Team Infidel
Forum Spin Doctor
New York Times
June 25, 2008 By Eric Schmitt
WASHINGTON — When the Army last year awarded a contract worth up to nearly $300 million to a tiny Miami Beach munitions dealer to supply ammunition to Afghanistan’s security forces, it overlooked a very checkered past.
A Congressional committee revealed Tuesday that by the time the Army awarded the bid, State and Defense Department officials had canceled or delayed at least six earlier contracts with the company, AEY Inc., for poor quality or late deliveries.
But that record, including a botched $5.6 million order for 10,000 Beretta pistols for Iraq’s security forces, was either ignored or omitted from databases that American military contracting officials have used to weed out companies suspected of involvement in suspect arms deals.
Congressional investigators also determined that the Afghanistan ammunition contract, which the company is also accused of mishandling, may have been unnecessary: Bosnia, Bulgaria, Hungary and Albania, the Eastern European countries from which AEY bought its ammunition, had offered to donate the type of Soviet-style rifle and machine-gun cartridges that the Afghan Army and police forces use.
With AEY’s business dealings now shut down and its top executives charged last week with defrauding the government on the Afghan contract, lawmakers on Tuesday criticized four State and Defense department officials for what the legislators called a case study in military contracting gone wrong.
A hearing of the House Oversight and Government Reform Committee on Tuesday hinged on a central question posed by its chairman, Representative Henry A. Waxman, Democrat of California: “How did a company run by a 21-year-old president and a 25-year-old former masseur get a sensitive $300 million contract to supply ammunition to Afghan forces?”
It is a question many federal and Congressional officials have been asking since March, when the Army suspended AEY from future federal contracting, citing shipments of Chinese ammunition and claiming that the company’s young president, Efraim E. Diveroli, misled the Army by saying the munitions were from Hungary. American law prohibits trading in Chinese arms.
House investigators have also gathered testimony that the American ambassador to Albania, John L. Withers II, helped cover up the illegal Chinese origins of ammunition that AEY was shipping from Albania to Afghanistan under the Army contract.
Tom Casey, a State Department spokesman, said Tuesday that the department’s inspector general had been asked to investigate the accusations. A statement posted on the Web site of the United States Embassy in the Albanian capital, Tirana, said that Mr. Withers expected to be absolved of any blame.
One answer to Mr. Waxman’s question is that Pentagon officials never consulted a “watch list” the State Department had compiled of 80,000 individuals and companies suspected of illegal arms transactions, including Mr. Diveroli and some middlemen the company used.
Under American law, American dealers must disclose every entity involved in an arms shipment overseas, including brokering, transportation and repackaging companies.
The State Department checks subcontractors and partners against a watch list of organizations and people suspected of involvement in illegal arms deals.
But the law exempts federal agencies and contractors working for them. Arms-trade researchers have complained that many contractors supplying munitions for the wars abroad, including AEY, have worked with suspicious companies abroad, and that the Pentagon has not screened their activities.
Lawmakers also criticized the government officials for failing to review several AEY contracts that had been canceled or delayed, many of which never raised red flags with contracting officials because they fell under the $5 million contract value that was the warning threshold.
In October 2005, the committee report found, AEY delivered a shipment of damaged helmets to the American training command in Iraq. One American inspector said in an e-mail message obtained by the committee: “The helmets came to Abu Ghraib by mistake. They are not very good. They have peeling paint and a few appear to have been damaged such as having been dropped.”
About the same time, AEY failed to deliver more than 10,000 Beretta pistols under contract to Iraqi security forces.
According to the contracting officer, Mr. Diveroli blamed the delays in part on a plane crash that had destroyed important documents and a hurricane that hit Miami.
When pressed by several lawmakers about the youth and relative inexperience of AEY’s top officials, Jeffrey P. Parsons, executive director of the Army Contracting Command, said that Army contracting officers were not required to know the age of a company’s owners, and that they had not known in AEY’s case.
Pentagon and State Department officials sought to defend their contracting procedures, arguing that AEY had repeatedly deceived officials or took advantage of loopholes in federal rules.
But the officials said the Pentagon, and specifically the Army, was reviewing how it ordered foreign munitions and supervised their quality, packaging and shipment. The military is also planning to revamp how it vets Pentagon-sponsored deals in the often murky world of foreign arms procurement.
“We’re going to do everything we can to ensure this never happens again,” said Brig. Gen. William N. Phillips, commander of the Joint Munitions and Lethality Life Cycle Management Command.
But that still left lawmakers angry and puzzled about how the Army could miss warning signs of trouble before it awarded AEY the Afghan ammunition contract in January 2007.
House investigators determined that Melanie A. Johnson, a contracting officer with the Army Sustainment Command, had overruled a contracting team that raised concerns about AEY’s inexperience and had concluded that there was “substantial doubt” that the company could fulfill the contract.
Investigators said Ms. Johnson had later acknowledged to them that she was unaware of the poor past performance of AEY, including the Beretta contract, when she awarded the company the Afghan bid.
“Obvious evidence of consistently shoddy performance was somehow missed or ignored as substandard or illegally obtained munitions were apparently being sent to Afghanistan,” said Representative Thomas M. Davis III of Virginia, the committee’s ranking Republican.
