D.C. insiders can reap fortunes from federal programs for small businesses

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Alaska native corporations and the communities they were created to support

After the attacks of Sept. 11, 2001, the Pentagon and other agencies awarded thousands of contracts without competition or proper oversight. In that rush, billions went to entities known as Alaska native corporations. Then the problems began.

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White reached out to Centennial Contractors Enterprises, a large corporation with offices in Reston.

Under federal rules, small businesses can team up with large businesses through an SBA program and create "joint ventures" to secure federal contracts. The rules allow the larger, experienced firm to take a leading role - and 49 percent of the profits. The smaller firm is still required to do a significant proportion of the work, but that proportion was not defined.

The SBA approved Centennial as Sentinel's official business mentor, and in the coming years the two firms would be given the green light to form nine joint ventures.

"It was an opportunity for us to continue to grow our business, and it was an opportunity for us to remain competitive," Centennial chief executive Mark Bailey said recently.

In September 2001, a Sentinel-Centennial joint venture received a deal worth up to $25 million for maintenance and minor construction work at military bases. Six months later, another Sentinel-Centennial joint venture landed a Navy contract without competition worth $175 million over seven years.

With federal revenue virtually guaranteed, a German company, Bilfinger Berger, bought Centennial in 2003.

That meant that millions in profits from small business set-aside programs would be going to a German firm with annual revenue today of more than $10 billion.

The exact amounts earned by White, Centennial and the native corporation are not public. The Washington Post pieced together this account from federal contracting data, court records and interviews with people involved in the contracts.

'A good opportunity'

In 2006, White approached MTNT about starting and running a second Alaska native corporation subsidiary that could land more contracts. She wanted the same terms she had at Sentinel, "namely, a 49 percent ownership interest and absolute operational control," according to court records.

MTNT executives balked. They told White she could run but not own the second firm.

About that time, White began encouraging her sister's boyfriend, Tom Kearney, to start his own firm in partnership with another Alaska native corporation that was a potential competitor of MTNT.

White, her sister, Christine Wilson, and Kearney together had bought a $1.2 million duplex in Los Angeles a few years earlier. It was listed as the address for a Sentinel-Centennial joint venture that had received $90 million.