Sure, kid; first one's free

Some times procurement fraud is perpetrated by one party on the other. Other times, it takes two to tango. This is a story of the latter, and is so brazen as to become almost comedic.

Accepting that I often, very often, omit, rearrange, paraphrase and generally slice an dice articles presented (so you are advised and admonished to read the articles at the link provided and embedded in the article title), let's frame this story in the dry manner of the press release by government lawyers.

"Charges were unsealed yesterday against a Micronesian government official for his alleged participation in a money laundering scheme involving bribes made to corruptly secure engineering and project management contracts from the government of the Federated States of Micronesia (FSM). In a related matter, on Jan. 22, a U.S. executive pleaded guilty for his role in a scheme to, among other things, bribe the Micronesian official in violation of the Foreign Corrupt Practices Act (FCPA). Master Halbert, 44, a Micronesian citizen, was charged in a criminal complaint filed in the District of Hawaii with one count of conspiracy to commit money laundering. Halbert was arrested yesterday, and had his initial court appearance before a U.S. Magistrate, is scheduled to have a pretrial detention hearing on Feb. 13, and a preliminary hearing on Feb. 22. [Then the fun begins].

As described in the complaint: Halbert was a government official in the FSM Department of Transportation, Communications and Infrastructure ("IT&C") who administered FSM’s aviation programs, including the management of its airports; between 2006 and 2016 a Hawaii-based engineering and consulting company owned by Frank James Lyon paid bribes to FSM officials, including Halbert, to obtain and retain contracts with the FSM government valued at nearly $8 million; Lyon entered into an agreement with Halbert to bribe Halbert in exchange for Halbert’s assistance in securing contracts for Lyon and his company; and that Lyon and Halbert allegedly agreed that these bribes would be transported from the United States to FSM. Of course, none of this has (as yet) been proved, and Halbert is not guilty until and unless proven guilty.

On the other hand, in the related matter, Lyon did plead guilty on Jan. 22 to a one-count information filed in the District of Hawaii charging him with conspiracy to violate the anti-bribery provisions of the FCPA and to commit federal program fraud. Lyon is scheduled to be sentenced on May 13."

It should be noted that, the ITCT Dept handles its own procurements and is far broader than aviation.

The Department of Transportation, Communications and Infrastructure (DTC&I) is responsible for the delivery of national infrastructure projects. All infrastructure projects require defined project management processes from scope definition through funds release, design and construction to successful completion. The Program Management Unit (PMU) being part of the DTC&I, has the responsibility to provide overall coordination of amended compact matters for FSM’s Compact Management Division. The PMU has a strong program oversight and will ensure that standards are developed and shared, subsequent design and construction contracts are consistent with appropriate risk management and will provide peer review expertise as required.

As outlined in the National Infrastructure Development Plan (IDP), the PMU has been restructured to focus on program management and is accountable for project management, from initial planning through design to construction completion. The National Government, through the PMU, is responsible for program management systems, training of national and state personnel in these systems, review of project documentation to ensure compliance with funding agency requirements, preparation of consolidated annual FSM program reviews, as well as program management implementation assistance to the States as required. The establishment of the PMU along with the updated annual infrastructure plan is aimed at smoothing the FSM-US infrastructure relationship and ensure that all projects are implemented in a timely manner.

The PMU has engineering expertise and technical administration resource to collect and collate engineering and contractual data for use across the four states of the FSMas outlined in the National Infrastructure Development Plan (IDP), the PMU has been restructured to focus on program management and is accountable for project management, from initial planning through design to construction completion. The National Government, through the PMU, is responsible for program management systems, training of national and state personnel in these systems, review of project documentation to ensure compliance with funding agency requirements, preparation of consolidated annual FSM program reviews, as well as program management implementation assistance to the States as required. The establishment of the PMU along with the updated annual infrastructure plan is aimed at smoothing the FSM-US infrastructure relationship and ensure that all projects are implemented in a timely manner.

The PMU has engineering expertise and technical administration resource to collect and collate engineering and contractual data for use across the four states of the FSM

Adding more color and detail to this story, the Guam Daily Post reported (Feb 12, 2019) Bribery case against FSM official details cash, cars, trips This more comprehensive description shows how wrongful acts often lead to more wrongful acts, and keep spiraling down, like drug addiction.
It all began not so innocently enough:

• On May 3, 2010, Halbert sent an email to Lyon and "Co-Conspirator 1" regarding an FSM auditor's concerns about the purchase of a vehicle. Halbert wrote, "I know I should protect myself and [not] put this in writing or discuss this in e-mail or any form of communication that can provide as a concrete evident [sic] and come back and used against me but its ok, if you want to take me down no problem." Halbert wrote and threatened that if Lyon and Co-Conspirator 1 were not willing to back him up in confronting the auditor, then Halbert did "not think [they] should do business together again."

• On June 2, 2011, Halbert sent an email to Co-Conspirator 1, stating, "I am sorry to do this but I really your [sic] help again. We came with $3,000 and we have already used half of that in food and shopping. Can you and Jim [Lyon] give me $1,500.00 and this should last us for the rest of the trip."

