Turtles and Dragons
Posted by Lurch on March 31, 2006 • Comments (4)Permalink

Maybe you remember the name David H. Brooks. That’s not the Republican operative who poses as a columnist for the New York Times. I mean the man who owns DHB Enterprises, the company that makes “Interceptor” body armor at its Florida subsidiary, Point Blank Armor.

In 1992, Brooks and his brother Jeffrey were investigated by the U.S. Securities and Exchange Commission for their part in an insider-trading scandal. The brothers agreed to pay a $405,000 fine, without admitting any wrongdoing.

That same year, Brooks began a new business: making body armor designed to help wearers survive a potentially deadly bullet. After the Sept. 11, 2001, terror attacks, profits soared at DHB Industries in Westbury, spiked by the company's sale of about 900,000 bullet-resistant vests to the military for use in Iraq and Afghanistan. According to financial records, DHB's annual sales grew to $340 million as of last July, compared with $98 million three years earlier.

But in the past few months, Brooks' once-little-known, publicly traded company has become increasingly controversial, with his own actions and his bullet-shielding vests under fire.

Probes, lawsuits

Congressional investigators have launched a review of the Defense Department's body armor program, including the "Interceptor" vests produced by Brooks' company. A spokeswoman for the U.S. Government Accountability Office, Laura Kopelson, said government investigators -- spurred by congressional concerns that the vests may be inadequate to protect troops -- are expected to launch a full review of the body armor program by July.

In addition, lawsuits by angry investors filed recently in U.S. District Court in Central Islip allege Brooks and other top company officials broke federal securities laws with a "pump and dump" scheme designed to earn the officials large sums from stock sales while they issued "false and misleading" statements about problems surrounding the company's body armor. During one high-water mark for the stock in late 2004, Brooks, the company's chairman, sold off $185 million worth of his holdings; other executives also made millions.

As questions about the body armor's effectiveness arose, DHB stock, which traded above $20 a share in late 2004, dropped dramatically. It has hovered around $5 a share so far this year. Christopher J. Keller, one of the lawyers for the investors who are suing, said his clients lost "tens of millions of dollars" in stock value.

As questions about the body armor's effectiveness arose, DHB stock, which traded above $20 a share in late 2004, dropped dramatically. It has hovered around $5 a share so far this year. Christopher J. Keller, one of the lawyers for the investors who are suing, said his clients lost "tens of millions of dollars" in stock value.

"There is a furiousness by investors with what has happened at DHB," says Neil Rothstein, another plaintiffs' lawyer. Referring to the $185 million, Rothstein said of Brooks, "He should be paying back every cent of that money."

The investors became even more furious when they learned Brooks, 51, who lives in Old Westbury, spent millions on a November 2005 bat mitzvah party for his daughter at Manhattan's Rainbow Room. News reports said the party cost nearly $10 million and featured performers including rapper 50 Cent and Steven Tyler of Aerosmith.

This is a bad thing, because this company’s armor is apparently not very good. Several police agencies have returned entire shipments because of defective materials, defective manufacturing processes, and inadequate levels of protection. When you make a product that is claimed to be able to stop a rifle bullet and it won’t stop a 9mm, for instance, that’s what you call a POS.

Interceptor armor has such a poor rep that some troops deploying to Iraq and/or Afghanistan have been buying their own armor, or their parents are buying it for them, because a child is a big investment, you know? You want to protect your investments.

There’s nothing to say about the alleged $10 million he spent on his little Princess’s bat mitzvah That’s Page Six gossip nonsense. He’s got the cash in his bank account; how he spends it is up to him.

Ah, but the armor……

However, legal representatives for Brooks and his company say the lawsuit has no merit and that criticism of Brooks' personal financial dealings is unfair. They also point to a $54-million order announced this month by the Army for more DHB body armor as a sign of a continuing good relationship with the military.

DHB officials insist that no troops have been endangered because of their products, and that most of their anti-ballistic vests have used bullet-resistant materials other than Zylon. Last year, the National Institute of Justice, a research and advisory branch of the Justice Department, revoked its approval for the body armor using Zylon, which was found to deteriorate when exposed to high temperatures in sunlight. By August, DHB, like other body armor manufacturers, said it would stop using Zylon in vests. It also announced a voluntary recall of existing vests containing the material, and took a $60-million third-quarter charge for costs of the replacement program.

The armor deteriorates in high temperatures? In sunlight? No problem. Just have the troops in Iraq not go out during the daytime in that 120 degree Iraq summer. Keep ‘em in the camps.


But you know how parents are. Not all of them can spend $10 Mil on a party, but they do want to give their kids every chance to come home alive and in one piece so they’ll take out that second mortgage to buy Dragon Skin for a reported $6,000. They’ve been buying Dragon Skin, the Rolls Royce of body armor for their children. It’s made by a company named Pinnacle Armor in California, and apparently is all that Point Blank isn’t.

But there is a problem there.

WASHINGTON (AP) - Soldiers will no longer be allowed to wear body armor other than the protective gear issued by the military, Army officials said Thursday, the latest twist in a running battle over the equipment the Pentagon gives its troops in Iraq and Afghanistan.

Army officials told The Associated Press that the order was prompted by concerns that soldiers or their families were buying inadequate or untested commercial armor from private companies - including the popular Dragon Skin gear made by California-based Pinnacle Armor.

"We're very concerned that people are spending their hard-earned money on something that doesn't provide the level of protection that the Army requires people to wear. So they're, frankly, wasting their money on substandard stuff," said Col. Thomas Spoehr, director of materiel for the Army.

There were reports several weeks ago that General Officers will only wear Dragon Skin in the sandbox. Murray Neal, chief executive officer of Pinnacle, said

"We know of no reason the Army may have to justify this action," Neal said. "On the surface this looks to be another of many attempts by the Army to cover up the billions of dollars spent on ineffective body armor systems which they continue to try quick fixes on to no avail."

If you’d like to learn more than you ever thought you needed to know about this body armor, go here. The Level IV sounds just perfect for defense against people annoyed that Mr Bush sent you to their country to steal their oil liberate them.

I don’t know. A cynical man would say that, back when Point Blank was selling at $5 a share, Mr Rumsfeld saw a terrific buying opportunity. But that would be wrong. You don’t think Mr Rumsfeld is more interested in his stock portfolio than in the lives of the grunts, do you?

Is anyone surprised that David H, Brooks is a serious Republican campaign donor? Not up to Pioneer or Ranger level, but still respectable.


Comments

Posted by: wkmaier at March 31, 2006 10:25 AM

Lurch, this is just plain sickening. But the worst part, is writer Mark Steyn saying: "We're all conscripted in this war, whether we know it or not."

I'm sorry Mr. Steyn, have you had a bad day? Maybe your coffee wasn't just to your liking? Quit your whining and get your ass to Walter Reed.

Posted by: Lurch at March 31, 2006 11:24 AM

I agree that Mark Steyn and Hugh Hewitt, who are both third-tier Fascist Party bobble heads are ludicrous. If Mr Hewitt is really that terrified sitting in a studio in the Empire State Building, then he should properly be in someplace safe, like a red state.

Those of us who are oxygen breathers understand that the "war on terror" is a minsomer. Terror is an object, and people who are not misdirected (say, Europeans, who've been dealing with the topic since the early 70s) understand this is a judicial problem, and most easily handled as a crime, requiring policing.

Posted by: wkmaier at March 31, 2006 02:12 PM

Lurch, a followup to the above. Dunno if you've seen this yet.

Posted by: Gordon at March 31, 2006 09:21 PM

Kinda reminiscent of the early M16 ammo. That got guys killed from being off spec.

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