From January 2003, when he took control of the House Armed Services Committee, Duncan Hunter seemed like a man in the right place at the perfect time. "This century is going to be a very dangerous century," Hunter told reporters after he was selected by acclamation as committee chair. Hunter pledged to give President George W. Bush "the resources he needs to win the nation's wars." He pooh-poohed the ability of United Nations inspectors to ferret out Saddam's weapons of mass destruction. The Iraqis, he said, had demonstrated they were "extremely skilled at hiding this stuff."
"Our nation must manage significant national security challenges over the next several years," Hunter said. "We are already facing a potential conflict with Iraq, new challenges on the Korean peninsula, and key decisions in the president's plans to transform the military." All this was going to cost money, he added, especially for military modernization and the high-tech weaponry that would be needed to win wars of the future. "I want to see us get to $90 billion," Hunter said. "There's a very strong case to be made for more money."
The era of the U.S. foot soldier fighting from house to house was a thing of the past, Hunter believed. Certainly Saddam would be beaten by America's technological might. Aerial drones would spy on the enemy, and smart bombs dropped by stealth bombers from 35,000 feet would wipe out the inept Iraqi legions, to be followed by an American advance into Baghdad -- all made possible by miracles wrought by U.S. defense contractors, many based in San Diego and with close ties to Hunter.
They included the Titan Corporation, founded and run by Gene Ray, a donor to Hunter and other Republican causes. The company started as a computer and electronics contractor to the Pentagon but had expanded into providing translation services for the Central Intelligence Agency. Other San Diego-area defense contractors who were friends of Hunter included Cubic Corp., Science Applications International Corp., and General Atomics. All were creatures of what President Eisenhower once labeled the military-industrial complex. Between them, they held billions of dollars in defense contracts, and they were regular campaign contributors to Hunter.
Though Hunter cultivated their support at fundraisers held at country clubs and hunting lodges throughout the country, he never acknowledged that the contractors' money influenced his vote or his actions on their behalf. An admirer of gadgetry, Hunter had called for more spending on "R&D," short for "research and development," to stock military arsenals.
"I like the idea of following weapon systems seamlessly from R&D to procurement," Hunter told a reporter for Aerospace Daily in January 2003. Speedy procurement was needed, the congressman said, because the smaller "force structure" favored by defense secretary Donald Rumsfeld would make it more dangerous for U.S. troops to fight more than one war at a time. Hunter said he "would like to see a force structure larger than we have now" but averred that more and faster spending on precision weaponry would counterbalance risking troops' lives.
When war came that March 19, the Armed Services chairman released a 167-word statement: "Saddam Hussein was given 12 years to disarm as a condition of ending the first Gulf War. He chose another path. Our armed forces will meet him at the end of this path. I believe we will win this conflict in overwhelming fashion. I also believe this must be our guiding principle for the future. America's mothers and fathers demand no less from us than providing all the tools and training necessary to win our wars with the fewest American casualties possible.
"Since the last Gulf War, we have had major advances in our war- fighting capabilities, from precision-guided munitions to deep-strike stealth aircraft. These capabilities will be exhibited in the coming hours. Our troops are well-trained, well-equipped, and well-led, from noncommissioned officers and small-unit leaders up through the commander in chief.
"We in Congress must stand behind our troops at all times. We also must continue to rebuild our military to ensure future victories in the continuing war on terror and other potential conflicts."
On May 27, little more than a month after America's victory over Saddam, Hunter led an eight-member congressional delegation on a tour of the conquered land. "Contrary to the impression of a general state of lawlessness in Iraq, our brief visit to the heart of Baghdad found a city bustling with activity and evidence of a return to normal life," he told reporters upon his return to Washington.
In the year since then, Hunter has maintained his faith in the success of America's foray into the land of Kurds, Shiites, and Sunnis. When word broke this month about prisoner abuse at the hands of U.S. National Guard troops serving as guards in Baghdad's Abu Ghraib prison, Hunter insisted to reporters that it was an isolated incident, not, as some alleged, a systematic breakdown rooted in the Pentagon, Central Intelligence Agency, and their civilian contractors. "Remember six individuals out of 135,000 people serving honorably in Iraq -- six individuals are now at this point the targets of investigation for criminal prosecution."
