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U.S. v. Metcalf & Eddy

 
:
Metcalf & Eddy
:
DOJ Civil
:
December 7, 1999
:
U.S. v. Metcalf & Eddy
:
U.S. v. Metcalf & Eddy, No. 99-cv-12566 (D. Mass. 1999)
:
Engineering Services
:
Egypt
:
1994; 1995; 1996; 1997; 1998; 1999
:
Egyptian government official (Chairman of Alexandria General Organization for Sanitary Drainage)
:
Metcalf & Eddy is a Delaware corporation specializing in architectural and engineering services, and is the successor by merger of Metcalf & Eddy International, Inc. ("M&E International").

According to the DOJ's Complaint, between October 1994 and December 1999, Metcalf & Eddy and M&E International paid bribes in the form of travel, lodging, and entertainment expenses to the Chairman of Alexandria General Organization for Sanitary Drainage ("AGOSD"), an Egyptian government organization. The bribes were paid to influence AGOSD's support of contracts and contract extensions between the United States Agency for International Development ("USAID") and M&E International.

According to the DOJ's Complaint, USAID sponsored two projects for the benefit of AGOSD. Although the contracts were awarded by USAID, the prospective contractors and their bids were subject to review by a Technical Review Board that included two AGOSD representatives. Although the AGOSD Chairman himself did not participate in the evaluation and scoring of bidders in the selection process, officials of M&E International knew that he was capable of exerting influence upon his subordinates, including the AGOSD officials who sat on the Technical Review Board.

The AGOSD Chairman, his wife, and two children allegedly traveled to the United States and France at the invitation of M&E International during periods of time in which the awarding of contracts and the corresponding contract extensions were under consideration by USAID. In October 1994, while the Chairman was in the U.S. at M&E International's expense, he signed an order on behalf of AGOSD, recommending M&E International for a contract worth over $10 million (the "Phase I contract"). About one month later, the Phase I contract was awarded to M&E International. Around this time, M&E International was bidding on another related contract (the "Phase II contract") although the Phase II contract was not awarded to M&E International until July 1995.

In September 1996, the Chairman and his family again traveled to the United States at M&E International's expense. Shortly after, the Phase II contract was extended by USAID, and the Chairman wrote a letter to USAID asking that the Phase I contract be extended.

Both contracts required that travel associated with the contracts be in accord with the Federal Travel Regulations, under which the Chairman was entitled to receive, in advance, a cash per diem payment to cover his travel-related expenses. On both trips, the Chairman allegedly received 150% of the estimated per diem expenses in a lump sum prior to leaving Egypt. In neither case was the extra 50% justified or documented by M&E International. Moreover, on both trips, M&E International paid for most of the travel and entertainment expenses incurred by the Chairman and his family, even though the Chairman had already received funds for his own per diem expenses. Also against the Federal Travel Regulations, which authorize only coach travel except in exceptional circumstances not applicable to this case, M&E International upgraded the Chairman's airline tickets to first class for both of his trips. Finally, an officer of M&E International allegedly obtained two undocumented cash advances immediately prior to and during the Chairman's 1996 trip, which funds were evidently expended in connection with the Chairman's travel.

The DOJ filed a civil complaint against Metcalf & Eddy on December 7, 1999. Metcalf & Eddy, without admitting or denying the allegations of the complaint, agreed to entry of a final judgment of permanent injunction, pay a fine of $400,000 and reimbursement of investigation costs of $50,000, and maintain a compliance and ethics program designed to detect and prevent violations of the FCPA.
:
Anti-bribery (Domestic Concern)
:
Fine, Injunction/Cease and desist
:
Permanent injunction, civil fine of $400,000 and reimbursement of investigation costs of $50,000.
:
450,000
:
0
:
Domestic Concern
:
U.S.
:
Contract Procurement/Retention
:
36,558,595
:
Cash, Entertainment, Travel
:
Not stated.
:
Egypt
:
No
:
No