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There's no watchdog for secret budgets

A deal between SOCom and eTreppid raises questions, but is hard to track.

Published March 9, 2007


TAMPA - It all began with an anonymous letter to the St. Petersburg Times in late 2005.

The four-page missive said the leader of U.S. Special Operations Command at MacDill Air Force Base gave preferential treatment to a defense contractor.

This and other allegations from people claiming to work at SOCom were later dismissed by investigators. But that did not end talk about the contractor, eTreppid Technologies of Reno, Nev.

How eTreppid won a no-bid, $30-million contract in 2004 for secret software provides a glimpse into the foggy world of the Pentagon's "black budget," highly classified defense spending that gets little public scrutiny.

To many budget watchers, the story also raised questions about congressional earmarks - items inserted into the federal budget, often to reward lawmakers' supporters.

"It's an atrocious process," said Winslow Wheeler at the Center for Defense Information in Washington, D.C., a nonpartisan think tank on defense issues.

ETreppid was in the news in November when the Wall Street Journal revealed that former Rep. Jim Gibbons, a Nevada Republican who is now the state's governor, accepted gifts from eTreppid's founder, Warren Trepp, and helped the company get government work.

Gibbons denied any "quid pro quo," but questions have persisted about the SOCom contract and others awarded to eTreppid, including deals with the Air Force and Central Intelligence Agency.

"The sad thing with the 'black budget' is that you don't know how the military's budgeting process works," said Craig Holman of Public Citizen, a public interest group in Washington, D.C. "We're operating under total secrecy with some of these things."

Anonymous letter

The news that eTreppid had won the SOCom contract in 2004 was revealed only in vague terms.

The contract, according to the Department of Defense, was for "compression and automatic target recognition software." Additional detail is classified.

The story is further obscured by the reluctance of so many of the players to comment. Gibbons' staff, Trepp and one of Trepp's defense lobbyists, former Largo resident Letitia H. White, did not return calls.

The Times got the anonymous letter in October 2005. It was later received by two Florida congressmen - Rep. C.W. Bill Young and Sen. Bill Nelson - and Pentagon investigators.

The letter said SOCom's commander, Army Gen. Bryan "Doug" Brown, gave eTreppid favored treatment out of line with established procedure. SOCom, which oversees the nation's elite commandos, denied the allegation.

ETreppid, the letter said, had spent $12-million but had not delivered a usable product.

"This is an example of waste and fraud," the letter said. Though the contract was for up to $30-million, SOCom says eTreppid was paid only $9.6-million.

At the time, Nelson said he was suspicious of "rambling anonymous letters." And nearly a year later, Pentagon investigators cleared Brown.

That might have ended the scrutiny over eTreppid but for the front-page article in the Journal.

'Wined and dined'

Trepp "wined and dined" friends and business partners during a weeklong Caribbean cruise in 2005, the Journal reported in November.

Among his guests: longtime friend Jim Gibbons.

Gibbons and his wife flew home from the cruise on a chartered aircraft paid for by Trepp. These gifts were not initially reported by Gibbons, which may have violated federal ethics rules.

Gibbons, a former combat pilot who served on the Intelligence and Armed Services committees, said he thought gifts from friends were exempt.

He also said he helped pay for the trip, though the Journal reported it was not enough to cover its cost.

In an e-mail exchange just before the cruise, the Journal reported, Trepp's wife told her husband, "Please don't forget to bring the money you promised Jim and Dawn," referring to Gibbons and his wife.

The Journal said Trepp quickly responded, "Don't you ever send this kind of message to me! Erase this message from your computer right now!"

Trepp questions the authenticity of the e-mails.

Companies and partnerships tied to Trepp had given nearly $90,000 to Gibbons' gubernatorial campaign, the Journal reported. And court papers filed by a former business partner now locked in a lawsuit with Trepp accused Gibbons of accepting $100,000 in cash and casino chips, which Gibbons denies.

Gibbons acknowledged that he helped open doors for eTreppid.

"My connection was to get people to evaluate the technology," he told the Journal.

Trepp, the Journal reported, said: "If a member of Congress becomes aware of a technology they believe will be beneficial to the country, don't they have a duty to bring it to the attention of the appropriate governmental agencies?"

In a statement to the St. Petersburg Times, SOCom denied that anyone used influence to win the contract and said eTreppid, like many vendors, simply contacted the command about its products. The company no longer does work for SOCom.

SOCom officials said the contract was no-bid because no other company offered a similar product.

ETreppid provided several products as part of its deal (exactly how many is classified). "Only one product worked as advertised," said Lt. Cmdr. Marc Boyd, a SOCom spokesman.

Now the FBI is investigating Gibbons and the eTreppid gifts, the Journal reported.

Oversight questions

The Pentagon's black budget has grown exponentially, doubling since 1995 in inflation-adjusted dollars to more than $30-billion in the current fiscal year.

"It's not debated and discussed like other policy issues," said Steve Kosiak, a researcher with the nonpartisan Center for Strategic and Budgetary Assessments. "The oversight can't be as rigorous as other open programs."

Wheeler, at the Center for Defense Information, said the military rarely rejects the "free money."

"I have no clue whether eTreppid does important stuff well," he said. "And, frankly, neither does Gov. Gibbons because one thing that is studiously avoided (with earmarks) is an objective evaluation from an entity that has no vested interest."

William R. Levesque can be reached at or (813) 226-3436.

[Last modified March 9, 2007, 05:52:55]

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