gifts | The Contracting Education Academy

December 1, 2016 By AMK

Office of Government Ethics revises Executive Branch gift rules

Effective January 1, 2017, the Office of Government Ethics (OGE) is revising the gift rules applicable to executive branch employees.

Office of Govt Ethics The revisions were prompted by the Ethics in Government Act of 1978, which requires OGE to periodically update its regulations.

For the most part, the revisions are non-substantive edits that enhance readability and remove gender references.

The OGE did, however make numerous changes that persons and organizations interacting with the federal government should be aware of to stay in compliance with ethics rules.

Notably, even if a gift qualifies for a specific exemption, the new rules “encourage” employees to decline a gift if they believe a “reasonable person with knowledge of the relevant facts would question the employee’s integrity or impartiality” by virtue of its acceptance.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=546920

January 13, 2016 By AMK

Ethics office proposes change to prohibition against soliciting and accepting gifts from contractors

The Office of Government Ethics (OGE) has proposed revisions to federal ethics rules that prohibit Executive Branch employees from soliciting and accepting gifts from contractors.

The proposed rule incorporates past interpretive guidance, includes updated citations, provides new examples, and clarifies the definition of “gift.” For example, the rule expands the exception from the definition of gifts for items of low intrinsic value that are “solely” for presentation to items of low intrinsic value that are “primarily” for presentation.

Previous exceptions to the gift rule are now listed as exclusions; for instance, a free offer to attend an event on the day the employee is speaking or presenting at the event is excluded from the definition of gift. An added example illustrates that the exclusion for “modest items of food and refreshment” does not include alcoholic beverages served at a Government contractor’s holiday party.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=454240

November 3, 2014 By AMK

Former Army contracting official sentenced to 4 years in prison in bribery and kickback scheme

In Seon Lim, a former contracting official for the U.S. Department of the Army, has been sentenced to four years in prison for his role in a scheme in which he accepted over $490,000 worth of benefits, including cash payments and vacations, from favored contractors. In return, he helped these businesses obtain millions of dollars in federal contracts.

Lim, 48, of Fairfax Station, Va., also known as InSeon Lim, pled guilty in July 2014 in the U.S. District Court for the Eastern District of Virginia to three offenses: conspiracy to commit bribery and honest services wire fraud; bribery; and attempting to interfere with and impede tax laws.

Upon completion of his prison term, Lim will be placed on three years of supervised release. He also must pay restitution, including $250,000 to the Department of Defense and nearly $125,000 to the IRS. In addition, he must pay a forfeiture money judgment of $490,262.

Lim is among 18 individuals and one corporation, Nova Datacom, LLC, to plead guilty to federal charges in an investigation that uncovered the largest domestic bribery and bid-rigging scheme in the history of federal contracting cases. Overall, participants in the scheme stole over $30 million in government money through inflated and fictitious invoices.

According to a statement of offense, signed by Lim as well as the government, Lim was a public official until April 2012. The charges involve his activities as an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems.

Until June 2010, Lim resided and worked in Seoul, South Korea. While in South Korea, his primary duties were to oversee and implement communications systems upgrades for the U.S. forces there, which included approximately 10 communications centers and various other special projects at military sites throughout the country. Among other things, Lim coordinated work on a major contract, which, in turn, had numerous sub-contracts.

From June 2010 until his resignation in April 2012, Lim worked as a product director at Fort Belvoir, Va.

In the statement of offense, Lim admits that he secretly used his official position to enrich himself by soliciting and accepting gifts, payments and other things of value from government contractors—totaling more than $490,000—in return for favorable official action. Among other things, the statement of offense notes, Lim received payments personally and to accounts that he controlled; payments for travel, vacation, vehicles, cellphones and cellular service for himself and family members; ownership interests in two companies, and other benefits.

In exchange, Lim now admits, he provided favorable official action on subcontracts obtained and retained by the favored government contractors as requested and as opportunities arose. He also disclosed confidential bid information to the favored government contractors.

“This Army official sold the public trust for a half-million dollars in bribes,” said U.S. Attorney Machen. “Lim is now headed to prison along with many other corrupt officials and government contractors brought down in this sweeping investigation. His fate is a warning shot for other government officials tempted to sell out the American people to line their own pockets that they should think twice. The prison sentences handed out in this case make clear that government officials and business people who corrupt the contracting process put their own freedom at risk.”

“In his role as a federal contracting officer, In Seon Lim betrayed the trust that was placed in him by fellow citizens by taking bribes in exchange for providing favorable action on government contracts,” said Assistant Director in Charge McCabe. “The FBI, with our partners, will continue to investigate and expose fraudulent kickback schemes that tarnish the good and ethical work that procurement officers carry out on behalf of the U.S. government each and every day.”

“The kickback scheme in which In Seon Lim participated disrespected the hard work and dedication of thousands of government employees who are committed to providing honest services in the federal contracting process,” said Special Agent in Charge Kelly. “IRS-Criminal Investigation stands committed to weeding out individuals, who abuse the privilege of their positions as a public official, for their personal gain.”

