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Three CIA contractors to pay $3 million to settle corruption allegations

By Lawrence Hurley

WASHINGTON (Reuters) - Three companies that contracted with the CIA agreed on Thursday to pay $3 million to settle allegations they violated anti-corruption laws, the U.S. Justice Department said.

The Justice Department had alleged that American Systems Corp, Anixter International Inc and Corning Cable Systems had, among other things, paid for meals and entertainment and provided tickets to sporting events to both CIA staff and consultants.

The three companies, which had teamed up for the project, hoped to shape specifications that would help them win the unspecified 2009 contract "to provide supplies and services," the Justice Department said.

The investigation was sparked by a whistleblower, former Anixter sales representative William Jones. The three companies were accused of violating both the False Claims Act and the Anti-Kickback Act while securing the contract.

Jones will receive $585,000 of the settlement, as provided for under the False Claims Act, the Justice Department said.

"Plying government officials with meals and entertainment to gain favorable treatment in the award of federal contracts corrupts the procurement process and will not be allowed," Stuart Delery, principal deputy assistant attorney general in the Justice Department's civil division, said in a statement.

CIA spokesman Todd Ebitz said allegations of employee misconduct were always "thoroughly investigated." The case "remains under review internally," he added.

(Editing by Howard Goller and Peter Cooney)

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