Home · Articles · News · Cover Story · War Bribes
November 2nd, 2011 COREY PEIN | Cover Story
 

War Bribes

An Oregon businessman wanted to get “filthy stinking rich.” Now he’s linked to a bribery case and risks losing his biggest customer: the U.S. Military.

It’s not clear how Bud Calkin first met Joe Marak, the Defense official convicted of taking bribes.

Marak, 51, was born in Connecticut, became an Eagle Scout and enlisted in the Army in 1979, training at Fort Lewis, Wash. He trained as a medic, served in Bosnia and retired as a sergeant first class in 1999. In a military service evaluation, submitted during his criminal case, a superior wrote “Joe’s abilities are endless.”


MEDIC!: Soldiers drag a man on a Skedco stretcher during a training exercise in Baghdad.
IMAGE: Sgt. 1st Class Ron Burke

In February 2002, Marak signed on as the Army Special Operations Command’s medical plans specialist at Fort Bragg, N.C. The job called for identifying flaws in military medical equipment, recommending improvements and assigning contracts for new gear.

By July of that year, Marak was leading the development of a new litter kit that could be attached to the belly of a Blackhawk helicopter or slide under the seat of a Humvee, then be quickly removed and carried into the field. 

The new litter kit, known as a CASEVAC for “casualty evacuation,” was developed especially for rugged terrain like Afghanistan’s. Defense procurement is rarely so straightforward as the government placing an order or a company making a sales pitch. In this case, the government—Marak—came up with the idea and went looking for a company to make the kit.

Marak led the design of the CASEVAC over the next few years, as his job description required. However, prosecutors say he put his own interests ahead of the Army’s, even signing drawings of the prototypes “property of Joseph J. Marak.”

It seemed Marak had a plan to profit from his design. In the spring of 2005, Marak reached out to others who could make the plan a reality. 

During a Special Operations Medical Association conference in Fayetteville, N.C., Marak met with Bud and Catherine Calkin in a hotel room along with representatives of one of Skedco’s competitors, Special Operations Technologies, known as S.O. Tech. 

Based in Carson, Calif., S.O. Tech was founded by James Cragg, an intelligence officer in the Army reserves. Cragg later said the meeting ended with a handshake deal for shared work on the CASEVAC system.

A few months later, the companies and the government had a contract. At Marak’s insistence, S.O. Tech and Skedco would form a joint venture to produce the CASEVAC.

With a deal in place, Marak began asking both S.O. Tech and Skedco for what he called “royalties”—but what S.O. Tech’s Cragg believed were kickbacks. 

The demands for payment were delivered by email and in person, prosecutors said, and came with threats to yank pre-existing contracts. 

Beyond kickbacks, Marak also began asking both companies for a job. In an October 2005 email to Cragg, Marak expressed anger that Cragg had ignored his previous request for employment. “You’re screwing with your life blood,” Marak wrote to Cragg in an October 2005 email. “I’m all talked out and burnt out on BS promises. I make things happen.”

Court documents show Marak was at that time already taking money from Skedco. From September 2005 to June 2006, according to the indictment later filed against him, Marak collected 35 traveler’s checks from a Defense contractor. 

Documents filed in the case reveal that company was Skedco. The checks, for sums between $100 and $3,000, eventually totaled $13,000. 

In the spring of 2006, the Army approved the CASEVAC design. Within a few months, the Army had purchased 2,800 kits from Skedco for $3.8 million—triple the previous year’s orders. 

S.O. Tech, which had refused Marak’s demands for payment, would soon find itself cut out of the deal.



A “debarment” is government jargon for banning a company or person from getting contracts. These statistics from the U.S. Army Suspension and Debarment officer show an increase in debarments in recent years. But according to the Commission on Wartime Contracting in Iraq and Afghanistan, which submitted its final report to Congress this year, the military still isn’t doing enough to sanction contractors who break the rules or behave unethically. 

SOURCE: U.S. Army


In June 2006, Marak, then 46, drove to his brother’s house in Whitewater, Colo., in a Ford Ranger pickup pulling a trailer. The trailer was filled with military packs, assorted gear, drafting materials, fabric and a used industrial sewing machine. 

Gary Marak, then 38, was a sergeant with the Grand Junction Police Department. He and his wife, Lori, helped his older brother install the sewing machine in a detached garage. Joe told them he was starting his own military equipment design company, and for the next month he worked nonstop on prototypes for Defense contractors he hoped to work with.

Gary says his brother talked about Skedco hundreds of times in the year they shared a home. “Joe always talked about the persons at Skedco by first name, Bud and Catherine,” Gary wrote in a five-page, single-spaced letter to the federal judge who this year sentenced Joe to 72 months in prison.

Joe’s optimistic attitude began to change in July 2006, Gary recalled.  

