TPM News

So what defense contract in Iraq didn't involve a kickback? What contract was awarded through competitive bidding? As Pentagon investigators conduct an unprecedented review into corruption in the department's Iraq contracting, it's a rare bid that wasn't crooked.

Yesterday, Congress learned that $6 billion worth of contracts are under criminal review. That's right -- criminal:

Military officials said Thursday that contracts worth $6 billion to provide essential supplies to American troops in Kuwait, Iraq and Afghanistan — including food, water and shelter — were under review by criminal investigators, double the amount the Pentagon had previously disclosed.

In addition, $88 billion in contracts and programs, including those for body armor for American soldiers and matériel for Iraqi and Afghan security forces, are being audited for financial irregularities, the officials said.

Taken together, the figures, provided by the Pentagon in a hearing before the House Armed Services Committee, represent the fullest public accounting of the magnitude of a widening government investigation into bid-rigging, bribery and kickbacks by members of the military and civilians linked to the Pentagon’s purchasing system.


House Armed Services Committee Chairman Ike Skelton (D-MO) called DOD's procurement process "a culture of corruption," an assessment that appears to represent the bipartisan consensus. Yet the Pentagon's deputy inspector general said the contracting corruption was attributable to "isolated incidents." Yes, $6 billion worth of isolated incidents.

Read More →

A knowledgeable government source says the account Admiral Mike McConnell gave to the House intelligence committee about the procedure for wiretapping Iraqi insurgents earlier this year is "really terrible."

McConnell told the committee today that restrictions derived by the FISA Court this year on wiretapping foreign-to-foreign communications that pass through the U.S. prevented the NSA from surveilling Iraqi insurgents who had kidnapped U.S. soldiers for 12 hours. But the source, who is privvy to the timeline of the incident, says "internal bureaucratic wrangling," and not court-based restrictions, were responsible for the lag time. "To get an emergency warrant, you just have to believe the facts support the application that someone is an agent of a foreign power," the source says. "That takes approximately five seconds to establish if you're going after an Iraqi insurgent."

Why did so much time elapse before the surveillance? Top Justice Department officials needed to approve the emergency order. But according to the source, Attorney General Alberto Gonzales was out of town; Deputy AG Paul McNulty had resigned already; Solicitor General Paul Clement "had left the building"; and the other responsible official, Assistant Attorney General Kenneth Wainstein was not yet authorized to approve the emergency order. Wainstein testified today, but demurred from answering questions about the incident in open session.

Despite McConnell's testimony today and Tuesday that the FISA Court unreasonably tied the NSA's hands in the case, the source says, "it stems from their own internal process, and it stems from their own reading" of the court's ruling.

More on this tomorrow.

On Tuesday, Admiral McConnell, director of national intelligence, told the House Judiciary Committee that a FISA Court ruling earlier this year prevented the NSA from eavesdropping on Iraqi insurgents who had captured U.S. soldiers. At least one FISA expert we spoke with found the claim "totally implausible." Today, McConnell offered some details about the incident to the House Permanent Select Committee on Intelligence in response to a question from ranking Republican Peter Hoekstra.

Well, sir, I have to be a little careful because of sources and method issues. But the situation was, as you know, because global communications move on wire, you can have a situation where information would pass on a wire through this country. So for us to specifically target the individuals that were involved in that kidnap, we had to go through a court order process.

Now, when we've talked about this before, people frequently say, "Well, wait a minute. Why don't you just do emergency FISA?" Well, that is the point. We are extending Fourth Amendment rights to a terrorist foreigner foreign country who's captured U.S. soldiers. And we're now going through a process to produce probable cause that we would have authority to go after these terrorists.

And then people say, "Well, why don't you just go? You got emergency authorization." Well, emergency authorization doesn't mean you don't go through the process, which is probable cause. So some analyst has got to do it and some official's got to sign it out. And it has to come to either me or some other official. Then it goes to the attorney general. Then it goes to FISA court.

