Four individuals, including a USAID official and three corporate executives, have admitted to their roles in a bribery scheme that funneled over $550 million in foreign aid contracts. The Department of Justice announced the guilty pleas on Friday.
Roderick Watson, a contracting officer at USAID, confessed to accepting more than $1 million in bribes. He directed substantial funds to several companies in exchange for kickbacks. Guy Ficco from the IRS Criminal Investigation stated, “Watson exploited his position at USAID to line his pockets with bribes in exchange for more than $550 million in contracts.” He helped three executives bypass fair bidding processes, receiving cash and luxury gifts in return.
The scheme exploited federal laws designed to support minority-owned businesses, known as 8(a) contracting. These laws allow contracting officers to award contracts to companies owned by minorities, women, or veterans without the usual competitive bidding. Walter Barnes III, the founder of a Baltimore-area company called Visant, admitted to bribing Watson with cash and extravagant gifts, including a wedding at a country club and a trip to Martha’s Vineyard.
Barnes’s company, which was previously known as PM Consulting Group, claimed to be “disadvantaged” because of Barnes’s race, while it collected millions in contracts. He was criticized in court for using a public defender despite his apparent financial means.
Darryl Britt, who owns Apprio Inc., another 8(a) contracting firm, also pleaded guilty. His company received $271 million in federal contracts since 2004. Britt bribed Watson to secure contracts for Apprio. As Apprio grew too large to qualify for 8(a) contracts, it began working with Barnes to receive contracts through Visant, which would then subcontract the work back to Apprio.
To hide the bribes, payments were often funneled through Paul Anthony Young, a friend of Barnes and president of another subcontractor, who also pleaded guilty to conspiracy. From 2013 to 2023, Watson was repeatedly bribed in various forms, including cash, electronics, and jobs for relatives, all in exchange for lucrative USAID contracts.
Watson awarded a $25.5 million contract for “professional management” to Visant in late 2018, which was subcontracted to other firms. As the bribery escalated, Watson even sought an exception to award contracts exceeding $20 million without competition, despite regulations limiting such contracts for minority-owned firms.
The contracts totaled $544 million between 2013 and 2022, starting with smaller contracts and eventually expanding to much larger ones. Some contracts included a $30 million deal for advisory services and a $40 million contract for project management.
Despite the severity of the case, the Department of Justice has agreed to defer criminal prosecution for both Apprio and Visant, accepting only $500,000 and $100,000 in penalties, respectively. Watson faces up to 15 years in prison, while the company owners could receive sentences of up to five years.
This case highlights ongoing concerns about fraud and abuse in federal contracting, particularly regarding programs intended to support disadvantaged businesses. The situation raises questions about oversight and accountability in government contracts, especially in light of previous criticisms regarding waste and mismanagement in foreign aid programs.