03/08/2013 12:29 pm ET Updated Mar 11, 2013

CIA Contractors Settle Hooters, Blue Man Group Kickback Case

WASHINGTON -- Three companies have agreed to pay the government $3 million for showering Central Intelligence Agency employees with tickets to sporting events and concerts; golf, fishing, and hunting excursions; and drinks and meals at restaurants like Hooters in an attempt to win contracts to provide cabling and wiring at CIA facilities.

American Systems Corp., Anixter International Inc. and Corning Cable Systems LLC reached an agreement with the Justice Department to resolve violations of the False Claims Act and Anti-Kickback Act, the DOJ announced Thursday. The allegations were brought forward in a whistleblower suit filed by former Anixter sales representative William Jones, who will receive $585,000 of the government's recovery under a provision of the False Claims Act.

In his December 2011 lawsuit, Jones alleged that nine CIA employees received expensive gifts from contractors trying to win bids for building projects nicknamed “Falcon” and “Buckeye."

CIA employees were treated to Red Sox, Cubs and Nationals baseball games; NASCAR events; trips to Boston, New Hampshire, North Carolina, Texas, Mexico and Myrtle Beach; Blue Man Group concerts; hunting trips and "scores of meals, drinks and snacks" at "numerous restaurants, bars and coffee shops" including Hooters and Famous Dave's, Jones alleged.

One of the contractors, American Systems Corp., even gave a job to the stepson of CIA employee Daniel Faber, according to Jones's lawsuit.

A CIA spokeswoman said the agency had no comment on the suit or the nine CIA employees accused of receiving the kickbacks. David Samuel Panzer, a lawyer representing Jones, had no immediate comment.

UPDATED: A CIA spokesman's full statement: “The CIA has a rigorous process for ensuring that any allegation of misconduct is thoroughly investigated and that our officers uphold the highest ethical and professional standards. Allegations of misconduct are reviewed by management, referred to the Inspector General, or, in cases involving the potential violation of federal law, referred to the Department of Justice. If a determination is made that an Agency officer violated the public trust, appropriate action will be taken. This case remains under review internally, and it would be inappropriate to provide any additional details at this time.”

CORRECTION: An earlier version of this story confused the first and last names of the whistleblower. His last name is Jones, not Williams.



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