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Former military manager took bribes to favour contractors: shows a legal and ethical dilemma.

A former Department of Defence civilian official has pleaded guilty to two felony charges for taking tens of thousands of dollars in illegal cash payments from a private contractor to support the contractor’s effort to obtain USD6.4 million from the government in connection with construction projects on a Navy base in the African nation of Djibouti, the US Department of Justice said, announcing a plea of guilty.

Nizar Farhat, 63, of Palm Desert, California, has pleaded guilty to one count of being a public official who received an illegal gratuity and one count of being a public official who received compensation from a private party for government services.

Farhat was a construction manager working at the United States Marine Corps Air Ground Combat Centre in Twentynine Palms.

According to his plea agreement, in 2014 and 2015, Farhat was on assigned temporary duty at the United States Navy Base Camp Lemonnier in Djibouti, where he oversaw a private company’s USD15 million contract to construct an aircraft hangar and a telecommunications facility. After the projects were completed, the company submitted to the Defence Department "Requests for Equitable Adjustment" that sought USD6.43 million in additional payments.

Farhat admitted that, on four separate occasions between December 2015 and October 2017, he met with representatives of the company at hotels in Las Vegas and Palm Springs. During those meetings, Farhat took USD15,000 in cash to help draft the Requests that the company submitted to the Defence Department, and another ISD22,000 in cash to recommend that the Navy certify completion of the construction projects and approve the Requests.

Following those meetings, Farhat urged the Defence Department to approve the majority of the Requests, without disclosing that defendant had received cash from the company in exchange for his recommendation.

The majority of the Requests remain under review by the Department.

Farhat is scheduled to be sentenced by US District Judge Jesus Bernal on 4th October. He faces a statutory maximum sentence of 10 years in federal prison.


The first allegation, that of accepting payment to assist in the preparation of the Requests, has widespread implications for both employees and bidders. The problem is both legal and ethical.

A bidder needs information as to exactly what a company requires. It is far from uncommon for contract managers in both bidders and companies offering contracts to know each other and/or to socialise during the bidding process. It is also far from uncommon for bidders to ask for as much detail as possible. The difficult arises in deciding exactly where the line is between giving commercial (we might consider it inside) information and providing the information necessary for a bid to be accurately made.

There is another dimension: it is far from uncommon for an employee of the company offering contracts to help a bidder to prepare and submit the bid. He may, as in this case, do it for a fee.

If the employee is permitted to take on outside consultancy, then in principle this is allowed. If the employee is not allowed to do so, then it is unlawful. But unlawful does not make it illegal.

Where it becomes illegal is where the assistance goes beyond a line that seems ill-defined, if is defined at all.

This case, as reported by the Department of Justice, does not help to define that line but it does hint at it and it's a lot more restrictive than many would consider. We must emphasise that the report is a superficial press release: we do not have the details of the allegations. On the face of the report, the line is drawn by the expression "Farhat took USD15,000 in cash to help draft the Reports the company submitted to the Defence Department." Again, on the face of it, Farhat as the construction manager would have access to information needed to be included in the Requests. He was not, in providing it, acting against the interests of his employer i.e. the Department of Defence, in relation to the construction.

But if the Requests were for moneys not properly due i.e. included an element of fraud, then he was acting against the interests of his employer in relation to the payments.

The course of conduct suggests that he was acting outside even the type of co-operation described above and that there was a plan that he was part of from start to what would have been the finish if all had gone well.

There is no doubt that the second event, taking money to procure a favourable result under the Requests is corruption.

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