- The Washington Times - Wednesday, January 14, 2015

A federal judge is questioning why the government wants to let an Army subcontractor off with just a fine, rather than pursue charges in a criminal case against the company whose founder doled out tens of thousands of dollars in bribes to a corrupt Army official.

Prosecutors have proposed letting Saena Tech pay a $500,000 fine and enact a corporate compliance program as punishment for the company’s part in what prosecutors have called the largest domestic bribery case in U.S. contracting history. If approved, the deal would allow prosecutors to drop the charges within two years.

But more than a dozen other figures in the case are serving federal prison sentences, and U.S. District Judge Emmet Sullivan raised questions about why Saena Tech’s founder got what another government contractor called a “sweetheart deal.”


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The Saena Tech investigation was an offshoot of a broader $30 million Army Corps of Engineers contracting scandal, which landed a government program manager in federal prison for 19 years.

The Saena Tech executive, identified as Jin Seok Kim, provided important information to investigators, prosecutors said in court papers. Though he personally was involved in the bribery scam, he’s never faced any charges.



Defense lawyers and prosecutors were ready to push ahead on the deferred prosecution agreement, but Judge Sullivan put off the decision last year. He appointed an expert on the use of the agreements to advise on him on whether he can reject the deal.


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The expert, Brandon Garrett, a professor at the University of Virginia, has since said in a report to Judge Sullivan that the proposed half-million dollar fine is hard to assess because court records don’t say how much money Saena Tech took in from the bribery scheme.

Paul Larkin, a senior legal research fellow at the Heritage Foundation and a former Justice Department attorney, said it’s hard to say from the court records why the government is offering the deal.

But he said prosecutors have all sorts of reasons for giving breaks to certain companies or individuals, including securing cooperation to go after bigger targets.

“It may be that the company provided the government with invaluable evidence that if they hadn’t then the government never would have been able to bring prosecutions against others,” he said.

He said while the Justice Department can sometimes make mistakes, most of its prosecutors are ethical and competent, and “if they gave somebody what a judge may think is a sweetheart deal, it’s probably because this person provided tremendous help to the government.”

Intelligent Decisions, another company ensnared in the same investigation, also has entered into a deferred prosecution agreement with U.S. attorney’s office in Washington.

But company attorneys said Intelligent Decisions and its employees have paid “a stiff price,” despite losing money in the same bribe scheme and facing a fine nearly as big as what the Saena Tech deal proposed.

“This issues raised by Saena Tech’s ‘sweetheart deal’ are simply not present here,” attorneys for Virginia-based Intelligent Decisions wrote in a recent court filing. They also said executives are working with Army suspension and debarment officials in hopes of avoiding sanctions that would effectively put the contracting company out of business.

The Army official at the center of the bribe scheme, In Seon Lim, was sentenced to four years in prison last fall.

During both the Bush and Obama administrations, the Justice Department increased the use of deferred prosecution agreements. The idea is to punish a company and hold it accountable, while ensuring that employees and others who depend on it don’t pay an unfair price.

In the most often cited example, thousands of Arthur Andersen employees lost their job amid charges filed in the Enron scandal that forced the accounting firm to shut down, even though the charges were ultimately tossed.

But the agreements also have raised others concerns, with critics saying companies dubbed too big to fail get breaks that other defendants don’t.

Last year, Rep. Bill Pascrell, New Jersey Democrat, called for more oversight and transparency into how the Justice Department strikes such agreements, including the hiring of corporate compliance overseers who can earn lucrative fees.

“For too long, the public has been shielded from the increased use of deferred and non-prosecution agreements and the potential abuse associated with some of these sweetheart deals,” he said.

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