In 2004 EDO Corporation was ordered to pay a fine of $2.5 million. This matter was related to activities of the former Condor Systems company, before EDO acquired assets of Condor Systems during their bankruptcy proceedings. Charges are laid out in a letter from the U.S. State Department to EDO President and CEO James Smith. Senior Vice President of Condor Systems, Fredric B. Bassett is EDO's Senior Vice President-Finance, Treasurer, Chief Financial Officer.
EDO Corporation has made payments from its Political Action Committee, to the political funds of both Republican and Democratic Party candidates, but these have tended to be to politicians who are on important government military defence and procurement committees. Controversy has arisen over contributions, to Senators Hillary Clinton, Charles Schumer and Congressman Steven Israel, who have then backed 'earmarked' government military contracts for EDO Corporation, soon afterwards.
Many of the companies and executives who won earmarks this year donated money not only to Senator Clinton, who sits on the Senate Armed Services Committee, and to Mr. Schumer, but also to Mr. Israel. And several of those designated for earmarks gave to members of the Joint Defense Appropriations Conference Committee, which wrote the New York projects into the defense spending bill.<
On 20 September 2006, the New York Sun reported EDO had gained further government defense contacts after giving financial donations to Washington insiders.
On 30 August 2006, EDO Corporation Chairman, CEO, and President, James M. Smith, was named in a report produced by the Institute for Policy Studies and United for a Fair Economy, entitled 'Executive Excess'. Smith was reported as having received one of the highest percentage pay raises of any CEO in America, as a direct result of the 'War on terror' since 2001. His total compensation in 2006 was $1.8 million per year, up from $893,200 in 2001. In July 2006 Smith filed U.S. Securities and Exchange Commission (SEC) data showing he had sacked 400 workers at a factory in California after his management team had failed to secure a lucrative contract for anti-IED devices. In September 2003 EDO was listed by Fortune magazine as number 10 in the top 100 fastest growing companies in the U.S. EDO have failed to make the top 100 at all in recent years because of financial troubles. and are now owned by ITT Corporation.
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EDO Director Dennis C. Blair and the EDO-IDA scandal
Dennis C. Blair was until 2006 a Director of EDO Corp. He has also been a U.S. military commander and the Associate Director of the Central Intelligence Agency for Military Support. He is on record as having knowledge of covert CIA operations within allied countries that were intended to influence political affairs for the benefit of US interests.
On 25 July 2006, The Washington Post published an article by Pulitzer Prize–winning journalist R. Jeffrey Smith and Renae Merle. This detailed links between a think tank, the Institute for Defense Analyses (IDA) that had been commissioned as an independent advisor to the Pentagon, and EDO Corporation. The article exposed serious issues arising out of Blair's joint positions as president of IDA and as a director of EDO Corp.
The article was based on evidence gathered by a non-profit corruption watchdog, called the Project on Government Oversight (POGO) that had published a detailed report on the same day, entitled "Preying on The Taxpayer: The F22 Raptor." This report details evidence of a conflict of interest between IDA and EDO Corporation.
The POGO report describes how IDA had produced an independent study for the Pentagon, entitled F-22 A Multiyear Procurement Business Case Analysis, that advised the U.S. Congress that a multiyear procurement (MYP) of the Lockheed Martin F-22 Raptor could result in a cost savings, which is one of six requirements for issuing a multiyear procurement contract. The report did note, however, that this estimated cost savings was less than for other historical MYPs. Congress then approved the MYP, through a legislative amendment, proposed by Senator Saxby Chambliss (GA), partly on the basis of the report's findings. The IDA report was the only one at the time that backed an F-22 program extension, in contrast with two other previous reports that had advised against it. A separate study by RAND, however, commissioned in the wake of the IDA-EDO scandal, also estimated a cost savings associated with an F-22 MYP contract, which was actually larger than the estimated cost savings that IDA reported. The Chambliss amendment extended the production life of the Lockheed Martin F-22 Raptor by three years, overturning a previous decision to phase out the fighter plane because of safety and performance problems, as well as its huge expense. In testimony before the Senate Armed Services Airland Subcommittee, on 25 July 2006, POGO's Danielle Brian said:
We do not know if Admiral Blair recused himself, or in any way affected the outcome of the IDA report. I would submit, however, that there is an appearance of a conflict of interest — given his substantial personal financial interest and his fiduciary responsibility to EDO—in the continued funding of the F-22A. This raises reasonable questions about the independence of IDA's analysis. EDO is an important sub contractor on the F22 program, being the sole supplier for the F22 AMRAAM vertical ejection launcher. As a director who owned shares in the company, Dennis Blair arguably stood to gain from any decision by Congress to extend the F22 program.
On 27 July 2006, The Washington Post reported that Dennis Blair had revealed that he would resign from the board of EDO Corporation, 'as soon as possible,' because of the revelations. Dennis Blair then submitted his letter of resignation on 31 July 2006.
On 13 September 2006, The Washington Post reported that Dennis Blair had resigned his position as president of the Institute of Defense Analyses after its trustees had found that a conflict of interest had occurred. Blair was asked to give up his other paid positions with military contractors, but he refused and instead chose to give up his position of president of IDA.
On 20 September 2006, Rolling Stone magazine published an article on the story entitled "Another Tale of Waste and Fraud Unpunished".
