Many Ohio workers are contractors or employees of contractors who work on projects of the federal government. Federal contracts are subject to strict laws regarding the payment of reward for better treatment than would otherwise be available under the official contract.
If the Department of Justice finds such payment to be an illegal kickback, criminal charges may follow.
Federal conviction of contractor for illegal kickback scheme
As reported by the Federal Times, an employee of a federal contractor received a four-year incarceration sentence following a guilty plea of accepting bribes. In that case, the defendant solicited and accepted payments from one of the subcontractors. The payments were in return for refraining from action that would cause injury to the subcontractor’s contracts. He also agreed to help the subcontractor gain more contracts.
In fact, between 2009 and 2014, the federal contractor employee accepted a known total of 57 wire transfers totaling approximately $1.9 million. In 2015, he topped it off with an additional $60,000 from two payments. The subcontractor was also subject to conviction and received a prison term of one year and one day.
When an agreement is an illegal kickback
What makes an agreement to do or not do something, within the federal government contracting arena, part of an illegal kickback? According to 41 U.S. Code Chapter 87 at section 8702, a person involved in a federal contract cannot give or offer a kickback. A person also cannot solicit or accept a kickback. Likewise, a person may also not slip the amount of the desired kickback into the contract price that a subcontractor charges the higher tiered contractor or that the prime contractor charges the government entity or agency.
What makes a particular monetary payment a kickback versus a contractual term? Section 8701 dictates that a kickback is a thing of value, including the following:
- Money or fee
- Commission or credit
- Gift or gratuity
- Compensation of any kind
If that money goes to a prime contractor or subcontractor, or to any employee of either, for the purpose of obtaining better treatment with regard to the contract, an illegal kickback would likely occur. Similarly, if the money goes to reward the contractor or employee for favorable treatment already received, an illegal kickback may exist.
When it comes to the giving of anything to a government official, even locally, Ohio residents must beware. Even outside of a government or city contract, an act of kindness can be seen, at times, as an illegal bribe. It may be best to not offer and not accept as a general rule.