Editor's note: This is the first in a two-part series resulting from an 18-month Independent investigation about William Clary, a Texas entrepreneur being investigated in connection with the 2001 collapse of a multimillion-dollar construction project at Fort Carson. Part 2 will appear next week.
Middle-aged, of average height, slightly stocky and with salt-and-pepper hair, William Leroy Clary draws little attention to himself.
In conversations, he's calm and composed. He habitually answers questions with his own, rhetorical queries. He speaks softly, with a vague hint of a smile -- even as he derides his adversaries as "liars" or "crazy."
Between 1994 and 2001, the 58-year-old Clary -- a carpenter and college dropout from Nebraska -- built from nothing a business empire, based in Colorado and Texas, that specialized in construction work for the federal government and at its peak took in $30 million in annual revenues.
In the process, Clary was accused of forgery, fraud and even soliciting a murder-for-hire. None of the accusations stuck.
But Clary built a house of cards.
For reasons still being sorted out, his operations collapsed in 2001, leaving several people and businesses in financial ruin. A key factor in the downfall was an associate's failure to complete a $58 million construction job at Fort Carson, which consisted of a complete renovation of 34 barracks on the base. Now, Clary himself acknowledges he owes as much as $20 million to various creditors.
Few people have heard of the Fort Carson fiasco, or of Clary. But for the last couple of years, agents from the Internal Revenue Service and the Department of Defense have been investigating the case, trying to figure out what happened to millions of dollars that the government paid for the unfinished Fort Carson work.
Though the agents refuse to comment on the case, it appears they're examining whether Clary, or anyone else associated with the project, somehow absconded with the money.
And after years of dodging various accusations against him, Clary believes the feds will ultimately indict him -- although he maintains he's done nothing wrong.
"I believe the allegations will be some sort of fraud allegations," Clary said in an interview. "Maybe certifying false statements, wire fraud and money laundering."
Behind the scenes
Former co-workers and business associates describe Clary as charismatic and friendly, yet secretive and low-key at the same time. He rarely discussed his private life with them.
"Have you ever met a person you can't read? That's the way he was," said Larry Pourier, a contractor who did business with Clary.
"He liked to play that 'Godfather' role," said Bruce Montgomery, who worked for a company that partnered with Clary. "That's Clary in a nutshell; he was the kind of guy that liked to operate behind the scenes."
People who would later rue the day they met Clary say they trusted him instinctively at first.
"Clary was very convincing in his sincerity," observed Richard Huffman, an attorney for one of Clary's business partners. "He'd talk around in circles."
Bill Rowe, a former Clary employee, said in a 1999 court deposition that, "I got to know Bill's mind a little bit. He seemed intent upon deception and roundabout methods of gaining control and power."
Born in Nebraska in 1945, Clary served as a radio operator with the Marine Corps from 1965 to 1967, including a tour of duty in Vietnam. He enrolled at the University of Nebraska at Lincoln in 1968 but dropped out and went to work in construction. Clary married in 1970 and had three daughters with his wife, Kathleen. The couple moved to Texas in the early 1980s.
In 1990, Clary went to work for MCC, a Denver-based construction company, at Bergstrom Air Force Base in Austin. It was there Clary first met George Nader Haidarian.
Eleven years Clary's senior, Haidarian had emigrated from Iran in 1957 and earned a civil engineering degree from Oklahoma State University. He worked in construction for years and had his own company, N&R Construction.
Haidarian was working as a project manager for MCC, however, when he and Clary met.
Unlike Clary, Haidarian often seems intense. His mood shifts quickly from gregarious to irritated and back. After almost half a century in the United States, he still speaks in heavily broken English.
"It's a dog-eat-dog world," Haidarian says, reflecting on his tumultuous years trying to make it in America.
Despite their differences, Clary and Haidarian had something in common: Both were entrepreneurs who liked to wheel and deal. They initially got along well, to the point where Haidarian and his wife, Jila, would sometimes lend Clary money.
"He didn't have a car to drive when he came to MCC," Haidarian recalled. "I gave him a car."
A sign of ambition
Clary and Haidarian were also skilled construction managers who performed well at Bergstrom.
"They did good jobs down there," recalled Jackie Beaudoin, who at the time ran MCC Construction along with her husband, Richard Beaudoin, who has since died.
Jackie Beaudoin quickly lost trust in the two, however. Haidarian, with help from Clary, had used copies of the company's bid proposals -- documents used to secure contracts, which Beaudoin claims were proprietary information -- to try to land his own work on the side.
