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Bush Administration Gives $300 Million Contract to 22-Year-Old War Profiteer

This is beyond ridiculous: We gave a $300 million contract to supply ammunition to Afghan forces to a 22-year-old who has never held a job and his 25-year-old vice president whose only expertise is that he is a licensed masseur.

Since 2006, when the insurgency in Afghanistan sharply intensified, the Afghan government has been dependent on American logistics and military support in the war against Al Qaeda and the Taliban.

But to arm the Afghan forces that it hopes will lead this fight, the American military has relied since early last year on a fledgling company led by a 22-year-old man whose vice president was a licensed masseur.

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.

This week, after repeated inquiries about AEY’s performance by The Times, the Army suspended the company from any future federal contracting, citing shipments of Chinese ammunition and claiming that Mr. Diveroli misled the Army by saying the munitions were Hungarian.

You can read the rest here. It's a very long article (several pages) but it's hilarious -- sad, but hilarious. Both of these clowns have had run-ins with the law. The 22-year-old war profiteer has been busted for felony possession of a fake driver's license. It had four years added to his age so that he could buy booze as a minor. The police found that on him the day after his 21st birthday. He told them, "I don't even need that anymore, I'm 21 now." When he was 19, his girlfriend filed for a restraining order against him and he wrote the judge informing the court that he was the president of a company defending the country against terrorism.

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Dude! You're gonna get to testify before Congress! Congrats! Have fun!

Committee Announces Hearing on Arms Contract

Chairman Henry A. Waxman announced that the Oversight Committee will hold a hearing on Thursday, April 17, 2008, to examine federal contracts awarded to AEY Inc. to supply weapons, ammunitions, and munitions to military forces in Iraq and Afghanistan.

According to the New York Times, AEY was awarded a contract worth nearly $300 million, but provided defective, unreliable ammunition, including shipments of Chinese ammunition, to Afghanistan army and police forces. The hearing will examine the company’s financial history, past performance, and compliance with U.S. law and government contracting regulations as well as the federal government’s efforts to investigate allegations that AEY may have violated U.S. law and government contracting regulations.

The following individuals are invited to testify:

• • Efraim E. Diveroli, President, AEY Inc.
  • David M. Packouz, Vice President, AEY Inc.
  • Levi Meyer, General Manager, AEY Inc.
  • Senior Official, Department of Defense
  • Senior Official, Department of State

P.S. -- Diveroli is 22, Packouz and Meyer are both 25.

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Efraim has a MySpace page!

Looks like he last logged in back in October 2005 when he was only 19. He's been president of AEY, Inc. since he was 18. It was a gift from daddy.

I finally got a decent apartment and im content for the moment , however i definately have the desire to be very successful in my business and this does take up alot of my time.

[Ninong]

Here's his most recent mugshot:

MIAMI-DADE CORRECTIONS
A mugshot of 22-year-old gun merchant Efraim Diveroli after his arrest on drunk driving charges on Miami Beach on March 5. He was released on $1,000 bond. The case is pending.

Feds target Miami Beach arms merchant

A young Miami Beach businessman whose $300 million military contract has been suspended by the Army faces a criminal investigation by federal authorities in Washington and Miami, according to law enforcement officials familiar with the case.

Efraim E. Diveroli, 22, is under investigation for allegedly selling Chinese-made ammunition to the military to supply Afghan soldiers fighting al Qaeda and Taliban insurgents, the officials said. Such munitions sales are a possible violation of U.S. law.

P.S. -- Dude! This is definitely not cool. This could be worse than when your girlfriend got that restraining order or when you beat up that parking valet.

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U.S. Embassy In Albania Conspired To Destroy Evidence

Remember our friend Efraim Diveroli, the 22-year-old arms merchant who received $300 million in contracts from the Bush administration to supply ammunition to troops in Afghanistan? Remember him? Well it now turns out that the U.S. Ambassador to Albania conspired with the Albanian Defense Minister to destroy the Chinese packaging that would have been embarrassing to the Bush administration had it been photographed by the NY Times the following day.

Young Efraim was buying shoddy, leftover Chinese ammo that had been manufactured in the 1960's and removing it from its original Chinese packaging and repacking it in new cardboard boxes for shipment to troops in Afghanistan. The ammunition was crap! It should have been disposed of long ago, and besides, it's illegal for us to buy arms from China! Efraim got it at a bargain basement price and was reselling it at top dollar to us for use by troops in Afghanistan. Who ever heard of packing ammunition in cardboard boxes? When it arrived in the field, the boxes would often break open from the weight of the ammo.

