continued "I don't remember joining the board of the company, okay?" he said laughing. "I told this to the lady at the Washington Post. I do vaguely remember when she told me I was on the board. She said, 'We have you down on the board.' I did remember Chris one time asked me about being on this board, and I probably said yes. I don't even remember the details. I remember him having a conversation with me that he was trying to pursue some contracts. I think it was with the city of D.C.
"All the blacks in D.C. live on governmental contracts; that's their livelihood. I think it was with the city or the school or something, and he has to have a board or whatever, and I vaguely remember him asking me to be on the board, and I probably said yes. But I didn't even know I was on this board."
Foster does remember introducing Baker to Brent Wilkes sometime in the early 1990s, but, "It wasn't like a personal introduction," Foster said. "Brent and I were going to dinner, and Chris drove us. Brent met Chris that way."
Foster says that the company was initially capitalized by an investment from Enterprise Partners, a La Jolla-based venture capital fund. A Union-Tribune report says that Sempra Ventures, a venture capital fund operated by the utility giant, had made a $14 million "third round" investment in the firm, but Foster said he did not remember any details of that.
The federal contracts awarded to Pentech, Foster said, were the result of competitive bidding. "We got government contracts early on. Probably early '90s. They were what you called low-bid contracts. The lowest bid won. One of them was dealing with maintaining a turbine," he recalled. "Then we got an environmental contract. I forgot the dollar amount of it. It was a low-bid situation. It's the kind of contract that mostly small firms -- they're not major or anything."
Foster said that he first met Brent Wilkes in San Diego when Wilkes approached him to offer his marketing services. Wilkes said he could be helpful to Foster by introducing him to powerful federal officials who might be in a position to offer government contracts to Pentech.
"Brent had made a call on us here in San Diego," recalled Foster. "I think Brent and I probably met a total of three times, one time at the Pentech office, one time at his office in D.C. Last time I saw Brent was the time when we went to dinner in D.C.
"His interest was in helping us market the product to the government. It didn't make a lot of sense to me. We had two or three government contracts, and my conclusion was that you can't make money off of government contracts. We were phasing out of that anyway."
Foster explained, "With all of them it was kind of like work orders...even though it had a dollar amount fixed to it. We went out and hired a bunch of people not really understanding you only work when you get called to work. So we ended up creating a lot of unnecessary overhead. It was not very sophisticated. We lost so much money on those things in the end."
Of the marketing service that Wilkes was offering, Foster said, "To my knowledge, there was nothing illegal about it. He would help us sell to the government for a fee, which, I understand, you can do that. To me it didn't make sense because if I had to turn around and give him a fee, you don't make a lot of money off the government anyway. Strategically it didn't make a lot of sense to me...[but] it wasn't a kickback scheme."
Pentech's 1990s partnership with defense contractor SAIC was brief, Foster said. "In those days -- and I think they still do it -- companies come along when you're a minority firm, companies like SAIC come along, and want to be part of your company. Forty-nine percent, you use your minority content to keep your contracts. I never wanted to play that game, and our relationship kind of went south."
To qualify for the set-aside contracts, Pentech's owners had to be economically disadvantaged. "I think the big thing with SAIC," Foster continued, "the disadvantage to them was the fact that we...could not get set-aside projects, contracts. That was the initial thinking, that I would fill out the paperwork, we would qualify. You couldn't own property. I don't remember the details of it, but we didn't qualify. We looked at it, but neither one of us, the minority owners, was willing to lie on the documents."
Foster also found that he was uncomfortable with the role of the minority business. "What happens in those contracts, if you're successful, the big company does the real work and the minority company does a couple of pieces, something that doesn't deal with your credibility. But you're not doing the real work. SAIC would be doing the real work. Once that began, I began to understand those kinds of things and the fact that the cost of doing business in D.C., pursuing contracts, is extremely expensive, and we didn't have those kind of dollars. It's just a very expensive process. And that was not what we started out to be. We only got into contracts because the power-development business is such long-term, and the thinking was, let's bring some revenue in now while we're going through the development process of the projects. And so it was never a major focus of our business anyway until SAIC took an interest.
"The initial thrust at Pentech," Foster said, "was independent power development, which is developing power plants. We worked together through joint ventures with companies like Canadian Utilities, Williams Company.... It went well until the mid-'90s. See, what made a company like us be able to survive with small players is that...a utility could only own 49 percent of their independent power -- joint ventures through utilities. And when they went through the deregulation, where utilities could own 100 percent, our value dropped. Whatever they had, they can go ahead and do it themselves."