Company Won U.S. Defense & Intel Contracts; Hid Russian Ownership

Oxygen Forensics, a technology company reportedly tied to Russia’s Federal Security Service, or FSB, posed as an American business while seeking U.S. security-related contracts (see: link).

This is more than embarrassing. This should raise a national security alarm.

The alleged scheme exposes how weak contractor vetting (especially within the product delivery realm) can turn American procurement into an open door for fraud, waste, abuse and foreign espionage. A U.S. registration, mailing address or polished website does not make a company genuinely American. An American 'CEO' that just gives his word that his business is American does not make that company genuinely American, either. Agencies must verify who owns and controls a business, where its products are made, who supports them and who can access customer data.

Apparently, too many officials are still satisfied with checking boxes instead of checking the people behind the boxes.

The potential damage extends well beyond the possibility of an improper contract award. A company seeking government work may learn about agency priorities, technical requirements, facility weaknesses, procurement schedules and the techniques, tactics and procedures used to protect American personnel and infrastructure. For a near-peer adversary such as Russia, that information can be valuable intelligence.

If the company submitted bids, attended demonstrations, contacted officials, accessed nonpublic requirements or worked through American intermediaries, the relevant agencies need to disclose exactly what happened. Inspectors general and Congress should determine whether officials ignored warning signs, failed to share information or simply lacked the competence to conduct basic ownership and counterintelligence checks.

If the system had no effective way to detect the alleged deception, that is not an excuse. It is an indictment.

American taxpayers should not be paying companies that misrepresent their identity. More importantly, American agencies should not be handing sensitive information to organizations controlled by hostile foreign interests because nobody bothered to look past the corporate name.

This is what happens when procurement offices treat national security like routine purchasing. The officials responsible for those failures should face more than another closed-door review and a carefully worded report. They should be held accountable for the risks they allowed into the system.

Are you a government official looking for actual American contracting—whether for services or products? If so, 'Get Chao Now.' I am here for you, so reach out to me. My businesses are American, led by Americans, staffed by Americans, and our products are produced and distributed by Americans. And that's something you can take that attestation to the bank.