The NY Times began investigating this nonsense about six months ago. The Times asked permission of the U.S. Embassy in Albania Albanian Defense Ministry to visit a site in Albania where Efraim's pals were removing decades old Chinese ammunition from its original packaging before sending it to Afghanistan. What to do, what to do? How embarrassing for the Bush administration if it got out that we gave a $300 million contract to a 22-year-old who was selling us shoddy, stale Chinese ammo that could put troops' lives at risk and charging us top dollar to boot. Oh, I know! Let's simply destroy the evidence!

The US Embassy in Albania approved an effort to conceal the illegal Chinese origin of ammunition provided to troops in Afghanistan under a Pentagon contract by a just-indicted 22-year-old Florida man, according to an investigation by the House Oversight Committee.

In a 10-page letter to Secretary of State Condoleeza Rice, Chairman Henry Waxman reviewed the committee’s findings in its investigation of AEY Inc., a start-up contractor that received up to $300 million in Pentagon contracts.

“The Oversight Committee has received information that the U.S. Ambassador to Albania held a late-night meeting with the Albanian Defense Minister at which the Ambassador approved removing evidence of the illegal Chinese origins of ammunition being shipped from Albania to Afghanistan by a U.S. contractor,” Waxman wrote. “The Committee has also received information that State Department officials tried to conceal this information from the Committee.”

Waxman’s letter laid out the results of the investigation:

On June 9, 2008, Committee staff interviewed Major Larry Harrison, the Chief of the Office of Defense Cooperation at the U.S. Embassy in Albania. According to Major Harrison:

• On November 19,2007, the U.S. Ambassador to Albania and his top aides met with the Albanian Defense Minister to discuss how to respond to a request by the New York Times to visit a site in Albania where a U.S. arms contractor, AEY, Inc., was removing Chinese ammunition from its original packaging before sending it to Afghanistan.

• As a result of discussions that went late into the night, the Albanian Defense Minister ordered one of his top generals to remove all evidence of Chinese packaging before the site was inspected the following day. Major Harrison told the Committee: “the Ambassador agreed that this would alleviate the suspicion of wrongdoing.”

• At the time of this meeting, AEY was under investigation for illegal arms trafficking involving Chinese ammunition. Major Harrison told the Committee that he did not agree with the decision to remove the Chinese markings and felt “very uncomfortable” during the meeting.

Moreover, it appears that Embassy officials sought to keep this information from the Committee. The Committee asked the State Department to provide any information concerning meetings between Embassy officials and the Albanian Defense Ministry, as well as any information about interventions into AEY’s repackaging operation. Although Major Harrison urged Embassy officials to inform the Committee of the November 19,2007, meeting, Embassy officials omitted any reference to the meeting in their response.

Copies of Waxman’s letter to Rice and further evidence are available on the Committee’s Web site.

P.S. -- Think about this for a minute. It is illegal to purchase Chinese ammunition, even fresh Chinese ammunition. This is a crime on the part of little Efraim but it would be embarrassing if the entire world found out that the Cheney-Bush Criminal Gang had awarded a $300 million contract to a kid who was shipping shoddy, illegal Chinese ammo to troops in Afghanistan. Instead of reporting the little creep to the Defense Department and having him thrown in jail, the Bush administration's political appointee in Albania decided to destroy the evidence. No doubt Condi Rice was informed immediately. In fact, she might have been informed in advance. That wouldn't surprise me one bit. Condi lies! A lot!

Nothing was done about this kid until AFTER the Times story broke. The State Dept. and the Defense Dept. and the White House were all trying to conceal this crime because it was embarrassing to the administration.

This is from late March 2008:

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.

This week, after repeated inquiries about AEY’s performance by The Times, the Army suspended the company from any future federal contracting, citing shipments of Chinese ammunition and claiming that Mr. Diveroli misled the Army by saying the munitions were Hungarian.

The U.S. Ambassador to Albania knew four months earlier that this guy was shipping "unreliable and obsolete" Chinese ammunition to troops in Afghanistan. It is almost certain that Condi Rice knew. And yet NOTHING was done until after the Times broke the story in late March 2008. They knowingly allowed him to continue shipping unreliable, obsolete ammunition to Afghan troops because that's the way the Bush administration operates.

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Additional Details

Interesting details that I think are worthwhile highlighting:

Embassy officials removed Major Harrison's proposed language about the November 2007 meeting and omitted any references to recommendations made by the U.S. Ambassador to the Albanian Defense Minister.

Although the final version of the Embassy's response indicated that it had been "Cleared" by "LHarrison," Major Harrison apparently never approved it. After consulting a military attorney with the Judge Advocate General, on April 16, 2008, Major Harrison wrote a memorandum that memorializes his efforts to urge the Embassy to inform the Committee about the November 2007 meeting. That memorandum states:

The list of questions was sent to me via email to provide input to the answers. Although I provided input to the third question, the Political-Economic Officer, the Deputy Chief of Mission and the Ambassador did not accept my input. The answers were forwarded to the committee with my name on the memo as having cleared the memo, or in other words, approved the content.

