Robert J. Stein Jr., a former administrator for the Coalition Provisional Authority in Iraq, can say that at least he did his best to maintain that country’s governmental tradition of greed, graft and corruption. Stein, along with businessman Harold H. Bloom and five Army reserve officers, took part in what The New York Times described as “a maelstrom of greed, sex and gun-running at the heart of the American occupation of a conservative Muslim country.” All the while, Stein was employed by St. Ignatius-based S&K Technologies.
During his time in Iraq, Stein stole $2 million in Iraqi reconstruction money and received another $1 million in bribes from reconstruction contractors like Bloom, to whom he funneled work.
On Feb. 2, in connection with those exploits, Stein pleaded guilty in U.S District Court in Washington D.C. to conspiracy, bribery, money laundering and possession of a machine gun.
S&K Technologies, owned by the Confederated Salish and Kootenai Tribes (CSKT), hired Stein for his Iraq position under a contract with the Department of the Army. Now, Greg DuMontier, founder and CEO of S&K Technologies, is concerned that negative publicity associated with Stein’s crimes might reflect poorly on his company.
S&K Technologies was started by Dumontier, a member of the Salish and Kootenai Tribes, in 1997. Thanks to rules that allow tribal companies easier access to federal contracts, much of S&K’s business comes from the public sector. The scope of the company’s government work is broad, including responsibility for combating airplane corrosion for the United States Air Force, provision of Geographical Information Systems mapping services to the Farm Service Agency, and providing consulting experts in a variety of subjects for Iraqi reconstruction, the contract under which Stein was hired.
Minority-owned businesses like S&K are known as 8(a) companies, after the section of the Small Business Act that details their special standing. According to the Small Business Administration, “the 8(a) program was created to help small disadvantaged businesses compete in the American economy and access the federal procurement market.” Such companies are awarded government contracts on a noncompetitive basis, and American Indian 8(a) companies are further advantaged by the lack of maximum dollar amounts on the sole-source contracts they are awarded. Sole-source contracts grant exclusivity to providers of particular goods and services.
S&K Technologies has a successful history of accessing the federal procurement market. The company has offices in Washington, Georgia, Texas and Ohio, and currently employs about 280 employees.
S&K Technologies is not the only tribally owned company thriving under the Small Business Act rules. In 2004, according to Washington Technology, an information technology (IT) newspaper for government contractors, eight of the top 25 8(a) companies were tribally owned. S&K Technologies sat in the number two spot, earning $76,782,000 in total IT income that year. Chenega Corporation, an Alaska Native-owned corporation was number one with $91,682,000.
The Small Business Act provisions that make tribal businesses like S&K Technologies possible have drawn criticism from some quarters. Charles Tiefer, a former solicitor of the House of Representatives, and now a professor at the University of Baltimore School of Law, was quoted in Washington Technology saying that the provision is a loophole gone wild. Tiefer questions whether the special status of tribal companies delivers more benefit to tribal members or to entrepreneurs skillful enough to exploit it.
DuMontier disagrees strongly with such criticism. CSKT benefits directly from ownership of S&K Technologies through dividends that go into the tribe’s general fund. And while the number of tribal members actually employed by S&K Technologies is not large, the number of jobs supported by those dividends is significant, DuMontier says.
“The tribal budget constitutes the largest employment opportunity for tribal people on the reservation. There are somewhere in the neighborhood of a thousand, perhaps even more, jobs that the tribe takes care of through the tribal budget. We contribute resources through the tribal budget that are supporting [those] employees.”
Vern Clairmont, a treasurer for CSKT, states, “If we didn’t get that [S&K dividends], we would have to reduce our budget, and with personnel making up a lot of the budget, it would mean laying people off.”
DuMontier believes the negative attention brought on by Stein’s criminal conduct is even more problematic for a tribally owned company like S&K Technologies. “We hold ourselves to the highest ethical standards. And one of the reasons we do that is, because we are tribally owned, people just naturally take a harder second look at us,” DuMontier says.
But the hard look at Stein’s hiring has arisen due less to tribal ownership of S&K Technologies than to questions concerning how Stein—who was convicted on federal fraud charges in 1996 and sentenced to eight months in prison and ordered to pay $45,339 in restitution—could have been hired to such a position in the first place.
According to DuMontier, responsibility for Stein’s security clearance rested with the Army, which made the final determination of his suitability for the job. And DuMontier points out that Stein himself bears primary responsibility.
“Stein himself misled not only us but also the federal government in terms of the information he provided,” he says.
DuMontier says that he and his company were used by Stein, who was “outprocessed” at the end of his contract with S&K in October 2004.
“It’s a simple case of greed on a couple of individual’s parts, placing their own needs in a higher priority…than the needs of the Iraqi people. And I regret that we were a part of it.”