ATCO alleges interference in govt contracts..lawsuit.
nctimes.com
Local Cunningham-linked defense contractor is sued
By: WILLIAM FINN BENNETT - Staff Writer
In the latest twist to the drama surrounding former Congressman Randy "Duke" Cunningham, a San Diego defense company is suing a Poway firm that the plaintiff says worked with Cunningham to snatch away contracts for ship defense systems.
The lawsuit alleges that Poway resident Brent Wilkes, and Cunningham, who in December pleaded guilty to taking bribes from defense contractors, worked illegally to steer contracts away from San Diego-based American Technology Corp. to a company Wilkes controlled.
Michael Lipman, an attorney for Wilkes, said Thursday the lawsuit was "totally without merit."
The lawsuit asked for unspecified damages for the money American Technology says it lost because of Wilkes, Cunningham and others.
The suit alleges that Wilkes' company, ADCS Inc., unlawfully pressured public officials, including "former Congressman Randall "Duke" Cunningham, who in turn influenced the performance of official acts related to defense contracts and orders," the plaintiffs state in a lawsuit filed Jan. 13 in San Diego Superior Court.
"Defendants engaged in intentional and unlawful acts designed to disrupt the relationship between ATC and the U.S. Military, particularly the U.S. Navy," the lawsuit goes on to say.
Cunningham was not named as a defendant in the lawsuit. Wilkes, whose home and offices were raided last summer in connection with the Cunningham bribery investigation, has been identified as one of the alleged co-conspirators in the Cunningham criminal case but has not been charged.
While the American Technology lawsuit alleges Cunningham worked on Wilkes' behalf as a result of bribery, it does not provide details to bolster its argument that a bribe existed. Neither does it charge that Cunningham in fact had worked on Wilkes' behalf to secure business for the warning system.
Wilkes' attorneys said as much about the lawsuit in their response, which was a procedural attack on the pleadings that initiated the lawsuit.
"ATC's inability to allege any facts linking a claimed bribe by Wilkes to its failure to obtain a specific benefit it otherwise would certainly have obtained, is largely ignored," Wilkes' attorneys state in their response.
Attorneys for the plaintiff could not be reached Thursday. In a phone interview that same day, a spokesman for American Technology declined to comment because the litigation continues. The next court hearing on the matter is scheduled for April 28, court officials said Thursday.
In late November, Cunningham pleaded guilty to tax evasion and receiving more than $2.4 million in bribes in exchange for steering tens of millions in government business to two defense contractors.
Defense Department records show that between 1999 and 2005, ADCS received or was working on government contracts totaling more than $85 million, mostly for work it did for the Pentagon.
In a plea agreement the San Diego U.S. attorney's office filed three months before Cunningham was sentenced to eight years and four months in prison, four unnamed co-conspirators were identified. Sources close to the investigation have identified co-conspirator No.1 as Wilkes. Court documents show that in May of 2004, co-conspirator No.1 paid $525,000 "thinly disguised as an 'investment'" to liquidate one of two real estate loans Cunningham had on his Rancho Santa Fe estate.
Anti-terrorist technology
American Technology Corp. specializes in acoustical engineering projects.
In the aftermath of the October 2000 terrorist attack in Yemen on the USS Cole which killed 17 U.S. sailors, the Navy established a 500-yard protection zone around U.S. vessels.
The decision to create a "protection" zone raised the need for a long-range acoustic device to hail and warn vessels away from the ships. In response, according to court records, American Technology sped up development of technology that allowed for long-distance verbal and sound warnings to any approaching vessels.
In May 2003, the company delivered its first prototypes of the system to the Navy. In February 2004, the company was awarded its first contract for the system by the U.S. Marine Corps. Other contracts soon followed. And, according to the company, it "had a reasonable expectation of a continued economic relationship with the U.S. Navy."
In May 2004, Wilkes became a controlling partner in a new company Acoustical Communications Systems, using technology similar to the American Technology system, that had been developed by San Diego-based Horizon Sports Technologies, Inc. Officials in that company became the minority partners in Acoustical Communications.
According to the lawsuit, in the lead-up to forming that partnership, Wilkes told his prospective partners that an unnamed Congressman had obtained authorization from Congress for a $25 million for such a warning system project and that his company had a track record of successfully lobbying U.S. government officials for projects.
The lawsuit said that even before creating the new company, another company owned by Wilkes, Group W Advisors, signed a consultancy agreement with Horizon calling for it to pay $1.5 million in upfront money "for lobbyists and various expenses," to secure the $25 million deal.
Between January and November 2004, the lawsuit states, Wilkes and other officials with his companies, including the newly formed partnership, "traveled to various locations to meet various United States Senators, Representatives, government employees and trade associations related to obtaining the contract ... these included trips to Washington D.C., Florida, Las Vegas, Nevada, and various locations in California and Hawaii."
Around the same time, Horizon executives began making major political donations.
Federal Elections Commission campaign finance records show that in 2004, two key Horizon executives donated $5,000 each to the conservative Superior California Federal Leadership Fund, which donates hundreds of thousands of dollars each year to congressional campaigns.
And in 2005, three of the company's executives and one of their wives donated a combined $8,000 to the campaign of U.S. Sen. Larry Craig, R-Idaho, a member of the powerful Senate Appropriations Committee, the records show.
The lawsuit also alleges that because of Wilkes' and others' actions, American Technology's system was "completely excluded" from a five-year, $250 million contract with the Navy "due to Defendants' intentional, unlawful and undue influence over the process and the public officials who oversee it."
Named as defendants in the lawsuit are: Wilkes, ADCS, Group W Advisors, Acoustical Communications Systems, as well as an additional 100 unnamed individuals or companies.
Earlier questions
Questions surrounding Wilkes and ADCS surfaced more than five years before the current lawsuit and the eruption of the Cunningham bribery scandal. In 1999, the Pentagon conducted an audit on ADCS and a multimillion contract it received from the Pentagon to digitalize engineering documents at the Panama Canal. The audit was released in early 2000, around the same time that Cunningham began taking bribes. It stated that two unnamed Congressmen had pressured Pentagon officials to award the Contract to ADCS.
Last year, the Department of Defense official who called for the audit told reporters that he had been pressured by both Cunningham and Wilkes, and that he had never seen such "meddling" and "arrogance."
Around the time the audit was released, officials with the Pentagon's Office of Inspector General began a separate investigation into equipment purchases and questionable billings by the company. ADCS later settled with the government on the price of the equipment and the Pentagon officials never paid off the questionable billings.
Department of Defense officials sent a copy of the investigation report to officials with the U.S. attorney's office in San Diego, a Pentagon official said last week. But for whatever reason, they "declined" to prosecute the case, Pentagon spokesman Gary Comerford said in a Wednesday phone interview.
On Thursday, a spokeswoman for the U.S. attorney's office, which successfully prosecuted Cunningham last year on unrelated bribery charges, did not return phone calls asking for an explanation as to why the earlier case was not pursued.
Contact staff writer William Finn Bennett at (760) 740-5426 or wbennett@nctimes.com. |
