Thank you for sharing!

Your article was successfully shared with the contacts you provided.
People come to Washington to make their reputations, but few, the saying goes, leave with them unscathed. The same might be said of those who helped lead the U.S. reconstruction efforts in Iraq, which have been bedeviled by inefficiencies, misunderstandings, and corruption from the start. Now, one such official has embarked on a fight to restore his reputation, which, he argues in a lawsuit filed in the U.S. District Court for the District of Columbia, has been sullied by false allegations about him that a Pentagon insider leaked to the press. A longtime telecommunications engineer with AT&T’s Bell Laboratories, Daniel Sudnick was sent to Baghdad in August 2003 as a senior adviser in the Coalition Provisional Authority‘s communications ministry and tasked with restoring the country’s telephone and communications systems. The trouble began, Sudnick says, in early 2004, when he discovered what he believed was an attempt at bid-rigging a contract by John Shaw, then-deputy undersecretary for defense for international technology security, who wanted to give a no-bid deal for the creation of a first-responders network to a consortium of telecommunications officials. Sudnick, 57, says in his complaint, which was filed in April, that he reported the problem to his superiors but was forced to resign a few weeks later. Then, Sudnick alleges, Shaw unlawfully leaked allegations to the press that he had taken bribes while arranging other cellular-company licenses. After returning to Washington, Sudnick says, he tried to find a new job and interviewed for a number of “senior-level positions at brand-name companies,” but once the companies found out about the allegations, “I became radioactive and all those invitations just vanished.” Shaw was investigated by the FBI over Sudnick’s allegations of bid-rigging but was eventually cleared. And Shaw himself was eventually pushed from the Pentagon in December 2004 for unrelated reasons. Yet, Sudnick argues, the Defense Department has done nothing to restore his image, and so he is seeking damages of at least $3 million from both the department and Shaw for violations of the Privacy Act — allegations similar to those leveled by Wen Ho Lee, the former nuclear scientist wrongly accused of spying for China, and bioweapons scientist Steven Hatfill, whose name appeared all over the media after Justice Department officials leaked that he was a suspect in the 2001 anthrax attacks. The Pentagon is expected to reply to Sudnick’s complaint by July 21. A Defense Department official declined to comment. On June 21 the clerk of the court issued a default judgment against Shaw for failing to respond on time. Shaw denies the accusations and has asked Judge Ellen Huvelle to set aside the judgment. “The entire complaint is a compendium of false allegations which are a replay of a smear campaign that Sudnick set in motion a year ago and which the FBI has shown to be absolutely false,” Shaw says. “I anticipate working closely with the Defense Department to dismiss this folly.” BIG IDEAS, POOR MANAGEMENT Sudnick has been a Navy officer and briefly served in the Pentagon during the George H.W. Bush administration. In the summer of 2003 the Defense Department called him in for an interview, where he met Shaw for the first time, and in just a few weeks Sudnick was on a plane to Iraq. His first assignment was to license cellular contracts inside the country. Under Saddam Hussein there had been no competition, just a single government-backed telephone operator, the Iraq Telephone and Post Co., which was woefully inefficient, relied on an antiquated infrastructure, and had virtually no functioning cell phone system. Sudnick got to work, and by December he had lined up three Iraqi companies on two-year licenses, each with a designated geographic zone: north, central, and south. There were some complaints about the license standards and how the contracts were split among geographic zones, says Alan Chvotkin, general counsel of the Professional Services Council, a trade association of government contractors. At least one company launched a bid protest at the Government Accounability Office, but it was denied because of the agency’s lack of jurisdiction over matters that don’t involve federal agency funds, like the CPA in Iraq. Still, former associates of Sudnick recall him as a motivating leader — a tall man with an athletic build and a full head of silvery hair who would often gather his team around a white board to engage in “big-picture” thinking about their goals. “Dan was very much an idea person. He looked at a 60,000-foot level,” says Michael Rumberger, a telecommunications consultant based in Seattle who worked under Sudnick in Baghdad. “Unfortunately he was not a good manager when it came to allocating his personnel resources.” That flaw slowed the office’s plan to set up a regulatory body similar to the U.S. Federal Communications Commission. Sudnick flew back to Washington a few times in the fall of 2003 to interview potential