NHDP - Failed CEO Walt Havenstein Addresses Law Enforcement Officials

As Failed CEO Walt Havenstein Addresses Law Enforcement Officials, He Still Hasn’t Come Clean on His Conflicting Stories About His Role in SAIC Scheme that Overcharged Taxpayers Millions to Train First Responders   

Havenstein Initially Said He “Held Those Responsible Accountable and Resolved the Problem,” But Only Hours Later Claimed He “Never Knew About It While There”

Manchester, NH — As failed CEO Walt Havenstein addresses law enforcement officials, he still hasn’t come clean on his conflicting stories about his role in an SAIC scheme that overcharged taxpayers millions to train first responders.

Recently, Havenstein came under fire after revelations surfaced that under his watch as CEO of SAIC he failed to stop a fraudulent scheme that overcharged taxpayers millions of dollars to train first responders. While Havenstein first 
declared that he “held those responsible accountable and resolved the problem,” hours later he claimed he “never knew about it while there.” Neither explanation is convincing given that the scheme happened throughout Havenstein’s tenure at SAIC, and was reportedly “well-known among high-level executives” according to a whistleblower.

“As Havenstein addresses law enforcement officials today, he still owes New Hampshire's law enforcement community and all Granite Staters answers about his conflicting stories on his role as CEO in an SAIC scheme that overcharged taxpayers millions to train first responders," said New Hampshire Democratic Party Deputy Communications Director Bryan Lesswing. “Havenstein needs to stop offering tortured excuses and level with Granite Staters about his failed leadership and mismanagement as CEO of SAIC, where he implemented a failed strategy, the company shed 5,000 jobs, its stock value plummeted over 30% and he failed to stop a scheme that wasted millions of taxpayers dollars. Granite Staters can't afford to let Havensetein drive the state into a ditch, just like he did to SAIC.”

Havenstein’s campaign also revealed in its contradictory pushback that Havenstein failed to stop the massive fraud and overcharging of taxpayers under his watch because he couldn’t keep track of all the contracts at SAIC. The Havenstein campaign admitted, “SAIC had roughly 10,000 contracts and Havenstein left the company months before the federal lawsuit became public and never knew about it while there.”


SAIC Fraud in the New Mexico First Responder Training Program

New Mexico Institute of Mining and Technology Received Six Federal Grants to Train Emergency Personnel to Respond to Terrorist Attacks; Awarded Subgrants to SAIC
Between 2002 and 2012, the New Mexico Institute of Mining and Technology (New Mexico Tech) received six federal grants from the Department of Justice, the Department of Homeland Security, and the Federal Emergency Management Agency to train first responder personnel to prevent and respond to terrorism events involving explosive devices. New Mexico Tech awarded subgrants to SAIC to provide course management, development, and instruction. The United States alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it intended to use and actually did use, resulting in inflated charges to the United States.” [DOJ Press Release, June 13, 2013]

Former SAIC Project Manager Filed Whistleblower Lawsuit in February 2012
According to the original lawsuit, filed by SAIC’s former project manager for the program, Richard Priem, SAIC charged the government costs associated with full-time employees who received fringe benefits to conduct the training, but actually used cheaper, part-time employees who received few benefits. […] The whistle-blower lawsuit was filed in February 2012 in the U.S. District Court in Albuquerque, N.M., where Priem resides, but was kept under seal as is required by the False Claims Act. The court lifted the seal once the parties reached a settlement, under which SAIC will pay $11.75 million as well as $200,000 in attorneys’ fees for Priem.” [Washington Business Journal, June 13, 2013]

Whistleblower Attests that SAIC “Cheated the Government Out of Millions of Dollars” Under First Responder Training Program
The lawsuit brought by Phillips and Cohen LLP on behalf of an unidentified client, alleged that SAIC had “cheated the government out of millions of dollars” under a training program that was part of the government’s Weapons of Mass Destruction First Responder Program.” [UPI, June 13, 2013]

Scheme Was “Well-Known Among High-Level Executives”
Global defense contractor Science Applications International Corp. has agreed to pay $11.75 million to settle a federal civil claim alleging it overbilled the government for homeland security training programs under a more than decade-long scheme that was well-known among high-level executives.” [AP, June 13, 2013]

SAIC Agreed to Pay $11.75 Million to Settle Claims it Overbilled The Government to Train Emergency Personnel to Respond to Terrorist Attacks
The Justice Department and U.S. Attorney Kenneth J. Gonzales of the District of New Mexico announced today that Science Applications International Corporation (SAIC) has paid $11.75 million to settle allegations filed in the U.S. District Court for the District of New Mexico that it violated the False Claims Act by charging inflated prices under grants to train first responder personnel to prevent and respond to terrorism attacks.” [DOJ Press Release, June 13, 2013]

Havenstein’s Failed Strategy as CEO of SAIC

SAIC was historically known as one of the most entrepreneurial of contractors. Founded by a physicist who led the business for more than three decades, SAIC’s units operated autonomously, and managers were encouraged to pursue their own work. But Walter P. Havenstein, the previous chief executive, moved the company toward a more integrated approach, arguing that the government’s focus on large contracting programs favored companies that could deploy a wide range of skills. The company struggled under the strategy, watching its profit and revenue decline.” (Washington Post, August 30, 2012)

There’s little to dispute the company’s stock and job loss performance. Government records confirm that when Havenstein started at the company, SAIC had 46,200 employees. The workforce was down to 41,100 in 2012. Likewise, according to Wall Street reports, the stock price was $71.32 a share when Havenstein took over on Sept. 21, 2009. On Havenstein’s last day on the job, the stock was worth $48.64.” (Nashua Telegraph, June 11, 2014)