Accession Number : ADA309138

Title :   Defense Procurement: E-Systems' Reporting of Alleged Wrongdoing to Army's Fraud Division.

Corporate Author : GENERAL ACCOUNTING OFFICE WASHINGTON DC OFFICE OF SPECIAL INVESTIGATIONS

PDF Url : ADA309138

Report Date : MAY 1996

Pagination or Media Count : 27

Abstract : After E-Systems, Inc., a defense contractor, pleaded guilty in July 1990 to violations of federal law related to contracts with the Department of the Army, the Army entered into a 3-year administrative settlement agreement (Memcor Agreement) with the company. Among other things, the agreement required E-Systems to report all hotline allegations to the Army's Procurement Fraud Division. When the Subcommittee on Oversight and Investigations, House Committee on Energy and Commerce, received allegations from a former chief investigator for E-Systems' Greenville (Texas) Division concerning the division's hotline/ethics program, the Subcommittee's then Chairman, asked the General Accounting Office (GAO) to answer the following questions: (1) Did federal law, regulations, or the Memcor Agreement require E-Systems to disclose suspected violations of procurement law?; (2) How many and what types of hotline complaints were lodged against E-Systems' Greenville Division?; (3) Did E-Systems' employees, contrary to federal law, alter or reinvestigate hotline complaints and investigation results to avoid disclosing information to the federal government; and what were the details behind three cases that had been brought to the Subcommittee's attention?; (4) Why did the Army not debar E-Systems from doing business with the government, given the serious accusations contained in a May 1994 Army 'show cause' letter?; and (5) What loss did the government experience as a result of E-Systems' actions in the three previously mentioned hotline cases?

Descriptors :   *CONTRACTORS, *DECEPTION, *CRIMINAL INVESTIGATIONS, UNITED STATES GOVERNMENT, ETHICS, AGREEMENTS, REGULATIONS, TEXAS, HOUSE OF REPRESENTATIVES, ARMY PROCUREMENT, PANEL(COMMITTEE), FEDERAL LAW.

Subject Categories : Administration and Management
      Government and Political Science
      Sociology and Law

Distribution Statement : APPROVED FOR PUBLIC RELEASE