SOS Ken Bennett's Firm Sued for Fraud, Breach of Contract

by Craig Harris -
The Arizona Republic
May. 2, 2010 09:04 PM

PRESCOTT - A small building-insulation company whose chairman is Secretary of State Ken Bennett is facing two suits that allege it engaged in securities fraud and breach of contract and failed to pay six employees more than $143,000.

The suits were filed in Yavapai County Superior Court against Prescott-based Global Building Systems, which makes energy-efficient wall and roof structures with foam blocks and embedded steel.


"I fully expect we will get these settled if we can sit down and negotiate," said Bennett, who became a director in April 2006 and chairman seven months later. "The company will be successful in the long run."

Bennett said the company, formed in 2002, spent numerous years in research and development to make an insulation product that will significantly reduce utility costs. The product also is highly resistant to fire, mold, water and termites, according to Global Building Systems.

Bennett said problems began about two years ago, when the company was ready to go to market but was hit by the recession and housing-industry meltdown.

Bennett, who is seeking to stay in office in this fall's election, said he's not paid as chairman and that he had invested $50,000 in the company.

The former state Senate president was appointed secretary of state in January 2009, when he replaced Jan Brewer, who became governor upon Janet Napolitano's taking a Cabinet post with the Obama administration.

Bennett is running unopposed in the Republican primary. He will face the winner of the Democratic primary between Sam Wercinski and state Rep. Chris Deschene.

The two lawsuits were filed in late March.

In one, Christopher and Cyndi Pronger, who lived in Williamson Valley, allege Bennett and other board members failed to properly monitor James Beavers, who now is the company's vice president.

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