Army contracting scandal nets guilty plea

Millions alleged to have changed hands

A former Army Corps of Engineers employee has pleaded guilty to charges of bribery and conspiracy in one of the most brazen corruption schemes in federal contracting, according to court documents.

As part of the plea agreement, Michael Alexander, a former program manager at the Army Corps, has agreed to plead guilty to bribery and conspiracy to launder money from the government, according to records filed Jan. 24.

The three others indicted in the case, Kerry Khan, another former Army Corps program manager, Lee Khan, his son, and Harold Babb, formerly the director of contracts at Eyak Technology, have pleaded not guilty in the case. They were arrested and arraigned Oct. 4.

Two officials with an EyakTek subcontractor—Nova Datacom—have already pleaded guilty, according to the Associated Press.

The indictment alleges bribery, conspiracy and unlawful kickbacks valued at $20 million dollars. The two Army Corps employees allegedly steered a $780 million contract to a government contractor. They are accused of conspiring to hide the money through a series of financial transactions on the Army Corps’ Technology for Infrastructure, Geospatial, and Environmental Requirements (TIGER) contract.

When announcing the indictment in October, U.S. Attorney Ronald C. Machen Jr. described the alleged activity as “one of the most brazen corruption schemes in the history of federal contracting.”

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Thu, Feb 2, 2012 Think it through Washington, D.C.

I started to type this out to disagree with you and say that a lot of specialized contracts were in place to level the market playing field, but you are right, especially given the economic times of today. I will say that corruption is possible in any arena though, and it comes down to integrity and more importantly, auditing contract progress.

Fri, Jan 27, 2012 Common Sense

All the more reason to eliminate all of the specialized contracts (DHS First Source, AF Netcents, etc) and go to OPEN MARKET bidding like commercial. Simply require adherence to a standardized set of terms and conditions and any provider who contractually commits to those terms, has a reasonable history of performance, and offers best price wins. In addition to hiding corruption, specialized contracts add huge overhead to the cost. Eliminating them would open competition, significantly reduce administrative overhead, and lower prices, in addition to offering full transparency.

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