"I begged my husband to fire them," she said.
But Richard Beaudoin, who was also an entrepreneur at heart, viewed Haidarian's behavior as a sign of ambition. He saw an opportunity: If he could team up with Haidarian, an ethnic minority, the two could together pursue government contracts set aside for small and disadvantaged businesses through a program run by the U.S. Small Business Administration, known as 8(a).
Under the program's Byzantine rules, people from Iran weren't considered a "disadvantaged" minority qualified for 8(a) set-asides. Haidarian, however, would get in by claiming he was actually born in Bombay, India.
Richard Beaudoin transferred Clary and Haidarian to MCC's headquarters in Denver, and he promoted Clary to operations manager. In 1992, Beaudoin and Haidarian launched a new company, PI Construction.
To meet government requirements, Haidarian was made owner of PI, while Beaudoin's son David served as manager. Under a joint-venture agreement, PI was to land contracts and MCC's role was to provide experience and financial backing in return for a 49-percent share of the joint-venture profits.
Such partnerships are not unusual; many 8(a) contractors initially lack the resources to secure and carry out large contracts, so they team up with larger, established companies to help them get off the ground.
Within a year, PI Construction landed contracts worth $4 million at Scott Air Force Base, Illinois, and at Fort Chaffee, Arkansas. The work mostly involved construction and renovation of buildings. By 1994, the company had grown from two employees to 21.
"I made so much money for MCC, they were bragging about it," Haidarian said.
'Power hungry beyond belief'
The MCC-PI partnership soon fell apart. Jackie Beaudoin chiefly blames Clary.
Clary, she says, resented taking orders from the Beaudoins -- so he schemed to pit Haidarian against her and her husband, by convincing Haidarian that PI was being cheated on the joint-venture deal.
Clary was "power hungry beyond belief," she said. "I really don't even think it was about money. [He] had a little Napoleon complex, and he just wanted the power to wheel and deal."
Clary, meanwhile, says the partnership ended because Haidarian got angry when he found out that Richard Beaudoin had withdrawn money from the joint-venture account.
Haidarian says both claims are true: On the one hand, Clary schemed to set him against the Beaudoins; on the other hand, the Beaudoins tried to keep him in the dark about PI's finances and took money from PI Construction.
Either way, in May of 1994 Haidarian fired David Beaudoin and froze the accounts. Shortly after, Clary quit MCC and joined his company.
The Beaudoins turned around and sued PI for their share of the joint-venture profits. But Clary and Haidarian counter-sued, saying MCC had stolen money from PI.
The fight got nasty, Jackie Beaudoin said. PI leveled numerous accusations of theft and wrongdoing against the Beaudoins and their business associates.
"Clary would stop at nothing," said James Misken, a bond broker for MCC who was named a co-defendant in PI's counter-suit. "He had a relentless pattern of coming at people."
In the end, PI won on some points, and the parties settled the rest of the litigation, mostly in PI's favor. Jackie Beaudoin says she and her husband ultimately gave up on the case because it wasn't worth the headache.
David Beaudoin says he believes Clary was the driving force behind the ugly split. "George, I think, was a puppet for Bill," he said.
Jackie Beaudoin agrees but also believes Haidarian was a willing accomplice.
"George is every bit as deceitful as Bill Clary," she said. "It's just honor among thieves between those two."
The cookie jar
Before the lawsuits wrapped up, Haidarian and Clary (now PI's operations manager) had moved the company's headquarters to their home turf in Austin, Texas.
PI continued to expand, adding large 8(a) contracts at installations such as Vandenberg Air Force Base in California, Fitzsimons Army Medical Center in Denver and Pueblo Army Depot in Pueblo -- contracts worth an estimated total of $5.7 million.
By most accounts, PI Construction performed quality work and ran efficiently. Managers on each work site "ran pretty tight ships," said one former project manager for the company, who asked not to be named. "It was a good place to work."
But at headquarters, fiscal discipline was not exactly PI's mantra.
An auditing firm that examined the company's accounting records in late 1995 noted that "none of the individual accounts could be relied upon as to their accuracy." Several of PI's tax reports "were either incorrect or were never filed."
As a result of one audit, the company wrote off $1.5 million in expenses that couldn't be accounted for.
The firm's coffers had turned into a veriable cookie jar, into which its principals would dip their hands. In subsequent tax audits, the IRS would question payments PI made to outside companies owned by Haidarian, Clary, Haidarian's son Ryan and Kathleen Clary, respectively.