recruits, using Shaw’s office as a base. Meanwhile, Sudnick’s office had taken responsibility for another project that would become the focus of his dispute with Shaw: creating a contract for a first-responders network that would allow communication between law enforcement and military personnel throughout the country. Sudnick’s team got to work on a test phase that would look at competing technologies from interested companies, but Defense Department officials put pressure on them to complete the first-responders system quickly, former associates say. One of those officials was Shaw, who, according to e-mails attached to the complaint, pushed Guardian Net, a consortium of telecommunications officials from companies such as Qualcomm, for the deal. “We were under tremendous pressure by Shaw to use his group for this contract,” says Bonnie Carroll, Sudnick’s assistant in Baghdad. Shaw asked Sudnick to meet with the consortium on one of his visits to Washington. Their pitch: Because the group had teamed up with Nana Pacific, an Alaska Native corporation, it could garner a no-bid contract. Government rules require that certain minority and underrepresented groups be given preference over other bidders so long as they meet the technical requirements. Under the name Liberty Mobile Holdings Inc., the consortium had tried — and failed — to win a contract for the cellular network. (Both Liberty Mobile Holdings and Guardian Net hired the same lobbyist, Don De Marino, who was a member of the consortium’s board of directors. De Marino says he was also a longtime friend of Shaw’s from their earlier days in the Commerce Department.) One of the central features of their plan was to use a particular digital technology known as CDMA, which was developed by Qualcomm and hadn’t gained much market share in the Middle East. For someone like Shaw, using the rules that allow groups associated with an Alaska Native corporation to win no-bid contracts was a vehicle to speed up the lengthy bidding process; others saw the effort as a way to sideline an open bid and favor a particular technology. “We didn’t want to lock it into any one technology,” says Fred Matos, a telecommunications analyst with the Commerce Department who worked on the bid with Sudnick. “We wanted to give everyone an equal playing field.” The complaint alleges that Shaw received a copy of the technical requirements for the contract and then urged Nana to write in that the winner of the first-responders network would be “able to offer nationwide commercial cellular service on a nationwide basis throughout Iraq.” Sudnick says he balked at the change. It would add another cell phone provider — and one that wasn’t paying license fees. He advised that the consortium’s bid be rejected. Then-CPA head L. Paul Bremer agreed, and the sole-source bid was dropped, according to the complaint. Shaw’s reaction was swift. “You effectively confirmed the lack of adequate coordination that concerned everyone here,” Shaw wrote to Sudnick in a March 12 e-mail, according to the complaint. SACKING SUDNICK Sudnick left Baghdad in February 2004 to brief the National Security Council on his work. But when he returned to Iraq a new set of managers had come in, led by John Redd, now head of the National Counterterrorism Center. Sudnick was told he no longer had authority over the first-responders system. A few weeks later, he was asked to resign or be fired. Sudnick complied, and by April 5 was back in Washington. Shaw had been given special investigative authority over technology transfers by the Pentagon’s inspector general, Joseph Schmitz, who was later forced to resign under a congressional probe. In early April, the complaint alleges, Shaw approached reporters at six news outlets — The Washington Times, the Financial Times of London, the Los Angeles Times, ABC News, NBC News, and Newsweek — with a preliminary report he wrote up for the inspector general alleging that Sudnick had taken bribes during the cell phone licensing bid. The Washington Times published an article based on Shaw’s leak, alleging that American officials, including Sudnick, were under investigation. A March 2005 article by Newsmax, an Internet news site, also named Sudnick, according to the complaint. As to Shaw, the Defense Department’s inspector general referred the allegations about him to the FBI in 2004. In October 2005 a Pentagon official told the Los Angeles Times the probe had been dropped. Meanwhile, Sudnick hasn’t been able to find work in his field. Instead he’s relied on his friend Carroll from Baghdad, who brought him into a Washington-based nonprofit she launched, Tragedy Assistance Program for Survivors, which counsels families who have lost relatives in war. “It’s very difficult when the government and the force of the government is brought to bear against you wrongly,” says Timothy Mills, Sudnick’s attorney, who recently left Patton Boggs for New Jersey-based Maggs & McDermott. “We believe we will have his reputation vindicated.”
Emma Schwartz can be contacted at [email protected].

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.