Page 2 of 2 Firing blanks in Afghanistan By David Isenberg
Henry Waxman (Democrat-California) sent out a press release stating it had
received evidence that the US Embassy in Albania approved an effort to conceal
the illegal Chinese origins of ammunition shipped to Afghanistan by AEY.
US Army military attache Major Larry D Harrison II, who is chief of the
embassy's office of defense cooperation, told investigators that John L Withers
II, the US ambassador to Albania, endorsed a plan by the Albanian defense
minister, Fatmir Mediu, to hide several boxes of Chinese ammunition from a
visiting reporter.
According to Harrison, he was one of the aides attending a late-night meeting,
on November 19, 2007, where Mediu asked Withers for help, saying he was
concerned that the reporter would
reveal that he had been accused of profiting from selling arms. The minister
said that because he had gone out of his way to help the United States, a close
ally, "the US owed him something", according to Harrison.
Mediu ordered the commanding general of Albania's armed forces to remove all
boxes of Chinese ammunition from a site the reporter was to visit, and "the
ambassador agreed that this would alleviate the suspicion of wrongdoing",
according to Harrison's testimony.
It is clear from the records that at that time the embassy knew the ammunition
was illegal, as this excerpt from the transcribed question and answer with
Harrison confirms:
Question: So at the time of this meeting between the defense
minister, the ambassador, and several other State Department officials, it was
clear that you were discussing Chinese ammunition; is that correct?
Answer: That is correct. That is correct.
Q: And it was clear that AEY was the company that was buying it
under a US contract?
A: That is correct. ...
Q: And you said, by this time, you had been informed that it was
illegal under US law for a US contractor to buy Chinese ammunition. Is that
correct?
A: That is correct, yes, sir ...
Q: And you said also at this time it was clear that there was an
investigation ongoing ... Is that right?
A: That is correct, yes, sir.
Not only did the embassy help Mediu conceal the ammunition, but it also did not
tell the truth about what happened when the House Oversight and Government
reform committee inquired of the State Department what it knew of the case. As
committee chairman Waxman wrote in a letter to US Secretary of State
Condoleezza Rice:
The information obtained by the committee raises
serious issues. If the information is accurate, it appears that senior US
Embassy officials in Albania approved of the efforts of the Albanian defense
minister to conceal evidence of illegal shipments of Chinese ammunition that
are now the subject of a criminal indictment. It also appears that information
about the incident was withheld from the committee. It is hard to understand
what rationale would justify these actions.
On Tuesday, the
committee held a hearing on AEY's Afghan contract. According to Waxman's
prepared statement, "The AEY contract shows that the procurement process at the
Department of Defense is dysfunctional. There was no apparent need for the
contract, no effective vetting of the company's qualifications, and no adequate
oversight."
To add insult to injury Waxman noted:
AEY acquired its ammunition from
stockpiles in Albania and other former Warsaw Pact countries. These countries
have surplus ammunition they are trying to give away or destroy. We learned
during the investigation that the president of Albania flew to Iraq in 2007 and
offered to donate Albanian stockpiles to General [David] Petraeus. It appears
that the army agreed to pay $300 million for ammunition it could have gotten
for free. The procurement failure that is the hardest to understand is the
selection of AEY. The State Department maintains a "watch list" of potential
illegal arms traffickers. Both AEY and Mr Diveroli are on the watch list. So
are AEY's subcontractor and the subcontractor's subcontractor. The State
Department official in charge of the watch list called this "a perfect
trifecta".
But the Defense Department never bothered to check the watch list before
awarding the $300 million arms contract. In the source selection decision, the
contracting officer wrote: "There essentially is no doubt that AEY would
perform in accordance with the delivery schedules and has no history of quality
rated problems. Based on this, AEY's initial rating was 'Excellent'.' This was
pure fiction.
According to Waxman, if army officials had just
examined AEY's performance under previous Defense and State Department
contracts, they would have easily discovered a dismal record of failure.
Documents produced to the committee show that federal agencies terminated,
withdrew, or canceled at least seven previous contracts with AEY for poor
quality or late deliveries, as well as four additional delivery orders under an
eighth contract. That included a botched $5.6 million order for 10,000 Beretta
pistols for Iraq's security forces.
One Pentagon official interviewed by the committee recalled that when AEY
failed to deliver Beretta pistols for the Iraq security forces, Diveroli
offered excuses that were false, such as blaming AEY's failure to perform on a
hurricane in Florida that never occurred. A contracting official stated: "It's
not like we didn't have the Internet in the Green Zone and couldn't check on
this."
