State Department To Probe Alleged Cover-up In Albania

TIRANA, June 25 – The U.S. Ambassador to Albania has denied allegations of wrongdoing, but in Washington the State Department’s Inspector General has opened an investigation.
State Department officials have known for months about allegations that arms dealer AEY and its 22-year-old president may have tried to pass off cartons of illegal Chinese-made ammunition to fulfill a $300 million U.S. government contract to supply the Afghan Army.
The fact that the U.S. Ambassador in Tirana, John Withers, may have known about it and then concealed the knowledge from lawmakers on Capitol Hill, apparently came as a surprise to the State Department.
On Tuesday, U.S. State Department spokesman Tom Casey said the allegation would be investigated, but that he knew of no evidence to support it.
Casey said the State Department has asked its inspector general “to go and look at these charges and conduct a thorough, fair and transparent investigation of these allegations.”
“These are very serious allegations.”
But Casey also said, “We certainly don’t have any information that would support or substantiate these allegations which are being made against a career Foreign Service officer” with 24 years of experience.
Withers is a career foreign service officer who has served with distinction, Casey said.
“When someone has had a cloud placed over them publicly, as Chairman Waxman has done through making these allegations, they deserve to have an independent body review them and come to an appropriate conclusion,” Casey said.
A statement from the U.S. embassy in Albania said Withers believes “the evidence in this matter, fully presented, will dissolve any and every assertion made against him, his staff, or his government.”
At a Tuesday hearing on Capitol Hill, Waxman’s Democratic staff released a report detailing the missteps by Army officials who awarded the nearly $300 million ammunition supply contract to AEY in January 2007. AEY’s top executive, Efraim Diveroli, was 21 at the time and the company already had a record of shoddy performance on prior government work.
Yet that information, as well as warnings that had been on a State Department watch list since 2005, were missed or ignored, according to the staff report.
Under a series of contracts, AEY provided potentially unsafe helmets to troops in Iraq, failed to deliver 10,000 pistols to Iraq, and shipped inferior ammunition to U.S. Army special forces, according to the committee report.
After $66 million in payments, AEY’s Afghan ammunition contract was terminated last month. On Friday, Diveroli and three others were charged in federal court in Miami with fraud for selling the prohibited Chinese ammunition.
Overall, the Defense and State departments have terminated or withdrawn seven contracts with AEY due to the company’s failure to perform, according to the committee report.
The failures earned stiff rebukes from military customers. In an October 2005 e-mail exchange, Richard Emmert, a Defense Contract Management Command official in Iraq, told Diveroli the helmets had peeling paint, cracks and beat up rims. Recalling an earlier delivery of low-quality gear, Emmert said AEY and Diveroli were not well thought of.
“Several scenarios were being planned for you, none of them pleasant,” he told Diveroli.
Despite the track record, AEY bested seven other offers for the Afghan ammunition contract.
At the hearing, Jeffrey Parsons, executive director of the Army Contracting Command, said the dollar value of AEY’s previous contracts may have been below a reporting threshold. That meant the contracting officers would not have known about the problems.
Brig. Gen. William Phillips, the Army’s program executive officer for ammunition, told the committee that contracting officers are not required to check watch lists, which might contain information excluding a company from performing federal work.
Parsons and Phillips said changes are being made to examine a contractor’s history more thoroughly before a contract is awarded.
These assurances didn’t satisfy the committee.
“Has anybody been fired for this?” demanded Rep. Stephen Lynch, D-Mass. “Did anybody get their walking papers for what’s happened here?”
No, Parsons said.
“Well, that’s a shame,” Lynch said.
Rep. Darrell Issa, R-Calif., said there was no need for the contract with AEY. Former Soviet-bloc countries are brimming with the kind of Asian and Eastern European ammunition favored by the Afghans. Countries including Bosnia, Bulgaria and Hungary had offered to donate the bullets and weapons for free.
“This is basically the old anti-NATO, Communist-bloc ammunition,” Issa said.