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What would the U.S. military do without KBR, its largest logistical contractor?

That's not something the military ever wants to find out. The U.S. occupation of Iraq would collapse within days without KBR, which provides food, fuel, and potable water along with critical services ranging from complex engineering to cleaning out the port-o-potties.

And KBR knows it. A story on the front page of today's New York Times lays bare the leverage that KBR holds over the U.S. military.

In short, KBR can charge the U.S. government anything it wants under the implicit threat that the firm will halt logistical services to troops in Iraq. If the military doesn't pay up in full, KBR has warned, "it would reduce payments to subcontractors, which in turn would cut back on services."

That's according to Charles M. Smith, the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the Iraq war. Smith, speaking out for the first time, said he was ousted from his job after he tried to question KBR's massive billing.

The Army itself admits to the Times that it really had no choice but to pay KBR.

"You have to understand the circumstances at the time," said Jeffrey P. Parsons, executive director of the Army Contracting Command. "We could not let operational support suffer because of some other things."


Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

As chief of the Field Support Contracting Division of the Army Field Support Command, he was in charge of the KBR contract from the start. Mr. Smith soon came to believe that KBR's business operations in Iraq were a mess. By the end of 2003, the Defense Contract Audit Agency told him that about $1 billion in cost estimates were not credible and should not be used as the basis for Army payments to the contractor.

"KBR didn't move proper business systems into Iraq," Mr. Smith said.

Along with the auditors, he said, he pushed for months to get KBR to provide data to justify the spending, including approximately $200 million for food services. Mr. Smith soon felt under pressure to ease up on KBR, he said. He and his boss, Maj. Gen. Wade H. McManus Jr., then the commander of the Army Field Support Command, were called to Pentagon meetings with Tina Ballard, then the deputy assistant secretary of the Army for policy and procurement.


After Smith was pushed out, the Defense Department hired a contractor to approve KBR's billing. (The department's own auditors had agreed with Smith that KBR was not properly documenting its billing.)

U.S.-paid contractors now outnumber U.S. troops in Iraq. Many contractors are recruited from poor Asian countries and paid far less than Americans would demand.

We've heard before about the "profound systemic problems" with KBR's billing. But Smith's account is the first time we've heard about an implicit threat to cut off services to troops.

KBR doesn't have the best record of providing troops' services. The company was criticized in March for making troops sick by failing to provide clean water. And top military officials have given false statements to Congress to quell controversy over the company.

But there's not much the military can do about it. Installing another company with the infrastructure inside Iraq needed to provide the same services would be an all-but insurmountable undertaking. So Smith's account should really come as no surprise.

"In the end," Mr. Smith said, "KBR got what it wanted."

A Senate investigation reveals that the Department of Defense used military psychologists to devise aggressive interrogation techniques to be used on detainees suspected of terrorism. Legal experts within the military warned department officials of the illegality of such tactics before they were approved. The defense lawyers spoke to investigators anonymously, as the information has yet to see an official release. (Associated Press)

As wars in Iraq and Afghanistan plod along, the role of inspector generals has increased. The FY08 defense bill created new oversight positions, in addition to the existing standards, as more and more responsibility (and disagreements over jurisdiction) is handed to the government monitoring agencies. (CongressDaily)

The Department of Defense inspector general's investigation of the 2005 killing of Reuters employee Waleed Khaled by U.S. soldiers who fired on his car in response to what they thought was a threat concluded that the soldiers acted properly. The decision comes after crucial video evidence in the case went missing. (Reuters)

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Buried deep in the new Senate intel report is evidence that yet another pre-war Bush administration claim about Iraq had been discredited within the intelligence community, months before the president used the claim publicly as an argument for war.

In October 2002, a few weeks before Congress voted to authorize the Iraq invasion, Bush told a crowd in Cincinnati: "We've learned that Iraq has trained al Qaeda members in bomb-making and poisons and deadly gasses."

