-Caveat Lector- THURSDAY AUGUST 26 1999 ---------------------------------------------------------------------------- ---- Is Washington 'corrupt beyond repair'? Former defense contractor says system is 'broken' ---------------------------------------------------------------------------- ---- By Jon E. Dougherty © 1999 WorldNetDaily.com A former defense contractor who once had his life threatened by a defense contracting official in the presence of government lawyers says, Washington is "too corrupt to fix" and is being "run by a bunch of 22-year-old staffers who think the whole thing's funny." Bill White, who has spent 18 years in and around Washington, D.C., told WorldNetDaily he has witnessed the corruption "up close and personal" after the Department of Defense (DOD) "squeezed" his defense firm out of business. But White, who said it takes "in the neighborhood of 10 years" to build even a small defense contracting company because of intense DOD requirements, said the loss of his firm, Logics Inc., is "just a symptom of the overall problem with corruption in Washington, D.C." "I wanted to tell my story because it's not just about losing my company," he said. "It's much bigger than that. The whole system operates this way, and that's the way they want it. There is no system of checks and balances anymore." His experience began in 1989 when his company -- an electronics manufacturing firm -- began applying for -- and winning -- modest defense contracts. White said he bid on military projects because, as a minority firm, his company qualified for an accelerated payment program. White was qualified for the program because he is ethnically Hispanic, though he adopted his stepfather's Anglo name years ago. Logics' first contract came in the form of a $3.2 million award to build satellite communications equipment for Navy warships. White, who is a meticulous organizer, hyper-trained his staff and streamlined his operation in order to make it as efficient as possible and, hence, more appealing to government contracting officers who sought to get the most for the taxpayer's money. When it was all over, the company won immediate praise from government and DOD officials, and even navy personnel who were tasked with using his firm's equipment called to express their gratitude. "We were getting calls from naval field personnel telling us how well our gear was performing," White said. "We were also recognized by the Army for the seven products we had built that were used in Persian Gulf war weapons systems." He added, "We shipped over 20,000 weapons systems and never once had a failure." After being named the Pentagon's small business contractor of the year, White continued to pursue military construction bids, winning Army contracts to build 16,000 copies of a component to keep TOW missiles from misfiring, an upgraded missile launch control panel, and 64 copies of a critical component for the Firefinder radar system on the Army's Multiple Rocket Launch System (MLRS). But just as the years of painstaking effort necessary to comply with government defense contractor specifications were finally beginning to pay off, White said the government threw him a curve ball. In a series of bids won by Logics, the government provided White's company with "flawed" technical data packages -- packages of information listing the government's particular specifications for the construction of key system components. White said each company "has to build the exact same component because they are all supposed to be interchangeable" in the military's weapons systems, no matter who builds them. The flawed technical data caused Logics several production delays and unnecessary cost overruns on a few Army contracts while trying to re-engineer the mistakes. And, under government procurement rules, a contractor can file a claim for reimbursement when he incurs extra costs as a direct result of "government error or inaction." So White was confident his government-caused, out-of-pocket expenses would be taken care of. But the Pentagon and the Defense Department were slow to reimburse Logics for the unnecessary development costs. So slow, in fact, that before Logics received reimbursement on their first claim -- some 19 months later -- the company had to file for Chapter 11 bankruptcy protection. He now says he believes the flawed specifications in the data packages were more than simply the result of incompetence -- a problem rife in the Clinton administration's Department of Defense. He thinks the data was intentionally misrepresented and erroneous, especially after learning from an admiral in the Pentagon that the "unofficial rule" within the defense procurement bureaucracy is to squeeze out small contractors like Logics -- "no matter what." In the meantime, White said Logics continued development work because he wanted to keep the contracts, but the company soon ran into other problems. For example, he said, the components his firm was constructing for the Army MLRS contract were supposed to be tested, under the terms of the agreement, by a transformer "that could not be purchased on the open market nor produced by us because it was already patented by someone else." "In other words," he said, "the Army told us to build their components -- based on faulty information -- then test them with an item that was not commercially