Wedtech Scandal

Political corruption case centered on Wedtech Corporation, a Bronx-based defense contractor that used bribes and political influence to fraudulently obtain over $250 million in no-bid federal contracts designated for minority-owned businesses. Company executives John Mariotta and Fred Neuberger cultivated relationships with politically connected intermediaries, including Attorney General Edwin Meese's close friend E. Robert Wallach, to secure preferential treatment from government agencies.

The scheme involved systematic bribery of government officials, falsification of financial records, and manipulation of minority business certification requirements. Wedtech paid substantial sums to Wallach, who used his relationship with Meese to influence contract decisions, while also bribing Pentagon officials, Small Business Administration personnel, and members of Congress. The company's fraudulent practices extended to stock manipulation and accounting fraud to maintain the appearance of legitimate operations.

The scandal broke in 1986 when Wedtech declared bankruptcy amid FBI investigation, ultimately resulting in convictions of numerous participants including Wallach, several congressmen, and company executives. Attorney General Meese, while not criminally charged, faced ethics violations and resigned under pressure. The case exemplified Reagan-era deregulation excesses and highlighted vulnerabilities in minority business programs designed to promote economic opportunity. Congressional investigations led to reforms in defense contracting procedures and stricter oversight of small business administration programs.