The court documents provide details about numerous contracts and payments. For example:

Nova Datacom: According to the statement of offense, two former employees of the Northern Virginia company—Alex N. Cho, also known as Young N. Cho, and Nick Park—paid Lim $40,000 in cash in 2007. In addition, Park paid for Lim’s travel, lodging, meals and entertainment during a trip to the Philippines in 2007, and Cho paid for Lim’s lodging, $10,000 cash, and a $1,000 casino chip during a trip later that year to Las Vegas. Lim, meanwhile, agreed to use his official position to recommend the company for a contract valued at nearly $330,000.
Avenciatech:According to the statement of offense, former officials of Avenciatech, Inc., a government contractor based in Annandale, Va., provided Lim with cash payments; payments for hotel stays for Lim and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile, and payments for other things of value. One of the officials, Oh Sung Kwon, also known as Thomas Kwon, also assisted Lim in obtaining financing for the purchase of a home in Fairfax Station, Va., where Lim resided following his reassignment in 2010 to a position at Fort Belvoir. Lim, meanwhile, assisted the company in obtaining more than $3 million in contracts.
UEI: Nick Park left Nova Datacom in 2007 and co-founded another government contractor, Unisource Enterprise Inc. (UEI), based in Annandale, Va. According to the statement of offense, in exchange for favorable treatment, Lim was given a secret ownership in UEI. Among other things, Lim provided Park with sensitive procurement information. He also assisted the company in obtaining a government sub-contract worth over $1.1 million.

Cho, Park, and Kwon are among those who earlier pled guilty to charges in the case.

In addition to pleading guilty to the conspiracy and bribery charges, Lim admitted that he failed to report the bribes he received on tax returns for the years 2007 through 2011. He also failed to keep records that would allow him to file accurate records for 2012 and 2013. Lim was sentenced on Oct. 24, 2014.

This content is based on an FBI report posted at: http://www.fbi.gov/washingtondc/press-releases/2014/former-army-contracting-official-sentenced-to-four-years-in-prison-in-bribery-and-kickback-scheme.

August 20, 2012 By AMK

VA limits purchasing authority amid probe of pricey conferences

Veterans Affairs Secretary Eric Shinseki has rescinded the purchasing authority of employees in the departmental division under investigation for two conferences that cost $5 million and may have involved inappropriate gifts. Shinseki also has set up a 90-day independent review of Veteran Affairs Department training policies, VA announced.

In a statement released after news broke Monday that human resources employees at conferences in Florida in July and August 2011 may have accepted thousands of dollars’ worth of gifts that included alcohol, concert tickets and spa visits, the department also said it is conducting new ethics training for all personnel involved with the planning and execution of conferences and recertification of contract specialists.

Keep reading this article at http://www.govexec.com/defense/2012/08/va-limits-purchasing-authority-amid-probe-pricey-conferences/57408/?oref=national_defense_nl.

September 29, 2011 By AMK

New ethics rules may limit contact with feds

New proposed ethics rules for federal employees aim to put the kibosh on their attendance at lobbyist-sponsored social events such as cocktail parties and movie screenings, but there is concern that the rules also may hamper federal employee attendance at a broader range of events, such as industry trade shows.

Currently, federal employees must comply with a Office of Government Ethics gift ban that prohibits accepting gifts valued over $20 from lobbyists, with limited exceptions. Additionally, political appointees are required to comply with a gift ban from lobbyists under an executive order from President Barack Obama in 2009.

The ethics office published a new proposed rule in the Federal Register on Sept. 13 that limits the exceptions from the gift ban. Since then, policy observers have been trying to figure out just exactly what it means.

Specifically, the rule further restricts gifts to federal employees when those gifts take the form of free registration and attendance, along with food and drink, at “widely-attended gatherings.”

“The Office of Government Ethics has indeed become concerned that some of the exceptions may have been used on occasion to permit gifts, such as attendance at certain events, where the nexus to the purpose of the exception is attenuated at best,” the proposal states.

On the other hand, the ethics office also made clear in the proposal that the new restrictions are not meant to curtail federal attendance at educational and professional development events.

Industry groups have been buzzing with discussions about the new language, while emphasizing that the full impact is not yet clear.

Alan Chvotkin, executive vice president and counsel of the Professional Services Council, said the goal of the new wording seems to be to shut the door on federal employee attendance at any purely social gathering sponsored by a lobbying organization.

At the same time, there are industry events that constitute “gray areas” in which federal attendance may or may not be affected by the new rules, he added. The effect may depend on how the sponsoring organization is constituted, and each organization is a little different in that regard, Chvotkin said.

Nonetheless, there is widespread concern about the new proposed rule, he added.

“It is generating a lot of discussion and concern for what it might imply. It could chill government and industry collaboration and communication,” Chvotkin said. He said the Professional Services Council was still analyzing whether the rule would impact its activities.

According to the Consumer Electronics Association, which owns and produces one of the world’s largest large technology trade shows, the new rules “would severely limit the ability of federal government employees to attend events sponsored by industry trade groups,” according to a Sept. 20 news release from the association.

“The government plays an important role in facilitating and even helping host these events as they attract visitors from all over the world, including important government officials from other countries,” Gary Shapiro, CEA president, said in the release. “As we increasingly restrict the ability of government employees to participate in these events we hurt smaller U.S. companies that rely on trade shows to display their wares. If we want to increase our exports, we need government to view these events as part of our national strategy to encourage jobs and exports.”

About the Author: Alice Lipowicz is a staff writer at Washington Technology, covering government 2.0, homeland security and other IT policies. This article was published Sept. 21, 2011 at http://washingtontechnology.com/articles/2011/09/21/feds-restrictions-industry-conferences.aspx?s=wtdaily_220911.

Effective January 1, 2017, the Office of Government Ethics (OGE) is revising the gift rules applicable to executive branch employees.

The Office of Government Ethics (OGE) has proposed revisions to federal ethics rules that prohibit Executive Branch employees from soliciting and accepting gifts from contractors.

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