http://www.nytimes.com/2010/01/23/business/23sting.htmlSupplier Accused of Bribes for U.N. Contracts
By DIANA B. HENRIQUES
Published: January 22, 2010
Last year, according to people briefed on the case, a Florida businessman went undercover to play the part of a corrupt sales executive in a foreign bribery sting that led to nearly two dozen arrests and 16 indictments announced earlier this week.
On Friday, the executive was accused by prosecutors of playing the same role in real life — paying bribes from 2001 to 2006 to get contracts to supply helmets, armored vests, pepper spray and other protective gear to United Nations peacekeeping forces
and a Dutch law enforcement agency. The accusations in the new case were made in documents filed by the Justice Department in Federal District Court in Washington. The defendant is Richard T. Bistrong, identified in the court record as a former vice president for international sales at a military and law enforcement equipment manufacturer in Jacksonville, Fla.
His employer was named in the document only as “Company A.” But during the years covered by the allegations against Mr. Bistrong, public records show that he worked at Armor Holdings, a manufacturer in Jacksonville that is now a subsidiary of BAE Systems of Britain.
John Suttle, senior vice president for corporate communications at the American unit of BAE, confirmed that Mr. Bistrong had been employed at Armor and said he was fired before BAE acquired the company in 2007. Armor had “disclosed this to the Department of Justice and the Securities and Exchange Commission,” he said, adding, “They did the right thing.”
He emphasized that all of these events occurred before BAE bought the company.
People briefed on the wide-ranging investigation confirmed that Mr. Bistrong was also the key intermediary identified as “Individual 1” in the 16 indictments released by Justice Department on Tuesday.
Those indictments, built around an F.B.I. sting, accused nearly two dozen executives in the small arms and military equipment industry of paying bribes to undercover agents posing as representatives of an African nation. “Individual 1” handled the introductions and posed as the broker for the deals.
That case was the first undercover sting aimed at violations of the Foreign Corrupt Practices Act, a law that bars the payment of bribes to win foreign business.
With 22 defendants, it was also the biggest individual foreign bribery prosecution by the Justice Department — and the new charges against Mr. Bistrong, identified as a main figure in the F.B.I. sting, reveal that a much larger investigation is under way than was previously disclosed.
The latest court filing, called a criminal information, accuses Mr. Bistrong of conspiring with four other unidentified people in a scheme that began in June 2001. They were identified only as a “U.N. Agent,” a consultant for Company A, and two other Company A employees.
A criminal information is typically filed when the defendant has waived indictment and is negotiating a plea agreement.
Brady Toensing, a lawyer who represents Mr. Bistrong, joined government lawyers in a federal courtroom in Washington on Friday for what was expected to be a public hearing.
Sitting with Mr. Toensing at the defense table was a tall, slender man in a dark suit. When Mr. Toensing and the government lawyers were called from the courtroom, that gentleman remained. Shortly thereafter, the hearing was canceled.
A Justice Department spokeswoman said she could not comment on the purpose of the hearing or why it was canceled. “But the criminal information remains in the public record,” she said.
According to that document, the object of this latest foreign bribery conspiracy was for Mr. Bistrong and “his co-conspirators” to increase the company’s revenue and enrich themselves by paying bribes to get and keep foreign business, concealing those bribes in the company’s books and avoiding the payment of necessary export licenses.
As part of the conspiracy, the government asserts, Mr. Bistrong’s company agreed to pay the United Nations agent “a success fee” — a percentage of the value of any contract that the intermediary helped the company obtain.
In exchange, the government claims, the United Nations agent rigged the bidding process to ensure that Mr. Bistrong’s company would win the 2001 and 2003 contracts to supply the United Nations with body armor. The total value of these contracts was approximately $6 million, according to the court documents.
A similar arrangement was set up in June 2001 with a Rotterdam police procurement officer, according to the criminal information. In that case, the unidentified Dutch official provided Mr. Bistrong’s company with confidential information that enabled it to win a $2.4 million contract for pepper spray.The case against Mr. Bistrong adds a dash of politics to what was already a cinema-ready investigation. From 2004 to 2008, Mr. Bistrong was married to Ambassador Nancy Soderberg, a prominent foreign-policy specialist in the Clinton administration who served as a senior representative to the United States mission to the United Nations from 1997 until January 2001 — before any of the events cited in the criminal documents filed against her ex-husband. Ms. Soderberg declined to comment.
Bernie Becker contributed reporting.
