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The Wedtech scandal was an American political scandal involving the award of government contracts. It was first brought to light in 1986.
| | This article needs additional citations for verification .(May 2020) |
The Wedtech scandal was an American political scandal involving the award of government contracts. It was first brought to light in 1986.
The Wedtech Corporation was founded in the Bronx, New York by John Mariotta, and originally manufactured baby carriages. But after a number of years, Mariotta brought in a partner, Fred Neuberger, and began focusing on winning small business set-aside contracts for the Department of Defense.
As a major employer in a depressed part of New York City, Wedtech enjoyed a strong local reputation and was even praised by then U.S. President Ronald Reagan for the jobs it provided for those who might otherwise be forced onto welfare rolls. Mariotta was praised as the Small Business Owner of the Year by the U.S. Small Business Administration.
Wedtech had won many of its defense contracts without competitive bidding under a Small Business Administration program that gave preference to minority-owned businesses, despite the fact that Fred Neuberger, not a member of any government recognized minority, owned a majority of the company's stock, thus disqualifying Wedtech as a minority-owned business. To keep Neuberger's controlling ownership secret, the company committed fraud, forging papers that claimed Mariotta was still the primary owner of the company.
When Wedtech went public, it gave shares of stock to law firms (as payment for legal services), including Squadron, Ellenoff, Plesent & Sheinfeld. Some of the law firms employed members or relatives of members of the U.S. House of Representatives, including Bronx Congressmen Mario Biaggi and Robert Garcia. Both would later resign their seats due to their roles in the scandal and were subsequently jailed, as were State Senators Clarence Mitchell III and Michael Mitchell of Maryland. With undisclosed holdings in Wedtech, they used their positions to help Wedtech win federal work. [1] [2]
Another key figure in the scandal was Paul Castellano's first cousin, Maj. General Vito Castellano [3] who occupied key capitol positions in Albany, such as the former commander of the New York National Guard and Governor Mario Cuomo's former chief of staff. [4]
Vito Castellano pled guilty to state charges of tax evasion in connection with payments from the Wedtech Corporation. Indicted on charges of bribing Mr. Castellano was Bernard C. Ehrlich, who Castellano had promoted to commanding officer of the 42d Infantry Division of the National Guard. [5]
Wedtech then began extending its reach to the White House, utilizing President Reagan's press secretary, Lyn Nofziger, to contact public liaison officer (and future Senator) Elizabeth Dole.
Through Dole, Wedtech won a $32 million contract to produce small engines for the United States Army. This was only the first of many no-bid deals that eventually totaled $250 million.
By the final years of Reagan's second term, Wedtech's crimes had become too numerous to hide. An independent counsel was appointed by Congress, which later charged Attorney General Edwin Meese with complicity in the scandal (his close friend had worked as a lobbyist for the company and sought help from Meese on Wedtech contract matters). While Meese was never convicted of any wrongdoing, he resigned in 1988 when the independent counsel delivered the report on Wedtech. [6]
Independent counsel McKay never prosecuted or sought indictment of Meese, but in his official report, which is still confidential, he was highly critical of Meese's ethics and urged further investigation of Meese's role in that scandal and others (such as Meese's efforts to help Bechtel Corporation build an oil pipeline for Saddam Hussein's Iraq).
In all, more than 20 state, local, and federal government officials were convicted of crimes in connection to the scandal. Some of these convictions, however, were reversed on appeal in 1991 when it was found that Anthony Guariglia, former Wedtech president and a star government witness, had committed perjury, and that the prosecutors had reason to know he was committing perjury. Guariglia had been convicted of lying about stopping his compulsive gambling, and an appeals court found that the jury would have likely discredited his testimony if it had known about the perjury. [7]
The Iran–Contra affair, often referred to as the Iran–Contra scandal, was a political scandal in the United States that occurred during the second term of the Reagan administration. Between 1981 and 1986, senior administration officials secretly facilitated the illegal sale of arms to Iran, which was subject to an arms embargo at the time. The administration hoped to use the proceeds of the arms sale to fund the Contras, an anti-Sandinista rebel group in Nicaragua. Under the Boland Amendment, further funding of the Contras by legislative appropriations was prohibited by Congress, but the Reagan administration figured out a loophole by secretively using non-appropriated funds instead.
