Rachel Slajda
The former head of a military contractor is on trial in Long Island for fraud, having allegedly used company funds to buy porn for his son, a burial plot for his mother, prostitutes for his employees and a ruby-encrusted American flag belt buckle worth $100,000.
David H. Brooks, the founder and former chief of body armor manufacturer DHB, is facing charges of fraud, insider trading and using millions of dollars in corporate cash to fund, as the
New York Times puts it, "personal extravagance."
Using the company coffers -- which were flush with Pentagon money -- Brooks
allegedly bought gifts for his family, including pornographic videos for his son, plastic surgery for his wife and textbooks for his daughter. He also bought luxury cars, country club memberships and a stable full of racehorses.
The prostitutes? They were to boost morale. From the NYT:
His lawyers also defended the hiring of prostitutes for employees and board members, arguing in court papers that it represented a legitimate business expense "if Mr. Brooks thought such services could motivate his employees and make them more productive." And then there's the belt buckle, which prosecutors have reportedly been waving around in the courtroom: $100,000 worth of diamonds, rubies and sapphires in the shape of the American flag.
And there's more: Brooks spent $10 million on his daughter's bat mitzvah, hiring 50 Cent, Tom Petty and Aerosmith to perform. The
leather-bound invitations cost $40,000 alone.
moreFlashback:
All's Not Quiet on the Military Supply Front (NYT)
When the Iraq war began in early 2003, analysts say, the American military hadn't stocked up on body armor because the White House did not intend to send a large occupational force. The White House game plan called for lightning strikes led by lithe, technologically adept forces that would snare a quick victory. A light deployment of troops and a harmonious occupation were to follow, with the Pentagon anticipating relatively little hand-to-hand or house-to-house fighting. But as the breadth and duration of the Iraqi occupation grew, the war became a series of perilous, unpredictable street fights in Baghdad and other cities, leaving soldiers exposed to sniper fire and close-quarters combat - and in urgent need of hundreds of thousands of bulletproof vests.
In the world of military contractors, times like these - when a sudden, pressing need intersects with a limited number of suppliers - have all the makings of full-blown financial windfalls. For small vendors, the effect can be even more seismic than it is for their larger brethren, turning anonymous businesses into beehives of production and causing their sales to skyrocket. DHB Industries, based in Westbury, N.Y., whose Point Blank subsidiary in Pompano Beach, Fla., is a leading manufacturer of bulletproof vests, found itself occupying this lucrative turf when the military awarded it hundreds of millions of dollars in body armor contracts in 2003 and 2004.
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DHB might have remained anonymous if not for a spate of recent events. The quality and adequacy of vests supplied to soldiers in Iraq has come into question over the last year, culminating in a Pentagon study, first reported by The New York Times this month, that said that 80 percent of the Marines who died in Iraq from upper-body wounds might have survived if they had had body armor covering more of their torsos. (It was the military, and not manufacturers, that determined the specifications for the vests DHB supplied the Marines, said DHB.)
The Marines and the Army recalled about 23,000 Point Blank vests from the field last year after The Marine Corps Times reported that the Marines acquired the vests despite warnings from Army personnel that the vests had what the newspaper described as "critical, life-threatening flaws." The Marine Corps issued a statement in November saying that there was "no evidence to suggest that soldiers or Marines have been at risk, or that these vests will not protect against the threat they were designed to defeat."
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