I did not approve the content of the answers and I am concerned that information may have been omitted relevant to the question.

Major Harrison is obviously a smart dude and he was making sure that his ass was covered in the event this thing blew up, which it just did. He recommended telling the truth about what had happened but he was overruled. He not only wrote a memorandum absolving himself from any responsibility for the deceptive answers the Embassy provided the Committee but he wisely consulted with a JAG attorney for advice, so that's part of the record.

Major Harrison wanted to inform the Committee that the U.S. Ambassador had recommended to the Albanian Defense Minister that he simply refuse to allow the New York Times reporters access to the base where the Chinese munitions were being repackaged for shipment to Afghanistan. After several hours of discussions that dragged on until midnight, the Albanian Defense Minister at 11 p.m., in the presence of the U.S. Ambassador, called the highest ranking general in the Albanian army and instructed him to have all Chinese ammunition removed from the airport before 0800 the following day. The U.S. Ambassador agreed that was a good way of solving the problem. Besides Major Harrison, the U.S. Ambassador had his two top deputies with him at that meeting. Of the four Americans present, only Major Harrison was in favor of telling the truth to the Committee.

Another thing that amazes me about all these various scandals we're discovering involving the Cheney-Bush Criminal Gang is just how valuable a tool email can be in hanging these crooks. Of course, Karl Rove destroyed millions of White House emails and we may never learn what was in those.

The day after the meeting between the U.S. Ambassador and the Albanian Defense Minister, Patrick Leonard, the Regional Security Officer at the U.S. Embassy in Albania, wrote to an assistant in an email: "NY Times just arrived today and might be doing a story on this and it might get ugly. ...Ambassador is very concerned about the case."

When the NY Times story was published on March 27, 2008, it was quickly forwarded around the U.S. Embassy. At 6:06 a.m. that morning, Mr. Leonard sent an email to several Embassy officials, stating that the AEY case "just made front page headlines in the New York Times -- 7 pages long. No mention of Embassy involvement -- thank God!"

Additional trivia: Young Efraim Diveroli had the Albanian Defense Minister in his back pocket. He was being paid kickbacks by Diveroli. Defense Minister Fatmir Mediu resigned his position on March 17, 2008, one week before the AEY suspension and the NY Times article. The Albanian Prosecutor-General has accused him of "abuse of power" and making an "unfair profit." The Albanian Parliament has voted to lift his immunity from prosecution.

P.S. -- Remember, everyone at the Embassy was aware of what was going on. The U.S. Ambassador and his top staff knowingly encouraged the destruction of evidence of criminal wrongdoing and then later lied about it to Congress. The Defense Dept. had opened a criminal investigation into little Efraim's shenanigans and the State Dept. (i.e., U.S. Embassy in Albania) was trying to cover up the crime. And later, when questioned about it by Congress, they lied about their involvement. Virtually everyone at the Embassy know what was going on. Are we to believe that Condi Rice was not informed?

We can't believe anything Condi says because she lies. A lot! I don't know when the American public is going to come to the realization that Condi was willing to say anything to please her boss, George W. Bush, whether it was truthful or not. She and Donald Rumsfeld both had a habit of picking the intelligence they liked and ignoring anything that didn't suit their goal of attacking Iraq. Colin Powell kept demanding proof, so they got rid of him. Condi got his job because she was a "team player," unlike Colin.

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Pentagon Blames State Dept For Not Telling Them Efraim Was a Crook

Pentagon officials told the House Committee that the reason they kept doing business with 22-year-old arms entrepreneur Efraim Diveroli was because the State Department did not tell them that they knew he was a crook. Why would Condi Rice want something like that to get out, especially since the U.S. Embassy in Albania was "involved."

U.S. House investigators said AEY Inc. of Miami Beach, Fla., continued to do business with the Defense Department even after the company had been flagged by the State Department as a possible violator of the Arms Export Control Act, The Washington Post reported Wednesday.

Pentagon officials told the House Committee On Oversight and Government Reform Tuesday they were unaware the company, headed by 22-year-old Ephraim Diveroli, had seen seven of its previous government contracts terminated for non-performance because the two branches of government didn't regularly share such information, the Post reported.

Diveroli and four associates have since been indicted for conspiring to conceal that ammunition they were supplying to Afghanistan had originated in China, and not Albania as they certified.

Here.

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From Australia: US diplomat helped 'hide' illegal arms

A US ambassador helped cover up the illegal Chinese origins of ammunition the Pentagon bought to supply Afghan security forces, according to testimony gathered by congressional investigators.

