PART I of a periodic series: The Terrorism of Racism
WASHINGTON (TEWire) — Reginald Bailey seemed to have done everything right. The 1995 business administration graduate of HBCU North Carolina A&T has never been in trouble with the law; he is a member of the prestigious Alpha Phi Alpha Fraternity; he is a married father of two children and a business owner.
In fact, just five years ago, the now 40-year-old Bailey and his business partner, Walter Gray, were awarded multiple contracts that totaled more than $140 million over a course of four years. The contracts were for management of telecommunications in Iraq and Afghanistan. Bailey’s firm, Worldwide Network Services (WWNS), served as a subcontractor and teaming partner under DynCorp International, a nearly $3 billion-worth U.S. defense contractor.
Fast forward five years later, Bailey, of Southeastern Maryland, has nowhere near his former lifestyle. Like many other Americans, he has even been through periods of concern about his mortgage, his credit rating, and the education of his children, a boy and girl, ages 8 and 4.
How did Reginald Bailey lose so much in so little time? It was not the economy; it was not corruption on his part; it was not due to bad business decisions; nor was it due to excessive spending and greed, all reasons for which people typically lose thriving businesses.
So, how did Worldwide Network Services go down so quickly? According to a May 14, 2008 ruling from an all-White jury of eight people in the U. S. District Court for the Eastern District of Virginia, Reginald Bailey lost his multi-million dollar company simply because he is Black.
In the 4-year court case that appears to be once again coming to a head even after the verdict, Bailey and his partners stood helpless as WWNS went belly up because of pure racism from an unlikely source. That source, according to court documents, was DynCorp – the same billion dollar company that teamed with WWNS seven years ago, resulting in the major contract.
On the flip side, DynCorp, which was acquired by Cerberus Capital Management, a multi-billion dollar corporation that merged with DynCorp in June, 2010, continues to grow from lucrative federal government contracts. It also thrives from investments from public pension funds, which include billions in contribution dollars, with 30 percent of those participants being African Americans.
Now emerging into the court of public opinion, the WWNS v. DynCorp-Cerberus case is viewed by some as a quintessential David and Goliath fight that has civil rights leaders seething.
The Rev. Jesse Jackson Sr. describes the case as “egregious” and “the most significant conviction of racial discrimination by a government contractor to an African-American business in U.S. history.” Among the leading activists seeking justice for WWNS, Jackson wrote his descriptions in an Oct. 26, 2010 letter to Secretary of State Hillary Clinton. The letter continued, “DynCorp has been the benefactor of multiple State Department awards, which comprise of a significant portion of their business and Cerberus’ current strategy to increase the depth and value of DynCorp through acquisitions of companies that also maintain a significant amount of State Department contracts.”
Marc Morial, president and CEO of the National Urban League, has also long advocated for justice in the case. “It’s a case of unfair treatment. It’s also a case of the government standing on the side at the time and not doing anything while one of its contractors treated an African-American business patently unfairly,” Morial said in a recent interview. “Light needs to be shed on it to show some of the trials and tribulations that African-American business owners face when doing business sometimes in the government.”
The National Urban League was among organizations that filed an amicus or “friend of the court” brief to side with WWNS in the case.
Morial said he had never met Bailey when he heard about the case and decided to support him. He says the injustice has grown steadily worse, even after the jury’s verdict, largely because it appears that DynCorp-Cerberus is not clearly and openly disclosing the race discrimination findings while continuing to reap public funds. “If this is not a violation of the civil rights laws, I don’t know what is,” Morial said.
According to federal acquisition regulations an “agency debarring official may debar a contractor on the basis of a conviction of or a civil judgment for an offense indicating a lack of business integrity or for any other ‘serious or compelling’ cause.”
Clinton and other high-powered names escalate the intrigue of the situation. Clinton, on Aug. 12, 2010, responded to a previous letter from Jackson, strongly asserting her commitment to civil rights. But, she declined immediate comment on the Bailey case because it was still in court. Jackson’s Oct. 26 letter pressed Clinton to set up a meeting to help resolve the issue since it is no longer in litigation.
Another high powered name that enters the picture is Frank Zaccanelli, a former top lieutenant of former presidential candidate Ross Perot. Zaccanelli introduced Bailey and Gray to DynCorp’s then President and CEO Steven Cannon. Zaccanelli is a long-time business associate and friend of Bailey, who is still a partner with the company. Cannon, even now, maintains a good relationship with WWNS, says Bailey.
Another high profiled name, former Vice President Dan Quayle, is chairman of an international division of Cerberus Capital Management and is responsible for raising Cerberus funds. Quayle was out of the country and unavailable to comment for this story, according to his executive assistant Kathy Murphy.
DynCorp, through a spokeswoman, Ashley Burke, sent an e-mailed statement to Trice Edney Wire denying any further responsibility in the case. “DynCorp International takes allegations of racial discrimination very seriously,” she wrote. “And our strict code of ethics and business conduct specifically addresses our zero tolerance for any kind of discrimination. Although we strongly disagreed with the verdict in this case, the judgment was paid in full.”
Bailey is determined that his company, in ruins – partially because of the millions of dollars it took to fight DynCorp in court – must be made financially whole as DynCorp-Cerberus continues to prosper.
In May 2008, the jury found DynCorp guilty of race discrimination and awarded WWNS $10 million in punitive damages. On DynCorp’s appeal, a three-judge panel in the U. S. Fourth Circuit Court of Appeals – widely considered the most conservative in the nation – upheld the race discrimination finding on Feb. 12, 2010. But, it set aside the $10 million in punitive damages due to a technicality involving clarity of jury instructions.
The U. S. Supreme Court on Oct. 4, 2010, denied the petition to hear the case.
Despite the loss of the $10 million in punitive damages, the findings upheld by both lower courts are irrefutable. According to court documents, while WWNS employees worked the war zones of Iraq and Afghanistan, DynCorp, now Cerberus:
· Regularly referred to Black WWNS employees and management as “kaffirs,” a racially offensive word used as a disparaging term for South African Blacks. Interpreted to mean infidel or uncivilized, it is considered as equivalent to the N-word in some definitions.
· Stopped making payments to WWNS, causing the company to suffer financially and re