Terrorist probe hobbles Ptech

Computerworld - The White House has given Ptech Inc.'s software a clean bill of health, and most of its customers and strategic business partners remain committed to its technology. But the company, investigated for having an al-Qaeda connection, has still become a casualty of the war on terrorism.

In an exclusive series of interviews with Computerworld, Ptech CEO Oussama Ziade and several former employees said the government's investigation of a former investor who is alleged to have ties to terrorism has dealt a nearly fatal blow to the Quincy, Mass., software company (see story). And they fear that the same thing could happen to other companies.
Ptech's crisis stems from a Dec. 5 consensual search by federal agents, which was broadly characterized by the media as an early-morning "raid" (see story). The search was part of an investigation of the company's relationship with Yassin al-Qadi, a wealthy Saudi businessman and one of two "angel" investors who helped get Ptech on its feet in 1994. Al-Qadi, who was never a shareholder of record in Ptech and who later twice turned down Ptech requests for additional funding, is believed by the U.S. intelligence community to have financial ties to international terrorism.
Since that search, Ptech, once a 65-employee company that rarely lost a competitive contract bid, has been reduced to 10 people and has almost no new business on the horizon.
"Almost immediately we lost our revenue for December and January," said Ziade. "Customers who know us and know our product have not walked away. They know there is nothing here related to terrorism."
But soon after the investigation broke, Ziade said, some large customers turned their backs on Ptech, refusing to comment publicly on their trust and confidence in the company and its enterprise software, which enables its customers in the Fortune 1,000 and government ranks to visualize and analyze their technology infrastructure and build models to conduct strategic business planning. That situation was confirmed by Computerworld in interviews with those companies.
"When you sell to the Fortune 1,000, you are in the business of trust," said Ziade. "But there were directives coming out of the legal departments in those companies that said Ptech is a risk company."
For example, a systems architect at a major forestry products firm that relies on Ptech software to conduct strategic data mining and business planning confirmed the existence of a corporate gag order. Yet nothing has changed in the company's relationship with Ptech, said the source, who requested anonymity. "The company is fine, and the software