When former- (and, he hopes, future-) Sen. Scott Brown (R) signed on as an adviser to Global Digital Solutions, Inc. last September, it may have seemed like the standard sort of politician-makes-a-few-bucks agreement that we've all grown accustomed to. Over the past five days, though, that agreement has dogged Brown's campaign for the Republican Senate nomination in New Hampshire for days and sliced GDSI's stock price by nearly a fifth.
After the Boston Globe reported the link between GDSI and Brown on Sunday, the story spread quickly. Rachel Maddow did a segment on it on Monday; New Hampshire Democrats called on Brown to release a financial disclosure statement. At a campaign event on Wednesday, Brown was surrounded by reporters focused on the relationship between him and the company, video of which is lower in this article.
A quick background on what GDSI is and what it does: It's not entirely clear. The Globe described it as follows in a story on Monday. It is "a tiny, publicly traded company based in West Palm Beach that says it is in the firearms business." "Says," because it doesn't appear to actually have any real product. Its Web site is awfully vague. When it announced earlier this year that it planned to buy Remington Outdoor Company for $1.5 billion, Remington responded by calling it "a publicity stunt from an agenda-driven group with no credible financing options." GDSI used to be a beauty supply company; as recently as last May, its Web site said it specialized in "wireless data communications."
Brown agreed to serve as an adviser to the company in exchange for 1.5 million shares of restricted stock in the company. When he made the agreement, the shares were worth 88 cents a share, down from its two-year peak last June at $1.28. On Monday, Brown defended his relationship with GDSI calling it "a legitimate company." GDSI is "trying to create jobs and ultimately come up with a plan to do so," he said.
On Wednesday, he ended his relationship with the firm. It doesn't appear that Brown made any money from the stock he was given. It was restricted, only vesting between January and September of this year and Brown says he didn't sell any. Had he sold it all on Wednesday, he could have done so for 33 cents a share.
Brown isn't the only former elected official to sign on with GDSI. Last April, former Florida lieutenant governor Jennifer Carroll also assumed an advisory position with the company — only a little over a month after she resigned her elected position following questions about her relationship with a Florida-based charity. That group, Allied Veterans, collected millions for veterans but only used two percent of the funds for charitable services. It also ran a series of internet cafes that offered a sort of informal lottery game. Shortly after Carroll signed on with GDSI, the company's stock price spiked.
Since news of Brown's involvement became public late last week, the price has dropped. (It's recovering slightly as of writing.) Neither Brown nor Carroll still appears on the company's "advisory board" Web page.