thedrifter
12-06-05, 12:43 PM
December 12, 2005
Exec at vest-producing firm catches flak over big party
By Kelly Kennedy
Times staff writer
The chairman of a company that produced 18,000 body armor vests being recalled by the Army and Marine Corps is catching flak for a multimillion-dollar bat mitzvah he threw for his 13-year-old daughter.
Entertainers Steven Tyler, Tom Petty, Stevie Nicks, 50 Cent and Don Henley performed Nov. 26 at New York City’s Rainbow Room for Elizabeth Brooks and 150 of her friends, a club spokeswoman said.
Gossip columnists report the party featured cocktail serenades from Kenny G and $1,000 kiddie gift bags complete with new iPods.
Just nine days earlier, Marine Corps Times reported that Army and Marine officials were recalling 18,000 vests after it was revealed they had been fielded even though a number of them had failed ballistics tests.
Point Blank Body Armor, which manufactured the recalled vests, is a subsidiary of DHB Industries, founded by David H. Brooks, whose bat-mitzvah bash caught the eye of the tabloid newspapers.
Brooks, DHB chairman, did not return phone calls. DHB spokesman Bruce Reuben said Brooks had every right to throw the party.
“This was not corporate money,” Reuben said. “This was a private event, a family matter. I think this was a celebration of a cherished Jewish ritual — coming of age.”
He also said the $10 million figure cited by several media organizations was “wildly exaggerated,” but refused to give a figure for the cost of the celebration.
Shareholders have filed a class-action lawsuit against DHB, alleging that the company failed to reveal flaws in the body armor.
Brooks’ rapid rise in salary has caught the eye of critics and shareholders.
In 2001, Brooks’ salary was $500,000. In 2004, a year after the war in Iraq started, it shot up to $70 million, according to Sarah Anderson, co-author of Executive Excess, mostly due to contracts with the U.S. military.
Anderson said her book featured Brooks because he has made more money than any other individual directly from the war in Iraq.
News of the ritzy party did not impress a former soldier who has established himself as a watchdog for troops’ interests.
“The bottom line is, there’s a soldier patrolling Ramadi right now for $20,000 a year, and this guy is throwing a $10 million party for his daughter,” said Paul Rieckhoff, who served as an infantry platoon leader with the 3rd Infantry Division in Iraq.
“You know, maybe with $10 million, he could have spent more on research and development of those vests” said Rieckhoff, who formed Operation Truth, an advocacy group for Iraq and Afghanistan veterans.
Shareholders, meanwhile, have been questioning the company’s actions, too. In September, the law firm Wechsler Harwood LLP filed a securities class-action lawsuit against DHB, alleging that officials failed to tell shareholders that the company’s bulletproof vests contained “a material amount of Zylon fibers whose effectiveness at stopping bullets degraded over time,” according to a Wechsler Harwood press release.
The recalled Zylon vests came from police contracts but affected all shares.
The release states that DHB officers sold 11.2 million shares, and Brooks sold more than 10.4 million shares for proceeds exceeding $204 million.
In August 2005, after officials sold their shares for $19.51 each, the company announced it would replace all Zylon vests. By Aug. 31, the stock had dropped to $4.58 a share, according to Wechsler Harwood.
According to the lawsuit, the company violated the Securities Exchange Act of 1934 by knowingly withholding information that could adversely affect share prices.
DHB officers announced in September that they would “vigorously defend” the company against “a number of lawsuits.”
“The company adamantly denies that any of its public disclosures have been false or misleading,” a DHB Industries press release states.
The release states that all of the company’s equipment is safe, including that containing Zylon, and said that includes “substantially” all of the body armor sold to the army and Marine Corps.
On Dec. 2, the company announced it had hired a new chief operating officer, Rick Hockensmith, who has worked with DHB for 10 years as a sales representative specializing in military and federal government sales.
Retired Army Gen. Larry Ellis, president of DHB and former commanding general of the Forces Command, did not return phone calls.
“We continue to strengthen our management team at all levels, and we are pleased to have Mr. Hockensmith as a key leader,” Ellis said in a press release.
Rieckhoff said the new officer, as well as all Americans, might want to take a “long, hard look at the idea of profit on the battlefield.”
“[Brooks] has every right to throw a party, but it’s just bad taste,” Rieckhoff said. “But I’m sure that if his daughter, God forbid, got drafted, she’d have a top-quality vest.”
