Contractor Whose Business Model Is Price Gouging the Pentagon Has Powerful Wall St. Backers – David Dayen April 13 2017, 8:59 a.m.


On March 21, first-term Congressman Ro Khanna sent a letter asking the Pentagon’s inspector general to investigate TransDigm, an aerospace supplier he accused of cornering the market on proprietary parts for military aircraft and then jacking up the prices.

The California Democrat charged that TransDigm operates as a “hidden monopolist,” to “enrich a few individual financiers who stand to benefit at the expense of our troops and weapons systems.”

The letter rebounded across Washington and Wall Street. TransDigm stock dropped over 10 percent in two days. The business press highlighted the story; The Huffington Post called TransDigm “The Martin Shkreli of defense contracting.”

In a nation that once saw a senator become president in part because of his investigation of war profiteering — and where memories of the Pentagon buying $640 toilet seats still linger — the story of a greedy corporation ripping off the military seemed to have legs.

But by April 11, TransDigm stock was back up to $236.48, virtually the same level it was at the day before Khanna’s letter. Investors had shrugged off the bad publicity, and the potentially damaging investigation.

It appears that the hedge funds, Wall Street banks, and highly paid executives cashing in on the scheme are confident that they can use the power and influence that comes with big money to prevent public outrage or government investigations from ruining their party.

And so far, they’re right.

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Health-care Web site’s lead contractor employs executives from troubled IT company By Jerry Markon and Alice Crites, Published: November 15


  • The lead contractor on the dysfunctional Web site for the Affordable Care Act is filled with executives from a company that mishandled at least 20 other government IT projects, including a flawed effort to automate retirement benefits for millions of federal workers, documents and interviews show.
CGI Federal, the main Web site developer, entered the U.S. government market a decade ago when its parent company purchased American Management Systems, a Fairfax County contractor that was coming off a series of troubled projects. CGI moved into AMS’s custom-made building off Interstate 66, changed the sign outside and kept the core of employees, who now populate the upper ranks of CGI Federal.

Graphic

A look at the consumer's route through the HealthCare.gov website and the potential failure points.

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A look at the consumer’s route through the HealthCare.gov website and the potential failure points.

They include CGI Federal’s current and past presidents, the company’s chief technology officer, its vice president for federal health care and its health IT leader, according to company and other records. More than 100 former AMS employees are now senior executives or consultants working for CGI in the Washington area.

A top CGI official said this week that the company is “extremely proud” of its acquisition of AMS. Lorne Gorber, CGI’s senior vice president for global communications, said CGI had been aware of the AMS “trip-ups” but has transformed the AMS culture over the past decade. “Anyone at CGI who came from AMS would not be able to find any similarities in how they work today to how they worked a decade ago,’’ Gorber said.

Article continues: http://www.washingtonpost.com/politics/health-care-web-sites-lead-contractor-employs-executives-from-troubled-it-company/2013/11/15/6e107e2e-487a-11e3-a196-3544a03c2351_story.html?hpid=z1