Dogged by controversies, Cornerstone eyes future (owned by nephew of US Congressman)

Times Leader (Wilkes-Barre, PA) ^ | 10/4/2003 | JERRY LYNOTT

[Born Conservative]

Dogged by controversies, Cornerstone eyes future By JERRY LYNOTT jlynott@leader.net

TECHNOLOGY WILKES-BARRE - The last of its federal contracts awarded, Cornerstone Technologies has warehoused its equipment and idled its staff.

The future of the company - held up as an example of the high-tech firms Northeastern Pennsylvania wants to attract - now depends upon its own success in the marketplace.

But the head of the research and development company that has received more than $9 million in government funds since 1999 insists Cornerstone is still viable.

"Nothing has changed. The company is ongoing," said Peter Kanjorski, president and chief executive officer of the privately held business.

He refused to answer questions Tuesday about Cornerstone's finances. He said he would answer questions only "off the record."

Cornerstone once was touted by Kanjorski's uncle, U.S. Rep. Paul Kanjorski, D-Nanticoke, as the type of company he wants to lure to the region.

Cornerstone has moved out of the building it leased in Plains Township and relocated its offices to a building co-owned by the congressman.

In late August, Peter Kanjorski said Cornerstone was looking for a smaller building to house its operations. He also said then that the company planned to begin production of powderized silver for use in microcircuits within a few weeks.

The company once employed 20 people, but the number of current employees could not be determined this week.

On July 3, 2002, the Office of Naval Research awarded funding for the last of four contracts, said Tim Henkle, a spokesman for the office. At that time, Cornerstone received $2.96 million of a $3.5 million appropriation. There are no further appropriations for fiscal years 2003 and 2004, he added.

Since it was created five years ago, Cornerstone has been awarded $9.3 million in contracts from the Office of Naval Research in the area of materials micronization technology, Henkle said. In addition to the 2002 award, the company received $3.5 million in 1999, $2 million in 2000 and $850,000 in 2001.

Congressman Kanjorski ensured the appropriations were included in past budgets.

But last year, after being criticized for securing money for the company run by Peter Kanjorski and other nephews, the congressman said he would not seek any more funding for research into microtechnology.

In a prepared statement, the congressman said Thursday the last appropriation bill that included funds for materials micronization technology was passed in 2001.

"To the best of my knowledge, Cornerstone Technologies is completing its research and development phase and is currently engaged in establishing commercial operations," he said in the statement.

The future of the company hinged on the development of water-jet technology - the use of high-pressure water to break down raw materials such as anthracite into microscopic particles. The particles could then be used to make composite materials for high-tech applications in the electronics, aerospace and automotive industries.

Cornerstone received a patent for the technology developed by Marian Mazurkiewicz, a mechanical engineering professor it hired from the University of Missouri at Rolla.

However, a university official acknowledged there is a dispute regarding the patent and an outstanding debt owed by Cornerstone. "They owe us funds from previous contracts," said Wayne Huebner, a university professor.

Huebner referred further questions to attorney Phil Hoskins, counsel for the University of Missouri system. Hoskins said he had no comment on the matters.

For much of its short life span, the company has been dogged by lawsuits filed by a former manager and by Cornerstone itself. Five lawsuits are pending in Northampton County Court of Common Pleas and one in Delaware.

A defendant in three employment lawsuits, Bruce Conrad, a co-founder of the company in 1998, said Cornerstone has offered him a $165,000 settlement to give up his interest in the company. "They buy my stock. I give up everything I did," said Conrad of Weatherly.

Conrad, who is suffering from cancer, said his health was a key factor in his decision to accept the offer as was the prospect of never "having to deal with the Kanjorskis again."

The settlement, which has yet to be finalized, includes a demand by Cornerstone that Conrad release the congressman from any liabilities for his actions, Conrad said.

Attorney Richard Breuer, who represents Cornerstone, could not be reached for comment.

Though no funds are owed Penn State University, the school ended its relationship with Cornerstone a few years ago regarding concerns about the quality of a product promised by the company.

Harold Schobert of Penn State's Energy Institute said Cornerstone promised to grind anthracite into 1 micron-size particles, but could only deliver particles 15 to 20 microns in size. A micron is one millionth of a meter.

Several members of the school traveled to Plains Township but were not allowed to see Cornerstone's equipment in operation.

"That's when I started getting a ticklish feeling," Schobert said.

In instances where there is proprietary information or technology, non-disclosure agreements are routinely signed, he said. But in the case with Cornerstone, the school was a partner in the research, and researchers should have been permitted to see for themselves how the equipment worked.

Fearing the product Cornerstone delivered would be unsuitable because it somehow might be contaminated, the school offered to bring its own anthracite to Plains Township, have it ground, put in a can and transported back to Penn State.

Cornerstone would not allow that either, Schobert said.

After parting ways, Schobert said, the school did further research and found out the particles did not have to be ground as finely for use in synthetic graphite. Anthracite provided an abundant and inexpensive resource for the product that was being made in the United States from the more costly petroleum coke.

Schobert said he would still be interested in 1-micron size particles of anthracite for use in the synthetic graphite. "If Cornerstone had delivered, who knows."

[Born Conservative]

More than $9 in government contracts, and the owner's uncle is a US Representative. This was a major campaign issue last year prior to the election that re-elected Kanjorski. Although he got back in, his hold on the position is slipping, as more and more people realize that he's a BUM. Although the NRA has supported him in the past, I haven't voted for him since Clinton's impeachment, since Kanjorski was present at the "pep rally" on the lawn outside the White House after the impeachment proceedings.

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[thegreatbeast]

"Congressman Kanjorski ensured the appropriations were included in past budgets."

The United States taxpayer thanks you, unc!