Kelly Kennedy covers the Army.
Ellie
Exec at vest-producing firm catches flak over big party
By Kelly Kennedy
Times staff writer
The chairman of a company that produced 18,000 body armor vests being recalled by the Army and Marine Corps is catching flak for a multimillion-dollar bat mitzvah he threw for his 13-year-old daughter.
Entertainers Steven Tyler, Tom Petty, Stevie Nicks, 50 Cent and Don Henley performed Nov. 26 at New York City’s Rainbow Room for Elizabeth Brooks and 150 of her friends, a club spokeswoman said.
Gossip columnists report the party featured cocktail serenades from Kenny G and $1,000 kiddie gift bags complete with new iPods.
Just nine days earlier, Marine Corps Times reported that Army and Marine officials were recalling 18,000 vests after it was revealed they had been fielded even though a number of them had failed ballistics tests.
Point Blank Body Armor, which manufactured the recalled vests, is a subsidiary of DHB Industries, founded by David H. Brooks, whose bat-mitzvah bash caught the eye of the tabloid newspapers.
Brooks, DHB chairman, did not return phone calls. DHB spokesman Bruce Reuben said Brooks had every right to throw the party.
“This was not corporate money,” Reuben said. “This was a private event, a family matter. I think this was a celebration of a cherished Jewish ritual — coming of age.”
He also said the $10 million figure cited by several media organizations was “wildly exaggerated,” but refused to give a figure for the cost of the celebration.
Shareholders have filed a class-action lawsuit against DHB, alleging that the company failed to reveal flaws in the body armor.
Brooks’ rapid rise in salary has caught the eye of critics and shareholders.
In 2001, Brooks’ salary was $500,000. In 2004, a year after the war in Iraq started, it shot up to $70 million, according to Sarah Anderson, co-author of Executive Excess, mostly due to contracts with the U.S. military.
Anderson said her book featured Brooks because he has made more money than any other individual directly from the war in Iraq.
News of the ritzy party did not impress a former soldier who has established himself as a watchdog for troops’ interests.
“The bottom line is, there’s a soldier patrolling Ramadi right now for $20,000 a year, and this guy is throwing a $10 million party for his daughter,” said Paul Rieckhoff, who served as an infantry platoon leader with the 3rd Infantry Division in Iraq.
“You know, maybe with $10 million, he could have spent more on research and development of those vests” said Rieckhoff, who formed Operation Truth, an advocacy group for Iraq and Afghanistan veterans.
Shareholders, meanwhile, have been questioning the company’s actions, too. In September, the law firm Wechsler Harwood LLP filed a securities class-action lawsuit against DHB, alleging that officials failed to tell shareholders that the company’s bulletproof vests contained “a material amount of Zylon fibers whose effectiveness at stopping bullets degraded over time,” according to a Wechsler Harwood press release.
The recalled Zylon vests came from police contracts but affected all shares.
The release states that DHB officers sold 11.2 million shares, and Brooks sold more than 10.4 million shares for proceeds exceeding $204 million.
In August 2005, after officials sold their shares for $19.51 each, the company announced it would replace all Zylon vests. By Aug. 31, the stock had dropped to $4.58 a share, according to Wechsler Harwood.
According to the lawsuit, the company violated the Securities Exchange Act of 1934 by knowingly withholding information that could adversely affect share prices.
DHB officers announced in September that they would “vigorously defend” the company against “a number of lawsuits.”
“The company adamantly denies that any of its public disclosures have been false or misleading,” a DHB Industries press release states.
The release states that all of the company’s equipment is safe, including that containing Zylon, and said that includes “substantially” all of the body armor sold to the army and Marine Corps.
On Dec. 2, the company announced it had hired a new chief operating officer, Rick Hockensmith, who has worked with DHB for 10 years as a sales representative specializing in military and federal government sales.
Retired Army Gen. Larry Ellis, president of DHB and former commanding general of the Forces Command, did not return phone calls.
“We continue to strengthen our management team at all levels, and we are pleased to have Mr. Hockensmith as a key leader,” Ellis said in a press release.
Rieckhoff said the new officer, as well as all Americans, might want to take a “long, hard look at the idea of profit on the battlefield.”
“[Brooks] has every right to throw a party, but it’s just bad taste,” Rieckhoff said. “But I’m sure that if his daughter, God forbid, got drafted, she’d have a top-quality vest.”
Kelly Kennedy covers the Army.
Ellie