Wedtech scandal

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The Wedtech Scandal was the name of an American political scandal that came to light in the late 1980s involving the Wedtech Corporation.

The company had been founded in Bronx County, New York by a Puerto Rican immigrant named John Mariotta, and originally manufactured baby carriages. But after a number of years, Mariotta brought in a partner, Fred Neuberger, and began focusing on contracts for the Department of Defense.

As a major employer in a depressed part of New York City Wedtech enjoyed a strong local reputation, and was even praised by then U.S. President Ronald Reagan for the jobs it provided for those who might otherwise be forced onto welfare rolls.

But Wedtech had won many of its defense contracts under a Small Business Administration program which allowed minority-owned businesses to be awarded no-bid contracts, despite the fact that Fred Neuberger, not a member of any minority, owned a majority of the company's stock, thus disqualifying Wedtech as a minority-owned business. To keep Neuberger's controlling ownership secret, the company committed fraud, forging papers that claimed Mariotta was still the primary owner of the company.

When Wedtech went public, it gave shares of stock to law firms (as payment for legal services). But many of the law firms employed members of the U.S. House of Representatives, including Bronx Congressmen Mario Biaggi and Robert Garcia, who would later lose their jobs for their roles in the scandal^[1][2].

Wedtech then began extending its reach to the White House, utilizing President Reagan's press secretary, Lyn Nofziger, to contact public liaison officer (and future Senator) Elizabeth Dole. Through Dole, Wedtech won a $32 million contract to produce small engines for the United States Army. This was only the first of many no-bid deals that eventually totalled $250 million.

By the final years of Reagan's second term, Wedtech's crimes had become too numerous to hide. An independent counsel was appointed by Congress, which later charged Attorney General Edwin Meese with complicity in the scandal (he had worked as a lobbyist for the company prior to his appointment to Justice). While Meese was never convicted of any wrongdoing, he resigned in 1988 when the independent counsel delivered the report on Wedtech.

In all, about 20 state, local, and federal government officials were convicted of crimes in connection to the scandal. Some of these convictions, however, were reversed on appeal when it was found that Anthony Guariglia, former Wedtech president and a star government witness, had committed perjury, and that the government prosecution had reason to know that he had committed perjury.

Halliburton has sometimes been compared to Wedtech, as another frequent recipient of no-bid contracts with possible insider connections, but lacking any specific facts, this is mere speculation.^{[citation needed]}

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