Hunter left unspoken the fact that an investigation in January 2004 by Army major general Antonio Taguba had implicated employees of one of the congressman's biggest campaign contributors, Titan Corp., in the Abu Ghraib affair. "In general, U.S. civilian contract personnel [Titan Corporation, CACI, etc.], third-country nationals, and local contractors do not appear to be properly supervised within the detention facility at Abu Ghraib," reported Taguba. "During our onsite inspection, they wandered about with too much unsupervised free access in the detainee area. Having civilians in various outfits [civilian and DCUs] in and about the detainee area causes confusion and may have contributed to the difficulties in the accountability process and with detecting escapes."
The report cited the testimony of Adel Nakhla, one of the Titan-employed translators working at the prison: "They [detainees] were all naked, a bunch of people from MI, the MP were there that night, and the inmates were ordered by SGT Granier and SGT Frederick ordered the guys while questioning them to admit what they did. They made them do strange exercises by sliding on their stomach, jump up and down, throw water on them and made them wet, called them all kinds of names such as 'gays' do they like to make love to guys, then they handcuffed their hands together and their legs with shackles and started to stack them on top of each other by insuring that the bottom guy's penis will touch the guy on top's butt."
Titan isn't the only Hunter campaign contributor with business in Iraq. The congressman has been one of the most effective fundraisers in the House. And the war in Iraq has done nothing but enhance his appeal. During this 2004 campaign cycle alone, from January 2003 through this March, the congressman raised $701,488; $418,588 of that was from individuals and the rest from corporations and political action committees. Many individual donors list their employees as government contractors. That puts Hunter on schedule to exceed the $785,000 he raised during the last two-year cycle, between January 2001 and December 2002.
In addition to his personal campaign committee, Hunter operates the "Peace Through Strength" political action committee, which so far this cycle has raised $69,625 from the same group of corporate donors, as well as transfers from political committees run by Hunter allies in Congress. During the 2002 election cycle, the group raised $47,450. Proceeds have been doled out to political friends of Hunter, both House members as well as San Diego-area politicos running for local office.
Hunter is not the only congressman to use the system to his advantage, of course. His fundraising is far exceeded by that of Illinois congressman Dennis Hastert, speaker of the house, who so far this cycle has raised $2.9 million, much of which he hands out to favored Republican congressional candidates. Hastert's take from political action committees alone is $1.2 million. At least ten other congressmen have raised more than Hunter.
But Hunter enjoys a safe seat in the 52nd District, stretching from the upscale outskirts of San Diego, over to La Mesa and Spring Valley, northward through Lakeside, Poway, and Ramona, and on through backcountry to the northeast corner of San Diego County. What does he need all that money for? Many of the regular voters who live in his district are white registered Republicans who supported the war in Iraq. Many are National Rifle Association members who don't like gun control, welfare mothers, or Democrats. They have sent Hunter to Congress 12 times.
The congressman, who will turn 56 at the end of this month, saw Army service in Vietnam as an officer with the 173rd Airborne and 75th Army Rangers. Upon his return from the war, Hunter used the G.I. Bill to get a degree from Western State University law school in 1973. He was first elected to represent California's 52nd congressional district in 1980, the year of Reagan's landslide. Hunter trounced 18-year congressional veteran Lionel Van Deerlin, a liberal Democrat and ex-TV commentator who had been dogged by small scandals during his last years in the House.
Almost as soon as Hunter was elected, the Republican leadership named him to a seat on the Armed Services Committee, where he built the status needed to seize the chairmanship after Arizona congressman Bob Stump retired in 2002. As representative of one of America's biggest military bastions, studded with Navy and Marine installations and some of the country's most sophisticated high-tech weaponry contractors, Hunter is counted on to deliver the federal largesse that's been the region's bread and butter since World War II.
This November Hunter will face Democrat Brian Keliher, a 42-year-old San Carlos resident and 1994 graduate of San Diego's Thomas Jefferson School of Law who bravely promises to give the incumbent a serious challenge. That's more than Hunter's previous Democratic opponents have done. And through March 31, Keliher has reported raising only $5515, most of it in small contributions from friends and family. It appears he's not much of a threat.