"There is no evidence that any services or products were provided" in exchange for the payments, the IRS noted.
Clary now admits that the companies that received the payments did little work for PI, but he says the payments were legal. It was a way, he says, for Haidarian and him to boost their personal compensation while keeping their salaries low on the books. Low salary costs helped make the company seem sounder when seeking credit.
"I don't see why it's not legal," Clary said. "It's not a public corporation; this is a privately held corporation. Who's being cheated?"
Clary's wife's company, Word Communique, did some work writing proposals for PI, he says. The companies in question had also performed work for other clients, he says.
Haidarian, meanwhile, says payments to a company owned by his son, Cry Baby Advertising, as well as Texas Imports, a car dealership that Haidarian owned himself, were legitimate. Cry Baby worked on proposals, and Texas Imports sold vehicles to PI, he says.
In addition, key PI employees, including Haidarian and Tony J. Garcia, would also borrow money from the company -- sometimes tens of thousands of dollars at a time, much of which was never paid back.
And a company employee would later claim in a sworn affidavit that Clary had used PI funds and credit to buy several trucks and sports cars -- including at least three Jaguars.
Clary says the cars were bought at salvage auctions.
Born in Bombay
Meanwhile, PI's status as a disadvantaged, minority-owned company was falling into doubt.
Acting on a tip that Haidarian had lied about his place of birth, the Small Business Administration launched an investigation. In late 1995, it notified Haidarian that it was moving to revoke his 8(a) status because records from the Immigration and Naturalization Service indicated Haidarian was actually born in Iran -- not India as he had claimed.
Haidarian told the government that he used to believe he was born in Iran, but that he more recently had learned he was born in India, while his parents were living and working in Bombay.
In an effort to save his company's status, Haidarian flew to Bombay to obtain what he said were copies of his original birth certificate. He returned with the documents, and the SBA backed off its claim -- though the authenticity of the documents would be questioned years later in another federal investigation.
Haidarian was still not off the hook. The SBA also moved to revoke PI's status based on a separate claim that Haidarian had tried to bribe a government contracting official, by giving the official $1,250 to help him land a $40-million contract.
Haidarian denies the bribery allegations to this day. And while the matter was referred to the U.S. attorney's office in Denver, the office declined to prosecute because the official who reported receiving the bribe was found to be mentally unstable. "There was no additional information to corroborate the bribery allegation," a report from the office states.
Still, the SBA stuck with its decision to revoke PI's 8(a) status. The company appealed, allowing it to maintain its status temporarily. The case would hang over PI's head until it was rendered moot when Clary took over the firm following a 1996 court battle.
Everybody wants a piece of PI
Following the split with MCC in 1994, Haidarian had given Clary increased responsibilities. He turned over many aspects of PI's management to Clary, he says, due to Clary's greater familiarity with U.S. laws and business practices.
"I didn't know the legal matters and the paperwork," Haidarian said. "I knew construction."
In May of 1995, Haidarian agreed to make Clary a partner. Clary says he paid $179,000 for 49 percent of PI's stock. But instead of spending his own money, he borrowed $50,000 from PI and returned it to the company as partial payment. He wrote a promissory note for the remaining $129,000. "The note was paid off over a period of time," Clary said.
It was a strange way to handle things, but Haidarian approved the arrangement, Clary said. "The stock ownership issue and how the stock was acquired has always been a mess. George and I started doing it because that's how the accountant told us to do it."
Clary wouldn't settle for half of the company, however. All along, Haidarian claims, Clary was scheming to completely take over the increasingly lucrative operation.
In July of 1996, Clary made his move.
On the morning of July 3, Haidarian and his wife left on a two-month business trip to Europe. That same morning, Clary maintains, Haidarian signed a written notice resigning as PI's president. The document appeared to be notarized by Tony J. Garcia, a company employee.
Clary also maintains that around the same time, he and Haidarian agreed verbally that Haidarian would sell Clary his remaining 51 percent interest in the company for $350,000. Clary, as the sole shareholder, then appointed himself president.
Clary claims Haidarian was "tired, confused and afraid" as a result of his battles with the Small Business Administration, and wanted to go back to selling cars and doing small construction jobs.
But Haidarian says he never agreed to sell his company. He would later claim in court that Clary forged the resignation notice.
