Ex-LTV Official Paul Thayer Acquires Stake in Computer Company
NEW YORK (AP) _ Paul Thayer, the former LTV Corp. chairman and Pentagon official who received the stiffest prison sentence ever in an insider-trading case, has bought a major stake in a growing California computer company that hopes to make it big in defense work.
Thayer earlier this week became the biggest shareholder in Computerbase International Inc., a 5-year-old company whose board of directors he joined in May, by acquiring a 15 percent stake.
He is overseeing the company’s development of sophisticated hardware and software systems using the ADA computer language, the standard computer language of the Defense Department.
″We’re seeing the comeback of a giant,″ Computerbase President Richard Manweller said of Thayer. ″We’re looking forward to unprecedented growth, powered by Paul Thayer’s proven leadership and personal drive.″
The 67-year-old Thayer was LTV’s chairman for 19 months before becoming deputy defense secretary - the Pentagon’s No. 2 official - in 1983, a post he held before resigning early in 1984.
His career was rocked in March 1985 when he and Dallas stockbroker Billy Bob Harris pleaded guilty to criminal charges of obstructing justice by lying to the Securities and Exchange Commission.
The charges stemmed from an SEC investigation of an insider trading scheme that netted the two and seven others more than $3 million in illegal profits from 1981 to 1983.
Prosecutors said Thayer, while heading LTV and serving on the boards of Anheuser-Busch Cos. Inc. and Allied Corp., passed confidential corporate takeover information to Harris. Thayer’s attorneys argued he participated in the scheme to provide a ″nest egg″ for his girlfriend, not out of personal greed.
Thayer and Harris each were sentenced to four years in prison and fined $5,000, despite pleas for leniency from luminaries that included former President Gerald R. Ford and top executives of LTV and several other major companies.
Thayer settled SEC charges by agreeing to pay the government $555,000, and this past May agreed to pay nearly $600,000 to settle a suit brought by Anheuser-Busch, which claimed he disclosed confidential company information while serving on its board.
Thayer was paroled last December after serving 19 months in federal prison and a halfway house.
While some of the major figures in Wall Street’s current insider trading scandal have yet to be sentenced, Thayer’s prison sentence is the stiffest ever given in connection with insider trading.
Officials of Irvine-based Computerbase shrug off Thayer’s criminal past in favor of his business acumen.
The company, whose stock recently has traded around 25 cents a share on the regional over-the-counter market, develops computer software and hardware for military, aerospace and telecommunications use.
Ted Aroney, Computerbase’s chief financial officer, said the company had about $2 million in revenue in the year ended last April and in its first quarter had surpassed that.
Computerbase last year made about 80 percent of its revenue in civilian work, but projects strong growth potential in defense ADA applications. Aroney said the company’s research in the past five years had put it at the forefront of ADA technology, and Thayer’s task would be to translate that into big business.
″We think we are in a position now to turn the corner, especially with Paul Thayer,″ Aroney said in a telephone interview.
Aroney also said he did not expect Thayer’s guilty plea to create obstacles in getting defense contracts.
Thayer was said to be traveling Thursday and not reachable by telephone.
In addition to Computerbase, Thayer is on the board of Envioronmental Processing Inc. of Dallas and has formed his own data-processing consulting firm.