"Partly I was redistricted, gerrymandered, into Duncan Hunter's district. I had Susan Davis, who I was completely happy with. I think she's a very good representative," says Keliher about why he decided to oppose Hunter. "I decided to run this time for a couple reasons. It must have been around September or October last year, I believe. There were reports about the flak jackets. Our fighting men and women in Iraq, many are without [them]; parents are buying flak jackets and sending them."
Of his fledgling campaign, Keliher says, "We are on the lower level and growing quickly. But I'm hearing every day from motivated individuals who say, 'We don't agree with Duncan Hunter. We don't like what he's doing.' So it's going to be a grassroots campaign. It's going to be a lot of shoe leather. We'll print up some flyers. I do believe we'll raise enough money to possibly get some TV commercials."
And Keliher insists he might have an angle, if to do nothing else than make Hunter squirm in an election year that has been soured by those increasingly bloody reports out of Iraq and the ugly Abu Ghraib prison scandal. He's been digging through the congressman's campaign-spending records, hoping to find a silver bullet with which to end the political career of the man who is one of the most enduring and powerful pillars of Washington's defense establishment.
Keliher has discovered that records indicate Hunter likes the good life, and, according to the financial disclosures, his campaign fund pays for it. The filings, Keliher says, portray an extravagant, jet-setting lifestyle at variance with Hunter's strictly business military countenance and vaunted middle-class, officer corps roots. In short, Keliher alleges, Hunter is a phony.
"For him this is a personal piggy bank," Keliher says. "The defense contractors give him money in his campaign war chest knowing he's going to spend it on his own personal spending spree. We like to say Duncan is living large, in a sense. So they give him this money, he in return takes care of them when it comes to contracts and such, like the Boeing deal and so on, and everybody's happy.
"Except the constituents. Over half of his money last election was from out of state, not just out of district. I think he spent about 70 percent of it out of the district. He's not connected to the district. He's a 24-year incumbent so far removed from his constituents that they're not getting what they need as far as representation."
The numbers appear to bear Keliher out -- at least in terms of Hunter's penchant for spending campaign money on personal travel, food, fishing trips, hunting, cocktails, golf outings, and what the Hunter campaign reports call "gifts to supporters." Notes Keliher, the records show that the Hunter campaign doesn't buy television spots or lavish money on direct mail, the traditional means of reaching voters, and, as of a few weeks ago, the campaign's official Web page wasn't operational.
"His website's 'under construction.' If you look to his expenditures, you don't see Channel 7 or 39; you don't see ad agencies developing commercials and all. I haven't seen a bumper sticker. I'm in the district; I didn't get anything in the mail. It's embarrassing that he does have these $800 golfing outings and you name it."
To judge from his campaign filings, Hunter does like to golf, or at least likes to pay the way for those who do. So far this election cycle, the congressman's campaign has paid for 13 "Golf with Supporters" excursions, most to Carlton Oaks Country Club, one to La Quinta, and two to Barona. The grand total: $6057. Then there's the category Hunter's campaign calls "Meals with Supporters." Seventeen entries appear, most for dinner or lunch at the exclusive Capitol Hill Club in Washington. Tabs ranged from $22 to $656. The grand total: $3796.
Another category, "Gifts for Supporters," so far totals $9451. In May 2003, the Hunter campaign spent $2635 at El Cajon's Art World, the highest single expenditure in the category. Second highest was $1024 at the House Gift Shop in Washington. Four hundred dollars was spent at Del Coronado Jewelers last June, and $569 at the KRS King Ranch Saddleshop in Kingsville, Texas, in November. The smallest expenditure was $13 for See's Candies in San Diego in December.
Under miscellaneous: about $26,000 in lodging and recreational events, such as $5000 for "Fish Canyon Getaway," described as a "hunting event" in Powderhorn, Colorado, last October. According to its website, the "Fish Canyon Getaway" is "a beautiful log home with three bedrooms (two queen beds, one double) and a loft with a queen futon bed" in Colorado's Gunnerson Basin. It rents for $300 a night. The website advertises that 5 percent discounts are available for National Rifle Association members or for those who book a week.
