United
States prosecutes VaxGen vp after Brian Deer's
investigation of AidsVax
Documents
obtained in 1999 by Brian Deer during his Sunday Times
investigation, The VaxGen Experiment, of California Aids
vaccine company, VaxGen Inc, resulted in federal
prosection of Dr William Heyward, who as HIV
vaccine chief at the Centers for Disease Control
and Prevention cheer-led for VaxGen's technology
and arranged federal grants whilst secretly
engaged to join the company. Below is the 2002
annual report from the US Office of Government
Ethics. Unrelated federal prosecutions are grayed
in the document. On February 24 2003, it was
announced that the trial had failed to show
efficacy for AidsVax
October 17,
2002
DO-02-023
MEMORANDUM
TO: Designated
Agency Ethics Officials and Inspectors General
FROM: Amy
L. Comstock
Director
SUBJECT: 2001
Conflict of Interest Prosecution Survey
This Office has completed
its annual survey of prosecutions involving the
conflict of interest criminal statutes (18 U.S.C.
§§ 203, 205, 207, 208, 209) for the period
January 1, 2001, through December 21, 2001.
Information on five new prosecutions by U.S.
Attorneys’ offices and the Public Integrity
Section of the Department of Justice’s
Criminal Division was provided to us with the
assistance of the Executive Office for United
States Attorney’s in the Department of
Justice. Summaries of the prosecutions reported
to this Office can be found on our web site at www.
usoge.gov under "Laws and
Regulations."
___________________________________________________________________________________
2001 Conflict of Interest
Prosecution Survey
1. United States v. Jon D.
Glassman -- While employed by the Department of
State, Glassman served as the Deputy for
International Coordination of the Task Force for
Military Stabilization in the Balkans (Train and
Equip Program) until his retirement on January 2,
1998. At all pertinent times, Glassman was paid
at the rate of level 5 of the Senior Executive
Service pay scale. The Train and Equip Program
was established to assist the Bosnian Government
in developing a stable military environment. The
Program was funded by various countries including
the United States and oversaw funds designated
for the purchase of military equipment and
training. Glassman’s responsibilities were
to secure international funding, to advise the
Bosnian government on available funds and
equipment, and to monitor the integrity of the
fund’s disbursement and negotiation
activity.
On January 5, 1998,
Glassman began work for Northrup Grumman
(Northrup) as the Vice-President for
International Business Development for the
Electronic Sensors and Systems Division. On
January 6, 1998, Glassman contacted the United
States Embassy in Bosnia-Herzegovina to inform
them that he anticipated a trip to Bosnia with
representatives from his new employer to discuss
their agreements with Bosnia to provide air
traffic control and air defense radar systems.
Glassman then requested a meeting for himself and
his colleagues with the American Ambassador to
Bosnia to brief the Ambassador on Northrup’s
efforts. Prior to the trip, the Department of
State requested that Glassman provide a concept
paper describing the air traffic control and air
defense radar systems. Glassman provided the
concept paper, in which he also mentioned the
hope of securing funding from Bosnia for the
contracts and Bosnian support with the United
States Government. A foreign company was the only
other competition for the contracts.
On April 22, 1998,
Glassman and other Northrup Grumman
representatives met with the American Ambassador
and other Embassy personnel at the Sarajevo
Embassy. The Government has evidence that during
the meeting Glassman expressed that he wanted the
Embassy’s support for the contract.
On July 18, 1998, the
Bosnian government entered into an
$11.3 million contract with Northrup to
initiate the first stage of the project. On
August 13, 1998, Glassman received knowledge that
a Department of State official told Bosnian
government officials that the Northrup contract
was more than Bosnia needed and the foreign
competitor offered a more appropriate and less
costly package. Glassman contacted personnel at
the Sarajevo Embassy and the Department of State
to gain support for United States contracts in
Bosnia.
The Government maintained
that Glassman’s conduct violated
18 U.S.C. § 207(c), a one-year
post-employment restriction that prohibits a
former “senior employee” from
communicating to or appearing before his former
department or agency, on behalf of another person
or entity other than the United States, with the
intent to influence official action. Glassman
denied the allegations. Pursuant to a civil
settlement agreement signed by the parties,
Glassman paid the Government $10,000, and the
Government released Glassman from its claims
under 18 U.S.C. § 207.