available." After some badgering, White said the Army finally produced one so he could comply with the terms of the contract, but that was 94 weeks later. Within days of delivering the transformer to Logics, White said Army officials contacted him again and demanded he return it "so they could send it to another company who was building the same components." Eventually he found out that "the 'other' company was Hughes, and they already had one of the testing transformers. Yet the Army wanted mine, too. Why?" "They knew I couldn't fulfill the contract without it," he said. During this same time period -- unbeknownst to White -- the Army had awarded his contract to Hughes because Logics had failed "to make progress" -- even though it wasn't their fault. After years of delaying, but eventually paying, some of Logics' claims, White said a government contract officer told him "even though they knew they were in the wrong, they were simply not going to pay" the last claim, worth nearly $600,000. "When this occurred, keep in mind that the government admitted that the technical data packages were seriously flawed," he told WorldNetDaily. "They admitted it in writing, and said they'd provide a new delivery schedule, as well as the equipment to test the new gear." Initially, he said, "the (government contracting) officer told me they would pay it. But when all of this got to court and we found out during the discovery process that he had already terminated our contract because of default, we realized we'd been had." The government has yet to pay White for "millions of dollars" in other lost development costs due to "their own incompetence and mistakes." White said "years of legal battles and court decisions" have proven that Logics' claims were not only legitimate, but that "the government and in particular, the Army, systematically used frivolous and bogus arguments to prolong" his cases. But finally, an exasperated White realized he was fighting a losing battle when a government contracting officer threatened his life "in front of his attorneys." "The guy told me, 'We'll let you live if you give us a no-fault, no cost termination,'" he said, referring to the signing of a waiver absolving the federal government of any liability to pay White's still-pending claims. Said White, "His attorneys taunted me afterward, telling me I'd never see a dime of my money." "I know I'm never going to get paid for this," he admits, "but as I said, this isn't just about me. This story is about a government so endemically corrupt that any avenue at redress is routinely and intentionally denied, blocked, and circumvented." "If the government refuses to obey the lawful order of a court to pay on a claim they know is legitimate, and if Congress refuses to intervene as they consistently have done, what is a citizen to do?" Harder to understand, he said, is Congress' complicity. "These guys know what is going on up there (in Washington) but won't do a damned thing about it." For example, reaching into his desk during the telephone interview White told WorldNetDaily, "I've got a summons here in my hand from some lawmakers that I received before all of the hoopla surrounding Clinton's impeachment began." He was bewildered by its contents. According to White, the letter contained an admission from Rep. Henry Hyde "and four or five others in Congress" that they knew many of the actions Clinton has been accused of were not only true but that they amounted to treason. He said the legislators accused Clinton of abusing "his power by illegally firing White House Travel Office employees after making false charges against them, and then illegally acquiring 900 confidential FBI files on his enemies for the purpose of blackmail, extortion or harassment." "When you call a sitting president treasonous," White said, "you better know what you're talking about or you've got problems. But guess what? These guys don't care." Lawmakers, he added, "will do nothing unless you're one of the big guys and you're in their back pocket." "The fact is, these guys are allowing this government to scuttle small companies because they know the small companies have no ability to fight the government. Even if some of them win, their attitude is, 'Hey, we've got to dispose of these cases without paying,' even though it's the big companies that are ripping the government off blind." White admits that "not all lawmakers" are corrupt, but he said they are few in numbers. "After walking the halls of the Rayburn Building with these guys for years, it's my conclusion that most Americans simply have no idea how bad" the corruption is in Congress and the White House. "But they need to know. There is a total disconnect between Washington and the rest of the country." Tomorrow: The destruction of the defense industry infrastructure Jon E. Dougherty is a contributing editor to WorldNetDaily. ---------------------------------------------------------------------------- ---- © 1999 WorldNetDaily.com, Inc. ---------------------------------------------------------------------------- ---- This page was last built 8/26/99; 3:51:08 AM Direct corrections and technical inquiries to [EMAIL PROTECTED] http://www.worldnetdaily.com/bluesky_dougherty/19990826_xnjdo_is_washing.sht ml Bard DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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