Other costs the campaign picked up include $3850 in "fundraising expenses" for a night of baseball with the Orioles at their Baltimore stadium. A "fishing event" at San Diego's H&M Landing was listed at $1000. "Lodging and meals" at the Quail Valley Hunt Club in Petersburg, Tennessee, last Fourth of July cost $250, and $909 covered a "Sportsmen Event Expense" this March at A&H Processing in Corpus Christi, Texas, on the Gulf of Mexico. A "Congressional Retreat" run by the Congressional Institute in Alexandria, Virginia, cost $2256. Also, $2494 was spent for "Fundraiser catering" at the Amarillo Country Club in Amarillo, Texas, in January 2003.
Hunter was reimbursed by the campaign for $46,000 in personal expenditures during this campaign cycle. Many of these items share the same categories of the direct expenses to vendors on the list: meals with supporters, golf with supporters, gifts for supporters, and reimbursement for lodging. Last November, the campaign reimbursed Hunter for $2039 worth of lodging. On the same date, it gave him $1235 for car rental. Personal airfare reimbursements, ranging from $600 to $1200, have been frequent. None of the personal reimbursements to Hunter provides any detail as to the purpose or location of the expense.
By contrast, Hunter's fellow GOP representative from San Diego, Randy "Duke" Cunningham, a Navy ace in Vietnam, has collected only $9818 in personal reimbursements from his campaign fund, which so far this cycle reports spending a total of $303,000, about $250,000 less than the campaign fund of the Armed Services committee chairman. Cunningham raised fewer funds than his colleague: $432,770 to Hunter's $701,488. Cunningham's highest-ranking committee post: vice chairman of the appropriations subcommittee for the District of Columbia, apparently not an auspicious place to be for raising political money.
Cunningham's largest personal campaign draw was listed as "reimbursement, computer," $2780. His only campaign expense for travel is listed as $508 a year ago this month. Most of the balance of the funds has been paid to political consultants, fundraisers, campaign office staff, and miscellaneous office overhead. In short, based on their campaign-disclosure filings, the difference in campaign budgets between Hunter and Cunningham involves Hunter's extensive personal travel, hotel bills, gifts for supporters, meals, and those rounds of golf and fishing and hunting excursions.
"It appears he's taking these guys, and/or girls, out for golfing," notes Hunter's opponent Keliher. "They're supporters; he writes a check [from] his campaign account, and it's over. No tax is paid on the money he's spending for him. It's absolutely, in my opinion, unethical. It's truly -- it's immoral. Not to try to ride a position too hard, but seriously, it's just wrong. You see how the system is so corrupt in that regard."
Hunter did not respond to requests for an interview left with his Washington press aide. But his campaign treasurer, Bruce Young, says that all personal reimbursements disclosed on the financial reports are directly tied to the Hunter campaign as well as to Hunter's political activities on behalf of other Republicans. "He does a lot of flying to campaign events to support other candidates," according to Young. "These are all campaign-related activities."
Young explains that the campaign pays for the congressman's golf with his supporters as a way to avoid the appearance of conflicts of interest. "Since it's so difficult to determine what he can and cannot accept when somebody wants to take him golfing, and people are always trying to pay for these things for him, we decided a long time ago to have the campaign pay for it." Meals at places like the Capitol Hill club fall into the same category, he says. Supporters who have been taken on golfing trips and given meals, says Young, have been "both donors and nondonors" to the Hunter campaign.
Gifts listed as campaign expenditures, according to Young, have been mostly mementos handed out at Hunter-fundraising events. "Whenever we have a fundraiser we end up buying a lot of gifts to give to people," Young says. The items purchased at the Coronado jewelry store, for example, were "flag-type pins, as I recall." Trips to the King Ranch, Corpus Christi, and other events were usually connected with Hunter appearances at fundraising events for others. "He gets a lot of requests to speak, and the campaign pays his way for all of them."
In the case of the Colorado cabin, Young says, the campaign paid for several wheelchair-bound veterans to stay there for a weekend hunting vacation. "Because of the fires here in San Diego, Duncan wasn't even able to go himself."
