Janet's Conner

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Friday, June 02, 2006


Contractor 'knew how to grease the wheels'

ADSC founder spent years cultivating political contacts

In government documents, he is referred to as "co-conspirator No. 1:" a man who gave more than $630,000 in cash and favors to former Randy "Duke" Cunningham for help in landing millions of dollars in federal contracts.

Poway military contractor Brent Wilkes---whom Justice Department officials identify as the co-conspirator---has long been active in local political circles, serving as the San Diego County finance co-chairman of Gov. Arnold Schwarzenegger's campaign and the state finance co-chairman for President Bush.

Wilkes has not been charged with a crime in the Cunningham case. The former Republican Rancho Sante Fe congressman announced his resignation in late 2005 after pleading guilty to charges of tax evasion and conspiracy. The other three men---Washington defense contractor Mitchell Wade, businessman Thomas Kontogiannis and financier John T. Michael, both of New York---also have been identified as co-conspirators.

Wilkes' story shows how gifts, favors and campaign contributions can be used to gain lucrative business from the government.

Over the past 20 years, Wilkes has devoted much of his career to developing political contacts in Washington. He and his associates have spent at least $600,000 on political contributions and $1.1 million on lobbying behind the gifts mentioned in the Cunningham plea agreement, as they cultivated such politicians as House Majority Leader Tom DeLay and Appropriations Committee Chairman Jerry Lewis. (Tom DeLay has since then, stepped down as House Majority Leader and intends to resign this month.)

And since 1996, he has received at least $95 million in government contracts for the small family of firms based in his $11 million headquarters in Poway, including ADCS Inc. and Group W.

Those who know Wilkes describe him as gregarious and ambitious, a person who can make friends easily and toss them aside just as quickly.

Born in San Diego County in 1954, Wilkes graduated from Hilltop High School in 1972, along with his football teammate and best friend Kyle Dustin "Dusty" Foggo, currently third-in-command at the CIA. Wilkes and Foggo were roommates at San Diego State University, were best men at each other's weddings and named their sons after each other.

Wilkes' career in political relations dates to the early 1980s, shortly after Foggo joined the CIA. Foggo was sent to Honduras to work with the Contra rebels who were tryig to topple the Sandinista government of Nicaragua, according to sources within the CIA.


Wilkes moved to Washington, D.C., and opened a business named World Finance Corp., about three blocks away from the White House. One of his chief activities, sources say, was to accompany congressmen---including then-Rep. Bill Lowery of San Diego, whom Wilkes met during his participation in the SDSU Young Republicans organization---to Central America to meet with Foggo and Contra leaders.

A number of sources who have had business dealings with Wilkes say he hinted at that time and afterward that he was affiliated with the CIA. CIA sources say he was never employed by the agency.

By the time Wilkes returned to San Diego in the late 1980s, he had established relationships with members of the House Armed Services, Intelligence and Appropriations committees.

Neither Wilkes, Foggo nor Lowery responded to requests for comment.

By 1990, Wilkes was working for Aimco Financial Management in La Jolla. His chief duty was to bring in politicians, including Lowery, to talk to Aimco clients about how new laws might affect their finances.

Aimco ran into trouble after securities regulators accused its founder, Marvin I. Friedman, of taking $268,000 of a client's funds in 1991.

Wilkes left Aimco in 1992 to take a job as a political consultant for Audre, Inc., a Rancho Bernardo firm that specialized in automated document conversion systems, which converted maps and engineering drawings into a format that could be edited via computer.

Audre, which was nearly bankrupt at the time, was eager to get more federal contracts. Shortly after Wilkes' arrival, the 35-person firm, headed by San Diego businessman Tom Casey, began donating thousands of dollars to key members of Congress.

"Wilkes was a political operator," said former Audre engineer Dirk Holland. "He was pretty slick. He knew how to grease the wheels."

Said a former business associate of Wilkes: "He knew that it pays to get a sponsor. He knew that's the way the game is played, and he convinced Tom Casey that that's what it's all about."

Between 1992 and 1997, Audre employees and family members donated $77,000 to members of Congress. Rep. Duncan Hunter (R-El Cajon), who got $7,250, and Cunningham, who got $5,050, became prominent backers of automated document systems in Congress.

"Our job as San Diego congressmen is to do our best to make sure our guys get a fair shot," Hunter said recently. "And Brent Wilkes and Tom Casey were aggressive and enthusiastic promoters of a breakthrough technology."

Audre was able to increase its influence by teaming up with Evergreen Information Technologies, a Colordo company that specialized in computerizing federal contract information.

Casey had been one of the founders of Evergreen in the early 1990s and served on its board of directors. Evergreen gave $22,000 in political donations, often targeting the same politicians on the same dates as Audre.

According to charges filed by the SEC Commission, $20,000 of Evergreen's donations were illegl. Evergreen Chief Executive Barry Nelsen asked staffers to write $1,000 checks, leaving the "payee" line blank, according to SEC documents. Nelsen then gave the checks to lawmakers and repaid his workers in violation of federal law, the SEC charged in 1993.

Nelsen did not fight the charges and was fined $65,000. He says he made the donations---none of which went to Hunter or Cunningham---so Congress would push the Navy to work with his firm.