Edwin Meese III is an American attorney, law professor, author and member of the Republican Party who served in Ronald Reagan's gubernatorial administration (1967–1974), the Reagan presidential transition team (1980–81), and the Reagan administration (1981–1985). Following the 1984 presidential election, Reagan considered him for the White House Chief of Staff position, but James Baker was chosen instead. Meese was eventually appointed and confirmed as the 75th United States Attorney General (1985–1988), a position he held until resigning in 1988 amidst the Wedtech scandal.
Franklyn Curran "Lyn" Nofziger was an American journalist, conservative Republican political consultant and author. He served as press secretary in Ronald Reagan's administration as Governor of California, and as a White House advisor during the Richard Nixon administration and again during the Reagan presidency.
Mario Biaggi was an American politician, attorney, and police officer. He served as a member of the United States House of Representatives from New York from 1969 to 1988.
Michael Keith Deaver was a member of President Ronald Reagan's White House staff serving as White House Deputy Chief of Staff under James Baker III and Donald Regan from January 1981 until May 1985.
Howard Edwin "Ed" Reinecke was an American politician from California. He served three terms in the United States House of Representatives. He was the 39th state lieutenant governor from 1969 until his resignation in 1974, in connection with a federal conviction for perjury.
Gary P. Naftalis is an American trial lawyer, and head of the litigation department and co-chair of Kramer Levin Naftalis & Frankel LLP, a New York City law firm.
The presidency of Ronald Reagan was marked by numerous scandals, resulting in the investigation, indictment or conviction of over 138 administration officials, the largest number for any president of the United States.
Vincent DiNapoli was a caporegime in the Genovese crime family, involved in labor racketeering. DiNapoli is best known for creating a cartel in the 1970s that controlled the price of drywall in New York City.
Salvatore Richard Martoche is an American lawyer and a retired judge of the NYS Supreme Court, Appellate Division.
James Traub is an American journalist. He is a contributing writer for The New York Times Magazine, where he has worked since 1998. From 1994 to 1997, he was a staff writer for The New Yorker. He has also written for The New York Review of Books, The Atlantic Monthly, National Review and Foreign Affairs. He is a senior fellow at the Center on International Cooperation at New York University and also teaches at the university.
Squadron, Ellenoff, Plesent & Sheinfeld was a New York City-based law firm that practiced from 1970 to 2002 when it merged with Washington, D.C.-based Hogan & Hartson, when the Squadron Ellenoff name was discontinued.
Robert Garcia was a United States representative who represented New York's 21st district. He was elected to the New York State Assembly in 1965 and the New York State Senate in 1967, and then served in Congress from 1978 to 1990.
Robert "Bob" J. Giuffra Jr. is an American attorney. He is Co-Chair and a partner of Sullivan & Cromwell in New York, and is a member of their Management Committee.
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Stanley Simon is an American lawyer and politician from New York. From 1979 to 1987, he served as the 10th Borough President of The Bronx. Previously, he served for six years on the New York City Council.
Alessandra Rose Biaggi is an American politician who served as a member of the New York State Senate from 2019 to 2022, representing the 34th district, which includes portions of Bronx and Westchester Counties. She was the chair of the New York State Senate Committee on Ethics and Internal Governance. She is the granddaughter of former U.S. Congressman Mario Biaggi.
Marilyn Walser Thompson is an American investigative journalist, author, and editor. She is the author of books covering American events such as the Wedtech scandal and the 2001 anthrax attacks, and co-authored two biographies of Senator Strom Thurmond (R-SC). At the Washington Post, Thompson was an editor of reports on gun violence that was a finalist for the Pulitzer Prize in public service in 1992. As an editor on the Investigative Team, she led the group that won the Pulitzer Prize for Public Service in 1999 and 2000.
Eugene Robert Wallach was a trial lawyer in California. He worked as a personal injury lawyer's before moving to Washington, D.C. to become an unofficial adviser to Edwin Meese III. Through his work with Meese, he became involved in the Wedtech scandal,