Who pays for Hunter's way of life? Keliher points the finger at hundreds of defense-related contractors. They make up a big part of San Diego's political establishment and over the years have sold trillions of dollars of military hardware, electronic gear, software, and miscellaneous services to the federal government. Hunter says he's keeping America safe and creating jobs and economic opportunity for his constituents. Keliher thinks Hunter is padding his pockets by selling out the taxpayers to the defense industry.
"Basically you see a lot of out-of-state money and you see a lot from defense contractors, which is because he's in such a powerful position," says Keliher. "They know what they're paying for. They don't give money to just anybody. They give it to Duncan because he's doing what they expect him to do. When we kick him out of office, he's staying in Virginia; he's going to be a lobbyist for defense contractors, guaranteed because he owns a cabin in Virginia, a plot of land in Virginia."
(Hunter purchased five acres of land and a house in Centreville, Virginia, in 1983 and made it his residence. In April 1993, he triggered a fuss among his neighbors when he lobbied a Fairfax County supervisor to loosen restrictions on subdivisions so he could divide a portion of the land into parcels for sale. "Congressional perks across the Potomac would pale in comparison to the perk Congressman Hunter would receive if the board approves this," Mary F. Dunn, president of a citizens group, told the Washington Post at the time. Hunter fired back: "I'm a congressman, but I've got to be somebody's constituent. I went through the system. It's kind of inappropriate for people to say that because I'm a congressman I can't ask for anything." According to Virginia public records, at least some of the land is still being held in the name of various members of the Hunter family.)
No one can argue that Hunter has been anything but wildly successful at raising funds from the defense establishment. And many of Hunter's donors have directly benefited from the war in Iraq. Near the top of the list at this point in the latest campaign fundraising cycle is La Jolla-based Science Applications International Corp., which, in combination with its employees, has contributed $25,000. Founded by physicist J. Robert Beyster during the Vietnam War as a small scientific think tank with a handful of federal contracts to study nuclear weapons effects, SAIC has burgeoned into a company with 42,000 employees and $6 billion in revenue, contracting with the Navy, the National Security Agency, the National Geospatial-Intelligence Agency, the Central Intelligence Agency, and other top-secret government operations.
The company has encountered more than its share of controversy in Iraq over an $82.3 million no-bid contract awarded by the federal government to set up the Iraqi Media Network, an effort by U.S. authorities in Baghdad to establish a television and radio broadcasting operation friendly to the occupation. In March, a draft investigative report prepared by government auditors concluded that SAIC purchased $7 million in unauthorized equipment -- including an H-2 Hummer and a pickup truck -- and had otherwise violated the terms of its contract.
"Of the contracts awarded, eight were awarded on a sole-source basis, citing unusual and compelling urgency and only one responsible source, to Science Applications International Corporation (SAIC), Incorporated," says the March 18 Pentagon audit report.
"The main purpose of the Iraqi Free Media contract was to provide media development and technical support," the report said. "However, when a subject-matter expert working in Iraq did not receive a contract from the U.S. Agency for International Development, [according to a government source], 'We...asked him to join the team by means of the SAIC contract. The easiest mechanism available at the time was the Indigenous media contract [Iraqi Free Media contract].'
"The memorandum continues, '...[The subject-matter expert] signed on as a direct hire SAIC employee for a period of six months.... The subject-matter expert was first placed in charge of determining how to dispose of garbage in Iraq. He was then assigned the role of Senior Ministry Advisor for the Ministry of Youth and Sport. Neither of those roles was within the scope of the Iraqi Free Media contract.'
"The contract was awarded on March 11, 2003, for $15 million and as of September 30, 2003, was valued at $82.3 million (approximately 71 percent of the costs were for materials). No detailed plan existed that describes and supports the costs of the Iraqi Free Media contract. Also, market research that could help determine contractors who were capable of performing the work was not available.
"In addition, SAIC was not monitored...to ensure work was adequately performed. For example, SAIC was supposed to provide a work plan five days after the contract was awarded describing how it would accomplish the contract, but the plan was not provided to the government until two months after the contact was awarded. Because of changing requirements, the dollar amount of the contract increased twice."
