Digging into DHB and their defective armor

[Kelvin Mace]

I am working on some research into DHB Industries

http://www.thoughtcrimes.org/mt/archives/002246.html

the owner of Point Blank, a maker of personal armor which the Marine Corp Times just said failed quality tests.

I am trying to run down the money trail via the usual sources (opensecrets.org) but not finding any campaign donations, which is odd for this type of guy. I have checked under his name (David H. Brooks) and his wife's name (Terri) in New York, Florida and Tennessee and turned up nothing.

I have tied DHB to the lobbyists BAKER DONELSON BEARMAN & CALDWELL, but can't find any money being spent for anyone by them or DHB.

Any suggestions of where else to look?

[punpirate]

1. Maybe he just didn't have the money before...

... have a look at his stock sales in November and December:

http://moneycentral.groups.msn.com/RAZFMoneyCentral/general.msnw?action=get_message&mview=0&ID_Message=73919&LastModified=4675521111736605674

This would also indicate that he's pulled $185 million in stock out of the company in about a month....

Maybe he can afford to be a fatcat contributor now. :)

On edit, note that some of the other stock sales were made by other members of the corp:

Chairman and CEO David H. Brooks
COO Sandra Hatfield
CFO, Treasurer,
Secretary,
and Director Dawn M. Schlegel

Wonder if the other sellers are board members. This would mean they're emptying out a lot of net worth.

As for campaign donations, you might also have a look at the donations of the above and some of the other big sellers. It's possible they're running the contributions through others in the company, so his name doesn't show up. Just a thought.

You might also be able to find something from the lobbyist's contributions:

http://www.opensecrets.org/indivs/search.asp?NumOfThou=0&txtName=&txtState=%28all+states%29&txtZip=&txtEmploy=Baker+Donelson&txtCand=&txt2004=Y&txt2002=Y&txt2000=Y&Order=N

[noamnety]

2. I would look at the retired marine LTC

Lt. Col. Gabriel Patricio recently retired, and is now an "independent acquisition consultant."

Sometimes that's slang for "working for the company he just helped, but as a contractor because he's not legally allowed to be their employee for a six month period."

I would want to know what projects he is specifically consulting on, and who's paying him. I worked with military program managers before, and it's not unheard of for them to be in charge of a contract for a corporation, and walk out of their military job with a six figure job waiting for them at that same company.

A deal like that wouldn't be funneled through lobbyists at all.

I'm assuming you already checked their other directors, right?
http://www.dhbindustries.com/management.asp

[punpirate]

3. He's got a bigger gun than a lieutenant colonel...

... on board now:

http://www.nynewsday.com/business/printedition/ny-bzdhb4244225may04,0,1084449.story?coll=ny-business-print

Cheers.

[noamnety]

6. Larry Ellis (retired 4 star)

was also recently named to the Board of Directors of Unitech, for whatever that's worth.

http://www.unitech1.com/press/press_ellis.htm

[punpirate]

7. Not the only one, either...

Just hired a Col. Ishmon F. Burks, who sounds like a perfect fit for the revolving door program--former Congressional liaison from the Secretary of the Army, former Kentucky State Police Commissioner and Secretary of the Kentucky Justice Cabinet.

[Kelvin Mace]

9. Working on them...

[noamnety]

4. Interesting post from April 2005 about DHB

"In the month of April a lot of events have transpired for our company that I am compelled to post and discuss with fellow shareholders/investors. Let me point out the 3 items that come into mind.

(1) Resignation of the independent auditors Weiser LLP. There could be a good reason why Weiser did not stand for re-election, but none has been given so far and no representative of Weiser will be present in the up-coming 2005 Annual Meeting to discuss the reason why they resigned. What we do know is that DHB filed their 10K on 17-Mar-2005 even though Weiser had not completed their review. That resulted in a subsequent amendment with restatements to Stockholder's equity and accounts receivable in the cash flow statement. Weiser pointed out certain deficiencies including weakness in the Audit Committee. Weiser has not given an opinion on DHB's internal control procedure as required under SOX. All this points to a poor working relationship between management, the board and independent accountants, not a good sign. I'm expecting an adverse opinion by Weiser on DHB's internal controls, which reflects badly on management and the board. Also the new independent accountants Rachlin Cohen and Holtz LLP are the same guys who checked the internal controls procedure of DHB (not mentioned in the 8K release but in the DEF-14A proxy statement). Something doesn't smell right here and I'm getting suspicious of management."

more: http://www.fool.com/community/pod/2005/050420.htm

[Kelvin Mace]

8. Thanks for the link

Interesting. All the hallmarks of a typical defense contractor.

[donsu]

5. kick

nt

[Bluebear]

13. again

[punpirate]

10. What's interesting about the stock sale, I just notice...

... is that the company announced a big military order in June, 2004. Stock jumps from five or six buck a share to $22-23. Brooks sells about $75 million in stock. Another announcement in early December of another military award and he sells $106 million Dec. 29th for about $20/share. Investors find out, are upset, auditors quit, and share price is down to $7.50 or so a share.

Pump and dump from the inside?

[noamnety]

15. He's been busted before for insider trading

"A third complaint letter filed today against DHB Industries with the Securities Exchange Commission alleges DHB has continued to violate federal securities regulations requiring disclosure of material information to investors. (snip)

In 1992, David Brooks, DHB's CEO, Chairman and largest shareholder was implicated in an insider trading scheme resulting in a federal injunction that he commit no further aiding and abetting violations. Shortly afterwards, the SEC banned him from associating with any investment company for five years. DHB was denied listing on the NASDAQ SmallCap market in 1995, partly because of Brooks' history of securities violations.

http://64.233.167.104/search?q=cache:TAdkq6shaccJ:www.notinourname.net/gi-special/2/47.pdf+%22david+H.+brooks%22&hl=en

pdf itself wouldn't open, but the google cached version did for me.

[noamnety]

11. Why does everything lead back to baseball?

David H. Brooks, partner in Lipman, Frizzell & Mitchell
http://www.lfmvalue.com/LFM_brochure.pdf

"The D.C. Council has instructed the city's chief financial officer to reexamine his recent cost estimate for acquiring 14 acres for a baseball stadium, saying that the figures are inaccurate and that the bill could be much higher.

~snip~

The city has hired Maryland-based Lipman, Frizzell & Mitchell to conduct a separate assessment of the land costs. Officials will use that study to develop offers to buy the property. If the owners refuse to sell, the District intends to acquire the land under eminent domain and a court would decide the fair price. "
http://www.washingtonpost.com/wp-dyn/articles/A32746-2005Apr6.html

Note: not sure if it's the same guy, could just be a different guy with the same name.

[punpirate]

12. Different guy...

... this one is a professional assessor.

Cheers.

[noamnety]

14. alright

I just see that eminent domain crap to build baseball stadiums, and I assume it's a crook associated with Bush. :)

[Ian David]

16. I was working on some of this in another thread...

Democratic Underground Forums - Armor issued despite warnings
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1455675

Democratic Underground Forums - Armor issued despite warnings
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1455675

I hope some of this might help.