We spoke earlier this week with Harold Salomon, the man who blew the whistle on contractor Louis Berger Group's deliberate and long-term cheating of the U.S. government. The interview was Salomon's first since the case, which grew out of his revelations, was unsealed in federal court in New Jersey earlier this month. LBG, one of the U.S. Agency for International Development's biggest contractors in Afghanistan, agreed to pay nearly $70 million in fines.
(In the 'Now It Can Be Told' department, when McClatchy Newspapers was the first to report the investigation of Louis Berger back in September, we were aware of Salomon's name as the whistleblower. We agreed to withhold it from publication at the request of he and his attornies at Phillips & Cohen law firm, who said publication might disrupt the investigation and lawsuit).
Salomon began work as a financial analyst at Louis Berger in early 2002 and said he quickly came to realize two things: fraud was going on, and he had been hired because, as a Haitian immigrant, his superiors assumed that he would either not discover the illegality, or not have the gumption to report it.
"Me being an immigrant would be easy prey," he said in a phone interview. They thought "I would not understand anything."
His first clue that something was wrong came just three months into the job, he said, when he was told to send an inexplicable $35,000 wire transfer to an individual overseas. (He declined to name the person or country involved). He questioned his boss, who told him to send the money anyway, and then asked for a confirmation email from the unnamed receipient. The response he got: "I was told it was 'grease money'," ie, a bribe.
Salomon said that at various points, he was asked to lie and misrepresent financial data to the Pentagon's Defense Contract Audit Agency. He once found a financial journal entry that was accompanied by a card that stated "do not show to auditors." He took it to his boss, who he said, exclaimed, "Holy Cow, we cannot show this to" the federal government. The note was taken from him and, he believes, destroyed.
Holly Fisher, a Louis Berger spokeswoman, declined to comment on the specifics of Salomon's experiences at the company. She said in an e-mailed statement:
"This matter was settled with the parties involved—the U.S. government, Mr. Salomon and The Louis Berger Group—on November 5, 2010. The Louis Berger Group has undertaken comprehensive improvements to its internal controls, policies and structures, which form the foundation of the company’s systems going forward. We see no reason to comment further on these matters."
The firm acknowledged over-billing the federal government, in what federal court documents and sources said was a complicated scheme to manipulate overhead rates, sometimes shifting costs from the company's private contracts to government ones.
Salomon said he eventually decided he had to leave the company in order to report what was going on. He took large chunks of data with him that he eventually turned over to federal investigators. "It was just an accident" that I had the information, he said, "I worked long hours at home."
He contacted agents from the Defense Criminal Investigative Service and soon became worried that Louis Berger would try to blame him for the fraud. He hired a lwayer.
Under the whistleblower statutes, Salomon can receive 15 percent to 25 percent of the court award. Salomon said he will give half that amount, still to be determined, to a charity for Haiti he founded.
Salomon said he had plenty of chance to get familiar with corruption in his native Haiti, where he worked from 1986 to 1993. Now, he said, "I have seen corruption in a way that I didn't anticipate or I didn't know could happen in the United States."