The Transportation Security Administration awarded a $2 billion contract to Unisys to devise a cutting-edge computer network linking hundreds of airports to the TSA’s state-of-the-art security centers. The contract was ideal, they argued, because if the company failed to meet its goals, Unisys would pay money back to the agency.
It didn’t turn out that way. In October, the Washington Post revealed the Pennsylvania-based information services company had overcharged the government for a whopping 117,000 hours -- billing $231 an hour for employees who were paid less than half that amount. Officials now see the project costing taxpayers as much as $3 billion.
Unisys’ prime lobbyists? A team from the Greenberg Traurig lawfirm led by Neil Volz, former chief of staff to Rep. Bob Ney (R-OH) -- which included indicted lobbyist Jack Abramoff.
RAW STORY has found that Unisys acquired the contract, said riddled with fraud, in a process that included backroom dealings and almost no competitive bidding, and former Abramoff associates say his lobbyists had a hand in the deal. The investigation also found that the man who brokered the TSA deal, a company president, was later a buyer of Abramoff’s posh Washington restaurant.
According to campaign finance filings, Volz’s team included seven staffers – among them individuals now under scrutiny in various probes, including Abramoff. Two Senate committees are currently investigating Abramoff, an erstwhile conservative superlobbyist who was indicted in Florida for conspiracy and wire fraud.
Details of Volz’s role are vague. Washington Business Forward reported that the firm listed Unisys as a client in October 2002. The TSA contract was awarded in August of that year.
Unisys, however, did not register Greenberg Traurig as a lobbyist until January of 2003, six months after the TSA contract. Corporations are not required to register if they are lobbying executive branch agencies below the level of political appointees.
Associates say Abramoff firm lobbied for contract
According to former associates, Volz and his team were charged with acquisition of government contracts and not with legislative work. One associate confirmed that Greenberg lobbyists had helped Unisys acquire the TSA contract but asserted that there had not seemed to be anything 'suspicious' about Abramoff's work. Another denied Abramoff had a role but was less confident about the role of Greenberg's other lobbyists.
Greenberg Traurig declined to comment.
Unisys paid Greenberg Traurig $596,000 in 2003 and 2004; Greenberg is the highest-paid lobbying firm the company has retained since 1998. A spokesman for Abramoff declined to comment.
Unisys spokesman Guy Esnouf told RAW STORY the firm had decided not to disclose the dates they retained Abramoff’s firm or any information regarding their interaction.
“I wouldn’t be able to comment at all,” Esnouf said.
This September, Unisys publicly lauded Greenberg for their lobbying work – an anomaly in the post- Abramoff climate. According to Influence Magazine, the firm remains a “satisfied customer.”
The lead broker of Unisys' TSA bid, now-president of Unisys' public sector division Greg Baroni, bought a share of bought Abramoff’s Pennsylvania Avenue restaurant, Signatures, when the lobbyist sold it in July of this year. He was promoted to corporate vice president by the company’s board in 2004.
A sweetheart deal
A report at the time stated some of the TSA’s decision making in awarding the contract involved “backroom negotiations.” The deal was not awarded using traditional competitive bidding.
Instead, the project was awarded from a pool of pre-qualified corporate “partners” selected under Information Technology Omnibus Procurement II, a government-wide General Services Administration acquisition contract. Only fourteen companies were qualified for the work under the terms of the task order.
As Information Technology partners, Unisys and Electronic Data Systems Corp. were the only firms to compete. According to an article in GovExec.com, a government watchdog, “insiders said Unisys had the inside track.”
Unisys was awarded the contract in August 2002. Celebrations were muted, however, since TSA was mired in a budget dispute. Two weeks earlier, the Office of Management and Budget had frozen funding for various technology projects. So a week later, according to GovExec, officials from “TSA and the White House met on a Sunday night in Baroni's office.” Within 48 hours, administration officials had given the green light to unfreeze TSA's budget.
At the time, the chief of staff to the General Services Administration was David Safavian, a former Abramoff colleague and later chief of federal procurement who was arrested in September for obstructing an investigation into the Abramoff's attempts to buy government property.
Safavian’s attorney, Barbara Van Gelder, said her client had no interaction with Unisys and was not in a position to unfreeze TSA's budget.
Lobbying reports compiled by the Center for Public Integrity show Unisys paid Greenberg $480,000 in 2003 and $216,000 in 2004.
A troubled history
Unisys has a history of legal trouble with regard to federal contracts. In 1991, Unisys pled guilty in U.S. District Court to using fraud, bribery and illegal campaign contributions to obtain billions of dollars in defense contracts. An investigation the Justice Department started in 1986 known as Operation Ill Wind resulted in the prosecution of seven companies, nine government officials and 42 individuals; Unisys' fines and penalties totaled up to $290 million.
Nine Unisys employees were indicted and pled guilty to using fraudulent practices to obtain government contracts. The company and its predecessor, mainframe computer manufacturer Sperry Corp., billed the government $27 million in consulting fees, diverted money to offshore accounts, and used the money to bribe Pentagon officials.
The product of a 1986 merger between Sperry Corporation and Burroughs, Unisys maintains offices in nearly every U.S. state and more than 60 countries. They say they're happy with Greenberg's work, now that the lobby shop has dismissed Abramoff from their stables.
"As long as they terminated the relationship [with Abramoff], that was my principal concern," Unisys vice president of government relations David Pingree told Influence Magazine.
According to the Center for Public Integrity, the Fortune 500 company has accrued some $20.7 billion in federal contracts since 1990, and has worked with the CIA, the EPA and the Navy among myriad other government agencies.
Jason Leopold contributed reporting for this article.
Originally published on Wednesday November 30, 2005