Fired EODT worker seeks $10.7M in suit

By Roger Harris

Lenoir City defense contractor EOD Technology Inc. has been accused of violating federal arms export laws, overcharging government contracts and circumventing federal campaign finance regulations in a lawsuit filed by a fired employee.

In a complaint filed March 12 in Loudon County Chancery Court, former EODT worker Donald Patton seeks $10.7 million in severance pay and punitive damages.

The suit says Patton was notified of his firing on March 31, 2009, in a letter from the company that accused him of "Violation of Code of Business Ethics and Conduct." The letter does not specify the alleged violations, but in an exit interview Patton was told there was an "appearance of impropriety" and he had falsified time records, according to the suit.

Patton denies both charges and calls them "factually false and pretextual."

In his complaint, Patton paints a picture of a defense contractor that ignored widespread misconduct by employees and company officials.

EODT has provided security and related services in Iraq, Afghanistan and elsewhere under government contracts worth more than $100 million.

EODT issued the following e-mail statement when asked to comment on Patton's suit:

"EODT acknowledges the lawsuit filed by Donald Patton, a former employee. Because of the ongoing legal process, EODT cannot comment on the details of the proceedings, except to point out that claims similar to those raised in Loudon County were previously raised by Mr. Patton and others in lawsuits filed in Knox County and Blount County and both of those lawsuits have been dismissed. EODT also registers its disappointment in the use of sensational, unsubstantiated, and untrue allegations as a tactic to obscure the real issues of the case."

Patton and EODT have waged a court battle for more than a year. EODT sued Patton and other former employees in Blount County Circuit Court, claiming they had formed a competing business while employed by EODT in violation of a noncompete agreement they had signed.

The Blount County suit against Patton was dismissed March 9.

Allegations in the Loudon County suit include:

n Steve Voland, Patton's superior at EODT, and Clay Turner, EODT's corporate risk manager, used cocaine while working on a contract with the U.S. Army Corps of Engineers in Panama.

n The company violated the International Traffic in Arms Regulations and refused to report those violations after an EODT employee raised concerns about the violations with company management.

n EODT overcharged the government for several years by "falsely inflating EODT's indirect corporate costs," which were charged to a Corps of Engineers contract. These costs included the $200,000 annual salary EODT Chairman James Burger was paid when he rode his bicycle across the country.

n Bruce Bowland, former EODT finance director, and EODT President Matt Kaye paid cash to Iraqi Ministry of Finance officials to settle EODT's tax liability. The suit says that in 2006 EODT paid $130,000 to its Iraqi subcontractor, Al Hurea, when EODT's tax liability was more than $1 million. Al Hurea officials subsequently paid Iraqi officials an "unknown amount."

In 2008, the suit says, company officials used the same method to funnel cash to Iraqi officials to obtain approval of EODT's license to provide security services in Iraq and to delay approval of a security license for EODT's largest competitor.

n Company officials shipped shotguns, pistols, ammunition and other material without the proper permits or licenses in violation of federal International Traffic in Arms Regulations.

n EODT gave some of its employees money to donate to Bob Corker's campaign "as they knew EODT could not provide funds directly to a federal candidate's campaign since it would violate federal and state campaign contribution laws."