Wedtech was a defense contractor in the Bronx, New York, that achieved infamy in the 1980s with a series of crimes, including fraud, bribery, and hiring a man named E. Robert Wallach to land them defense contracts. Wallach was a long-time friend of then-U.S. Attorney General Edwin Meese III, whose corrupt work on WedTech's behalf ended his career.

The company had been founded by a Puerto Rican man named John Mariotta as Wellbilt Electronic Die Corporation, and originally it made baby carriages. He soon brought in a partner named Freddie Neuberger, recast the company as a defense contractor, and changed its name to Wedtech.

Politicians loved the company -- it was proof of the power of private industry to revitalize depressed communities like the Bronx. In the words of Ronald Reagan in 1980, "today, through Wedtech, John Mariotta not only has built a successful corporation, he's helping hundreds of people who would otherwise be condemned to menial jobs or a life on the dole."

However, Wedtech never played on a fair playing field. They won their defense contracts under a Small Business Administration program that allowed minority-owned businesses to receive government contracts on a no-bid basis. (This was basically fraudulent, as Neuberger, who was not a member of any favored minority group, owned more than half of the company. They presented forged documents to the SBA showing the opposite). After Wedtech went public, the company also gave shares of stock as payment to lawfirms that employed U.S. congressmen. If the company did well, these congressmen profited. In many regards, the story resembles that of Halliburton, writ small.

Their reach within the Reagan administration expanded considerably with the help of Lyn Nofziger, who introduced them to Elizabeth Dole, then head of the office of public liaison. With her help, they won a contract to build $32 million worth of small engines for the army. This was followed by other no-bid deals, and the company reached sales of over $250 million in the next two years.

By Ronald Reagan's second term, the scope of the company's crimes had increased. They were double-billing the government and generated billions of dollars in false invoices. Apparently, Neuberger was responsible for much of this and was afraid Mariotta would rat him out if the crimes were discovered. He looked into the possibility of having Mariotta killed but the scandal broke before he had a chance to execute this plan.

The scandal reached through the Reagan adminsistration, with Ed Meese as the highest figure implicated. His lobbying on behalf of the company formed the backbone of a fourteen month independent counsel investigation and subsequent 800-page report on Meese's corrupt behavior in office. Though no charges were ever brought against him, Meese resigned upon delivery of this report in 1988.

Others were not so lucky. Between local, state, and federal governments, 20 government officials were convicted of crimes in connection with WedTech. Martha Stewart take note -- in three cases, including that of E. Robert Wallach -- the verdicts were overthrown because Anthony Guariglia, Wedtech's final president and a key government witness, lied on the stand.

Bloomberg News 7/30/1993
Christian Science Monitor, 12/31/1998
Wedtech v. Biaggi and Ehrlich, 1992. 137 B.R. 575 5/24/2004
Bull Street - The Art of the Con 1/1/2004

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