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Eyak swiftly fires employee allegedly involved in 8(a) kickback

Alex DeMarban
iStock

In a statement sent to media, an Alaska Native corporation CEO said the company immediately fired an executive after learning he had been implicated with others in an alleged scheme that defrauded the federal government of millions of dollars.

According to the Washington Post and other media, Harold Babb was arrested and faces criminal charges as part of a "complex contracting scam" that involved three others, including two U.S. Army Corps of Engineers contracting officers and Harold F. Babb, director of contracts for EyakTek, which has an office in Dulles, Va.

"Based on information provided to EyakTek, the employee was immediately terminated," said Rod Worl, chief executive of The Eyak Corporation and president of Eyak Technology.

Here's more from the EyakTek statement:

EyakTek is a subsidiary of The Eyak Corporation and is engaged in performing contracts with the federal government. Worl stated that EyakTek is cooperating fully with the federal government in its investigation, but it cannot comment on the substance of the charges pending the completion of the investigation.

"Eyak and its shareholders will not tolerate this type of conduct by anyone employed by or associated with an Eyak company," Worl added. "We take pride in the dedication of our employees and the services that we provide the government."

According to the Post article: "Federal law enforcement officials said the scam involved delivered and promised kickbacks of about $20 million on what they described as substantial contracts for critical technology services."

A U.S. District Attorney, refers to it as "one of the most brazen federal contracting scandals in our nation's history.”

In the scam, a subcontractor who is not identified passed along "fraudulently inflated quotes" to EyakTek for its work, which then forwarded the bills to the Army Corps.

The "overhead," as the costs were called, were then paid out to Babb and the others involved.

EyakTek, whose parent corporation, Eyak, represents Native shareholders in the village of Cordova, has been in the Post's sights before, apparently for unrelated issues, the article notes.

Below is a statement from Native 8(a) Works, a group that is fighting to preserve the federal 8(a) contracting program that's been worth millions of dollars for Native, Indian and Hawaiian organizations:

Native 8(a) Works is troubled by the bribery allegations that led to the arrests of four people, including an employee of an Alaska Native Corporation subsidiary.

Native corporations and their subsidiaries should conduct business in an open and transparent manner.  As a group, we condemn any action that betrays the trusting relationship between Native corporations, our subsidiaries and the people and communities we represent. Native 8(a) Works supports efforts that improve transparency in federal 8(a) contracting, and address any potential for waste, fraud or abuse. We fully support and endorse compliance with federal rules and ethical conduct.

At a time when Native corporations' status as 8(a) contractors is constantly under attack, we hope that the alleged actions of one company will not contribute to further misconceptions about Native 8(a) contractors and the value they deliver to America taxpayers. The alleged wrongdoing by a few individuals is exactly that -- the actions of individuals -- and these individuals’ crimes should not be considered representative of the Native corporation subsidiary or the broader category of Native-owned 8(a) companies that provide excellent products and services to the federal government.

Native 8(a) contracting helps Alaska Native, Tribal members and Native Hawaiians prosper through dividends, scholarships and many other benefits. The program provides tens of thousands of jobs across the country, helping community economies around the country.

Contact Alex DeMarban at alex(at)alaskadispatch.com