In what’s rapidly turning into a week Dell would really like to forget, the company is in court in New Orleans accused of shady practice in securing a deal to install CCTV cameras in the city, including paying for vacations for Mayor Ray Nagin and his erstwhile technology chief, Greg Meffert.
On the day after the Attorney General fined the company $4 million for deception in the Big Apple, Dell stands accused in the Big Easy of conspiring with City Hall to kick two other camera vendors off the lucrative contract.
The corruption charges are based on email messages that the plaintiffs – Southern Electronics and Active Solutions – claim show that Meffert wanted them out and arranged to have one of his vendors and associates, Mark St. Pierre, set up a deal with Dell. When Meffert left City Hall in 2006, it was to take up a $600,000 consultancy job with St. Pierre’s company, NetMethods, at the same time as another company owned by St. Pierre, Veracent, signed a deal to become Dell’s camera supplier.
Meffert charged $130,000 to a corporate credit card belonging to St. Pierre. Included in the charges are vacation expenses for Meffert, Nagin and their families on a 2004 trip to Hawaii, along with first-class air travel for the Nagin family to Jamaica shortly after Hurricane Katrina hit the city.
Dell claims Southern Electronics and Active Solutions were kicked out for underperforming, but if the case against Dell is proven, they could be in line to receive massive compensation payments. They claim that internal Dell documents show that the company was determined to break into the multi-billion CCTV market and that the hardware giant used its pals inside City Hall to muscle in on the deal.
They also claim that Dell – which wasn’t allowed to sell cameras itself – referred to them as ‘eyeballs’ or ‘surveillance modules’ in documentation to circumvent the restriction and that the company was in talks with the city as long ago as 2003.
Meffert and St. Pierre say they will plead the Fifth Amendment if forced to testify and that they can’t afford to pay a full-time team of lawyers for the trial which is expected to run for at least three weeks.
UPDATE: In an amusing footnote to the story, today sees the jury selection process taking place. Dell’s lawyer is quizzing prospective jurors to see if they own Dell hardware and, if so, asking if they are having any problems with it. Anyone who says ‘yes’ is being rejected as being potentially biased against his client…