The former chairman of the Utah Board of Pardons says he successfully lobbied Republican Sen. Orrin Hatch to land a Sandy-based company potentially billions of federal dollars, according to a breach of contract lawsuit the man filed against the company.
Michael Sibbett, now a lobbyist, said the company unlawfully terminated its contract after Congress appropriated the money and won't compensate Sibbett's firm according to the contract.
The suit filed a month ago in 3rd District Court says Sibbett and two other former state officials were hired by Secure Alert to attempt to lobby criminal justice authorities and to assist in drafting legislation that would increase the chances that Secure Alert's product would be chosen over its rivals.
Sibbett said he, Robin Riggs, former legal counsel for Gov. Mike Leavitt, and Kevin Howard, outside general counsel for the Utah State Retirement Board and Systems and a former legislative attorney, formed the lobbying group HGR Enterprises to capitalize on their extensive contacts in Utah and Washington, D.C.
The suit states the three were "instrumental in assisting Senator Orrin G. Hatch in sponsoring and drafting of the Adam Walsh Child Safety Act of 2006," which passed Congress last July. The bill included a "single-source provision that only the TrackerPAL device can satisfy."
Secure Alert's TrackerPAL uses GPS and cellular technology to keep track of parolees. It also includes a two-way radio feature that allows a parole officer to communicate with a parolee by voice.
The language of the bill calls for electronic monitoring units that contain "global positioning system and cellular technology in a single unit and provides two- and three-way voice communication." The bill didn't specifically mention the Secure Alert product by name.
Sibbett says in the suit that the language pretty much ensured Secure Alert would get the federal funds, to the tune of $2.5 billion to $2.8 billion over the next five years.
In exchange for their efforts the suit says Sibbett, Riggs and Howard were contracted to receive 50 to 75 cents per day for each individual who wears the TrackerPAL device over the next five years. Secure Alert also agreed to allow HGR Enterprises to receive up to 50 percent of its compensation in stock at 60 cents per share.
In addition to pulling strings in Washington, the suit states Sibbett and Riggs secured a written contract for TrackerPAL with the Utah Department of Corrections as well as securing "intent language" in the state's budget to purchase the devices. Legislature appropriations minutes dated Feb. 2, 2006, show that Rep. Eric Hutchings, R-Kearns, proposed to allow the Department of Corrections to spend state funds on monitoring devices as an alternative to incarceration. That resulted in $173,000 in funding for a preliminary program.
HGR also persuaded the California Highway Patrol to start a pilot program using 2,000 TrackerPAL units. A new federal standard was established for GPS tracking devices for sex offenders.
However, the suit says that a day after Congress passed the Adam Walsh Child Safety Act, Secure Alert sought to terminate the contract. Sibbett said he and his group were told that Secure Alert believed HGR deserved "far less compensation."
The alleged break in the contract led to filing of the suit last month.
Hatch, who is running for re-election this year, declined to comment on his involvement in introducing the "single-source provision" in the Adam Walsh Child Safety Act.
"We will not comment on any part of a pending legal matter," Hatch spokesman Peter Carr said in a statement. "Congress created these standards to ensure we had what is necessary to truly seek offenders. Everyone involved Senate and House judiciary staff, outside child protection groups and other people interested in this issue agreed these standards were appropriate. Any company that meets the standards in the law can participate."
Hatch's Democratic opponent Pete Ashdown in this year's election said the lawsuit shows how Hatch works for special interests and then gets campaign contributions to help him run again.
"This is the vicious cycle of money in politics that I am fighting against," Ashdown said.
HGR and Sibbett are asking to be paid in excess of $264 million over the next five years as part of their contractual agreement. They are also seeking the right to convert 50 percent of that amount into shares of stock and are seeking punitive damages as well as attorney fees.
Helen Duncan, attorney for Secure Alert, said the company's contract with HGR included a right to cancel the contract up to 30 days after written notice, which, she said, Secure Alert did. Duncan said Secure Alert was not happy with the results of HGR's lobbying efforts.
"Not a single contract has been achieved as a result of their efforts," Duncan said. "What they're trying to do is profit from the success of a company that makes its own product."
Duncan called Sibbett's claims of working deals in Washington, Utah and California "a lot of self-aggrandizement."
Jack Ford, spokesman for the Utah Department of Corrections, confirmed to the Deseret News that it did sign a contract last April with Secure Alert for a pilot program, which includes 50 units a month over two years. So far the program has been slow and currently there are 20 units in use to track parolees.As for who is responsible for the contract, Ford could not say, but he did say that Sibbett was the one who contacted UDC director Scott Carver and gave a personal demonstration of the TrackPAL before the contract was signed.
Contributing: Suzanne Struglinski E-mail: [email protected]
E-mail: [email protected]