SAIC has also been criticized for mismanaging the propaganda end of the broadcast operation. Gordon Robinson, identified as a journalist and former contractor to the SAIC-run station Al-Iraqiya, told the Associated Press last month that Republican operatives controlled the channel and the occupation's Baghdad press office. "I had the impression in dealing with the civilians in the green room that they viewed their job as essentially political, promoting what the Coalition Provisional Authority is doing in Iraq as a political arm of the Bush Administration."
Melbourne, Florida-based Harris Inc., another defense contractor, took over the broadcasting operation from SAIC in January, through a new Pentagon contract.
Another defense donor to Hunter is Kearny Mesa-based Cubic Corporation, which has given his campaign $27,000. Like SAIC, the company's products and services have played a major role in the invasion and occupation of Iraq. Its recent war-related contracts include those for "leadership training" for Army officers as well as computer systems to simulate the battlefield.
In February, Cubic's Simulation Systems Division received a $33.5 million contract to provide its "Engagement Skills Trainer 2000" software to the Army. According to a Cubic press release: "The EST 2000 is the only small arms training system validated by the United States Army Infantry School. As the most accurate small arms training system available today, this device trains marksmanship skills, squad level collective defense, and judgmental 'shoot/don't shoot' tactics."
Ranking high on the list of biggest Hunter donors is La Jolla-based Titan Corporation, the source of some $20,000 in contributions to the congressman during the past 15 months. The company has arguably become the most controversial, due to its contract to provide translation services to the U.S. military at Baghdad's Abu Ghraib prison.
Founded in 1981 by Gene Ray, an ex-deputy secretary of the Air Force and SAIC executive, Titan provides the Pentagon everything from software to missiles. In 1998, Titan purchased a Virginia-based provider of translation services, which ultimately led it to Abu Ghraib. Ray himself is a major Republican fundraiser, and Titan is a longstanding client of the Washington lobbying firm of Copeland, Lowery, Jacquez, Denton, and Shockey. Its principals include Bill Lowery, the ex-San Diego GOP congressman who left office under the cloud of 1980s savings and loan scandals.
A close Lowery friend and former city council colleague, ex-San Diego mayor Susan Golding is a member of Titan's board of directors. Titan has also used Northpoint Strategies, a firm made up of former staffers for Congressman Randy Cunningham. Titan's total lobbying tab since 2000: $1.29 million. But the investment seems to have paid off: the company grossed $1.8 billion in 2003.
Last week, Titan employee Adel L. Nakhla, who had worked as a translator at Abu Ghraib, was reported by the Los Angeles Times to have exercised his Fifth Amendment right not to testify in a secret preliminary court-martial hearing in the case of Army specialist Charles Graner, one of the military guards accused of physically abusing and humiliating Iraqi detainees. Titan subsequently announced it had fired him.
Nakhla had been quoted extensively about the abuse he said he witnessed at the prison in the initial Army investigation conducted in January by Major General Antonio Taguba. Nakhla is listed as a suspect in that report.
In an appearance last Tuesday on ABC's Good Morning America, Guy Womack, a lawyer for Graner, asserted that his client had identified Nakhla as one of those in a photograph of several people standing over a pile of naked Iraqi detainees. Nakhla was identified by Graner as a man in the photo wearing camouflage pants who appeared to be bending over and touching the neck of one of the prisoners. Titan has denied that it or its employees did anything wrong at Abu Ghraib. "We have no contracts that involve the physical handling of prisoners. Our only services are linguistic services," Titan spokesman Ralph Williams has said.
Titan's government contracts are very lucrative. So lucrative that the firm's ties to Abu Ghraib have not slowed pending plans by Lockheed Martin Corp. to buy the La Jolla company for $2 billion, though the offering price was recently reduced. Nor has the fact that Titan is under investigation by the federal Securities & Exchange Commission and Justice Department in connection with possible bribery of foreign officials by Titan consultants or subsidiaries damaged the takeover's prospects. "At the moment, we do not see these as systemic issues," a Lockheed spokesman said last week about the Abu Ghraib allegations. "Until all the facts are known, it's premature to draw conclusions about what did or did not happen with respect to one or two Titan employees."
Not all of Hunter's biggest contributors make weapons, but most have a connection to lucrative government contract awards. One example is TriWest Health Care Alliance, a manager of military health insurance for the U.S. government. Phoenix-based TriWest was formed about a decade ago by 11 Blue Shield plans and 2 university hospitals to bid on billions of dollars' worth of the Pentagon's so-called Tricare medical-service contracts.
Tricare was an outgrowth of the Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS, created in 1956 to provide health-care benefits for active-duty and retired military. Tricare was in part an effort to privatize the system. In 1996, TriWest received its first five-year contract, valued at $2.5 billion.
When Congress moved in 2002 to expand the Tricare program, called "Tricare Next Generation" -- or T-Next for short -- offering more managed-care contracts to the private sector, competition for the new business was intense, and TriWest was one of the most anxious applicants. T-Next folded 12 previous service regions into three giant ones. At stake was a contract for the Western region of Tricare worth at least $2.1 billion and possibly $10 billion or more with contract renewals. The company had at least one advantage going in. Its president and founder, Dave McIntyre Jr., an ex-Blue Cross executive, knew his way around Capitol Hill and the Pentagon: he had been a health-care policy aide to Arizona Republican senator John McCain.
TriWest has no other clients than the federal government. So its existence was totally dependent upon winning the Western regional managed-care contract, for which it was competing against Sacramento-based HealthNet. With the Western regional contract, TriWest would gain extraordinary clout among doctors and hospitals. Without it, the company, employing more than 800 people, said it would be doomed. McIntyre told an Arizona newspaper last August that if TriWest didn't get the Tricare business, "There would be no reason to continue the corporation, so we would disband and distribute the profits to the owners."
The competition kicked off in late 2002, but disaster soon hit TriWest. On December 14, burglars broke into the company's Phoenix headquarters, making off with computers containing the names, Social Security numbers, and confidential medical information for about 562,000 military personnel and dependents. McIntyre announced he was reviewing the company's security system and offered a $100,000 reward for information leading to the identity and apprehension of the thieves, but no one came forward.
A class-action suit was filed in federal court against TriWest, alleging that the company had negligently failed to protect the patient records. The case was dismissed by a judge who said the plaintiffs could not show they were damaged; the suit was refiled after one soldier claimed he'd been a victim of identity theft as a result of the stolen records. The break-in did nothing to help the company's reputation at the very time the new Tricare contract was being decided inside the Pentagon. Some believe the balance had been tipped to the HealthNet bid.
Meanwhile, as the summer deadline for the contract awards approached, McIntyre and his staff were raising money for the chairman of the Armed Services Committee. According to Hunter's campaign filings, TriWest executives contributed a total of $17,000 to the congressman during 2003. The first round of donations, which came in on June 16, 2003, consisted of nine separate contributions of $1000 each. Those donors included McIntyre along with eight other top company executives. Then, on July 25, three additional $1000 contributions were made, including one from Robert Kaplan of La Jolla, who was listed as a senior vice president.
Less than a month later, on August 21, the Pentagon announced it was awarding the Western Regional Tricare contract to TriWest. "We are honored that the Department of Defense has again selected TriWest to assist in providing access to healthcare services for those who sacrifice so much in defense of our freedom," said a statement released by McIntyre. Two weeks later, on September 8, McIntyre and three other TriWest executives, including senior vice president James Sears of Poway, each made $1250 contributions to the Hunter campaign.
Asked about the peculiar timing of the TriWest contributions in a telephone interview this week, Hunter campaign treasurer Bruce Young said, "To be truthful, I don't even recall them."
That contract will not be the last for Hunter's stable of campaign contributors. With prolonged fighting in Iraq a fact of life, along with the demand for revamped weaponry, Pentagon budgets are likely to remain high. Late last week, Hunter appeared with defense secretary Donald Rumsfeld following House approval of a $447 billion package of military expenditures, including an extra $25 billion requested by the Bush administration for Iraq and Afghanistan.
Responding to Democratic critics, Republicans highlighted the extra $1 billion they had appropriated for upgrading armor on military vehicles, as well as more ammunition and a military pay raise. Declared Hunter, "This is the year of the troops."