Joe had returned upset from a brief trip to Oregon, where he visited Skedco, Gary wrote. One of the things that upset Joe: Calkin had made a comment about becoming “filthy stinking rich,” Gary wrote.

“Joe would tell me over and over again that this was not what he wanted to do or become,” Gary wrote, adding that Joe came to question “whether Bud and Catherine were trying to do the right things or just make money, and why they were trying to hide him and his work behind the scenes.”

Despite such reservations, court records show, Joe Marak signed on in July 2006 as a consultant for Skedco. In coming months and years, he would collect $350,000—money paid in return for the exclusive contracts he had arranged as a government employee, prosecutors said.

In June 2007, the deal between Marak and Skedco started to come to light.

That’s when S.O. Tech, the company that had refused to pay Marak, sued Skedco and Marak in U.S. District Court in Oregon.

S.O. Tech claimed Skedco and Marak had conspired to steal its designs and cut it out of participation in the CASEVAC joint venture and future contracts. Among other allegations, S.O. Tech said Marak had written one of its contracts in such a way that required it to purchase laminated first-aid cards from Skedco for $10 apiece—a hugely inflated price used to fund payments to Marak.

According to Gary Marak, S.O. Tech’s lawsuit increased Skedco’s power over Joe. “[T]he only way he could pay for a lawyer was to work for Skedco,” Gary Marak wrote. “From my standpoint, as time passed they seemed to have control over him.”

Skedco’s Calkin told the court he had lost sleep over the “scurrilous” accusations by S.O. Tech. 

“Neither Skedco nor I have done anything wrong,” Calkin said in a 2009 court filing. “We were just unlucky to have been talked into using an incompetent subcontractor who is willing to say anything to get back at us for rejecting its totally unusable products. I cannot get the injustice of this case off my mind.”

Skedco filed a counterclaim, accusing S.O. Tech of defamation and shoddy work on the CASEVAC kits. Calkin also claimed Cragg’s employees physically threatened him at a 2007 trade show. 

S.O. Tech’s allegations against Marak drew the government into the case. 

Initially, the U.S. Attorney’s Office in Oregon, then led by Karen Immergut, sought to have S.O. Tech’s civil claim thrown out of court, on the grounds that Marak was acting in the scope of his duties as a federal employee. Immergut’s office dropped the argument when the U.S. Attorney in North Carolina decided to bring criminal charges against Marak in 2010.


S.O. Tech’s civil lawsuit remains pending against Joe Marak even as he sits in a federal prison. But the company settled with Skedco.

S.O. Tech and Cragg are now fighting to protect their privilege to sell products to the government. S.O. Tech’s attorney, Robert Aldisert of the Portland firm Perkins Coie, says the Army sought to debar his client even though Cragg refused to pay Marak any bribes. That decision “was based on a confused reading of the indictment, which was not a model of clarity,” Aldisert says. 

Skedco’s attorney, Lois Rosenbaum of the Portland firm Stoel Rives, says the company should not be barred from military contracting because it was a victim of Marak’s extortion, and because it cooperated with prosecutors.

She says no Skedco competitor makes products of the same quality—and that America’s military personnel would be put in danger if they had to rely on inferior gear.

“It’s done so much for so many people,” Rosenbaum says of Skedco. “In fact, it’s dedicated its whole corporate existence to saving the lives of military personnel.”

The Calkins’ supporters have rallied to Skedco’s defense.

“I know that Bud and Catherine regret what they did that led to this hearing,” Landsteiner, the retired colonel, writes in another letter of support. “I know that they have been humbled and have truly learned from their actions also.”

Joe Marak is appealing his criminal conviction. Before his brother was sentenced, Gary Marak told the court he didn’t understand why Skedco escaped accountability.

“I know he did not force or coerce Skedco into anything,” Gary wrote. “I have seen this company now and the resources they have available to them. In their entire story, my brother was able to do everything he has done while acting alone.”

“I have investigated more crimes than I can remember,” he went on, “and I have seen a lot while working the streets and investigations. I am having a hard time understanding how all this is coming down on one man.”


A Brother's Appeal

When Joe Marak left the U.S. Army Special Operations Command at Fort Bragg, North Carolina, he moved in with his brother, Gary Marak, a Sergeant in the Grand Junction Police Department in Colorado. Before a federal judge sentenced Joe to 72 months in prison, Gary wrote this letter asking for leniency and detailing what he saw of his brother's involvement with Skedco. Gary wrote that Joe regretted having taken money from Skedco while working for the government, and questioned why one man alone was being punished for this crime.

Continue reading: Page 1 | Page 2 | Page 3 |
 
  • Currently 3.5/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
 
 
 

 

comments powered by Disqus
 

Web Design for magazines

Close
Close
Close