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After Debate Denial, Walt Havenstein’s Campaign Admits: He Knew About Fraudster Raises

After Being Confronted with Documents Proving His Company Authorized Raises for Consultants at Heart of Massive Taxpayer Fraud Scandal, Havenstein’s Campaign is Backtracking

walt havensteinManchester—Hassan Campaign Press Secretary Aaron Jacobs issued the following statement after failed CEO Walt Havenstein confirmed that he was not truthful in WMUR’s Granite State Debate.

“Failed CEO Walt Havenstein has confirmed that he was not truthful in WMUR’s Granite State Debate. Havenstein vehemently denied – multiple times – on television that he gave the fraudsters at the heart of the massive CityTime scandal a raise. But after being confronted with documents that prove his company authorized raises for the people responsible for a taxpayer-funded project that went more than $500 million over budget due to massive fraud, Havenstein is now backtracking.”

“Havenstein’s shifting responses and attempts to duck responsibility for the bad management, thousands of jobs shed, and massive fraud under his watch as CEO of SAIC reinforce that he puts his own interests first no matter who gets hurt, and that he shouldn’t be allowed to run New Hampshire.”

BACKGROUND:

In WMUR’s Granite State Debate, Havenstein denied SAIC gave fraudsters at heart of CityTime scandal a 5% raise. [WMUR, 10/29/14]

But later, his campaign said, “Havenstein was aware of the raises and let them proceed because he did not want to take any action that could jeopardize the federal investigation.” [AP, 10/30/14]

Failed CEO Walt Havenstein Must Come Clean with Granite Staters

Did He Let SAIC Give a 5% Raise to Consultants at Heart of Massive $500 Million Fraud Scandal?

Either Havenstein Was Deliberately Dishonest in WMUR Debate or He Didn’t Realize His Company Gave a Raise to The Fraudsters at Heart of CityTime Scandal with Project Already $500 Million Over Budget — Either Way, It Proves Again Why He Shouldn’t Be Allowed to Run New Hampshire

Cash Bribe Politician MoneyManchester, NH – In last night’s WMUR debate, failed CEO Walt Havenstein tried to deny the fact that SAIC gave a five-percent across-the-board raise to those at the center of the massive CityTime fraud scandal more than a year into his tenure as CEO. But with public documents confirming the facts, Havenstein must level with Granite Staters about whether he was deliberately dishonest in WMUR’s debate or he didn’t realize his company gave a raise to the fraudsters at the heart of the CityTime scandal with the project already $500 million over budget.

“Failed CEO Walt Havenstein must immediately come clean with Granite Staters about why SAIC gave the consultants at the heart of the massive CityTime fraud scandal a 5% across-the-board raise more than a year into his tenure,” said Hassan Campaign Press Secretary Aaron Jacobs. “Either Havenstein was deliberately dishonest with Granite Staters during last night’s debate, or he was completely clueless about his company giving an across-the-board raise to the fraudsters at the heart of the CityTime scandal. But either way, it simply proves once again why New Hampshire can’t afford to let him mismanage the state.”

“Even if Havenstein was unaware of the massive fraud scheme that took place under his watch as CEO, it’s still beyond belief that he would allow his company to hand out raises to those responsible for a project going $500 million over budget on the taxpayers’ dime. What’s worse, his refusal to take responsibility shows he puts his own interests first, no matter who gets hurt,” added Jacobs.

BACKGROUND

During Walt Havenstein’s time as CEO of SAIC, the U.S. Department of Justice discovered that his company was involved in a massive, $500 million fraud scheme against taxpayers.

