Army Captain Arrested Over Alleged Bribe

Aug. 23, 2007 — -- The U.S. government has charged an Army captain for allegedly accepting a $50,000 bribe in exchange for steering contracts in Iraq.

Authorities arrested Capt. Austin Key, 27, of Watertown, N.Y., late Wednesday upon his return to the United States. Key was recently stationed in Baghdad, where he "had authority to purchase supplies for the U.S. Army" and "oversaw the administration of service and supply contracts awarded by the U.S. Army worth hundreds of thousands of dollars," according to the complaint filed in the southern district of New York.

The complaint charges that Key, "being a public official, corruptly demanded, sought, received, accepted and agreed to receive a thing of value personally in return for being influenced in the performance of an official act."

Key pleaded not guilty to one count of bribery at his Thursday afternoon appearance in United States Magistrate Court. The court released him on signature bond; his next court appearance is set for Sept. 21, according to his attorney, Raymond Granger. Granger declined further comment on the case.

In a sworn deposition, FBI agent James W. Price stated that through conversations with other law enforcement officials and his research of reports and records, he learned of a confidential informant Key had been dealing with in his role with the Army. The confidential informant is described in the complaint as a U.S. citizen who owns a business that is a regular supplier of services and provisions to the U.S. Army in Baghdad.

In July, the complaint says, Key demanded $125,000 from the confidential informant in an attempt to protect the ability of the informant's company to obtain future U.S. Army contracts.

The business owner, however, spoke with an agent from the Pentagon's Defense Criminal Investigative Service and agreed to allow the military to record phone conversations he had with Key and to wear a wire and hidden camera during meetings with him.

During an Aug. 11 meeting, Key allegedly "told the CI that in exchange for $50,000, he would give the CI advance, confidential information on contracts so that the CI would be more successful in bidding on U.S. Army contracts." Additionally, the complaint claims, Key said he would tell fellow Army staff to favor the informant's company over a rival's.

Key allegedly agreed to steer the bidding for $50,000 cash, plus "the approximate equivalent of 5 percent of any contracts Key steered to the CI's company."

Aug. 15, the two met again. The complaint asserts Key accepted the $50,000 cash bribe at that meeting.

After the alleged exchange, law enforcement agents stopped Key and recovered the money, which he was reportedly carrying in his pants pocket. Key then spoke to authorities and provided a written statement "in which he admitted that he had agreed to steer U.S. Army contracts to the CI in exchange for the $50,000 payment," according to the complaint.

If convicted, Key could face up to 15 years in prison and a fine of either $250,000 or "three times the gross gain or loss from the offense," whichever is greater.

The case is being lauded by the Department of Justice as a success under the National Procurement Fraud Task Force, a group established by former Deputy Attorney General Paul McNulty in the fall of 2006. The task force is responsible for promoting the "early detection, identification, prevention, and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs."