Vested Interests

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Point Blank's Power told New Times that the U.S. government has never informed the company of quality concerns. But a memo signed by Point Blank's president contradicts that claim. On November 30, 2004, Hatfield signed a waiver that allowed the release of body armor that the company knew had not met government safety standards.

On May 4, 2005, the U.S. Marine Corps recalled 5,277 Interceptor vests manufactured by Point Blank Body Armor. In a statement provided by Point Blank, Lt. Col. Patricio, who has since retired, said the vests in question later passed independent tests and were not substandard or defective. "I would personally take any vest and plates in the inventory and deploy to Iraq today," Patricio said in his statement.

Perhaps to stave off potential investor fallout, on the day before the recall, DHB Industries promoted Point Blank's Hatfield to DHB chief operating officer and named her successor: retired four-star Army Gen. Larry Ellis, a 35-year veteran who previously led a command of more than 500,000 soldiers.

But the former military man has been unable to prevent DHB's falling stock price. On May 4, DHB closed at $8.33 per share. It's since slid to roughly $3.75 per share. And on September 16, California lawyer David R. Scott filed a class-action lawsuit against DHB, alleging, among other things, insider trading and investor fraud because "the company falsely represented the quality and safety of its body armor products."

At a recent investor conference call, Ellis reiterated that quality is the primary goal at DHB's Point Blank: "DHB has the best body armor product in the industry. This point is dear to my heart and to the values of DHB. We place enormous efforts on product innovations and ensuring that our customers are our top priority. DHB wants to ensure that the men and women who protect this nation, both military and law enforcement, are confident that the protective gear they wear will do what it's meant to do when it's put to the test -- that is, save their lives."

But David Goldenberg, Rep. Hasting's legislative director, still has significant concerns about the quality of the armor strapped to young troops overseas.

"It's beyond irresponsible that troops went into the war with an inadequate amount of body armor and the possibility that the body armor they're wearing is flawed," he said. "Part of what we need to do is guarantee the quality of Point Blank's body armor. But the onus also falls to the military. If the military knowingly accepted defective body armor solely to cover up the fact that it was irresponsible and did a horrible job planning for this war, then those are questions that the president has to answer."

On August 17, more than a month after Pfc. Stephen Tschiderer's body armor stopped a sniper's bullet, national news media were still clamoring over his story. Matt Lauer, of NBC's Today show, was in Baghdad for a story on the war. He pulled Tschiderer into the camera's view.

Dressed in a hat and camouflage, Tschiderer held up a large ceramic plate like the one that was inserted into his Interceptor vest on July 2. "This is a version of the plate that stopped the round and saved my life," Tschiderer said.

Lauer stepped back and held the microphone to his mouth. "So when people say, 'Boy, they wear that body armor, and it's hot, you say, 'Forget the heat. These things save lives. '"

"Oh, yeah," Tschiderer replied.

And saving lives in the body armor business has never been better.

On July 20, 18 days after Tschiderer took a sniper bullet to the chest, Point Blank Body Armor received an additional $10.1 million contract from the U.S. government.

It's going to be another profitable year.

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Trevor Aaronson
Contact: Trevor Aaronson