Despite Havenstein’s claims that he took action and held people accountable, the New York Daily News reported that, “In early December 2010, only weeks before federal agents launched the first arrests in the scandal, the city’s Office of Payroll Administration permitted SAIC to give 5% across-the-board pay increases to all consultants supplied by Technodyne.” [NY Daily News, 11/21/13]

The employees and owners of the TechnoDyne consulting firm were at the heart of the massive CityTime fraud scheme. Before the U.S. Department of Justice discovered the scheme, SAIC employees funneled $400 million in taxpayer dollars to TechnoDyne. [US DOJ Press Release, 6/20/11]

The across-the-board pay increase for all TechnoDyne consultants came over a year after Havenstein became CEO of SAIC on September 21, 2009. At the time of the raise, the CityTime project was already hundreds of millions of dollars over budget. [NY Times, 12/15/10]

See here for public documents showing that SAIC gave a five-percent raise to the TechnoDyne consultants on December 9, 2010, just six days before the U.S. Department of Justice’s first round of arrests in the case.

Walt Havenstein’s Campaign Full Of Controversy And Has A Record of Failed Leadership

The battle lines for the corner office are now official. Walt Havenstein was overwhelmingly selected as the GOP candidate for Governor of New Hampshire.

Lets start with a few facts about Walt:

  • Walt is a graduate of the US Naval Academy, and served in the US Marines and Marine Corp reserves for a combined 28 years.
  • Walt was the CEO of BAE System, a government defense contractor.
  • Walt was also CEO of Science Applications International Corp. (SAIC), a science, engineering, and technology firm that worked closely with federal agencies like the NSA, the DOD, and the Department of Homeland Security.

Isn’t it strange that the same man – who has made massive amounts of wealth working for and contracting with the federal government – is now going around saying we need “limited government” and “fiscal responsibility”?

So far, that fundamental inconsistency hasn’t been discussed much. Havenstein’s background and campaign is too full of other controversies.

There were questions about Havenstein’s residency and eligibility to run for Governor of New Hampshire.

After retiring from BAE, Havenstien became the CEO of SAIC, based in Maryland. Havenstein moved to Maryland where he owned a home and used tax exemptions that are only available to Maryland residents. After deciding to run for office in New Hampshire, Havenstein fought to prove his eligibility with the NH Ballot Law Commission; and they sided with Havenstein. However, after Havenstein’s residency was confirmed by the State of New Hampshire, the State of Maryland came after Havenstein for tax fraud.

“Havenstein will be billed for several years of back taxes after officials in Maryland said he accepted tax breaks he shouldn’t have. In 2007, Havenstein signed a pair of affidavits pledging that his primary residence at the time was in Maryland, and for four years, he received tax credits known as the homestead exemption. But upon entering the race for governor, Havenstein asserted that he has always lived in New Hampshire, and the state Ballot Law Commission ruled in his favor. Revenue officials in Maryland told News 9 that Havenstein shouldn’t have accepted benefits in that state.” [WMUR, August 20, 2014]

Then there is Havenstein’s “economic plan” to spur growth and create 25,000 new jobs.

“My economic plan commits the state to helping create 25,000 jobs over 2.5 years by changing the culture in Concord to focus on the private sector. That’s the same approach I successfully took at BAE Systems, where we created 1,500 new high-tech jobs right here in New Hampshire” (Union Leader Op-Ed, Sept 3, 2014)

The funny thing is that Havenstein is trying to tap into the current economic growth that Governor Hassan spurred. The Bureau of Labor Statistics reports that between June 2013 and June 2014, New Hampshire created over 10,000 new jobs. Included in the 10,000 new jobs are 2,500 new jobs in the hospitality and leisure industry – strong signs that the New Hampshire economy is already rebounding.   The BLS also shows an increase of over 1,000 new jobs in manufacturing, which would be the closest calculator for “high tech” jobs in New Hampshire.

As CEO of BAE Systems, Havenstien did create jobs but he did it by using our tax dollars. In 2008, BAE was the 5th largest contractor with the federal government receiving over $15.2 Billion dollars. This is more than have of their 2008 revenue, and this does not include the revenue from the governments of the United Kingdom and Saudi Arabia.

Havenstein is attempting to portray himself as a leader by citing his work as the CEO of two massive corporations. What Havenstein is neglecting to tell you is that as the CEO of SAIC, Havenstein collected his $20 million dollar salary while the company shed thousands of jobs and the company’s stock plummeted 32%.

