By Robert O'Harrow
Washington Post Staff Writer
Saturday, February 26, 2011; A11
A Bethesda consultant who received more than $15 million in pay from a disadvantaged Alaska native corporation could be barred from federal contracting because he allegedly submitted "false or misleading documents" to the government, according to a letter from the Small Business Administration.
H. James Nunes, whose consulting firm was based at his home in Bethesda, worked for a subsidiary of the Nome-based Sitnasuak Native Corp. until 2009. Under consulting contracts, his firm received as much as $32,500 a month and up to 36 percent of the pre-tax profits from government contracts.
At issue in the SBA letter are oversight forms that require firms operating in the SBA's 8(a) business development program to disclose their use of representatives in connection with federal contracts, a person familiar with the matter said.
In early 2007, Nunes submitted two of the forms on behalf of the subsidiary, SNCT, for the previous year. Although he was working as a consultant under contract, he wrote "none" on the documents where it requested the names of any representatives. Nunes signed them as "President, Partner, or Proprietor."
Nunes's attorney, John W. Nields, said Nunes did not file any misleading paperwork. "The 'none' was in response to a different question," Nields said.
The documents first came to light last year in a Washington Post investigation of Alaska native corporation contracting, which found that only a tiny fraction of more than $29 billion in federal contracts awarded to the corporation's subsidiaries went back to native shareholders.
In a Feb. 18 letter to Nunes, an SBA official said the agency had recommended that Nunes be considered for debarment from federal contracting because it "has information demonstrating" that Nunes "submitted false or misleading documents."
"Specifically you submitted documents claiming that [SNCT] did not utilize or pay for the services of representatives, agents, or consultants," the letter said. "However, the documentation shows that not only were consultants utilized and paid for by [SNCT] at this time, but that you yourself were one such consultant."
If proven, the allegations could have deeper implications for Nunes. Under federal law, individuals found to have submitted false or misleading statements could ultimately face up to $500,000 in fines, 10 years in prison or both.
The SBA letter said Nunes "may provide SBA with any and all information you deem may be useful" before the agency decides if it will proceed with debarment.
Nields emphasized that the inquiry is in its early stages.
"They haven't decided anything," Nields said.
Nunes was hired as an SNCT consultant in 2002. Although he worked on staff as chief executive in 2005, he went back to being a consultant to SNCT and the parent corporation. During his time as a consultant, the native subsidiary received Pentagon contracts worth hundreds of millions of dollars for uniforms.
Sitnasuak's annual revenues soared from about $20 million in 2004 to $213 million in 2009, according to disclosures filed by the company, most of it through contracts set aside for small businesses or awarded without competition, The Post found. Nunes received $6.4 million in pay in 2009. Sitnasuak's 2,238 shareholders received about $305 each in direct payments that year, a Post analysis found.