Body Armor riches

Every once in a while, I go back to do a little more research on something I've blogged about in the past. Back on January 17th, I blogged briefly about David H. Brooks, CEO of DHB Industries which ownes Point Blank, the principal supplier of body armor to the Pentagon. Among other things I mentioned, he gave his daughter a $10,000,000 bat mitzvah.

Today, I re-Googled our Mr. Brooks and found a NY Times article from January 22nd which I missed when it was published. Here are some more juicy tidbits about our Mr. Brooks:

The Marines and the Army recalled about 23,000 Point Blank vests from the field last year after The Marine Corps Times reported that the Marines acquired the vests despite warnings from Army personnel that the vests had what the newspaper described as "critical, life-threatening flaws." The Marine Corps issued a statement in November saying that there was "no evidence to suggest that soldiers or Marines have been at risk, or that these vests will not protect against the threat they were designed to defeat."

The Marine Corps declined to respond to repeated interview requests for this article. An Army spokesman said in an e-mail message that Army officials would not grant an interview because it "would be inappropriate, considering DHB and Point Blank Armor business arrangement."

DHB declined to make any of its executives or directors available for interviews, including David H. Brooks, 51, its founder, namesake, largest shareholder and chief executive. In regulatory filings, DHB said it had delivered more than 850,000 vests to the military since 1998, and a company spokesman, Bruce Rubin, said the vests that the military withdrew were only a small percentage of those it supplied most recently...

Mr. Brooks, who, along with his wife and children, cashed in DHB stock worth about $186 million in late 2004, has also courted attention and controversy. In November, Mr. Brooks held a bat mitzvah party for his daughter atop Rockefeller Center in New York, which an article in The Daily News said had cost $10 million. Mr. Rubin characterized the figure as exaggerated. He declined to comment on other elements of the article, which said that Mr. Brooks had used his company's jet to fetch a clutch of rock and hip-hop stars, ranging from Don Henley to 50 Cent, to perform at the celebration; that he changed out of an all-leather, metal-studded suit into a hot-pink suede suit as the party heated up; and that he supplied guests with goody bags stuffed with $1,000 worth of merchandise.

The $186 million stock sale occurred four months before reports surfaced of possible problems with vests in Iraq, and reduced Mr. Brooks's stake in DHB to 15 percent from 48 percent in 2003. It also preceded DHB's announcement last fall that it would take a $60 million charge to reserve for a potential class-action settlement and replacement costs related to legal disputes surrounding vests the company had sold to police departments nationwide. Those events helped DHB's shares to plunge 76 percent last year, but a lawyer representing Mr. Brooks said that none of his client's stock sales were based on nonpublic information.

Over the years, DHB has bestowed unusual financial rewards on Mr. Brooks. From 1997 to 2004, he was entitled to lay claim to 10 percent of the company's annual profits as reimbursement for personal and business expenses. During that time, he rang up $2 million in personal charges on DHB's corporate credit cards, according to securities filings. For one year, between 1996 and 1997, he was also entitled to 10 percent of the company's annual profit as a bonus, a right that Mr. Rubin said Mr. Brooks had never exercised. Mr. Brooks' total annual compensation in 2004, the most recent year for which data are available, was about $73.3 million. Of that amount, $69.9 million represented options he exercised as part of his $186 million stock sale that year. DHB itself had profits in 2004 of $49.5 million...

... the Securities and Exchange Commission is currently investigating aspects of Mr. Brooks' compensation and other corporate transactions, according to the company's securities filings. Mr. Brooks and the company declined to comment on the investigation, as did the S.E.C.

I hope the S.E.C. is investigating insider trading as well, a problem which Mr. Brooks has had to deal with before, as the article also points out.

This is not the first time that regulators have examined Mr. Brooks' activities. In 1992, the S.E.C. fined him heavily and barred him from the brokerage business for five years for improprieties related to an insider trading scandal. That aspect of Mr. Brooks' résumé appeared in the company's public filings until the late 1990's, and then disappeared.

Nobody's fund a direct connection to Bush -- yet, but he certainly seems to fit the pattern of Bush's cronies pretty well.