In fact, Haidarian says he was completely surprised when he returned from Europe in early September, to find that he no longer controlled PI. Clary had changed the company's bank accounts and moved its offices to another building, across the street from the previous one.
"A criminal, a gangster used me," Haidarian later said of Clary in a deposition. "He stole the company."
Clary, meanwhile, denies committing any forgery. As a matter of fact, shortly after returning from Europe, Haidarian came and asked for his $350,000, Clary says. Clary wrote him a $50,000 check, which he says was a "good faith" payment. Again, the money came from PI's coffers; Clary admits he never paid the money back into the company.
Haidarian cashed the $50,000 check. But he says Clary presented it as partial repayment of money Haidarian had lent the company -- not payment for his shares of PI. Clary, meanwhile, maintains PI didn't owe Haidarian any money.
Haidarian then sued Clary to get his company back.
$1 million for murder
According to subsequent testimony by PI employee Garcia, Clary had simultaneously hatched a separate plan to get rid of Haidarian.
In a 1997 affidavit, Garcia claimed that the summer before, Clary had offered him $1 million to murder Haidarian.
"Mr. Clary was sincere with his offer to the extent that he purchased a colt [sic] 357caliber hand gun," Garcia's affidavit states. "He suggested that I use it for the request that he had offered me, only because it would take one shell to complete the job."
PI had taken out $2.4 million in life insurance on Haidarian, whose death would otherwise have been detrimental to the company. "If George would have died, the company would have lost its [minority-owned] status," Clary explained.
Garcia said he declined the assignment.
"Mr. William L. Clary is a very deceitful and hateful individual who will stop at nothing to get what he wants," Garcia stated in his affidavit.
Garcia, who repeated his claims in a subsequent deposition, didn't report the alleged offer to the Austin Police Department until August 1997. He later said he had waited because PI owed him money, and he was concerned about getting paid.
When he finally contacted police, he turned over what he said was a tape recording of Clary making the contract-killing offer. Police looked into the matter but ended up dropping it for lack of evidence.
"We couldn't really go anywhere with it," said James Bittick, the detective in charge of the case, who has since retired. Garcia's tape recording "was of such poor quality I couldn't tell what was going on."
Without solid proof or any other witnesses, it was "all a bunch of he said, she said kind of stuff," Bittick said.
In his preliminary inquiries, Bittick quickly learned that Clary and Haidarian were fighting each other in court, the IRS was auditing both of them, and that the FBI had investigated Haidarian's alleged bribe.
Garcia also had an ax to grind with Clary, who had recently fired him, claiming Garcia had stolen proprietary information from the company. Clary was also suing Garcia to recover more than $70,000 that he said Garcia had borrowed from PI.
"All of them [were] a bunch of lying, scoundrel con artists," Bittick said of Clary, Haidarian and Garcia. "And they were all trying to cheat each other."
Garcia, reached by phone, declined to be interviewed in detail for this story.
"He ruined my life," Garcia said of Clary. "I've had three heart attacks, and I don't care to get involved."
Clary denies offering Garcia money to kill Haidarian. Though Garcia made the claim twice under oath, Clary says police found it "so phony" that they never even contacted him about it.
At first, Haidarian's suit to regain PI seemed headed for a quick resolution. A judge ordered the parties to mediate, and they settled in December of 1996.
Haidarian says one reason he agreed to settle was his wife's health. Jila, he says, suffered a nervous breakdown after a mysterious person, identifying himself as a federal agent, appeared at the Haidarians' house and hinted George Haidarian might be deported for allegedly lying about his place of birth.
The prospect of deportation was particularly frightening, the Haidarians say, because they belong to the Baha'i faith -- a religious group whose followers are persecuted in Iran.
Haidarian adds that he made the mistake of hiring a lawyer on the cheap who lacked the expertise to go up against Clary's seasoned legal team.
Under the settlement, Haidarian relinquished his claims to PI in exchange for $200,000.
Clary remained in control of the company from then on, but the settlement didn't last long. After just a few months, Clary sued Haidarian, claiming he was breaching the agreement by refusing to turn over PI business records still in his possession. Haidarian countersued to rescind the settlement, saying he had signed it "under duress" and that he believed Clary was responsible for bogus threats to deport him.
Each party hired handwriting experts; Clary's testified that Haidarian's resignation note was genuine; Haidarian's declared it a fake.
Over time, several people testified that Clary had forged other documents. The day after being fired by Clary, Garcia signed an affidavit saying he never notarized Haidarian's supposed resignation statement.
