000, Wolff ordered LBG’s assistant controller to instruct the accounting department to pad its time sheets with hours ostensibly devoted to federal government projects when it had not actually worked on such projects.

At an LBG annual meeting in September 2001, Salvatore Pepe, who was then the controller and eventually became chief financial officer (CFO), presented a USAID overhead rate that was significantly below Wolff’s target. In response, Wolff denounced Pepe, called him an “assassin” of the overhead rate and ordered him to target a rate above 140 percent, meaning that for every dollar of labor devoted to a USAID contract, LBG would receive an additional $1.40 in overhead expenses supposedly incurred by LBG.

In response, Pepe and former controller Precy Pellettieri, with Wolff’s supervision, hatched a fraudulent scheme from 2003 through 2007 to systematically reclassify the work hours of LBG’s corporate employees, including high-ranking executives and employees in the general accounting division, to make it appear as if those employees worked on federal projects when they did not. At his plea hearing on Dec. 12, 2014, Wolff admitted that Pepe and Pellettieri, at Wolff’s direction, reclassified these hours without the employees’ knowledge and without investigating whether the employees had correctly accounted for their time, and at times did so over an employee’s objection.

In addition to padding employees’ work hours with fake hours supposedly devoted to USAID work, Wolff instructed his subordinates to charge all commonly shared overhead expenses, such as rent, at LBG’s Washington, D.C., office to an account created to capture USAID-related expenses, even though the D.C. office supported many projects unrelated to USAID or other federal government agencies.

On Nov. 5, 2010, Pepe and Pellettieri both pleaded guilty before then-U.S. Magistrate Judge Patty Shwartz to separate informations charging them with conspiring to defraud the government with respect to claims. Also on that date, LBG resolved criminal and civil fraud charges related to Wolff’s and others’ conduct. The components of the settlement included:

  • a Deferred Prosecution Agreement (DPA), pursuant to which the U.S. Attorney’s Office in New Jersey suspended prosecution of a criminal complaint charging LBG with a violation of the Major Fraud Statute; in exchange, LBG agreed, among other things, to pay $18.7 million in related criminal penalties; make full restitution to USAID; adopt effective standards of conduct, internal controls systems, and ethics training programs for employees; and employ an independent monitor who would evaluate and oversee the company’s compliance with the DPA for a two-year period;
  • a civil settlement that required the company to pay the government $50.6 million to resolve allegations that LBG violated the False Claims Act by charging inflated overhead rates that were used for invoicing on government contracts; and an administrative agreement between LBG and USAID, which was the primary victim of the fraudulent scheme.

In the settlement, the government took into consideration LBG’s cooperation with the investigation and the fact that those responsible for the wrongdoing were no longer associated with the company.

Click here for the original announcement (pdf).

 

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New #Burundi Travel Warning, Non-Emergency US Embassy Staff & Family Members Now on Ordered Departure

Posted: 9:46 pm  PDT
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We posted this earlier today: US Embassy Burundi: Amidst Coup Attempt, No Movement of Personnel Until Further Notice. Sometime in the last 24 hours, the State Department must have decided to place the US Embassy in Bujumbura on “ordered departure.” A new Travel Warning was released today. Non-emegency personnel and family members are also ordered to depart the country.   Ordered Departure is initiated in extraordinary circumstances when the embassy is no longer confident of the security of its personnel and families. Once the Under Secretary of State for Management (“M”) approves the evacuation status for post—either authorized or ordered—the 180-day clock “begins ticking” (by law, an evacuation cannot last longer than 180 days).

The State Department also recommends that U.S. citizens currently in Burundi depart “as soon as it is feasible to do so.”   Meanwhile, the game of continues, and there are still conflicting reports on social media regarding the operating status of the Bujumbura airport.

by-map bujumbura

Below is an excerpt from the new Travel Warning dated May 14:

The U.S. Department of State warns U.S. citizens against all travel to Burundi and recommends that U.S. citizens currently in Burundi depart as soon as it is feasible to do so.  As a result of the deteriorating security situation, the Department of State ordered the departure of dependents of U.S. government personnel and non-emergency U.S. government personnel from Burundi on May 14.  The U.S. Embassy is able to offer only very limited emergency services to U.S. citizens in Burundi.  This Travel Warning supersedes the Travel Warning issued on May 11, 2015.

The security situation remains fluid and volatile because of military and security forces activity in Bujumbura.  There have been increased political tensions and civil disturbances related to these actions.  Airport and land borders are reportedly closed.  U.S. citizens should shelter in place until it is safe to move about, ensure that your travel documents are up-to-date, and confirm that air and land borders are open before attempting to depart the country.

The terrorist organization al-Shabaab, based in Somalia, has threatened to conduct terror attacks in Burundi.  It may also target U.S. interests in Burundi.  Political violence persists throughout Burundi, a carryover of the Burundian civil war. Armed groups operate in Burundi.  Weapons are easy to obtain and some ex-combatants have turned to crime or political violence.  Crime, often committed by groups of armed bandits or street children, poses the highest risk for foreign visitors.  Exchanges of gunfire and grenade attacks have increased but are usually not directed at foreigners.  If you encounter such a situation, stay indoors in a ground floor interior room away from doors and windows.  Common crimes include muggings, burglaries, and robberies.  U.S. government personnel are prohibited from walking on the streets after dark and from using local public transportation at any time.  Local authorities in any part of Burundi are often unable to provide timely assistance during an emergency.

Demonstrations, gatherings, and even sporting events that are intended to be peaceful can turn violent without advance warning.  For this reason, U.S. citizens should routinely monitor local media sources and the Internet for reports of demonstrations and unrest, and avoid political rallies, demonstrations, and crowds of any kind.

Travel outside the capital, Bujumbura, presents significant risks, especially after nightfall.  Note the U.S. embassy limits and monitors the travel of its personnel in Burundi.  All movement by embassy employees outside the city from 6:00 p.m. to 7:00 a.m. is prohibited.  Likewise, U.S. citizens should not travel on national highways from dusk to dawn.  Armed criminals ambush vehicles, particularly on the roads leading out of Bujumbura.  Keep vehicle doors locked and windows up when stopped in heavy traffic.

Corruption is endemic in Burundi and contributes to an environment where the rule of law is not respected.  Government officials may ask for bribes for providing routine services.  Travelers are frequently stopped, questioned, and asked for bribes by security forces at numerous official and unofficial roadblocks throughout the country.  Likewise, criminals who have paid off local officials may operate with impunity.

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