Oregon defense firm chief pleads guilty to $171 million conspiracy

SEATTLE The owner of an Oregon-based defense firm pleaded guilty on Monday to plying a U.S. official with cash, meals in Vietnam and Costa Rica, and an Alaska fishing trip during a decade-long conspiracy to win business worth $171 million, a prosecutor said.

The man, who uses the single name, “Sky,” pleaded guilty to a conspiracy charge on Monday in a federal court in Portland, Oregon, Assistant U.S. Attorney Greg Nyhus said.

Sky was accused of heaping gifts on a U.S. Army Corps of Engineers program manager in a bid to secure government contracts for his Ashland, Oregon-based firm from 2002 through 2013 under what Nyhus called a “wink-and-a-nod agreement.”

“There was an expectation that the gratuities would continue,” Nyhus told Reuters.

In total, Sky’s firm, Sky Research, Inc, or SRI, which primarily provided services to the government for detecting un-exploded bombs and other munitions, received $77 million under nine contracts worth roughly $171 million, according to charging documents filed last week in U.S. District Court in Portland.

The case, which involves the expectation of gratuities, differs legally from an outright bribery case because, in the latter, there is clearer evidence of a quid-pro-quo relationship between the parties, Nyhus said.

No charges had been filed against the Corps of Engineers program manager, identified in court documents only as J.H., who oversaw a defense department military munitions program from Omaha, Nebraska, though the case continues to be reviewed, Nyhus said.

The gratuities went on for years, the charging documents show. In July 2009, for example, SRI was awarded a $9 million contract for environmental remediation services a day or so after Sky paid J.H. $3,000.

In September 2010, Sky paid for an Alaska fishing expedition for the program manager at around the same time SRI was awarded a $9.9 million contract for military munitions response services.

Sky bought J.H. meals and lodging in Costa Rica and Vietnam in 2008 and, 2004 respectively. In 2009, Sky gave him $3,000 in cash.

Sky faces as much as five years in prison and a $250,000 fine, Nyhus said.

(Reporting by Eric M. Johnson in Seattle; Editing by Sharon Bernstein, Bernard Orr)

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