Problem is, it wasn't true. More importantly, a lot of people at the CIA and the Defense Intelligence Agency knew it probably wasn't true. That's one of the interesting revelations inside the Senate's recent 171-page Phase II report on whether White House statements were backed up by prewar intelligence.

Once again, it's important to make the distinction between good-faith flaws in prewar intelligence and evidence that the public was misled by a bogus case for war. (A lot of people have tried hard to make that a very hazy distinction in recent years)

As Newsweek noted, the Senate report reveals that: "The intelligence reports on chemical and biological weapons training came primarily from the interrogation of al Qaeda detainee Ibn al-Shaykh al-Libi."

But al-Libi had been widely discredited months before the president made that remark -- by both the CIA as well as the Defense Intelligence Agency.

From page 65 and 66 of Senate report:

A February 22, 2002 DIA Defense Intelligence Terrorism Summary noted that Ibn al-Shaykh [al-Libi] "lacks specific details on the Iraq's involvement, the [Chemical Biological Radiological and Nuclear Weapons] materials associated with the assistance and the location where the training occurred. It is possible he does not know any further details; it is more likely this individual is intentionally misleading the debriefers. Ibn al-Shaykh has been undergoing debriefs for several weeks and may be describing scenarios to debriefers that he knows will retain their interest. Saddam's regime is intensely secular and is wary of Islamic revolutionary movements. Moreover, Baghdad is unlikely to provide assistance to a group it cannot control.

DIA reiterated some of these points in additional reports. On August 7, 2002, the CIA reported on al-Libi's credibility. The Summary of the report stated that questions persist about [al-Libi's] forthrightness and truthfulness" and later elaborating "in some instances, however, he seems to have fabricated information. Perhaps in an attempt to exaggerate his own importance, Ibn al-Shaykh claims to be a member of al-AQa'ida's Shura Council, a claim not corroborated by other intelligence reporting.

(emphasis added)


Intel officials long ago stopped trying to defend al-Libi as a source. He recanted in January 2004, leading the CIA to order all prior intelligence suggesting Iraq trained al Qaeda personnel in chemical and biological warfare "recalled and re-issued" in February 2004.

But the fact the intelligence community knew al-Libi was unreliable from early to mid-2002 casts many official statements in a new light. For example, al-Libi has been reported as a primary source for Colin Powell's claim that al-Qaeda received chemical or biological weapons training from Iraq when he addressed the United Nations in early 2003. Powell did not use his name, but referred to al-Libi as a "senior Al Qaeda terrorist" who ran a training camp in Afghanistan.

(U.S. forces captured al-Libi in Afghanistan in 2001 and flew him to Egypt, where he provided the false Iraq-al-Qaeda link while undergoing harsh interrogation.)

Also, we know that Bush's speech was vetted because that was the same speech on Oct. 7, 2002, that CIA director George Tenet personally called the president about and urged him not to make mention of Iraq's alleged effort to obtain uranium from Niger because intelligence sources did not support that claim.

Last week, we wrote about Samuel Israel III, the former hedge fund manager sentenced to a 20-year prison sentence for fleecing his clients out of $400 million.

At first, authorities thought Israel may have committed suicide when he disappeared on June 10, just days before the start of his prison term. They found his car near Bear Mountain Bridge with the words, "suicide is painless" scrawled in the dust on the hood.

But the enigmatic quip, the title of the theme song from the hit TV series M*A*S*H, was just part of a ruse to avoid incarceration, though authorities did not state why they had ruled out suicide.

From the AP:

U.S. Marshal Joseph Guccione said Monday that investigators now consider the case of Samuel Israel III to be solely a fugitive investigation.

. . . Federal marshals issued a wanted poster Thursday for the man convicted of cheating investors out of $450 million in his Bayou hedge funds. They said he should be considered armed and dangerous.

At first Rep. Henry Waxman asked politely.

But today the chairman of the House Government Oversight and Reform Committee issued subpoenas for the FBI's paperwork stemming from interviews of Vice President Cheney and President Bush regarding the outing of covert CIA agent Valerie Plame Wilson.