• On Dec. 1, 2011, Halbert emailed Co-Conspirator 1, "Can you ask Jim for some money? I need $1,000 and if ok, you can give it to me when we get to Hawaii."

• On May 7, 2014, Halbert sent an email to Co-Conspirator 1, with the subject line, "Per dium," [sic] stating, "Please bring my money at home. Can you ask Jim if you can add another $1,000."

• In or around June 2015, Halbert and Lyon instructed Co-Conspirator 1 to draft a request for qualification document seeking bids for an FSM project management contract.

• In July 2015, the engineering company was awarded the contract by the FSM government.

• On Aug. 27, 2015, Halbert sent an email to Lyon with the subject line, "2014 Chevy Silverado," stating, "Please get this truck. It is my cash so when I need to pay back anyone, I can sell it or this will be my ride forever. If you can, lift it 6 in and put on black rims."

• In connection with his plea, Lyon admitted that in 2015, he and his co-conspirators purchased an additional vehicle for Halbert's personal use.

• On Sept. 1, 2015, Halbert sent an email to Co-Conspirator 1, asking Co-Conspirator I to talk to Lyon about loaning Halbert $2,500 to open an account.

• On Nov. 15, 2015, Halbert sent an email requesting that the engineering company book and pay for a hotel room for Halbert and members of his family for a trip to Guam. The engineering company executive responded that "at this time" the engineering company was approving "only project reimbursable travel requests."

• On or about Nov. 16, 2015, Halbert emailed three of the engineering company's employees, "This is to inform you that I am closing your office starting tomorrow until further notice."

The Hawai'i Free Press also followed the story. Lyon Bribery Micronesia: Arrests Start at the Top

Arrested over the weekend, Master Halbert, son-in-law of Federated States of Micronesia (FSM) President Peter Christian and son of FSM Senator Dohsis Halbert, appeared before Honolulu Federal Judge Richard L. Puglisi for arraignment Monday, February 11, 2019. A Federal source tells Hawai’i Free Press Halbert is charged with being the ‘Micronesian Official 1’ described in the January 16, 2019, indictment and January 22, 2019, guilty plea of corrupt Honolulu engineering contractor Frank James Lyon. Alleged bribes to ‘Micronesian Official 1’ include cash, a pickup truck, a trip to Las Vegas, and tuition at UH Manoa. These were only part of the total bribe package outlined in the Lyon indictment: 'From in or around 2006 through in or around 2016, Frank James Lyon, together with his co-conspirators, provided bribe payments to FSM officials totaling at least approximately $200,000 in order to obtain approximately $7.8 million in contract payments.'

The HFP article points to an online organization chart of the FSM Department of Transportation, Communications, and Infrastructure (TC&I) shows (or showed) nine (9) of 11 personnel under its Secretary to have email addresses for "@LYON.US.com".

In its practice of leaving no stone unturned, the HFP article also notes

In 2014 Halbert was tried in FSM courts for falsifying his academic record from the University of Washington in order to award himself a $173,614.56 ‘professional premium’ taken from FSM and FAA projects. '‘Crim. Case No. 2014-501; FSM v. Master Halbert” can be found on internet discussion board Micronesia Forum, and The Wayback Machine, but it has been stripped from the FSM Supreme Court website. An extensive 2016 discussion on Micronesia Forum titled, “Massy Halbert resigns from National Government...and then he goes on a trip funded by the government representing TC&I”, reveals the case was dropped as part of a plea agreement. Much of the federal indictment unsealed in Honolulu deals with Halbert soliciting bribe money from Lyon to pay the fine imposed in the FSM plea agreement.

Finding no dirt too deep to dig, the HFP article describes yet another scandal, in this case one that has been dragged around on Guam for decades. "The IT&C's PMU was previously managed by GMP Hawaii, Inc, a company owned by Wagdy Guirguis. Guirguis was convicted of tax evasion in Honolulu Federal Court, November, 2018. HFP has done a more extensive look into Guirguis also, complete with the Guam angle. For instance, it includes a link to an article from 1997, Guam Rubbish Piling Up,. The story goes way back near to the creation of the long-running trash incineration project, which was the brainchild of GRRP (Guam Resource Recovery Partners). It reports,

An overflowing landfill is causing a big stink on Guam, but the smell is not from the dump. It is from a contract for a $64 million waste-management project. The contract involves Guam Resource Recovery Partners, a Guam partnership with ties to GMP Associates Inc., a Hawaii-based engineering firm. In 1982, a company called IEEI of New York won a contract and a $250,000 loan from the Guam Economic Development Authority, or GEDA, to build an incinerator. In 1989, after years of legal wrangling with the Guam government, IEEI sold the license to G-Power Inc. G-Power is a Guam company whose principal shareholder is Wagdy Guirguis, G-Power allied itself with Wheelabrater to form GRRP. GEDA and GRRP then spent seven years negotiating a final contract."

That contract is still, contentiously, not finalized. Not sure about the smell. (I tend to hold my nose every time the subject comes up.)