Prosecution handled by
the Public Integrity Section of the Department of
Justice’s Criminal Division.
2. United States v. William L. Heyward -- Dr.
Heyward was the HIV Vaccine Coordinator for the
Centers for Disease Control (CDC) until December
1999. While employed by CDC, Dr. Heyward made
recommendations about, and participated in the
negotiations of, the terms of CDC’s
collaboration with a private company, VaxGen,
Inc. At some point during the negotiations, Dr.
Heyward began negotiating for post-retirement
employment with VaxGen. The Government maintained
that Dr. Heyward’s conduct violated 18
U.S.C. § 208 for participating personally and
substantially as a Government employee in a
particular matter in which, to his knowledge, an
organization with whom he was negotiating
prospective employment has a financial interest.
Pursuant to a settlement agreement dated February
5, 2001, Dr. Heyward paid the Government $32,500,
and the Government agreed not to proceed
criminally on the alleged violations under
18 U.S.C. § 208.
Prosecution handled by
the Northern District of Georgia.
3. United States v. Lorenzo
Humberto Lucero -- Lucero was a Cattle Inspector
for the Department of Agriculture. His duties
included inspecting animals that would be brought
into the United States. When the owner of two
horses took the horses to Mexico for a show,
Lucero solicited and received $500 for assisting
the owner in crossing the horses back into the
United States.
Lucero was charged with
violating 18 U.S.C. §§ 203, 205, 208 and/or
209. After the United States filed a motion for
summary judgment, Lucero settled the case through
the entry of an Agreed Judgment in the amount of
$5,000 and resigned his position.
Prosecution handled by
the Western District of Texas.
4. United States v. Charles Rives Sledge --
Sledge worked at the Norfolk Naval Shipyard as a
GS-12 Asbestos Control Project Manager. His
duties included ensuring compliance with all
applicable regulations concerning the abatement
and disposal of asbestos and other fibrous
materials. This required him to become aware of
the abatement plans and practices of contractors.
While employed at the Shipyard, Sledge also
worked as the training director for the Asbestos
Analytical Associates, Inc. (AAA), a business
owned by Carol Holden that monitored and tested
airborne concentrations of asbestos fibers. AAA
provided abatement training for C.E. Holden, Inc.
and K&K Contracting, Inc., asbestos and lead
abatement contracting companies owned by Charles
and Carol Holden. These companies performed
asbestos abatement work at the Norfolk Naval
Shipyard.
The Government alleged
that Sledge provided Government contract pricing
information to C.E. Holden, K&K, and AAA. In
addition, it alleged that Sledge allowed
abatement work by C.E. Holden, K&K, and
AAA to proceed when he knew the abatement plans
contained false and fraudulent information,
including training certificates falsified by
Sledge as the training director for AAA.
The Government maintained
that Sledge’s conduct violated
18 U.S.C. § 208(a) for participating
personally and substantially as a Government
employee in a particular matter in which, to his
knowledge, he had a financial interest. Sledge
entered a guilty plea and was sentenced to three
years probation, fined $5,000 and given 384 hours
of community service.
Prosecution handled by
the Eastern District of Virginia.
5. United States v. Denice Patrick -- Patrick was
a Senior Attorney at the Social Security
Administration when she opened her own private
practice in 1994. In her practice, she
represented Social Security claimants against the
Social Security Administration while still
working at the agency. Some of the outside cases
were the same kind of cases she defended for
Social Security.
The U.S. Attorney’s
Office for the Western District of Washington
began to pursue a case against Patrick under 18
U.S.C. § 205, for acting as an attorney before a
Federal agency in connection with a particular
matter in which the United States is a party.
Ultimately, Patrick admitted to several conflicts
violations at a Social Security administrative
debarment hearing. She entered into a pre-filing
settlement for $113,000 to be paid in
installments over the next 15 years.
Prosecution handled by
the Western District of Washington.
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