June 25, 2008 By Eric Schmitt
WASHINGTON — When the Army last year awarded a contract worth up to nearly $300 million to a tiny Miami Beach munitions dealer to supply ammunition to Afghanistan’s security forces, it overlooked a very checkered past.
A Congressional committee revealed Tuesday that by the time the Army awarded the bid, State and Defense Department officials had canceled or delayed at least six earlier contracts with the company, AEY Inc., for poor quality or late deliveries.
But that record, including a botched $5.6 million order for 10,000 Beretta pistols for Iraq’s security forces, was either ignored or omitted from databases that American military contracting officials have used to weed out companies suspected of involvement in suspect arms deals.
Congressional investigators also determined that the Afghanistan ammunition contract, which the company is also accused of mishandling, may have been unnecessary: Bosnia, Bulgaria, Hungary and Albania, the Eastern European countries from which AEY bought its ammunition, had offered to donate the type of Soviet-style rifle and machine-gun cartridges that the Afghan Army and police forces use.
With AEY’s business dealings now shut down and its top executives charged last week with defrauding the government on the Afghan contract, lawmakers on Tuesday criticized four State and Defense department officials for what the legislators called a case study in military contracting gone wrong.
A hearing of the House Oversight and Government Reform Committee on Tuesday hinged on a central question posed by its chairman, Representative Henry A. Waxman, Democrat of California: “How did a company run by a 21-year-old president and a 25-year-old former masseur get a sensitive $300 million contract to supply ammunition to Afghan forces?”
It is a question many federal and Congressional officials have been asking since March, when the Army suspended AEY from future federal contracting, citing shipments of Chinese ammunition and claiming that the company’s young president, Efraim E. Diveroli, misled the Army by saying the munitions were from Hungary. American law prohibits trading in Chinese arms.
House investigators have also gathered testimony that the American ambassador to Albania, John L. Withers II, helped cover up the illegal Chinese origins of ammunition that AEY was shipping from Albania to Afghanistan under the Army contract.
Tom Casey, a State Department spokesman, said Tuesday that the department’s inspector general had been asked to investigate the accusations. A statement posted on the Web site of the United States Embassy in the Albanian capital, Tirana, said that Mr. Withers expected to be absolved of any blame.
One answer to Mr. Waxman’s question is that Pentagon officials never consulted a “watch list” the State Department had compiled of 80,000 individuals and companies suspected of illegal arms transactions, including Mr. Diveroli and some middlemen the company used.
Under American law, American dealers must disclose every entity involved in an arms shipment overseas, including brokering, transportation and repackaging companies.
The State Department checks subcontractors and partners against a watch list of organizations and people suspected of involvement in illegal arms deals.
But the law exempts federal agencies and contractors working for them. Arms-trade researchers have complained that many contractors supplying munitions for the wars abroad, including AEY, have worked with suspicious companies abroad, and that the Pentagon has not screened their activities.
Lawmakers also criticized the government officials for failing to review several AEY contracts that had been canceled or delayed, many of which never raised red flags with contracting officials because they fell under the $5 million contract value that was the warning threshold.
In October 2005, the committee report found, AEY delivered a shipment of damaged helmets to the American training command in Iraq. One American inspector said in an e-mail message obtained by the committee: “The helmets came to Abu Ghraib by mistake. They are not very good. They have peeling paint and a few appear to have been damaged such as having been dropped.”
About the same time, AEY failed to deliver more than 10,000 Beretta pistols under contract to Iraqi security forces.
According to the contracting officer, Mr. Diveroli blamed the delays in part on a plane crash that had destroyed important documents and a hurricane that hit Miami.
When pressed by several lawmakers about the youth and relative inexperience of AEY’s top officials, Jeffrey P. Parsons, executive director of the Army Contracting Command, said that Army contracting officers were not required to know the age of a company’s owners, and that they had not known in AEY’s case.
Pentagon and State Department officials sought to defend their contracting procedures, arguing that AEY had repeatedly deceived officials or took advantage of loopholes in federal rules.
But the officials said the Pentagon, and specifically the Army, was reviewing how it ordered foreign munitions and supervised their quality, packaging and shipment. The military is also planning to revamp how it vets Pentagon-sponsored deals in the often murky world of foreign arms procurement.
“We’re going to do everything we can to ensure this never happens again,” said Brig. Gen. William N. Phillips, commander of the Joint Munitions and Lethality Life Cycle Management Command.
But that still left lawmakers angry and puzzled about how the Army could miss warning signs of trouble before it awarded AEY the Afghan ammunition contract in January 2007.
House investigators determined that Melanie A. Johnson, a contracting officer with the Army Sustainment Command, had overruled a contracting team that raised concerns about AEY’s inexperience and had concluded that there was “substantial doubt” that the company could fulfill the contract.
Investigators said Ms. Johnson had later acknowledged to them that she was unaware of the poor past performance of AEY, including the Beretta contract, when she awarded the company the Afghan bid.
“Obvious evidence of consistently shoddy performance was somehow missed or ignored as substandard or illegally obtained munitions were apparently being sent to Afghanistan,” said Representative Thomas M. Davis III of Virginia, the committee’s ranking Republican.