The Justice Department yesterday filed nine lawsuits to recover more than $3.8 million in bribes and other illegal payments given to General Services Administration employes and government contractors.
The nine separate civil lawsuits, which resulted from the extensive criminal investigations into GSA corruption, name 22 persons, including nine former GSA employes and five corporations as defendants in connection with more than 2,000 contracts that involved bribes, inflated prices and other fraud.
The government's civil actions, filed in the U.S. District Court here, follows criminal cases already resolved in the federal court and is seen by some law enforcement authorities as an added deterrent to possible future illegal activity.
Some law enforcement officials, including former U.S. attorney Earl J. Silbert, have criticized sentences handed out in GSA criminal cases in Washington as too lenient. Nine of 25 former GSA employes and contractors who have been sentenced in Washington on various criminal charges so far in connection with the GSA investigation have been given jail terms of no more than six months and fines. Four additional cases are pending in the federal court here.
Seventeen of the 22 former GSA employes and contractors named as defendants in the civil lawsuits yesterday have pleaded guilty to criminal charges in connection with the corruption investigation. Justice Department attorney Vincent B. Terlep Jr. said yesterday that the nine lawsuits are the first in a series of civil actions the department expects to file as a result of the separate criminal investigations. Terlep said that the sentences imposed in the Washington cases "had nothing to do" with the department's decision to file the civil cases.
The government's total claim for damages in the civil suits yesterday amounts to more than $11 million. The amount, claimed under the False Claims Act, includes double the GSA's loss in alleged bribes and inflated contract payments as well as a $2,000 penalty for each of the more than 2,000 contracts filed in violation of the law.
The suits allege that bribes were paid to GSA employes both in cash and gifts, including automobiles, trips to the Bahamas and Las Vegas, Nev., jewelry, color televisions, other appliances and clothing. Some contractors also provided labor and materials for work done at homes of various GSA employes, the government alleged.
Each of the nine suits represents a separate case in which a contractor allegedly conspired with GSA employes to submit phony or inflated contracts for work on GSA buildings.
Former GSA employes are named as joint defendants with a contractor in each of the nine cases. Eight of the former employes are named as defendants in at least four of the cases, which significantly expands their liability to the government for money damages. The nine cases detail allegations of rigged bids and payments and kickbacks for general contracting, painting and decorating, janitorial and cleaning services.
One of the largest of yesterday's suits is against Michael M. O'Connor, 37, and his sister, Carmen O'Connor, 40, both of Washington, who allegedly paid more than $1 million to nine GSA employes for more than 788 contracts awarded to Levcom Construction Co., which they controlled, and other businesses they ran.
Carmen O'Connor, who pleaded guilty in federal court last year to accepting more than $1 million in contracts for phony work, was fined $5,000, placed on probation and ordered by Judge Oliver Gasch to complete 200 hours of community service.
According to the suit filed against the O'Connors yesterday, they received more than $6.5 million in contracts as a result of their alleged corrupt dealings with GSA employes. That amounted to a loss for the government of more than $1 million in inflated or fake contracts, the suit alleged.
One of the former GSA employes named as a defendant in seven of the civil suits, Robert M. Beacham-42, yesterday pleaded guilty in federal court here to conspiracy, fraud, bribery and obstruction of justice in connection with the GSA corruption investigation.
Specifically, Beacham, who lives in Gaithersburg, admitted that he received more than $75,000 in kickbacks from 1972 to 1977. Beacham was the GSA's building manager for the State Field Office, which includes the State Department and other government buildings in that area.
Assistant U.S. Attorney William S. Block said at a court hearing yesterday that the government could prove that Beacham received in excess of $500,000 in cash, trips and other gratuities in connection with GSA contracts. Some of the money was invested in Georgetown properties, investigators have said.
Beacham pleaded guilty to the government's charge that he attempted to persuade a GSA contractor to lie to a federal grand jury investigating GSA corruption charges. The government contended that Beacham met with the contractor on five occasions in two restaurants in the Lanham, Md., area in attempting to influence the contractor's testimony. Beacham's action, Block said, took place both before and after government prosecutors began negotiations with Beacham about his alleged role in the GSA related criminal cases brought in Washington, released Beacham on his personal recognizance pending sentencing.