The FCPA Files: F.G. Mason Engineering (1990)

Construction of the Berlin Wall was well underway by the time Francis G. Mason set out on his own as an electrical engineer. He had spent the previous decade working for Aladdin Industries (best known for its iconic metal lunchboxes carrying images of superheroes and popular television programs) where he invented more than a dozen components to improve signal reception within the very-high and ultra-high radio frequency range. From 1961 on, he turned his attention to the part of the electromagnetic spectrum in which electronic listening devices do their clandestine work, developing an expansive catalog of bug-sweeping devices (known by the initialism “TSCM” — technical surveillance and countermeasures) for purchase by the U.S. Army, among others.

The West German government showed interest as well: specifically, the Militärischer Abschirmdienst (“MAD”) or Military Counterintelligence Service, tasked with rooting out sabotage and espionage within the West German armed forces — a significant challenge given the historically expansive surveillance capabilities on the other side of the partition. But while the East Germans were notoriously adept at all manner of eavesdropping, their real strength lay in gathering human intelligence through infiltration and collaboration. Mason’s devices were valuable, but they arguably exemplified an overreliance on technology in the Western Bloc’s approach to spycraft.

In any event, MAD proceeded to purchase a range of devices from the F.G. Mason company, starting with the suitcase-bound A-2 portable receiver, which has been described as “the first publicly available modular TSCM bug detector”. The business relationship eventually led to an agreement to custom-build a new model tailored to the country’s specific countersurveillance needs. Trouble arose, however, as the West German procurement officer, Dirk Ekkehard Zoeller, demanded a “commission” of 13.3% on the hardware items and another 50% on calibration services. Mason acceded to the arrangement in mid-1984, and the company’s payments to Zoeller totaled more than $225,000 over the next five years.

The scheme was eventually exposed, and Mason and his company were jointly subjected to a fine of $75,000 and required to provide a restitutionary credit of $160,000 to the Federal Republic of Germany. It isn’t clear how much of that credit the country was able to draw down: F.G. Mason Engineering would close its doors shortly after final judgment was entered in November 1990 — one year after the Berlin Wall came down, and one month after Germany’s reunification.

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This post is part of "The FCPA Files" series, examining key enforcement cases under the Foreign Corrupt Practices Act and the lessons they offer for modern compliance.