- The Washington Times - Saturday, October 19, 2002

Two former high-ranking Pentagon officials in the Clinton administration were arrested yesterday on charges of extortion, bribery, money-laundering and witness tampering in a suspected scheme involving the awarding of contracts to minority firms.
U.S. Attorney Paul J. McNulty said Robert L. Neal Jr., 50, of Bowie, and Francis D. Jones Jr., 40, of Fort Washington, are accused of having used for "their own private enrichment" their management positions at the Pentagon's Office of Small and Disadvantaged Business Utilization (SADBU), a $28 million annual program.
The suspected scheme, according to Mr. McNulty, netted the two men more than $1.1 million in illicit profits.
"Those who hold public offices at high levels of the Pentagon owe the highest duties of loyalty to the public and to our men and women who have the distinction of serving in uniform," Mr. McNulty said, adding that Mr. Neal and Mr. Jones "abused" their public offices.
"They took advantage of the very disadvantaged business people whose interests they were supposed to promote," he said. "Those who have been granted the privilege of serving at the highest levels of public office need to understand that if they betray the public trust they will be prosecuted."
According to an affidavit unsealed by prosecutors yesterday, Mr. Neal a Clinton political appointee served as SADBU director from June 1996 until June 2001. Mr. Jones worked as his assistant. Neither is now employed by the U.S. government.
Neither was available yesterday for comment.
SADBU is the office within the Defense Department chiefly responsible for the development and promulgation of policies and management initiatives designed to ensure that small businesses, small disadvantaged businesses, women-owned small businesses, historically black colleges and universities and minority institutions were given an equal opportunity to compete for Defense Department contracts.
The affidavit said Mr. Neal controlled a $28 million annual budget and that he and Mr. Jones could substantially influence whether a prospective minority bidder was accepted or denied. They also had direct influence over contractors who sought to provide services and materials to SADBU, the affidavit said.
According to the affidavit, Mr. Neal and Mr. Jones, both of whom are black, engaged in a wide range of criminal activities during their tenure at the Pentagon, using their positions as leverage to receive illegal extortion payments, bribes and gratuities from minority or disadvantaged Defense Department contractors seeking to participate in the preference programs.
The affidavit said the two men "coordinated their illegal activities and worked together as partners," conspiring with others in a sophisticated scheme to launder the proceeds of their illegal activities through phony companies, offshore bank accounts and multilayered sham transactions.
It also said they conspired to embezzle more than $100,000 in funds from federal programs.
A search yesterday by Defense Criminal Investigative Service (DCIS) and FBI agents of houses belonging to Mr. Neal and Mr. Jones uncovered $7,000 in cash from the Jones residence and gold Rolex watches from both houses.
The affidavit said the watches were purchased for Mr. Neal and Mr. Jones "by an individual whose company held contracts with DOD over which Neal and Jones were in a position to exert influence."
Mr. Neal was named to head SADBU on June 24, 1996. At the time, he was the associate administrator for the Office of Enterprise Development of the General Services Administration (GSA). At GSA, his responsibilities also included the administration of preference programs and conducting outreach to small, minority and women-owned businesses to increase their participation in government contracting.
He also served as an associate deputy administrator for government contracting and minority enterprise development at the Small Business Administration and held a number of positions at the Office of Management and Budget (OMB). As a deputy associate administrator with the Office of Federal Procurement Policy, he was co-chairman for the OMB's regulatory efforts to implement the Drug-free Workplace Act.
Mr. Neal has been awarded the Secretary of Defense's Outstanding Public Service Medal and Outstanding Achievement Award, the OMB's Special Performance Awards, OMB's EEO Award and OMB's Divisional Awards for Special Performance.
Prosecution of the case is being handled by Assistant U.S. Attorney Matthew Friedrich.

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