Thoughts
on the Vergez Felonies, the Justice Department and Redstone Arsenal
This summer, the U.S. Federal Court began sentencing proceedings on Col. Norbert Vergez, former head of the U.S. Army's
Non Standard Rotor Wing Aviation Program Office. In a month or so, it will start on Ms. Teresa Mayberry,
Col. Vergez’ contracting officer. These sentences are the culmination of over 2 years of investigation
by the DoD Inspector General, the Defense Criminal Investigative Service (DCIS) and the FBI. Strangely,
they ended up doing more to highlight the shortcomings of our justice system than the address the corrupt culture at
Redstone.
There was no lack of evidence uncovered during the investigation; Vergez could have
been no better friend to his chosen compatriots. The chief beneficiaries of his largess were Rosoboronexport,
Science and Engineering Services (SESI), Avia Baltica (AVB) and MD Helicopters.
I have
discussed Col Vergez’ dealings with Rosoboronexport in other venues, suffice it to say that he overpaid them in excess
of $400M while trying to force them to sign an exclusive deal with SESI and AVB. He undermined the Afghan
Mi-17 program by making decisions not based on requirements, but on what would flow the most dollars into certain contractor’s
pockets. He even went so far as to offer the Russians an extra payment under an existing contract if they
would agree to work with SESI/AVB on another task. Working directly, Col. Vergez issued the SESI/Avia team
over $100M in sole source task order awards and continue to do so even after AVB had been recommended for debarment.
He accepted gifts and arrange employment with them for direct family members. In
return, the DoD IG (Report DODIG-2012-135) found that millions were wasted on questionable charges, overpayments and waste.
We reported some of Vergez’ well-known biased actions on behalf of the SESI/AVB team in our brief to the judge
(attached). I am certain that there were many more of which we are unaware.
Vergez’ office
also issued a $186M contract to MD Helicopters to procure MD-530s for Afghanistan. He chose this aircraft
for the Afghan Air Force, and once the initial trainers were procured, he championed the armed 530s as the perfect solution
as a scout/light attack platform for Afghanistan. Of course, time has shown that the 530 was a very poor
choice for Afghanistan. According to Afghanistan most decorated pilot, Colonel Qalandari, “It’s unsafe to fly, the engine is
too weak, the tail rotor is defective and it’s not armored. If we go down after the enemy we’re going to have
enemy return fire, which we can’t survive. If we go up higher, we can’t visually target the enemy,” “Even the guns are no good.” The armed variant, rushed into production with minimal testing, has proved an absolute
failure. Fully loaded, it cannot leave the ground in Kabul. After a crash and a large
number of tail rotor assembly failures, it is now being redesigned at MD. The Department of Defense has
now concluded the 530 is of marginal utility and that too many were purchased. An update - a 2021 trial in Huntsville
found MD had committed fraud by acting with Vergez in the Army contracts and awarded a $108M verdict against them. Unfortunately,
it is too late for criminal charges, the statute of limitation has expired.
How did this happen?
Once Vergez decided to go to work for MD Helicopters, he effectively became their employee. He worked to
tailor the Afghan procurement requirement to the minimum the MD530 could meet, without regard to real operational requirements.
After being recused by the Army from involvement in MD related issues due to his ongoing employment discussions, he continued
to be actively involved in MD helicopter acquisitions. He regularly engaged in talks and emails with Lynn
Tilton giving her advice on MD contracts his office was managing. In return, he accepted money from MD
without reporting it. He flew in Tilton’s plane and accepted other gifts. Upon
retirement, he ignored the Army prohibition against employment with MD and became an officer there.
Of course, the corruption did not stop at Vergez – no man is an island. He could
never have succeeded in pushing through the wrong aircraft and wrong contractors without the full support of his senior civilian
staff. After Vergez retired, his former contract officer who issued the MD helicopter contracts left the
Army. He joined a one-man, no office consulting company that exclusively performed soil analysis.
A few weeks later, the company received a $250,000 contract to perform a study for MD Helicopters. His
Mi-17 program manager, David Pinkley and this technical director, Marvin Denenny, cooperated fully and knowingly in all Vergez’
acts on behalf of Rosoboronexport, SESI and AVB. They joined him in retaliating against those who filed
IG reports and spoke to DCIS.
When the report on the Vergez case was sent to
Justice, I was informed it recommended issuing three initial indictments. The FBI and DCIS then planned
on moving forward based upon what developed from subsequent negotiations. Vergez alone was facing 19 serious
felony counts. DCIS and the FBI believed they had cracked the biggest case ever at Redstone Arsenal.
Unfortunately, they had not considered the influence of the $7 billion dollar, 130lb white elephant in the corner.
When the report was sent to Washington, the Justice Department did nothing on the charges for months.
It became apparent that they had decided not to move forward with the case. Fortunately, some embarrassing
articles about Vergez and Tilton came out in the press that forced Justice’s hand. Even so, Justice
refused to be bullied into convicting anyone wealthy of the crimes they had committed. Justice’s
decision -
· Drop all proposed charges against Vergez that would also incriminate
Lynn Tilton, MD Helicopters and others. Thus taking illegally taking money and gifts from contractor went
from being bribed to “failing to report gifts.”
·
To insure
the cooperation of Vergez, reduce the 3 remaining charges so he only faced probation, not prison.
·
No charges
against the contracting officer who received the $250k contract as this would result in charges against MD. No
charges against Vergez’ other staff.
It is clear that Vergez did everything crooked an Army program manager could do.
He accepted cash and gifts from contractors, he steered them contracts and then failed to supervise them, ignoring
poor performance and overcharging. Felonies went unchecked and millions of dollars were squandered.
What’s more, the poor performance of his chosen contractors and the aircraft his office procured
have seriously harmed our efforts in Afghanistan. Upon retirement, he flagrantly violated his post retirement
restrictions and went to work for the company he had championed while in office. And his punishment? If
all goes to Justice’s plan - probation.
Redstone itself has been conspicuous in its silence.
In talks with some Army personnel there, I have been told they feel Vergez did nothing wrong, at least nothing any
other program manager would not do to make sure of a good job upon retirement. At Vergez’ sentencing,
former and active Army officials (some of whom clearly benefited from his corruption) wrote letters testifying to his outstanding
character. General Via, Major General Richardson and the rest of the Redstone leadership obviously did
not find one of their PMs and one of their contract officers working to defraud the U.S. a subject worth engaging in. Perhaps
they too are looking towards their retirement.
In conclusion, while waiting for Vergez sentencing,
I sat through a plea agreement being made by a young black woman. She was being charged with failing to
report $27,000 on her taxes. Because she filed electronically, she was also being charged with wire fraud.
She was facing 25 years in prison for these crimes. I could not help but think that if she only
would have been in a position of trust and stolen millions, she would only be facing probation. Truly,
there is something very wrong with the criminal justice system.
Mark Young