SAIC has had other problems, too. In Oakland, California SAIC came under fire for being selected to design a city-wide “surveillance hub” that some said would infringe on their civil liberties and violate their rights to privacy. Civil liberty issues aside, the people of Oakland took issue with SAIC being selected to design this “surveillance hub” due to the company’s history.

“In recent years, SAIC has been accused of defrauding municipal governments, bribing foreign officials, and delivering shoddy products. And when the company does deliver the goods at cost and on time, it’s often for militarized projects linked to human rights abuses. Among SAIC’s recent contracts: training the Egyptian military, operating drones used to kill foreign citizens, building and operating portions of the NSA’s internet spying system used on Americans, and more.” (East Bay Express, Aug. 2013)

What the East Bay Express was referring to: in 2011, SAIC was forced to remove three high-level executives for work relating to New York City’s “CityTime” employment timekeeping system.

“The U.S. Attorney’s Office for the Southern District of New York has alleged that “a massive and elaborate scheme to defraud the city” corrupted the program, and it charged Gerard Denault, SAIC’s lead project manager on the program, with receiving at least $5 million in illegal kickbacks.” (Washington Post Oct. 2011)

The project was an attempt for the City of New York to move municipal employees from paper punch cards to new digital palm scanners.

“The project’s initial budget was $68 million. But after SAIC acquired the company that had won the competitive bidding process for the work, CityTime’s cost mushroomed to more than $740 million in ten years.” (East Bay Express, Aug. 2013)

U.S. Attorney Preet Bahara said, “virtually the entirety of the more than $600 million that was paid to SAIC was tainted directly or indirectly by fraud.” (NY Daily News, June 2011)

NYC Mayor Bloomberg called for SAIC to refund $600 million dollars to the city.

And just before SAIC agreed to pay a $500 million settlement to NYC, Havenstein announced that he would be retiring for “personal reasons”.

At least Havenstein knows when to jump off the sinking ship.

The Washington Post was very critical of Havenstein and his leadership of SAIC.

“The company struggled under the strategy, watching its profit and revenue decline.” (Washington Post, Aug. 2012)

What’s next for a failed CEO? Politics, of course!

The people of New Hampshire should look closely at Havenstein’s record of failed leadership.   Havenstein is not what we need in the corner office. We do not need a Governor who is good at padding his bank account while others get shafted.

Havenstein has already stated that he will repeal the bi-partisan Medicaid Expansion bill that opened access to healthcare for 50,000 Granite Staters. I wonder how Walt would feel if we took away his healthcare?

Havenstein is also vehemently opposed to raising the minimum wage.

“I’m not in favor of raising the minimum wage because, I’m not in favor of raising the minimum wage, period.” [Havenstein Interview with WBKB, 15:03 min]

Havenstein does not know what it is like to be one of the tens of thousands of struggling middle class Granite Staters. With millions in his pockets, he has never had to choose whether to buy food or pay the heating bill. The fact that he would not even consider an increase in the minimum wage shows just how out of touch Havenstein is with real Granite Staters.

NH AFL-CIO Presents Movie Night : ELECTORIAL DYSFUNCTION with Mo Rocca

morocca

Thursday, February 7
6:00pm

New Hampshire  AFL-CIO 
Movie Night!

Electoral Dysfunction
is the first documentary project to take an irreverent — but nonpartisan — look at voting in America. In the same way that An Inconvenient Truth revealed the need for immediate action on global warming—the film will help spark a national dialogue on the steps ordinary citizens can take to ensure that every vote counts.

Mo’s quest—set against the backdrop of the historic 2008 presidential election—leads him to Indiana, home to some of the toughest voting laws in the country. As he progresses on his journey, Mo investigates the heated battle over Voter ID and voter fraud; searches for the Electoral College; critiques ballot design with Todd Oldham; and explores the case of a former felon who was sentenced to ten years in prison—for the crime of voting.

Movie Night is FREE and open to NH AFL-CIO members and guests.
Call (603) 623-7302 for more information.

Thursday, February 7, 2013 – 6:00pm
161 Londonderry Turnpike, Hooksett

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