Moreover, "I have observed Mr. Clary 'doctor' documents by inserting or changing information on invoices and personal and business bank statements," Garcia claimed.
Another PI employee, Erik Smith, also said in an affidavit that, "I have personally observed Mr. Clary forge the signature of Mr. Haidarian numerous times on documents such as checks, bid bonds, performance and payment bonds, and forms submitted to the U.S. government."
Clary, meanwhile, points out that Haidarian had given him power of attorney to sign documents. "I did sign George's signature when he wasn't available, and I had permission to do it."
He denies, however, the accusations that he falsified records.
Like Garcia, Smith also had an ax to grind, Clary notes. The two had been fired simultaneously when Clary accused both of stealing company information.
And, there was a problem with Garcia's affidavit: Earlier, while still working for Clary, Garcia had signed a different affidavit saying he did in fact notarize Haidarian's resignation.
Clary's attorney asked for a criminal investigation of Garcia, citing the contradictory sworn statements. An inquiry was launched, but Garcia was never prosecuted. Garcia explained his apparent self-contradictions by saying he'd notarized certain documents but that Clary had subsequently altered them.
Yet while Clary challenges Garcia's and Smith's credibility, a third person with no apparent beef against Clary would also later back the forgery theory.
In a statement filed with the Texas secretary of state's office in 1999, former PI employee Barbara Metker denied having notarized Haidarian's signature on documents transferring PI stock from Haidarian to Clary. Haidarian had claimed that Clary forged his signature on the transfer.
"I feel George is correct in saying he did not sign," wrote Metker, who has since died. Haidarian's purported signature looked fake, she said.
"There were things in that office that were not right," Metker's statement continues. "I feel Bill Clary used George as a 'puppet' to minipulate [sic] to his advantage."
Clary, in an interview, dismissed Metker's statement as "crazy."
Chasing down documents
Meanwhile, as the court fight raged on, Clary also got Haidarian in trouble with the IRS by filing a Form 1099 stating that Haidarian had received $459,000 in unreported income from PI between 1994 and 1996.
The IRS demanded that Haidarian pay $298,000 in back taxes and penalties. Haidarian, however, denied receiving any of the money as personal income, telling the IRS that Clary had fabricated the 1099 to ruin him.
Haidarian spent the next seven years chasing down documentation to convince the IRS that the 1099 items were bogus. He succeeded to a great extent, but the IRS eventually issued a $42,000 lien against him last year.
Clary says he didn't issue the 1099 out of malice, but as part of an attempt to straighten out PI's books once he took over the company.
Clary also got in trouble, however, when the IRS began looking into PI's books and his personal finances. IRS documents from the time appear to suggest that PI failed to report income, or to document losses and business expenses, totaling almost $2.9 million. Included was the $1.5 million that an accounting firm had previously written off.
Clary himself was slapped with a $150,000 lien for failure to pay income taxes. Among the income he hadn't reported were the payments from PI to companies owned by Clary and his wife.
Clary says he never intended to hide the payments from the IRS. "It was reported as personal income when I hired somebody to get it all straightened out," he said.
Clary, who now claims to be broke, still hasn't paid the lien.
The court battle between Clary and Haidarian didn't officially end until 2003. By then, PI no longer existed and the case had long been dormant.
"Years had passed," Clary says. "So we just quit."
As for why Haidarian would sell him the company and then claim it was all a fraud, Clary attributed it to Haidarian's ethnic background.
"Have you ever done business in the Middle East?" he asked. "When you sign a contract, that's just the beginning of the negotiations."
Added Clary, "The negotiations are never over with those people. ... It's just part of their makeup."
After losing control of PI in 1996, Haidarian went back to doing small construction jobs through his old firm, N&R. He also continues to run his small car dealership, Texas Imports.
He and Clary both still live in Austin, though they don't talk to each other.
Thinking or talking about Clary still makes Haidarian mad. "I didn't do anything to this guy," he said.
But he tries not to dwell on the past.
"I'm too old," Haidarian said. "You can't sit down and cry for the rest of your life."
For Clary, meanwhile, the battle for PI was only the beginning. Over the next few years, he became involved in an even bigger mess through partnering with another minority contractor, whom he helped land a major contract at Fort Carson, as well as several other large military contracts.
Through mismanagement -- and, some people believe, theft or fraud -- the Fort Carson deal failed spectacularly, setting off lawsuits, leaving more companies and individuals in financial ruin, and sparking yet another federal investigation, which continues to this day.