Pentagon Ties Boost Clark’s Business

Retired General Helps Firms Navigate Homeland
Security and Defense-Procurement Maze
By Jacob M. Schlesinger and Sara Schaefer in
Washington and Greg Hitt in Little Rock,Ark.

Wall Street Journal, 9/18/03

IN ANNOUNCING his presidential campaign, Wesley K.
Clark promoted himself as the candidate best qualified
to prosecute the war on terror. As a businessman, he
has applied his military expertise to help a handful of
high-tech companies try to profit from the fight.
Since retiring from a 34-year Army career in 2000, Gen.
Clark has become: chairman of a suburban Washington
technology-corridor start-up, managing director at an
investment firm, a director at four other firms around
the country and an advisory-board member for two
others. For most, he was hired to help boost the
companies’ military business.

After the Sept. 11, 2001, terrorist attacks. Gen. Clark
counseled clients on how to pitch commercial
technologies to the government for homeland-security
applications. One is Acxiom Corp., based in Gen.
Clark’s hometown of Little Rock, Ark., where he
formally launched his campaign yesterday. He joined the
board of the Nasdaq-traded company in December 2001, as
the company started to market its customer-database
software to federal agencies eager to hunt for
terrorists by scanning and coordinating the vast
cyberspace trove of citizen information.

"He has made efforts at putting us in contact with the
right people in Washington ... setting up meetings and
participating in some himself," says Acxiom Chief
Executive Charles Morgan. "Like all of us around 9/11,
he had a lot of patriotic fervor about how we can save
our country."

Gen. Clark’s long military career is both his
campaign’s strength and its weakness. While backers say
he is the only Democratic candidate who can compete
with Republicans on national security, foes say he has
no track record handling other important issues, such
as the economy.

Gen. Clark’s brief speech yesterday did nothing to
assuage those concerns. While he blasted President
Bush’s economic record, he offered no platform of his
own, but promised a major speech on it in the coming
weeks.

His brief business career bears examining because it
represents his only domestic experience as he seeks to
lead a troubled U.S. economy-and because he invokes his
time, largely at little-known companies, to assert his
qualifications on economic policy. "I became an
investment banker in what was probably the worst period
for private equity in 70 years," he said in an
interview in mid-August. "You learn quickly from that
kind of a situation."

In aiming for the White House, Gen. Clark follows a
long revolving-door tradition of government officials
going back and forth between the public and private
sectors. For now, at least, he plans to mix business
and politics. "At this early point in the campaign,
Gen. Clark will remain on his hoards," campaign adviser
Mark Fabiani said this week. Gen. Clark did, however,
miss a board meeting for Chicago-based Sirva Inc.
yesterday to launch his campaign.

It is unclear exactly how successful Gen. Clark’s
business career has been-either for his clients or for
himself. Most companies contacted declined to give
specific examples of contracts he helped them win.
Those willing to detail his role mainly said it was too
soon to see the fruits of his efforts.

Most of the companies for which Gen. Clark has worked
are closely held and haven’t disclosed his
compensation. The proxy statements of those that have
suggest he has hardly struck gold since the high-tech
bubble burst.

Acxiom has given him 4,210 shares of its stock, valued
at about $67,000 at yesterday’s close. The company has
also paid his consulting firm an annual retainer of
$150,000, about the same as his base salary as supreme
commander of North Atlantic Treaty Organization forces.
(A company spokesman said Gen. Clark’s candidacy
automatically terminates the consulting contract, but
he will remain on the board.)

His main compensation from Entrust Inc., an Addison,
Texas, Internet-security company, has been 40,000
shares of the company’s stock in the form of options,
most of which are worthless at the current market
price. Executives at Gen. Clark’s companies say he has
contributed to their business beyond his military and
government expertise.

"I actually used him more for management questions. He
has a good head on his shoulders about how to work with
people," says John Woolard, founder of Silicon Energy
Corp., an Alameda, Calif., company selling software to
help utilities improve energy efficiency. The company
hired Gen. Clark as an adviser in November 2000.

While he was originally hired as a consultant by
WaveCrest Laboratories LLC, Dulles, Va., to help find
military buyers for its promising new electric motor,
Gen. Clark became the company’s chairman in April, and
has also focused on selling products in the commercial
market. But Gen. Clark’s knowledge of and ties with,
the military and government markets have been a large
part of his appeal to potential employers.

Stephens Inc., the large, politically connected Little
Rock investment firm, hired him to boost its aerospace
business shortly after he gave up his NATO command. He
left Stephens last year and opened his own consultancy,
Wesley K. Clark & Associates.

While Gen. Clark was at Stephens, the firm also
marketed him to clients such as Silicon Energy-in which
Stephens held a stake - "as a good person to help us
understand the federal procurement process," says Mr.
Woolard. The company was trying to enter the government
market, and Gen. Clark explained the process "and
contacted people at the Navy and Air Force and told
them what we had," Mr. Woolard says. (Silicon Energy
was acquired earlier this year by Itron Inc., and Gen.
Clark no longer advises the firm).

Time Domain Corp., a Huntsville, Ala., advanced
wireless-technology company, recruited Gen. Clark to
become an adviser in February 2002 through one of its
chief operating officers, who had been a colonel under
his NATO command during the Bosnia campaign. Gen. Clark
has counseled the company on how to answer Pentagon
concerns that its low-power radar system might
interfere with global positioning and communications
systems, as well as to better craft that technology for
military use. board of Entrust, at the request of CEO
William Conner, who had served with him on a Pentagon
advisory panel.

At Entrust, Gen. Clark has provided
advice on how to sell to various NATO governments, says
David Wagner, Entrust’s chief financial officer. He has
also helped emphasize the firm’s product securing
electronic networks for new homeland-security
applications.

"The next battle in the war on terrorism may be on the
’cyber-front,’ " Gen. Clark and Mr. Conner warned in
August 2002 in a jointly signed opinion piece for the
Washington Times. "We need to quickly devise and
implement a national cyber-security plan," they urged.
"Congress and the federal government must allocate the
funds required for these solutions."