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BUSINESS The Trials of Bill Moore

A CEO’s nightmare: How can my government do this to me?
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DAY IN, DAY OUT FOR SEVEN WEEKS, each time court convened, Bill Moore had to hear the words that made him angry, words that even now, months after his November 1989 acquittal, choke the strength from his voice: “The United States of America versus Recognition Equipment Incorporated, William G. Moore Jr., and Robert W. Reedy.”

“It’s more than outrage,” Moore says. “It’s just this incredible sense of ’how can my government be doing this to me?’”

My government. That’s how the self-proclaimed patriot, whose first job was as a regular Army officer, still refers to the entity that he says tried to ruin his professional life. His government’s motivation: revenge, pure but not so simple, Moore says.

The investigation and prosectition of Moore, his top marketing executive, Reedy, and the company they ran were anything but simple, spanning nearly four years, employing a battery of attorneys on both sides, and amassing expenses into the millions of dollars before a U.S. District judge threw the whole thing out and acquitted Moore and his fellow defendants before their attorneys even began a defense. But the damage was already done. It can be argued that the prosecution of Bill Moore ruined a prosperous company, one of the largest public corporations based in Dallas.

In 1986, Recognition Equipment Incorporated (REI), a maker of optical character recognition systems, with Moore as CEO, president, and chairman, was enjoying steady growth in earnings. That was no simple accomplishment-when Moore came to the company in 1982 it was nearly bankrupt. But REI’s turnaround was quickly stifled when the vice chairman of the Postal Board of Governors, Peter Voss, pleaded guilty in May 1986 to taking bribes from a consultant to steer government contracts into his hands. It just so happened that REI employed this same consultant to help it secure government contracts. With the damning newspaper accounts that followed, REI stock took a dive.

At first, Moore cooperated with the government’s investigation. He says prosecutors assured him that REI was not a target, that they were looking for other offenders. So Moore opened the doors and offered to help.

In October 1988, Moore, Reedy, and REI were indicted on several counts, including conspiracy to defraud the United States, theft, and mail fraud. No startling new evidence had been unearthed. Instead, the prosecutor later told a jury, the government hoped to assemble “a puzzle of 10,000 pieces” that would show that although there was no direct evidence, REI “must have known” about the conspiracy. Moore and Reedy were savvy businessmen, the prosecutor reasoned, and it was ridiculous to believe that they had been conned by their BUSINESS consultant, that they could be this close to such a lucrative conspiracy and not be a part of it.

Following their indictment, Moore and Reedy stepped down from their RE1 posts on paid leaves of absence. Since then, REI has not had one profitable quarter. In its weakened position, the company was raided by the New York-based Prospect Group. With new leadership at REI, Moore and Reedy are out pounding the pavement and trying to put their professional lives in order.

In his portfolio, Moore carries both his vindicated reputation and an embittered longing for what could have been. He is a company man, used to climbing the corporate ladder through conglomerates like Perkin-Elmer and the Bell companies. But Moore’s trials-the indictment and his personal response to it-have put a temporary moratorium on such corporate coups.

“I’m still learning about my emotions,” Moore says. “I thought I was absolutely U.S. of A, and suddenly my government was trying to put me in jail. That had more of an impact on me than apparently I knew.”

Moore’s deep feelings for his government may stem from familiarity. He was born in Washington, D.C., went to high school there, and was graduated from Georgetown University in the shadow of the Washington Monument. But when Moore and his attorneys traveled to Washington for the seven-week trial, he had no sense of going home. Instead, he was at war, bunkered on a floor in the Watergate hotel.

The general of the opposing forces was prosecutor Joseph Valder, a lifer with the United States Attorney’s criminal division. Valder now faces possible disciplinary action stemming from a complaint Moore’s attorneys filed with the Justice Department’s Office of Professional Responsibility. The complaint is little more than a revamping of a U.S. District judge’s forty-page memorandum and order that acquitted the defendants, saying that not only had the government failed to establish that the defendants conspired to defraud the United States, but also that some of the government’s own evidence pointed to the innocence of the defendants.

That exculpatory evidence still burns at the soul of Bill Moore.

While five witnesses for the government, including Voss, admitted to conspiring to defraud the government before a grand jury, they were never asked questions regarding REI’s knowing involvement in any conspiracy. Yes, the consultant REI hired was paying off Voss for steering contracts to his client. But at the trial, these same witnesses admitted that they took steps to conceal that conspiracy from Moore and Reedy.

“As the trial unfolded, we realized that substantial exculpatory evidence was not presented to the grand jury,” says Moore’s attorney, Charles Stillman. “Excessive zeal in a prosecutor I can live with, but this I could not.” Stillman, a former U.S. Attorney himself, says Valder’s actions are an embarrassment to the Department of Justice, and that Moore, Reedy, and REI should never have been indicted.

Meanwhile, Valder stands by his case and points to the government’s formal response to complaints about his conduct. In court documents, the government says defense counsel were merely “wrapping themselves in the mantle of former federal prosecutors,” and that their tactics demonstrated only that the best defense is a good offense.

But Moore has a conspiracy theory of his own. Moore tells a story of deception, greed, and revenge, a story of an 800,000-employee Postal Service handicapped by manual labor, and of REI that pushed for automation and the use of its machines-and in the process stepped on some powerful toes.

When Moore arrived at REI, the Postal Service had already invested $50 million in research and development with the firm. Though satisfied with the equipment developed, the Postal Service had problems with REI management along the way. Moore thought his involvement would change that.

Then something really strange happened. The Postal Service decided to spend billions of dollars on finding a way to automate mail sorting, all keyed around the new zip-plus-four codes. There were two ways to get the nine-digit code on an envelope. The Postal Service could try to get the mailing public to do it, or it could use new technology that it had paid REI $50 million to develop.

“To me it was a no-brainer” Moore says. “There was no way you were going to be able to get the public to do it. 1 said, ’look, this is the simplest, most straightforward argument in the world. We have the machines. They are not prototypes but are working at the post office now, effectively generating zip-plus-four mail.’ “

Yet the Postal Service was going to forsake this technology that it had paid for and was already using in limited numbers and would in essence start at the very beginning with one of REI’s competitors.

Moore went to Washington to see then-Postmaster General Bill Bolger and told him to change his mind or he would go to the Postal Board of Governors and to Congress and the media. Moore knew the media would bite at a story that showed the government making a wasteful business decision.

“It was a very dangerous approach, as it turned out,” Moore says.

When REI took the business difference public, the Postal Service was embarrassed into conceding, and several people lost their jobs. That’s about the time a certain consultant came along touting his influence with the Postal Service. Moore believes his prosecution stemmed from revenge: the Postal Service getting back at REI with an indictment that effectively disabled the company.

But neither the indictment nor the trial has permanently disabled Bill Moore. Instead, it has forced him, at fifty-one, to change gears. As a marketing wizard and a sort of corporate fix-it man, Moore had moved his wife and their three children seventeen times. No more moves.

In his makeshift office in Las Colinas, Moore is surrounded by construction. His lone assistant makes calls from a phone on the floor in a soon-to-be reception area. Moore has been overwhelmed in recent weeks by requests for his consulting skills. In the near term, hell help Trammel! Crow revamp the floundering Infomart project, and he’ll look at a troubled division of Computer Language Research.

So the Moores will stay here, where, throughout their ordeal, many friends stood by them. On the day of Bill Moore’s acquit tal, a neighbor mailed several hundred preprinted invitations to a party: “They’re home. They’re safe. They won.”

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