"...Salomon said he was asked to lie and misrepresent financial data to the Pentagon's Defense Contract Audit Agency. He once found a financial journal entry that was accompanied by a card that stated, 'Do not show to auditors.'..."
By WARREN P. STROBEL
McClatchy Newspapers | November 21, 2010
KABUL, Afghanistan -- A corporate whistle-blower, whose evidence of fraud led to one of the largest fines ever against a war-zone contractor, said that he was ordered to facilitate bribes, keep information from government auditors and inflate overhead rates.
Former Louis Berger Group employee Harold Salomon, in his first interview since the case was settled earlier this month, said he came to believe the New Jersey firm hired him because executives calculated that the Haitian immigrant would not uncover their defrauding of U.S. taxpayers.
"Me being an immigrant would be easy prey," he said. They thought "I would not understand anything."
Louis Berger agreed Nov. 5 to pay $69.3 million in civil and criminal penalties and accept a "deferred prosecution," which means federal charges would be dropped only if the firm complies with its court agreement with the government. The deal, however, allows the firm to continue competing for U.S. government contracts.
Louis Berger is among the U.S. Agency for International Development's largest contractors in Afghanistan.
Salomon, who worked as a financial analyst for Louis Berger from 2002 to 2006, described a culture of fraud that permeated much of the company.
He said his first clue that something was amiss came just three months into the job, when he was told to send an inexplicable $35,000 wire transfer to an individual overseas. He questioned his superior, who told him to send the money anyway, and then asked for a confirmation email from the overseas recipient. The response he got: "I was told it was 'grease money'" - in other words, a bribe.
Salomon, who declined to identify his superiors by name, spoke to McClatchy in a telephone interview from the United States.
Louis Berger spokeswoman Holly Fisher declined to comment on the specifics of Salomon's experiences at the company.
"This matter was settled with the parties involved - the U.S. government, Mr. Salomon and the Louis Berger Group - on November 5, 2010. The Louis Berger Group has undertaken comprehensive improvements to its internal controls, policies and structures, which form the foundation of the company's systems going forward. We see no reason to comment further on these matters," she said in an e-mailed statement.
The firm acknowledged overbilling the U.S. government, in what federal court documents and sources said was a complicated mathematical scheme to manipulate contract overhead rates.
Salomon said he once came across a document, misplaced in a stack of papers, that was a "menu of fraud." Meant as an analysis for a senior company official, it contained columns showing various options for increasing Louis Berger's profit by including different overhead costs.
Salomon said he was asked to lie and misrepresent financial data to the Pentagon's Defense Contract Audit Agency. He once found a financial journal entry that was accompanied by a card that stated, "Do not show to auditors." He took it to his boss, who, he said, exclaimed, "Holy cow, we cannot show (them) this." The note was taken from him and, he believes, destroyed.
He eventually decided he had to leave the company in order to report what was going on. He took large amounts of data with him that he later turned over to federal investigators. "It was just an accident" that I had the information, he said, "I worked long hours at home."
On the advice of a colleague, Salomon contacted agents from the Defense Criminal Investigative Service. He soon became worried that Louis Berger would try to blame him for the fraud and hired a law firm, Phillips & Cohen.
Under federal whistle-blower statutes, Salomon can receive 15 percent to 25 percent of the court award. He said he would give half that amount, which is still to be determined, to a charity for Haiti he founded.
Salomon said he first became familiar with corruption in his native Haiti, where he worked from 1986 to 1993. Now, he said, "I have seen corruption in a way that I didn't anticipate or I didn't know could happen in the United States."