Read More →

If Erik Prince of Blackwater shows up at the House oversight committee's hearing into his company's activities in Iraq, expect him to get an earful. It's not just about the Mansour incident, or the murky legal status the private-security firm possesses. According to the Iraqi government, Blackwater employees engineered a jailbreak to free a minister convicted of corruption charges.

Prime Minister Nouri al-Maliki referred obliquely to the incident yesterday. But a Defense Ministry spokesman told Leila Fadel of McClatchy that Blackwater, in December, broke former Electricity Minister Ahyam al-Samarrai out of prison in the Green Zone, where he was awaiting sentencing for embezzling $2.5 billion in reconstruction money.

Until now, Iraqi officials hadn't named the private security company that they believe helped Samarrai, the only Iraqi cabinet official convicted of corruption, to escape from a jail that was overseen jointly by U.S. and Iraqi guards. He subsequently was spirited out of the country and is believed to be living in the United States.

Read More →

John Bresnahan over at The Politico reports that a federal grand jury has subpoenaed House payroll records for Ed Buckham, formerly ex-Rep. Tom DeLay's (R-TX) chief of staff. Bresnahan notes that it's a clear indication that the feds are closing in on Buckham, who left DeLay to found the Alexander Strategy Group, the firm that made millions as the gateway to DeLay during the heady years when he ran the Hill.

Buckham, as DeLay's bag man, has long been considered the key to prosecutors building a case against DeLay as part of the Jack Abramoff investigation. The vise has been closing on him for quite some time. But Peter Stone reports in this month's National Journal that Buckham finally turned down a deal offered by prosecutors to plead guilty, and that "he expects to be indicted soon."

Buckham would be the third former DeLay aide to be targeted in the scandal. Two other ex-aides who went on to work with Abramoff, Michael Scanlon and Tony Rudy, have pleaded guilty.

Note: Here's our rundown on all of Buckham's many entanglements.

Update: Back in May, DeLay challenged the Justice Department to "Fish or cut bait. Do something," since they seemed to be taking their own sweet time questioning his associates about his relationship to Buckham and Abramoff. It appears that the Department has chosen the "fish" option.

In the wake of the ongoing Blackwater scandal, Rep. Henry Waxman (D-CA) wants to have a frank discussion with Erik Prince, the company's founder. His House oversight committee will hold a hearing on Blackwater on October 2. And it just won't be a party if Prince doesn't attend.

Waxman sent Prince a letter today requesting his appearance at the hearing. The little-seen Blackwater official probably won't take kindly to Waxman's intent to question "whether the specific conduct of your company has advanced or impeded U.S. efforts."

The Blackwater hearing offers Waxman the opportunity to link the issue with a different investigation his committee is undertaking. Waxman is also looking into whether the State Department's inspector general, Howard "Cookie" Krongard, obstructed an inquiry into allegations that Blackwater, on a State Department contract, was illegally smuggling weapons into Iraq. Krongard has been invited to an October 20 hearing before the committee.

Text of the letter below the fold.

Read More →

Last month, in an interview with the El Paso Times, Director of National Intelligence Mike McConnell said that openly debating changes to the Foreign Intelligence Surveillance Act -- changes requested by none other than McConnell himself -- would mean that "some Americans are going to die." At first it seemed like an unfortunate bit of demagoguery. At a hearing today of the House intelligence committee, though, McConnell again anticipated bodies piling up in the streets as the direct consequence of discussing the McConnell's favored revisions to FISA. From Reuters:

He said debate over the programs was important to ensure authorities had proper tools to fight suspected terrorists, but that the open discussion would also help U.S. enemies.

"What this dialogue and debate has allowed those who wish us harm to do, is to understand significantly more about how we were targeting their communications," McConnell told the House of Representatives Intelligence Committee.

Asked if debates had cost U.S lives, he said, "They will."


Or as he also put it: "The intelligence business is conducted in secret. It's conducted in secret for a reason."

Why not just declare the 20 committee members enemy combatants and be done with it?