On 28 September 2006, The New York Times reported that the F-22 multiyear contract had been approved by Congress despite opposition from Donald Rumsfeld, George W. Bush and the present and future chairmen of top U.S. Government military procurement committees. The New York Times suggested that the military industrial lobby that pushed the F-22 multiyear programme was more powerful than the elected officials who oversee government military spending including the President of the United States himself.
On 1 December 2006, The Washington Post reported that the U.S. Inspector General had found that although Blair had indeed violated IDA's conflict of interest policy by working for both EDO and IDA at the same time, his actions had not affected IDA's results on the F-22. It also found that Blair's involvement in the IDA F-22 MYP study was "minimal," with no involvement in conducting the analysis or preparing or reviewing the report before it was finalized.
Dennis C. Blair was replaced as an EDO director by General John A. Gordon (ret), who is closely linked to Blair. In 1996 Gordon replaced Blair as Associate Director for Military Affairs at the CIA, and in 2007 Blair and Gordon sit together on the council of SAFE, a corporate-military think tank tasked with finding solutions to the approaching energy crisis.
In January 2009 Blair became Director of National Intelligence under President Barack Obama making him the highest ranking intelligence official in the US Government. He resigned this position in May 2010.
EDO Director Leslie Kenne and the Joint Strike Fighter contract
Lieutenant General Leslie Kenne spent 32 years in the United States Air Force. In 1997 she was appointed Director of the Joint Strike Fighter (JSF) program, the U.S. Department of Defense's largest ever military acquisition program with a budget of $30 billion. Lockheed Martin is the prime JSF program contractor. Lockheed Martin awarded EDO a contract on January 9, 2002 for the design, development and manufacture of a suite of pneumatic weapon delivery systems for the JSF.
Kenne resigned from the USAF in September 2003 and shortly afterwards joined the board of directors of EDO Corporation.
EDO Director Paul Kern and allegations of war crimes at Abu Ghraib/EDO links with Titan Corporation
While still serving in the U.S. military General Paul Kern was appointed by Defense Secretary Donald Rumsfeld to report on an internal investigation into the Abu Ghraib torture and prisoner abuse. In August 2004 he presented the Fay Report largely absolving the military hierarchy of blame for the torture and sexual abuse. Kern blamed the torture in part on the civilian contractors working with military intelligence services in the prison. One of the companies involved was identified as Titan Corporation, a contractor that supplies technology and 'civilian interrogators' to military intelligence. (The company has close links to the US intelligence community. Former CIA director James Woolsey has served on its board of directors.) However Kern did not advise that Titan Corporation should be charged with any criminal offence. Kern had been picked by Rumsfeld to investigate the Military Intelligence operations at Abu Ghraib after an earlier report which had implicated them in the torture. This earlier report was called the Taguba Report and because of its controversial reference to 'systematic abuse' was kept secret until it was leaked to Seymour Hersh of The New Yorker. In June 2007 Hersh published an article on Taguba who was forced to resign after submitting the report to Rumsfeld.
A few enlisted U.S. soldiers were eventually convicted, and imprisoned as a result of the investigations. Titan Corporation sacked one of their employees Adel Nakhla who had admitted holding down prisoners who were being tortured. Another Titan employee John Israel, a 'civilian interrogator/interpreter' identified by the Taguba Report as one of the four main people believed to have been responsible for the torture is suspected by some journalists including Robert Fisk of being an Israeli agent.
In April 2008 the Bush Administration were ordered to release a memo under the Freedom of Information Act that showed it had approved torture techniques in 2003 and given legal argument support for the use of torture techniques.
Kern retired shortly after the report came out and in January 2005 joined EDO Corporation as a director. Two of the other ten EDO Corporation directors who helped to elect him, James Roth and Robert M. Hanisee, were, and remain directors of Titan Corporation and as directors are open to charges of collusion and direct involvement in war crimes according to international law, but they have not been prosecuted by the United States legal system. Despite a lack of political will by the US Government to prosecute, Titan Corporation and CACI were nonetheless defendants in a civil action brought by victims of the
torture in Abu Ghraib Prison.
The U.S. Military Commissions Act of 2006 effectively brought an end to such legal actions in the US.
In 2005, Titan Corp. admitted bribery charges after it paid $2 million into the re-election fund of the President of Benin, Mathieu Kérékou.
Kern is also a member of the Cohen Group which has as its CEO yet another EDO Corp director, Robert S. Tyrer.
Sir Robert Walmsley and the Al Yamamah arms scandal
Sir Robert Walmsley has also been linked to controversy over the Al Yamamah arms deal with Saudi Arabia which was conducted in such secrecy that government National Audit Office reports into the deal remain classified. The deal has been associated with bribery and corruption allegations, and was the subject of a police investigation until dropped in controversial circumstances. Police were denied access to an NAO report because it is classified. A The Daily Telegraph report on 7 July 2006 reported, that judging from a list documents released under the Freedom of Information Act (FOIA), that there had been two classified NAO reports rather than just one as previously thought. The revelation came about through the title of one of the documents: "Letter from Sir Robert Walmsley, Chief of Defence Procurement to C&AG [NAO head Sir John Bourn] responding to recommendations in draft audit findings - 30 March 1998" which apparently refers to a draft of a second secret NAO report.
