In connection with his guilty plea, Lee admitted that, as the president and chief executive officer of American Logistics Services (ALS), a Kuwaiti company providing supplies to the U.S. military in Iraq, he paid a $15,000 bribe to former Lieutenant Markus E. McClain in exchange for favorable official action in the awarding of an extension of a lucrative bus contract to ALS. Specifically, Lee admitted that, in August 2004, several of his employees met with former Lieutenant McClain at Camp Arifjan, Kuwait, and offered McClain $15,000 and a Rolex watch in exchange for former Lieutenant McClain’s assistance in getting the contract extension to ALS. Former Lieutenant McClain ultimately accepted the bribe payment.

During the sentencing hearing, the court also made specific findings that Lee directed the payment of over $1 million in bribes to other Army personnel.

Former Lieutenant McClain previously pleaded guilty to one count of accepting a gratuity, and will be sentenced on Oct. 23, 2015. In addition, Lee’s son, Justin Lee, previously pleaded guilty to one count of conspiracy to commit bribery and four counts of bribery for his role in the scheme, and is scheduled to be sentenced on Oct. 29, 2015.

The case is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the U.S. Department of Homeland Security Immigration and Customs Enforcement, and previously was investigated by the Office of the Special Inspector General for Iraq Reconstruction. The case is being prosecuted by Trial Attorneys John Keller and Richard Evans of the Criminal Division’s Public Integrity Section and the U.S. Attorney’s Office of the Eastern District of Pennsylvania.

SOURCE: Department of Justice

Although Judge Crone compelled production of the report, a subsequent order on the matter does not contain an explanation for her decision.

KBR’s attorney, Tirzah S. Lollar of Vinson & Elkins LLP pointed out that Judge Crone ruled “on grounds other than what the government argued” and said, “we respectfully disagree with that ruling.”

The government’s FCA case alleges Eagle Global Logistics employees Kevin Smoot and Thomas Kessner bribed KBR’s Robert Bennett for better subcontract terms under the company’s massive Logistics Civil Augmentation Program III contract, which the government spent $38 billion on over 10 years.

Bennett pled guilty to accepting illegal gratuities from EGL, a point the government has cited as evidence he violated the Anti-Kickback Act. The alleged violations, the government argues, should be imputed to the contractor.

In its last-minute motion, the government argued that KBR waived privilege of the investigation when it used the document at trial this week to claim that it had disciplined Bennett for his conduct as a result of KBR’s “zero tolerance” policy. That testimony, the government claimed, put the document squarely in play.

The company shot back against the motion in a Thursday trial brief, saying the testimony did not refer to any of the privileged information; rather, it simply mentioned the fact that the company disciplined the employee as a result of its findings.

Following the close of trial Thursday, Judge Crone ordered the parties to file post-trial briefings by Aug. 14, at which point she will take the case under advisement.

The government is represented by Michael W. Lockhart, Glenn P. Harris, Benjamin C. Mizer, John M. Bales, Michael D. Granston, Judith Rabinowitz, Kelley C. Hauser and Samuel J. Buffone of the U.S. Department of Justice.

KBR is represented by Tirzah S. Lollar and Christine N. Roushdy of Vinson & Elkins LLP and Patricia D. Chamblin of MehaffyWeber PC.

SOURCE: LAW 360