Ex-Pentagon official on trial on charges of self-dealing

Published October 5, 2008 4:00am ET



The former head of security for a Pentagon agency that defends the country from nuclear and biological attacks is expected to stand trial Tuesday on charges he conspired to steer large government contracts to a company he helped start.

James E. Wright, the ex-chief of the Security and Counterintelligence Directorate for the Defense Threat Reduction Agency at Fort Belvoir, and his alleged accomplice, John D. Villanueva, a Department of Defense contractor, are scheduled to face a jury starting at 10 a.m. Tuesday in District Judge Liam O’Grady’s federal courtroom in Alexandria.

Both men were indicted in June on charges of conspiracy and committing an act affecting personal financial interest.

According to charging documents, one month after Wright, Villanueva and a third man formed the company VMW Inc., Wright helped steer a $450,000 contract to another company, ZKD Inc., which subcontracted the work to back to VMW, documents said.

To hide Wright’s financial interest in the company, prosecutors said Wright sent a resignation letter to his partners and asked that his shares be transferred to his wife.

“That was the best resignation letter I have ever seen. It almost brought tears to my eyes,” Villanueva allegedly responded in an e-mail, according to court documents. “We’re doing the right thing. … We will become a very dominant force in this arena. … Six to 12 months of exile is worth it.”

After Wright determined that ZKD deserved the contract, Wright expressed concern about future Defense Threat Reduction Agency contracts coming under scrutiny and transferred his company shares to his son, who has a different last name from Wright, documents said.

The Defense Threat Reduction Agency was expected to award a second $9.1 million contract for the same type of services, documents said.

“This would have masked my involvement to a greater extent,” Wright allegedly wrote in an e-mail to Villanueva.