What are the odds Attorney General Michael Mukasey turns them over?

Meanwhile, we can expect former White House press secretary Scott McClellan to be on Capital Hill testifying about the same matter on Friday.

Following the Justice Department Inspector General's report on the FBI role in Sept. 11 detainee interrogations, high-level administration officials have been implicated in the debates over torture tactics. Now, besides the DoJ's investigation, former Attorney General John Ashcroft and FBI Director Robert Mueller are facing private suits from the detainees.

From the AP:

The Supreme Court says it will decide whether former Attorney General John Ashcroft and FBI Director Robert Mueller must face a lawsuit that claims prisoners detained after Sept. 11 were subject to ethnic and religious discrimination.

The lawsuit was filed by Javaid Iqbal, a Pakistani Muslim who spent nearly six months in solitary confinement in 2002. Iqbal, since deported from the United States, says Ashcroft, Mueller and others implemented a policy of confining detainees in highly restrictive conditions because of their religious beliefs and race.

A federal appeals said the lawsuit could proceed, but the Bush administration says the high-ranking officials should not have to answer for the allegedly discriminatory acts of subordinates.

Brad Schlozman, the former Justice Department official who left the Department in August 2007 after he openly admitted to "boasting" about his hiring of conservative Republicans, is the focus of a new turn in the DOJ's investigation into the 2006 U.S. attorneys firing scandal.

You might remember Schlozman as the head of the DOJ's Civil Rights Division-cum-U.S. attorney in Kansas City, and most recently, his work at Main Justice. Schlozman famously talked of replacing Clinton appointees with "good Americans" and keeping tabs on a lawyer who he had heard, "didn't even vote for Bush."

The Wall Street Journal reports today that lawyers have filed for a grand jury referral, which could lead to criminal charges, in order to investigate Schlozman's involvement in improper prosecutions during his time running the DOJ's civil-rights division in general. The referral appears specifically tied to possible perjury in his 2007 congressional testimony.

The Journal, summarizes Schlozman's past role in the investigation:

In testimony before the Senate Judiciary Committee, Mr. Schlozman conceded boasting to associates about the number of Republicans he managed to hire at the department. The allegations against him helped feed months of scandal that eventually forced the resignation of Attorney General Alberto Gonzales in August.

. . . At a Senate hearing last June, Democrats zeroed in on allegations that Mr. Schlozman was part of an effort by Republican political officials to pursue vote-fraud investigations in important swing states as a way to gain electoral advantage.

Mr. Schlozman's promotion to the U.S. attorney's office in Kansas City came after the department asked his predecessor, Todd P. Graves, to resign. Mr. Graves was among several U.S. attorneys who had shown reluctance to bring vote-fraud-related cases, according to testimony and documents gathered by Senate investigators last year.

After Mr. Schlozman's arrival in Kansas City, prosecutors filed charges against workers from a left-leaning activist group, Acorn. The workers eventually pleaded guilty to violations related to voter registration. The timing of the indictment, five days before a close Senate election, drew criticism from Democrats.


Schlozman filed a clarification of his Congresional testimony, in which he had first stated that he was "directed" to pursue the timely prosecution of the voting group by superiors. In his later revision he took "full responsibility" for prosecutorial discretion:

"I want to be clear that, while I relied on the consultation with, and suggestions of, the Election Crimes Branch in bringing the indictments when I did, I take full responsibility for the decision to move forward with the prosecutions related to Acorn while I was the interim U.S. Attorney," he said in the clarification.


DOJ inspectors are hoping to complete the investigation in the coming weeks:

Separate investigations into the department's handling of the prosecutor firings and related issues, which are being conducted by the Justice Department's Office of Professional Responsibility and the Inspector General, are expected to be completed within the next few weeks, lawyers familiar with the probe said. Both want to abide by department guidelines aimed at clearing up politically sensitive investigations well before the elections, to avoid accusations they could influence the outcome.

