Report looks at Gibbons ties with Reno software entrepreneur
November 1, 2006
LAS VEGAS ” A news report is raising a series of questions about ties between Rep. Jim Gibbons, the Republican candidate for Nevada governor, and a Reno-based software entrepreneur and political donor.
A report today by the Wall Street Journal focuses on the relationship between Gibbons and Warren Trepp, owner of eTreppid Technologies, a company with millions of dollars in classified federal software contracts from the Air Force, U.S. Special Operations Command and the Central Intelligence Agency.
The Journal also reported that Trepp and his wife hosted Gibbons and his wife, former state Assemblywoman Dawn Gibbons, R-Reno, and others on a weeklong Caribbean cruise in March 2005. Trepp also has been a generous Gibbons campaign supporter.
Gibbons also got unreported gifts of cash and casino chips from Trepp, according to sworn testimony in a civil lawsuit filed in February in federal court in Reno.
Gibbons and Trepp deny unreported payments, with Gibbons calling the claims “outrageous.”
“I am not hiding a damn thing,” he said, “and Warren is not the kind of person who’d do anything like that.”
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Gibbons also said there was nothing improper about the Caribbean trip, Trepp’s campaign contributions or his efforts to open doors in Washington for Trepp. He said eTreppid won business on its merits and that he had nothing to do with any classified contracts.
“My connection was to get people to evaluate the technology,” Gibbons said, describing Trepp as a longtime friend and “like a younger brother to me.” He added their wives are best friends.
Trepp, 56, is known on Wall Street as the one-time chief trader for Michael Milken at Drexel Burnham Lambert, which collapsed in 1990 following a criminal investigation into junk-bond abuses.
Gibbons, 61, is locked in a tough gubernatorial battle with Democratic state Sen. Dina Titus. Gibbons’ double-digit lead in earlier polls has shrunk to a statistical tie since a cocktail waitress accused him of assaulting and propositioning her after a night of drinking last month in Las Vegas. Gibbons has denied any impropriety. Police are investigating.
A former combat pilot and decorated Vietnam veteran, Gibbons has served five terms in the House and has served on Intelligence and Armed Services committees, among others.
Gibbons’ campaign manager, Robert Uithoven, said Wednesday the congressman supports developing Nevada-based businesses, and has been a strong supporter of defense technology particularly after the terrorist attacks of Sept. 11, 2001.
“Funding that was provided to eTreppid was supported by our entire Nevada congressional delegation, not just Jim Gibbons,” Uithoven said.
“One of Jim Gibbons’ responsibilities as a representative of Nevada is to try to support communities and businesses in the state,” Uithoven added. “eTreppid provides well-paying high skilled jobs, and one of the programs helps keep our nation safe.”
Trepp told the Journal that Gibbons acted at all times in the nation’s best interests.
“If a member of Congress becomes aware of a technology they believe will be beneficial to the country, don’t they have a duty to bring it to the attention of the appropriate governmental agencies?” Trepp asked in an emailed response to Journal questions.
“Given my longstanding personal relationship with Jim and his position on the Intelligence Committee, it was natural for me to show him our technology,” he said.
On the Caribbean trip, the Trepps hosted the Gibbonses and others including actors Patrick Swayze and John O’Hurley, who played the role of J. Peterman in the “Seinfeld” television series, on a weeklong Caribbean cruise in March 2005. The Trepps and Gibbonses flew back to Nevada after the cruise on a chartered Boeing 727 paid for by Trepp.
Dawn Gibbons said she gave a $1,654 check to Trepp’s wife to help pay for the trip, and put $1,508 on her credit card for on-board expenses. An agent for the cruise line estimated the cost of a comparable cruise for a family of three at more than $10,000, excluding airfare.
Uithoven said Wednesday the Gibbonses paid the full amount requested by their hosts, adding, “They wanted to pay their way, they were told how much to pay and they paid it.”
Federal ethics rules require a public disclosure by members of Congress when they receive gifts or make reimbursements. Gibbons said he believed the cruise was an exception because he and Trepp are longtime friends.
Kenneth Gross, a former Federal Election Commission attorney now at Skadden, Arps, Slate, Meagher & Flom LLP in Washington, told the Journal there is a friendship exemption but anything valued at more than $250 must get written approval from the House ethics committee and in most cases be publicly reported.
Public records show Trepp and separate Trepp companies and partnerships have contributed almost $100,000 to Gibbons. The entities, many of which list the same mailing address, gave the maximum amount on the same day last year.
Nevada law prohibits individuals or corporations from giving more than $10,000 to a candidate in a single election cycle. But Gibbons said the campaign contributions didn’t violate Nevada law because they came through different corporate entities.
Trepp said he believes all the contributions complied with state law and had “nothing to do at all with any federal contracts.”
The allegations of unreported gifts of cash and casino chips were made by a former eTreppid executive, Dennis Montgomery, in a civil suit between Trepp and Montgomery over the rights to certain software code.
The legal dispute, which hasn’t been previously reported, sheds light on a shadowy world of black-budget contracting and Gibbons’ efforts to help fund programs in which eTreppid was involved.
Trepp said eTreppid won classified work on merits and already had government contracts before Gibbons starting making introductions on the company’s behalf.
Uithoven said there was “no quid pro quo whatsoever” for contributions from contractors. And while some funding was secret, “it was because of the sensitive nature of the work” and not to avoid public scrutiny, Uithoven said. He also said Congress has no role in classifying the contracts.
Trepp, a Drexel partner, paid an estimated $19 million to help settle civil claims against the firm, without admitting culpability in the case. He founded eTreppid in Reno in 1998 with Montgomery, a software developer who served as chief technology officer, according to court papers.
Between 2003 and 2005, Gibbons repeatedly arranged meetings and demonstrations for eTreppid executives with top Air Force generals, both in Washington and Reno, according to congressional staff and company documents.
In the civil suit, Montgomery says he was pushed out of the company by Trepp in January of this year. Trepp, in turn, charged that Montgomery stole classified tapes from eTreppid when he left.
On March 1, FBI agents raided Montgomery’s home. They seized computers and disks, but didn’t find any classified material, court records in the civil suit show. Montgomery has sought the return of his property, alleging that Trepp used his political influence to get local FBI agents to intervene in what was essentially a private business and copyright dispute.
Trepp denies Montgomery’s claims and says he will fight the lawsuit.