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Inquiry grows in contract scandal

By Jim McElhatton
January 24, 2008

Law-enforcement authorities are widening their probe into a $130 million federal contracting scam that has led to convictions against a General Services Administration procurement official and two former executives of a prominent security company.

A federal prosecutor disclosed the ongoing investigation yesterday at a sentencing hearing in federal court in Greenbelt for Michael B. Holiday, founder of Holiday International Security.

Holiday, 50, is a central figure in what U.S. Attorney Rod J. Rosenstein said last year ranked among the biggest public-corruption cases in Maryland history.

A former Montgomery County police officer, Holiday was caught in an unrelated child-pornography sting in 2004. Later, he began giving investigators details about corruption involving federal security contracting officer Dessie Ruth Nelson, defense attorney Bruce Marcus said.

At one point, Holiday wore a wire to secretly record a meeting in California with Nelson, according to court documents. She pleaded guilty to a bribery charge earlier this month and is awaiting sentencing. She admitted taking $45,000 in cash and a $7,000 cruise from Holiday for steering contracts to his company.

Through Holiday's undercover meetings with Nelson, authorities also learned about activities involving "unrelated contractors" that remain under investigation, assistant U.S. Attorney Jonathan Biran told a judge yesterday.

A spokeswoman for the U.S. Attorney's Office yesterday declined to elaborate, saying officials could neither confirm nor deny any ongoing investigations.

"Federal investigators have followed the evidence in this case across the nation, from Maryland to California, to ensure that anyone involved in this corruption scheme will be held accountable," Mr. Rosenstein said after Nelson's Jan. 10 guilty plea.

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