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AEY`s Awful Afghan Ammo: Is It An Affirmative Action Scandal?
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March 29, 2008, 01:48 PM
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This is one of those blog posts where I start writing about one thing and in the middle of it, I discover something I never expected, so the whole thing lurches off in a different direction. I apologize for the lack of pre-planned structure.

In the wake of the NYT`s story on 22-year-old high school-dropout Efraim E. Diveroli, who snagged $202,000,000 in U.S. government ammunition contracts in Fiscal Year 2007 to supply bullets to the embattled Afghan government, many people are wondering how the federal government could have handed out such a big contract to some loser who has been arrested twice in his young life: for drunk driving and for beating up a parking valet.

You would think that somebody in our huge federal government might want to do some background checks on the Internet. For example, the only job Diveroli has ever held besides working for his dad Michael Diveroli was working for his uncle`s weaponry shop, Botach Tactical, in South Central LA. So, what kind of lessons did young Efraim learn working for Botach?

Here, unedited, is just the first page`s worth of customer reviews of Botach Tactical on Epinions.com:

QUALITY MERCHANDISE/INEPT CUSTOMER SERVICE REPS! Botach. Great Prices, Horrible Customer Service. Shop elsewhere. Poor customer service. NOT WORTH THE AGGRAVATION ! One word "Agonizing" Please investigate this company on the Internet before purchasing anything! Horriable!!!!!!!!!!!!!!!! painfully awful. the WORST customer service you can imagine Extremely frustrating and disappointing Worst Customer Sevice Experience EVER. My order was just forgotten Cut out the middleman and just flush your money down the toilet. RUN BY TOTAL MORONS Worst Shopping Experience Ever!!! service and trust, I rate them at minus 90 Worst Customer Service Around

But, maybe the Feds aren`t supposed to look at Botach Tactical`s performance because the firearms dealer has, according to FedVendor.com:

Certificates: Small Disadvantaged

In other words, Botach Tactical gets affirmative action in government contracting! Indeed, much of its legitimate business is done with law enforcement and military buyers. (Leaders of the South Central LA black community suspect it might also do business with less reputable locals, but that`s another story.)

In fact, young Efraim`s AEY.Inc is listed in USSpending.gov, as Mike Carney at USAToday noticed, as:

Small Disadvantaged Business: Yes

Does that explain how a loser like him got $202 million in contracts?

And why is Efraim Diveroli`s ludicrous little company certified as "Disadvantaged?"

Because he`s a Hasidic Jew. (Efraim`s cousin, Michael Jackson`s favorite rabbi Shmuley Boteach, the son of the owner of Botach Tactical, is one of the best known Lubavitcher rabbis in the media).

In fact, I just learned, all Hasidic Jews, such as the Botach/Boteach/Diveroli clan, are eligible for federal ethnic preferences! I had no idea ....

An alert reader pointed out in the comments to an earlier post this old NY Times story:

Reagan Grants Hasidim `Disadvantaged` Status New York Times, Jun 29, 1984

They were talking about it in the Crown Heights section of Brooklyn yesterday. Bearded men in dark coats under a hot sun, men known for their deep spiritual values, their belief in education and hard work, their pride in self-reliance.

They were all Hasidic Jews, and they were talking about President Reagan`s decision, announced Wednesday, to add them to a list of minority groups considered ``disadvantaged`` by the Government.

The list already includes Hispanic people, blacks, Indians and other groups that are considered by the Government to have encountered severe economic problems because of discrimination.

The designation means the Hasidim are able to apply for Federal assistance in running businesses. They will also be eligible for programs that set aside work for minority-group businesses.

Holy cow ... affirmative action?!? Is that why the Syrian Jews of Brooklyn have gotten so rich?

An Amazon.com reviewer of a book about the Hasidic Satmars of Williamsburg notes:

As a result of their low level of education and literacy, Satmar hasidim, to a much greater extent than most Orthodox Jews, fit poorly into the modern economy; professional jobs are of course off limits. According to the author, 1/3 of Williamsburg Hasids have incomes below the poverty line, and the median Jewish income in Williamsburg is one half the median family income in New York City (which in turn is below the median family income for NYC suburbs). In several parts of the book, the author goes out of his way to brag that in 1984, the Satmar were "offically designated a disadvantaged minority" by the U.S. Commerce Department (by which I assume he means that they are eligible for easy access to federal contracts under affirmative action regulations - though the author is not very clear about this). In fact, he states that this decision was "the most significant factor" in "the development of the entreprenurial spirit" among the younger hasidim. Somehow I find it troubling that a community can, by undereducating its members, become voluntarily poor and then gain "affirmative action" protections that were intended for communities that become poor through discrimination.

Here`s former NYC mayor Ed Koch`s statement of disbelief that the Reagan Administration made Hasidic Jews an official disadvantaged group.

I`m not real clear on just what affirmative action goodies Hasidim are eligible for as a disadvantaged minority — clearly, they can get help from the Minority Business Development Agency, but I`m not sure what else. If you know, let me know.

Despite, or perhaps because of, their Commitment to Service and Federally-Certified Ethnic Disadvantage, the Botach / Boteach family of LA is wildly wealthy. Luke Ford points out today:

This Week The Botachs Married Off A Daughter At The Century Plaza Hotel

I’m told there were 800 guests for the wedding of the daughter of Shlomo and Dalia Botach. Shlomo is Yoav’s brother. The daughter is [celebrity rabbi] Shmuley Boteach’s cousin.

How do they afford it? The Botachs own much of downtown Los Angeles. They live under the radar in the modest Pico-Robertson neighborhood. They send their kids to Hillel and YULA and get scholarships because of their large families. No one dreams of the vast amounts of money this family accumulated. Yoav (Shmuley Boteach’s father) is the largest owner of warehouses in California. Rumored to be Israelis, their roots are Iranian. [More]

The Century Plaza is the big Hyatt Regency hotel in Century City, right next door to Beverly Hills. Their wedding reception package starts at $132 per guest, so that`s six figures right there.

So, this whole story may be another affirmative action scandal, rather like crooked defense contractor Wedtech in the 1980s, whose Italian-American boss qualified as Hispanic because his parents had lived for awhile in Puerto Rico. Clifford D. May wrote in the New York Times in 1987:

One important aspect of the Wedtech case is that the Bronx-based company, which declared bankruptcy late last year, was in a position to benefit greatly from political influence because it was owned by a member of a minority group. Under Section 8(a) of the Small Business Act, such companies may receive Government contracts without going through the process of bidding against competitors, and Wedtech did so to gain most of its $100-million-a-year business.

Wedtech`s minority status was based on the fact that its founder, John Mariotta, was Hispanic. Mr. Mariotta -the name is Italian - was born in New York, though his parents came from Puerto Rico.

``This is an issue that troubles me,`` said Senator Daniel Patrick Moynihan, the New York Democrat who has been involved in minority issues for more than a generation. ``After all, there were slave-owning families in Puerto Rico in the 19th century. Do individuals from those families, too, qualify as disadvantaged minority group members?``

In any case, the company somehow kept its privileged status even after it went public in 1983.

The thorniest problem lawmakers face is that in the absence of competitive bidding, a minority-owned company must depend for its contracts on political influence and the subjective perceptions of those with a hold on the Government`s purse strings. That, in turn, can open up broad opportunities for corruption.

Of course, what`s the real scandal with AEY is that it`s not a scandal for Hasidic-owned firms to claim affirmative action breaks.