Two weeks ago, I learned of the indictment of David H. Brooks, the founder and former CEO of Point Blank Solutions, Inc., and its COO Sandra Hatfield for insider trading, fraud, obstruction of justice, and tax evasion to the tune of nearly $200 million dollars.
Point Blank Solutions, Inc., formerly DHB Industries, is a leading U.S. manufacturer of body armor for our troops and law enforcement, manufacturing more than a million Interceptor body armor units that have been standard issue to our troops in Iraq and Afghanistan for the last several years.
The downfall of David H. Brooks is, at its heart, a story that combines the worst elements that have come to define the Bush administration; combining corruption reminiscent of Enron, questionable sole-source contracts awarded to companies unable to produce the lifesaving equipment need for war, and greed and excess on an unconscionable scale. The consequence of these dealings has been disastrous for our troops in harms way , too many of whom, without enough or properly manufactured body armor, ended up paying the ultimate price.
In the two weeks since these indictments were handed down, what has truly shocked me is the lack of attention that this has merited, both from the mainstream media and the online community. Have we become so desensitized to the corruption and excesses of George Bush's war in Iraq that even this sordid tale of greed is to be greeted with little more than a yawn? The announcement from the U.S. Attorney's Office drew little more than a few scattered articles, with far more attention focused on Point Blank's third quarter earnings and a potential hostile takeover attempt. One reporter who deserves tremendous credit for being at the very forefront of this story is Sarah Anderson of Alternet, whose early reporting of the Brooks/Point Blank scandal dates back to 2005, and who has been the gold standard in coverage.
The troubles with Point Blank/DHB Industries began with a practice that we have seen all too frequently in the course of this Iraq war -- sole source contracts awarded to contractors unequipped to fulfill their requirements for reasons that too often smack of political connections. In this case, the initial sole-source contract resulted in a shortage of body armor to our troops deploying to Iraq at the beginning of the war. As Anderson wrote on Alternet back in July of 2006:
Jim Magee, a retired Marine colonel and former head of DHB's Point Blank subsidiary, recently told the Washington Post that by hiring only DHB, rather than spreading the work around to the 20 or so qualified companies, the military created a bottleneck that kept many troops in Iraq from having state-of-the-art body armor until nine months after the war began. Eventually, the Pentagon broke DHB's monopoly to speed up production...
And the troubles did not end once Point Blank/DHB was able to manufacture the body armor, many of which turned out to contain production defects that prevented the vests from stopping even a small caliber 9mm bullet -- one of the bare minimums of battlefield protection for body armor:
Over the course of 2005, the Marines and Army recalled a total of 23,000 vests - all of them produced by DHB -- after an investigation by the Marine Corps Times revealed that the vests had failed ballistics tests for stopping 9 mm bullets. The exposé showed that Pentagon officials had dismissed repeated warnings by inspectors. In one instance, army ballistics expert James MacKiewicz alerted higher-ups of "major quality assurance deficiencies" by DHB and recommended rejecting certain lots of vests and "disciplinary action against the contractor."
Despite these issues and the investigation of several of their former executives, "The Army inked a new armor contract with Point Blank in May to supply 75,000 of its updated "Improved Outer Tactical Vest" -- a more modern armor system that's lighter and provides more coverage to Soldiers" according to Military.com.
If the details of the body armor manufacturing issues weren't enough, the charges brought against Brooks and Hatfield are surely newsworthy. Anderson notes, "The 71-page indictment (PDF) alleges that while Brooks was chief executive of DHB Industries, a leading provider of military body armor, he pocketed more than $185 million from insider trading, fraud and tax evasion. He is also charged with using millions of dollars in DHB funds for personal expenses" and Military.com notes "If convicted of all charges, Brooks and Hatfield each face up to 75 years in prison and a combined $190 million in fines."
Last year, after reading a heartbreaking article about the lack of available body armor for our troops in Iraq, I wrote a letter to the Pentagon's Inspector General asking him to investigate and issue a report on the military's armor procurement practices. We received the first report in June detailing some of the major issues that came with sole-source contracting and the procurement of the Mine Resistant Ambush Protected Vehicles (MRAPs). My office and I are still waiting for the second report on a similar investigation for body armor. I imagine it will tell us only more sad stories of how this administration had greater regard for the profit margins of a few politically connected contractors than our troops in harms way.