Under these contracts, AEY provided potentially unsafe helmets to US forces in
Iraq, failed to deliver thousands of weapons, and shipped poor quality
ammunition to US special forces.
A US inspector in Iraq wrote to AEY about the helmets:
Some people at
MNSTC-I [Multi-National Security Transition Command - Iraq] got a little wound
up when they saw the daily receiving report. They remembered the 10,000 helmets
you sold them earlier this year and the junk AKs we still have in the
warehouse. The concern was that, if they break and crack, are they
ballistically correct? In other words, will they stop a bullet and what do we
do if they don't? Several scenarios were being planned for you, none of them
pleasant.
How was it that AEY survived the initial evaluation
for the Afghanistan contract when it performed so poorly on past contracts, the
results of which had been amply documented?
According to the Oversight and Government Reform committee staff analysis, the
Pentagon's "source selection team" for the ammunition contract evaluated AEY's
past performance based only on three contracts identified by AEY. In other
words, the Pentagon did not do anything more than check the paperwork that AEY
provided.
A review of a database available to the source selection team would have
identified the other Defense and State Department contracts awarded to AEY.
Apparently, however, AEY's performance under other contracts with the
Departments of Defense and State was not considered.
But, even given that limited data, there were warning signs.
The selection team considered AEY's record of on-time delivery, quality,
international movement of ammunition and success as a "system integrator",
which included experience in "the identification of ammunition appropriate for
foreign weapon systems", "the ability to establish quality control, safety and
transportation plans", and "adhering to the regulations and policies of both
foreign and US governments".
The team gave AEY a mixed rating. It rated AEY's past history of on-time
delivery and quality as "Excellent". But with respect to AEY's history of
"international movement" and experience as a "systems integrator", the team
concluded that AEY's past performance was "Unsatisfactory". It also found that
the contracts submitted by AEY for consideration failed to demonstrate "past
performance experience with contracts for large number of varied items and the
ability to identify appropriate ammunition to stated foreign weapon systems".
The team concluded: "Lacking this experience, there is substantial doubt that
AEY could perform in accordance with the solicitation requirements."
On January 22, 2007, the contracting official who ultimately awarded the
contract overruled the source selection team and raised AEY's score from
"Unsatisfactory" to "Good". She acknowledged that her change made "a
difference", and she stated that AEY "would not [have] gotten the award"
without this adjustment. But in changing the rating she gathered no additional
information about these contracts beyond what was available to the source
selection team.
Another major problem was that the contract with AEY contained a huge loophole,
which it took full advantage of.
In the contract the Defense Department provided little or no guidance on the
quality or condition of the ammunition required. The contract called for
ammunition that was "serviceable", but it gave no further details.
The contract also specifically permitted the use of "surplus" ammunition. The
contract failed to set an age limit for the ammunition purchased by AEY. A
section of the contract in which the contracting officer answered questions
raised by bidders addressed this issue specifically: Question 2: Is
there an age limitation on the items to be delivered under this contract?
Answer: No, but material must be serviceable and issuable to all
units without qualifications.
Documents show that AEY paid close attention to age restrictions in contracts,
and sought to take advantage of the lack of such restrictions in order to
obtain older, cheaper ammunition. In a request for price quotes under the
Afghanistan contract, AEY wrote to potential suppliers, "We remind you that
although target prices seem low, we already have the contract with the US
government signed ... and ANY age ammunition is acceptable."
And despite the hazardous nature of the cargo, the contract also had no
specific restrictions on the type of packaging to be used in transporting
ammunition. The contract had the following instruction, without any
elaboration: "Package in cartons in accordance with the best commercial
practice for international shipment."
There is no adequate explanation why the Defense Department failed to include
proper quality, age and packaging requirements in the contract. Other military
contracts for similar ammunition included such restrictions.
AEY also took advantage of the Defense Department's failure to conduct rigorous
inspections. The Defense Contract Management Agency did not conduct consistent
inspections of AEY's ammunition before it was shipped, citing "a plethora of
reasons", including an inability to send inspectors to the various Eastern
European countries from which AEY procured ammunition.
David Isenberg is an analyst in national and international security
affairs, sento@earthlink.net. He is also a member of the Coalition for a
Realistic Foreign Policy, an adjunct scholar with the Cato Institute,
contributor to the Straus Military Reform Project, a research fellow at the
Independent Institute, and a US Navy veteran. The views expressed are his own.
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