The U.S. attorney for Manhattan filed a 16-page criminal complaint against Norman Hsu today. You can read it here.

Hsu is charged with defrauding investors of more than $60 million. The scam, as described by prosecutors, was actually pretty simple. Hsu would lure investors in by delivering on small-time deals, gaining their trust. But when it came time for the big deals, he never actually invested the money as promised -- instead, he just used newer investors' money to repay older investors, and so on and so on. The classic Ponzi scheme.

Interestingly, the prosecutors say that Hsu's considerable fundraising skills (for Hillary Clinton and other Dems) were part of the fraud:

During the same time period, NORMAN HSU, the defendant, in an effort to raise his public profile and thereby convince more victims to invest in his fraudulent scheme, pressured victims into individually contributing tens of thousands of dollars to various candidates... he supported. HSU made implied threats to the victims leading them to believe that their failure to make the required political contributions would adversely affect the victims’ ongoing investment relationship with HSU.


The complaint also alleges that Hsu reimbursed two people for $20,000 in political contributions, a crime.

The charges, two counts of fraud and one of violating campaign finance laws, amount to a maximum 45-year sentence if served consecutively. Hsu also faces a maximum fine of $120 million.

Hear that? That silence is the sound of my phone not ringing. It's been a familiar quiet since I first started trying to get some answers about Rep. Don Young's (R-AK) Coconut Road earmark last month.

Someone, apparently acting on Young’s behalf, managed to change the bill’s language in the massive 2005 transportation bill after it had passed both houses of Congress, but before the President signed it into law. The change no doubt gratified real estate developer Daniel Aronoff, who’d raised $40,000 for Young earlier that year in his push for $10 million to construct a highway interchange. Young’s language change steered that cash away from the community’s requested use and to Aronoff’s pet project.

So a few weeks ago, I decided to figure out how, in a very technical sense, a bill's language can change after it passed both houses of Congress. Surely there must be a process to keep bills awaiting the President's signature safe from tampering, or so I assumed.

But after being passed repeatedly from office to office, I’m still none the wiser as to how Young might have changed the bill’s language. It’s become crystal clear, however, that those who should know don’t have a ready answer -- and don't seem eager to find one.

I started with a call to the current House clerk in late August; I heard nothing. Then I tried the House clerk who was in place in 2005 when the rewording occurred. Jeff Trandahl, now the executive director of the National Fish and Wildlife Foundation, was on a cruise two weeks ago. When he returned, his secretary called to let me know he is too busy to talk -- too busy indefinitely, that is. I pressed, asking if that means he is saying no comment. "No, he is just too busy with an upcoming fundraiser." (Classic Washington blow-off line!)

Read More →

The Congressional Budget Office's cost-analysis of a U.S. presence in Iraq following the Korea model -- stationing 55,000 troops there indefinitely, in CBO's reckoning -- allows for the crunching of numbers several different ways. But most appear to be fairly conservative.

CBO estimates that a Korea-style garrisoning will require 55,000 troops for either combat missions or non-combat missions. The former is expected to cost $25 billion annually, and the latter $10 billion annually, on top of one-time fixed costs of $4-$8 billion for the former and $8 billion for the latter. But neither scenario envisions total costs of what President Bush has cited as an "enduring relationship" between the U.S. and Iraq. Funding for the Iraqi security forces, diplomatic operations or country-to-country aid -- probably billions of dollars -- is outside the scope of the CBO report.

Totaling the full cost of the Iraq war requires accepting a range of estimates, particularly in the case of tabulating prospective costs, rather than ones already incurred. Both this report and a preceding CBO report present a ballpark, not a set projection. And an aggregate set of projections for the Iraq war's future cost can only emerge when an endpoint is envisioned. Since the Bush administration has flirted with a Korea-style model for U.S. troops, it seems reasonable to envision a 50-year endpoint, commensurate with the 54 years U.S. troops have been garrisoned in postwar South Korea.

Read More →

TPMLivewire