N.Y. Times (June 29, 2008)

June 29, 2008

Editorial
More Waste, Fraud and Abuse

Representative Henry Waxman recently asked a question for which we would also like an answer: “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?” Mr. Waxman raised the issue after executives of a Miami Beach arms dealer, AEY, were indicted on fraud charges this month, accused of pawning off tens of millions of banned and decrepit Chinese cartridges on the United States Army to supply Afghan security forces.

The Pentagon’s folly with the fly-by-night trafficker is just the latest example of the Bush administration’s cynically cozy contracting practices and shockingly weak oversight that have wasted billions of dollars of taxpayers’ money.

Congressional investigators took testimony from a United States military attaché who accused the American ambassador in Albania of helping to cover up the Chinese ammunition’s origins. The ambassador, John Withers, denies wrongdoing. But Rep. Waxman is wisely working to map the dimensions of fraud and waste.

The AEY fraud case followed a detailed investigation by The Times, which found the company scored the Afghan contract despite a record of failure and risky corner-cutting in a half-dozen other plum contracts. (Along the way, Efraim Diveroli, the company president who is now indicted, had the gall to fight off a court case accusing him of abusing his girlfriend by claiming national security privilege “in the fight against terrorism.”)

AEY’s record, including a failed $5.6 million contract for 10,000 pistols needed by Iraqi security forces, should have been obvious to anyone consulting a State Department watch list of 80,000 — count them, 80,000 — suspect traffickers in illegal arms. American contractors must avoid such crooked middlemen. The Pentagon is exempted by law from having to consult the list.

How, indeed, could such scheming profiteers find their way onto the Pentagon gravy train? The answer is one more example of this administration’s disastrous mismanagement of the wars in Iraq and Afghanistan.