Stewart Could Lose Federal Contracts Defense Department Reviews Contracts After Guilty Plea
Millionaire Republican businessman Thomas Stewart, who illegally funneled contributions into local political campaigns, could lose $50 million in federal contracts because of criminal convictions against him and one of his companies.
Stewart’s contracts to provide food services to the U.S. Defense Department were already in jeopardy because of a tainted meat scandal last year. They are now in further trouble after he pleaded guilty this week to federal election-law violations.
The Defense Logistics Agency, which provides supply support for the military, has proposed that Stewart be stripped of his current contracts, a generally routine action when a federal contractor is convicted of a crime.
In addition, Stewart and Food Services of America could also be barred from holding future contracts with the Pentagon. Food Services is a subsidiary of Stewart’s Seattle-based holding company, Services Group of America.
Stewart, his Seattle attorney, Cyrus Vance Jr., and other lawyers are scheduled to meet with a Defense Department official Tuesday in Washington, D.C., to plead their case on why Stewart shouldn’t lose the contracts.
Roberta Eaton, the agency’s special assistant for contracting integrity, will listen to the arguments and plans to issue her recommendation later.
Food Services was first proposed for loss of the contracts after the company pleaded guilty in June to two misdemeanor counts for selling tainted meat. According to court documents, Food Service’s Kent distributorship took beef and chicken refused by its regular customers, repackaged it and sold it to food “salvagers” at 10 cents to 20 cents a pound. Some of the contaminated meat and poultry ended up in a Tacoma grocery store.
Under a plea deal, the company agreed to pay $400,000 in fines and donate $600,000 more in products to a charity. The company cooperated in the investigation and said the violations were unintentional.
On Wednesday, Stewart pleaded guilty in federal court to one misdemeanor count of violating federal elections laws, as did Dennis Specht, SGA’s chief financial officer. Under a plea deal, each was sentenced to 60 days of home confinement with work release, ordered to perform 160 hours of community service and fined $100,000.
Food Services pleaded guilty to 24 counts of violating elections laws and was fined $4.8 million.
Food Services currently holds four contracts, worth $16.7 million annually for the next four years, to provide bulk-food services to military installations in the Northwest, spokeswoman Tara Jennings-May said.
The company will be allowed to continue providing services through the first year of those contracts.