Two Accused of Corporate Spying
Oct. 12, 1998
MONTGOMERY, Ala. (AP) _ Johnston Industries opened its doors all the way to the president's office when a young, eager graduate student showed up, wanting to write his master's research project on the Georgia textile company.
Then-president Gerald Andrews met with him. Company executives took him to factories in Alabama and Georgia. They showed him and told him things that no one outside the factory walls knew _ things they say he promised to share with no one other than his professor at Georgia State University.
Johnston executives exhibited the same Southern hospitality when an investment banker showed up about the same time in 1995, claiming to represent potential Swiss investors. They say they shared confidential product and customer information with the financier.
``They were given access throughout the company,'' current Johnston president D. Clark Ogle said in an interview.
Then nearly three years later, the company learned Justin Waldrep wasn't a graduate student and Rodney A. Taylor wasn't an investment banker. They were, the company contends in a lawsuit, corporate spies for textile giant Milliken & Co.
Johnston officials say they were so thoroughly fooled by the two that they didn't realize the ruse until they read about it in another company's legal pleadings.
``We learned it by accident. They had done the same thing to another company, NRB,'' Ogle said.
NRB Industries of New York filed a suit against Milliken last year. The suit, which reads more like a novel of intrigue than a legal paper, accused Milliken of using the same two men to conduct corporate spying. But in this case, Waldrep was supposed to be a graduate student at Columbia University since NRB is in New York.
Court records included an investigation contract signed by a Milliken division chief and an agreement stating, ``Milliken's identity will remain absolutely anonymous.''
Milliken settled that suit in January without disclosing the terms. But that wasn't the end of it. Johnston Industries was surprised to find itself mentioned in the documents filed in the case, Ogle said.
Milliken, based in Spartanburg, S.C., declined comment on the suit. ``For 133 years, Milliken has conducted its business with honesty and integrity and it remains committed to these business principles,'' company spokesman Richard Dillard said.
Taylor, an Atlanta investigator, also declined comment, except to describe himself as ``an innocent man.''
Waldrep, who also lives in Atlanta, was more talkative during an interview, describing Taylor as ``my mentor'' and former employer.
``I was doing what I was told to do to get paid. He told me it was all right and everybody was doing it,'' Waldrep said.
Waldrep disagrees with the suit's claim that he presented himself as a Georgia State student. He says he only told executives that he was doing postgraduate work.
Roy Bowen, president of the Georgia Textile Manufacturers Association, said he is unfamiliar with the suit, but ``the industry has a long history of working with college students,''
Johnston Industries, based in Columbus, Ga., has annual revenues of $330 million and employs 2,500 people, with more than 2,000 of them at its Alabama plants.
Milliken is South Carolina's largest privately held company, with estimated annual sales of $2 billion. Its chairman, Roger Milliken, routinely makes Forbes magazine's list of the 400 wealthiest Americans.
Johnston filed the suit in Phenix City, Ala., where three of its plants are located and where it contends most of the spying occurred. The company estimates it lost $30 million in business because of information gleaned from its process to make napkins more absorbent and to make fabric used for car and airplane seats.
For the litigation, Johnston hired former Alabama Lt. Gov. Jere Beasley, known as the king of torts for the frequency with which he wins multimillion-dollar judgments for consumers who sue insurance and finance companies.
That record was one reason the suit was filed in Alabama rather than Georgia.
``Having grown up in Alabama, I know of Mr. Beasley's reputation,'' Ogle said.