"I went to Tom Casey and said, 'How do we get some money or political heat or something to make the Navy do what they should?'" Nelsen said. "So up pops Brent Wilkes."

Nelsen said Wilkes identified which politicians should be given donations.

The lobbying by Audre, as well as that of other software companies, was effective. Congress created an automated document conversion program, which provided $190 million in contracts between 1993 and 2001.

Audre won more than $12.5 million of those contracts, largely provided through earmarks that let legislators add pet projects to the budget.

"An earmark is usually devoted to a particular company or particular project that is tied to a particular congressman," said Michael Surrusco, director of ethics campaigns at Common Cause, a government watchdog group.

Earmarks are typically added to budget bills after they have been passed by the Senate and the House and the differing versions are being resolved in a conference committee. Because those meetings occur outside public view, the earmarks can be a way of avoiding scrutiny or accountability.

The earmarks were included in the budget even though the Pentagon never asked for funds for automated document conversion. In 1994, the General Accounting Office, now known as the Government Accountability Office, which monitors federal spending, found that the military did not need automated systems because it already had its own systems to digitize documents.

That did not dissuade Audre's supporters in Congress.

"I operate under the idea that not all good ideas come out of the Pentagon," Hunter said.

Two dozen firms vied for funding from the automated document conversion program. Their success depended on lobbying influential legislators, said Richard Gehling, who headed Audre's federal sales in the late 1990s.

Once Congress has appropriated mony for programs, Pentagon officials decide how to apportion the money among prequalified contractors. These officials are very mindful of the desires of members of Congress who were crucial in funding the program, contractors and program managers said.

Gehling described Audre's technique for obtaining government contracts during a deposition in a lawsuit he filed in 2000 to gain back pay from the company.

A successful sale to the military, he maintained, "normally boiled down to who the House and Senate member was and how much pressure they put on the undersecretary (of Defense) about getting the funding for their constituents."

Audre Attorney, Ian Kessler: "That, in turn, depends upon how much political muscle, how much influence (a company has) with a particular congressman?"

Gehling: "The majority of the time, it's (whichever company) has the most clout."

Kessler: "You mean the most political clout?"

Gehling: "Who's paid more."

Kessler: "Paid more in terms of political contributions?"

Gehling: "Fundraisers. Sponsoring."

To build more political backing for Audre, Wilkes asked Casey in 1994 to budget at least $40,000 a month for lobbying, far beyond what the money-losing company had been spending, according to two sources at the company.

When Casey balked, Wilkes quit the firm. Six months later, Wilkes launched ADCS Inc., customizing a German system called VPMax to compete for contracts to convert government documents. It was a family affair. Most of the company's top executives were related to Wilkes or his wife, Regina.

The Pentagon rated VPMaz as faster, easier and cheaper that Audre. VPMax cost $6,035 per unit, compared with $11,479 for Audre's PC system and $29,950 for its Unix System. Even so, Hunter backed Audre, partly because it was a U.S. made product.

"I did oppose having a German firm get the business," he said recently, although the German creator of VPMax was getting a little more than licensing fees for the ADCS project.

Casey played on the sentiment. When talking to Hunter about ADCS, Casey

He called it "the German software." Hunter, in turn, asked Maj. Gen. John Phillips, the Pentagon's chief purchasing officer, to "whenever possible, use [document conversion] products that are made in the United States by American taxpayers."

In May 1995, just as Wilkes was launching ADSC, Hunter---who had just been named chairman of the Armed Services Committee---let Audre use his office for two weeks to demonstrate its newest release to Pentagon officials.

Two weeks after the demonstrations ended, Audre sold $1.2 million of the software to the military for testing.

"When you're in a position like Hunter was, you have a lot of clout, and we're not supposed to rock the boat," said a former Pentagon procurement official who declined to be named.

At that point, Wilkes started donating money to Cunningham, who sat of a House Appropriations subcommittee everseeing the Pentagon budget. Since October 1995, he and his associates have given $71,500 to Cunningham's campaign and political action committee. Cunningham became an ADCS booster.

"The success achieved by ADCS Inc., is an asset to the San Diego business and technological communities," Cunningham said in a 1997 endorsement that was printed in ADCS' pamphlets and press releases. He predicted VPMax would lead to "a stronger, more efficient national defense."

In 1996, Casey pressed Hunter to find out why the military was not buying more of Audre's software. Hunter demanded a Pentagon investigation.

A report from the Pentagon's Inspector General responded that "little demand exists" for automated document conversion systems. Aside froma Navy base in Ventura County, Port Hueneme, no military instllation said it needed the systems. Much of the Software Congress had funded was languishing in storage.

Such criticism did not dissuade Hunter.

According to Gehling's deposition, Hunter pushed the military to buy $2.5 million in Audre software in February 1997.

"There were still problems with the software," Gehling said. "It's always been flaky. It's still flaky."

Under pressure from Cunningham, the Pentagon shifted the money from Audre to ADCS. At the time, Cunningham said he only wanted the military to pick the best contractor possible. Donald Lundell, who was then Audre's chief executive, accused Cunningham of being swayed by Wilkes' campaign contributions.

This is the end of PART 1.............

Part II includes all of the names of our Congressional members that have been involved in this little scandal.


  • At 1:05 AM, Anonymous Jimmy said…

    We read you on the daily kos


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