State set to help those affected by company closing
Published Feb. 15, 2011
By Joe Baker
Daily News staff
There will be some ripple effects from the multi-million-dollar defense contract kickback scandal allegedly involving a local defense contractor and Navy command, state officials said. For example, suppliers of Advanced Solutions for Tomorrow suddenly find themselves without a client, since the company laid off its staff and shut its offices in Middletown, Roswell, Ga., and Fairfax, Va., on Monday.
Keith W. Stokes, executive director of the state Economic Development Corp., said Gov. Lincoln D. Chafee has ordered the agency to assist the company's laid-off employees, subcontractors and vendors in any way it can.
"We have to watch this carefully," Stokes said following the organizational meeting of the Special Legislative Commission on Defense Economy Planning held Monday afternoon in Providence. "ASFT has a supply chain. If there's federal funding that has stopped, that's going to hurt those small businesses."
The company announced Monday it was shutting down after the Navy froze its assets in the wake of owner Anjan Dutta-Gupta's arrest Feb. 6 on a charge of bribing a public official in connection with an alleged $10 million kickback scheme involving government contracts. Federal authorities charge Dutta-Gupta teamed with Ralph M. Mariano, a civilian program manager and senior systems engineer, to bilk the Navy by adding change orders to existing contracts for work that never was done. ASFT had about $128 million in legitimate Navy contracts, officials said.
On Monday morning, nearly 100 employees at the Middletown technology company received layoff notices informing them their jobs ended at noon. Chafee immediately ordered Stokes and Charles Fogarty, director of the state Department of Labor and Training, to round up support services for the employees and any other businesses affected by the sudden shutdown.
Stokes said he does not believe there will be widespread impact through the large, tight-knit defense community on Aquidneck Island.
"The good news is that this industry is a pretty robust industry," Stokes said. "It's been pretty stellar. This is an aberration. It's an awful aberration, but it's just an aberration."
But Sen. Louis P. DiPalma, D-Middletown, an engineer for Raytheon Co. for 28 years, said: "I don't see how it can't (have a ripple effect. There's going to be increased scrutiny."
Senate President Teresa Paiva Weed, D-Newport, agreed. "We need to be guarded," she said. "And it makes a commission such as this even more important."
Established by Weed and Speaker of the House Gordon D. Fox, D-Providence, the commission is charged with exploring and recommending ways to support the $1.75 billion defense industry in Rhode Island.
According to an affidavit filed in U.S. District Court in Providence by U.S. Attorney Peter Neronha, Mariano would approve changes to existing contracts and Dutta-Gupta would funnel non-existent work through several subcontractors. The owner of one of the subcontractors, C&S Technology Inc. of Portsmouth, became a cooperating witness and told investigators he would deposit money into bank accounts for Dutta-Gupta, Mariano and Mariano's relatives and friends, including his longtime girlfriend, Mary O'Rourke - identified as MO in the federal affidavit.
O'Rourke, a vice president at ASFT, was president of the Southeastern New England Defense Industry Alliance, a defense industry trade group. In that role, she had been appointed to serve on the new legislative commission that met for the first time Monday afternoon.
But she resigned from the alliance and the commission after the recent arrests of Dutta-Gupta and Mariano.
Stokes said he doesn't know Mariano and only knows Dutta-Gupta casually. But he knows O'Rourke well because she is a longtime member of the Newport County Chamber of Commerce's board of directors.
"I was totally shocked," Stokes said about O'Rourke's name showing up in the federal investigation. "I had no idea whatsoever. That's nothing like the Mary O'Rourke I knew."
Jody Sullivan, who replaced Stokes as director of the local chamber, agreed that O'Rourke has been an asset in the local defense industry and business community.
"She was always great," Sullivan said Monday. "She was a good board member."
Weed said she met O'Rourke through her involvement with SENEDIA.
"In my experience, she was professional and committed to the industry," Weed said.
DiPalma said he has met Mariano on a professional level. "He was a worker like I was," he said. "I was an engineer at Raytheon and he was an engineer for (the Naval Undersea Warfare Center)."
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