by D. Cupples | Two Days ago, the New York Times reported on yet another private contractor that seems to have taken advantage of ripped off us taxpayers. Rep. Henry Waxman's House Oversight Committee wasted no time inviting company officials to testify at a hearing on April 17.
The company in question is AEY, run by a 22-year-old who reportedly has little or no experience in the military or in the arms-dealing arena. One company vice president is a licensed masseur. Allegedly, during its several years' work for us taxpayers, the company has provided decades-old ammunition in decomposing packaging, some of which was Chinese-made (apparently a violation of law). The New York Times reports:
"With the award last January of a federal contract worth as much as nearly $300 million, the company, AEY Inc., which operates out of an unmarked office in Miami Beach, became the main supplier of munitions to Afghanistan’s army and police forces.
"Since then, the company has provided ammunition that is more than 40 years old and in decomposing packaging, according to an examination of the munitions by The New York Times and interviews with American and Afghan officials.
"Much of the ammunition comes from the aging stockpiles of the old Communist bloc, including stockpiles that the State Department and NATO have determined to be unreliable and obsolete, and have spent millions of dollars to have destroyed.
"In purchasing munitions, the contractor has also worked with middlemen and a shell company on a federal list of entities suspected of illegal arms trafficking.
"Moreover, tens of millions of the rifle and machine-gun cartridges were manufactured in China, making their procurement a possible violation of American law.
"The company’s president, Efraim E. Diveroli, was also secretly recorded in a conversation that suggested corruption in his company’s purchase of more than 100 million aging rounds in Albania, according to audio files of the conversation." (NY Times)
The obvious question: how could a group of post-adolescents get hundreds of millions of tax dollars without first being vetted? Might they have been related to a government official who deals with procurement?
Reportedly, problems with the ammunition were evident as early as last fall. Yet the Army waited until last week to suspend AEY's government business (until the allegations are resolved) -- and only after the New York Times badgered the Army over this issue.
Despite the suspension, the Pentagon will allow AEY to provide ammunition that was already on order.
Isn't bad ammunition a bad thing for our nation's war efforts? Let's hope, for the sake of soldiers in Afghanistan, that the ammunition is functional.
The Times gives some context to the AEY scandal:
"AEY is one of many previously unknown defense companies to have thrived since 2003, when the Pentagon began dispensing billions of dollars to train and equip indigenous forces in Afghanistan and Iraq. Its rise from obscurity once seemed to make it a successful example of the Bush administration’s promotion of private contractors as integral elements of war-fighting strategy."
Yes, AEY is among numerous examples of President Bush's use of tax dollars to promote private contractors: a list that includes troubled firms such as Blackwater, Custer Battlers, and Halliburton/KBR.
The Times has an interesting history of the rapid rise of AEY, which was incorporated by Diveroli's father in 1999, and its dealings with Eastern Bloc countries.
Related BN-Politics Posts:
* Blackwater et. al.: High Cost of Private Contractors
* Inspector General Blocked Investigations re: Waste & Fraud?
* Contractor Gets $30+ Million but Built Nothing
* "Billions over Baghdad": Poor Accounting Enabled Waste & Fraud
* DoD Rewarded Bad Contractor Performance?
* Hearing: Rice Evasive, Republicans Don't Want Probe
* Hearing: Krongard's Brother's Blackwater Ties, Republicans Don't Want Probe
D,
I have some swampland I'd like to sell to the Pentagon, who do I talk to?
...glad to see you are still following the money.
Posted by: billkav | March 30, 2008 at 10:40 AM