Guantanamo Bay and Abu Ghraib have been synonymous with detainee abuse in recent years. Now McClatchy interviews of guards and prisoners from the U.S. internment camp in Bagram, Afghanistan say the spot was the site of widespread abuse and sadistic violence that rival its counterparts in Iraq and Cuba (where innocent prisoners are still unable to go home). (McClatchy and Miami Herald)

The Election Assistance Commission, created in response to the Florida recount in 2000 to prevent such election boondoggles, is still underfunded, understaffed and overworked. The embattled commission faces many important issues this election year, yet frustration stemming from partisan and bureaucratic entanglements persist. (Associated Press)

Non-profit and government programs attempting to grant U.S. visas to Iraqis who have worked for the U.S. occupation in some manner have failed to meet the initial goals and promises. State Dept. figures show only 763 of over 7,000 Iraqis involved in the visa program have successfully received entry. (Washington Post)

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So how lenient will Jack Abramoff's judge really be?

He'll find out on Sept. 4, which a judge in Washington today set as his sentencing date.

But don't expect that to be the end of the multi-year investigation of his lobbying ring. The feds expect him to keep up is cooperation, and possibly even testify at some point. Keep in mind that Abramoff has been cooperating from federal prison since he began serving time for his role in the separate fraud case in Florida.

Attorneys in the case came to an interesting agreement this week, according to a joint motion filed in federal court.

While the government anticipates that Mr. Abramoff's cooperation in the form of possible testimony will continue for the foreseeable future, the parties believe that they are in a position to inform the court about the full scope of his misconduct and cooperation, and that, consistent with the commitments in the plea agreement with Mr. Abramoff, sentencing in the near future in this case is appropriate.


Under his plea agreement, Abramoff can expect to receive a jail sentence of 9 1/2 to 11 years, and he is required to make restitution of $26.7 million to the IRS and to the Indian tribes he defrauded.

We just learned that the head of the U.S. Office of Special Council, whose office and home were raided by federal agents last month, had a habit of instructing employees to go online and post comments rebutting news stories that he perceived as negative, according to a report from CongressDaily

"That did go on," said a former employee who has been involved in the activity. "Bloch would suggest posting things in the comments section. ... There'd be a negative article about Scott's involvement on something ... and [the] comment would be something like 'This Bloch guy is doing a good job." Two former OSC employees have gone so far as to describe Bloch as thin-skinned and "obsessed" with his press coverage.


Admittedly, Bloch has gotten some bad press in recent years. The man running the office in charge of investigating whistle-blower complaints, Bloch himself came under investigation in 2005 for retaliating against whistle blowers.

Then the feds got involved, suspicious that he was obstructing justice when he had a firm called "Geeks on Call" delete a batch of office emails potentially related to the investigation.

Meanwhile, through it all, Bloch still found time to worry about what everyone is saying about him, especially in his home state.

The employee suggested at least one OSC worker posted comments on the Web sites of such publications as the Washington Post, Topeka Capital-Journal, and the Lawrence Journal World. The two Kansas-based publications have written about Bloch because he is from the state.

In another instance confirmed by CongressDaily, an OSC employee who has not served in the military identified himself as "A Combat Vet" in an online response to a July 13, 2007, article on GovernmentExecutive.com. In the article, House Oversight and Government Reform Committee Republicans faulted Bloch for his use of personal e-mail to discuss agency business.

The anonymous posting said news organizations were devoting too little coverage to OSC's enforcement of the Uniformed Services Employment and Reemployment Rights Act, which bars discrimination against people based on service in the armed services.

"Where is the coverage of USERRA?" the posting asked. "OSC helped my buddy out when he couldn't get his job back, and it doesn't seem like anybody is checking into how it helps veterans. ... Who the hell cares if Bloch sent an email about congresscritters goofing off and playing pattycake. This USERRA issue is a huge deal for us who served. Does anyone give a crap?"


TPMmuckraker has tracked Bloch's travails pretty closely over the past several months. We don't have any indication his underlings were posting comments here -- but it does make us curious.

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