For over a decade, ADS and companies in its orbit have come under suspicion of having violated a law known as the Berry Amendment, which requires the Pentagon to buy items such as textiles, clothes, shoes, and food grown or produced in the U.S. ADS denies any violation of the law. “ADS has a rigorous Berry Compliance program,” ADS’s general counsel, Adam Casagrande, emailed POGO. “Our entire company is trained on it consistently, and we perform audits on ourselves and our vendors, some without notice, regularly to ensure compliance.”
So-called “Buy American” laws like the Berry Amendment recently got a boost from an executive order from President Joe Biden
stating that “the United States Government should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America’s workers thrive.” The Trump administration also took recent steps to buy more goods made in the U.S.
According to a 2011 Defense Criminal Investigative Service memo, sources within the Defense Logistics Agency (DLA) shared Berry Amendment allegations with criminal investigators: “Allegations have also been raised to DLA by competing vendors concerning issues that ADS has affiliations with certain manufacturers, some of which have production facilities overseas, which ADS utilizes to fill purchase order awards, possibly in violation of the Berry Amendment.”
Referring to this memo and another, Casagrande emailed that “the quotes in the memos do not directly implicate ADS.”
“On occasion, through no fault of ADS, a supplier will incorporate something non-Berry compliant into a product ADS purchases,” Casagrande wrote. “That is never with ADS’s knowledge, and, when it comes to light, ADS has always remediated the situation with the government immediately, at its own loss if the supplier is unable to cover the costs. The Government does not pay nor get harmed in the few instances that has occurred.”
In episodes where Berry Amendment violations have been confirmed, ADS and its executives may have been unaware of what transpired. A 2009 Defense Criminal Investigative Service memo
on ADS states that a tipster “alleged DoD [Department of Defense] vendors attempted to improperly influence the award of U.S. Army and USMC [U.S. Marine Corps] contracts” and that a vendor had violated the Berry Amendment.
The memo was silent on the first set of allegations, but testing of fabric in balaclavas that were the kind supplied by ADS showed the “fabric was processed overseas, and therefore not compliant with the Berry Amendment.”
A spokesperson for the Defense Criminal Investigative Service told POGO it could not comment.
The Defense Department learned that other products supplied by ADS that were legally required to be made in the U.S. were in fact made overseas. Barrier Wear, an ADS subcontractor from 2008 to 2012, supplied the Pentagon $30 million in garments that were made in Mexico but were falsely certified as made in the U.S, the Arizona Daily Star reported.
“Our investigation also demonstrated that Barrier Wear took steps to conceal that its clothing was manufactured abroad, consistent with the conclusion that it was aware of its Berry Amendment obligations and intentionally disregarded them,” according to a Pentagon investigator’s 2016 affidavit obtained by the Arizona Daily Star.
There’s no apparent indication that ADS was aware of the scheme, however, and the investigator wrote that Barrier Wear sought to hide its lawbreaking from ADS. Barrier Wear’s owners were sentenced to three years of probation.
More recently, in 2017, federal law enforcement agents executed a search warrant at London Bridge Trading, a company that the Justice Department stated in a 2017 press release was among several “purported small businesses affiliated with ADS.” (The press release was about a False Claims Act lawsuit, but London Bridge Trading was not formally accused in the lawsuit itself. ADS and Luke Hillier, its majority owner, settled the lawsuit in 2017 and 2019, respectively, both without admitting wrongdoing.)
According to the Virginian-Pilot, the federal investigation was into potential Berry Amendment violations by London Bridge Trading, which has disclosed that it uses manufacturers in Peru and Mexico. The company, which primarily makes “tactical nylon products” like body armor and backpacks, said in a factsheet at the time that the products made overseas are not sold to the Defense Department, but commercially and to other customers where the Berry Amendment does not apply.
“We have always taken our compliance obligations under the Berry Amendment seriously and we are fully cooperating with the authorities in this matter,” the company’s chairman said in a 2017 statement. No charges have been brought to date. London Bridge Trading’s chief executive did not respond to questions regarding the Berry Amendment and about the allegation that London Bridge Trading is affiliated with ADS.
“I want it known that when we were informed of the 2017 search of LBT by the federal government regarded [sic] possible Berry violations, ADS immediately stopped all purchasing and shipments of all products by LBT,” Casagrande told POGO. “Then, at its own cost, ADS performed its own independent audit of LBT to ensure there were no Berry violations occurring, engaging a third party. Not until after that audit found there were no violations did ADS resume purchasing and selling products from LBT.”
A trade group called the Warrior Protection & Readiness Coalition, formed by ADS executives and whose chairman’s council is comprised of Luke Hillier and London Bridge Trading President David M. Bohannon II, recently touted its lobbying efforts to bolster the Berry Amendment.