A military attache has told investigators that the US ambassador to Albania endorsed a plan by the Albanian Defence Minister to hide several boxes of Chinese ammunition from a visiting reporter. As reported in The Age on March 28, the ammunition was being repackaged to disguise its origins and shipped from Albania to Afghanistan by AEY Inc, a Miami Beach arms-dealing company.

The ambassador, John Withers, met the Defence Minister, Fatmir Mediu, hours before a New York Times reporter was to visit the American contractor's operations in the Albanian capital, according to the testimony. The Pentagon bought the ammunition to supply Afghan security forces, although US law prohibits trading in Chinese arms.

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According to today's Miami Herald, young Efraim and his company were already on a State Dept watch list for possible illegal arms dealing last year when the Defense Dept awarded the then-21-yr-old a $298 million contract. Think about that for a minute. The Defense Dept awarded a $298 million contract to a 21-yr-old kid who had already had seven previous government contracts cancelled for non-performance and who was on a State Dept watch list for possible illegal arms dealing. Wow! How could that happen?

Sounds a lot like the way FEMA awarded contracts down here after Hurricane Katrina. You had to have connections to the Bush administration to be considered. Of the four major general contractors awarded clean-up contracts, three were based in Texas and had close ties to the Bush administration. They cleaned up alright! FEMA even awarded a contract for converting mobile homes to school classrooms to a company in Alaska with no previous experience but with close ties to Alaska's Republicans. The company in Alaska charged nearly twice as much as a local company in Mississippi with many years experience doing exactly this sort of work. Alaska! Why would FEMA order mobile classrooms from Alaska for Louisiana and Mississippi when they could have gotten them much cheaper right here in Mississippi? (P.S. -- The actual figures were $85,000 each from Alaska vs. $59,000 each from Mississippi.)

Military slammed over oversight in Miami Beach arms case

A congressional probe found that a Miami Beach man was granted a military contract even though he, his company and a supplier he worked with were on a State Department watch list.

WASHINGTON -- Military officials promised changes Tuesday after a lashing by congressional Democrats and Republicans, who expressed anger and astonishment that a 22-year-old Miami Beach man on a State Department watch list and with a history of failing to deliver on military contracts was awarded a $298 million deal to arm allied forces in Afghanistan.

A congressional investigation found that Efraim Diveroli was granted the contract even though he, his company AEY, and a supplier he worked with were on a State Department watch list for suspicious international arms dealers, House oversight committee Chairman Rep. Henry Waxman said.

P.S. -- While we're reminiscing about FEMA and Hurricane Katrina, who can forget that FEMA bought 14,000 mobile homes intended for the Gulf Coast that ended up stored in open parking lots in Hope, Arkansas because they didn't meet minimum federally mandated construction requirements for use in a federal hurricane zone 1 area. So FEMA substituted a lot of flimsy "FEMA trailers" instead and these turned out to have five times the federally mandated safe levels of formaldehyde, so FEMA concealed the test results and let people get sick living in these FEMA trailers. FEMA advised residents to "open the windows" to air out the trailers. It took more than two years for the truth to finally come out and for FEMA to finally remove people from these unhealthy trailers.

And we can't forget the hundreds of tractor trailers filled with ice that drove all over the country and ended up somewhere near Maine. Seriously. These refrigerated tractor trailers loaded with ice just burned gas driving all over the country for four or five weeks for some reason or other.

The amount of waste and fraud and corruption that was uncovered in the Hurricane Katrina recovery effort is staggering. There was fraud at every level of government. FEMA was not only outrageously incompetent, they were also shockingly corrupt and guilty of numerous criminal acts. You would be amazed at the number of flat panel plasma TVs that were charged to FEMA that ended up in FEMA employees' homes.

FEMA paid "select" contractors $2500 a house to install blue FEMA tarps over damaged roofs. FEMA provided the tarps free of charge so all the contractor was providing was about two hours of labor. Local contractors said they normally charged about $350-$500 labor for such a job. FEMA awarded these no-bid contracts to the major Republican-connected general contractors, who in turn hired sub-contractors who used mostly undocumented workers from south of the border to do the labor because they were cheaper than the local workers. The local population of undocumented workers from Mexico, Honduras, Guatamala, etc., exploded in the weeks following Katrina and they're mostly still here. The big contractors hired sub-contractors who in turn hired labor contractors who employed cheap day-laborers instead of giving work to locals who were unemployed thanks to Katrina.

One of the most telling episodes of the Hurricane Katrina mess was the reported emails between Michael "Brownie" Brown and his staff in the days following Katrina. "Brownie" complained that he was having a hard time finding a first-class restaurant in Baton Rouge that met his high culinary standards open because so many of them had closed due to lack of electricty or storm damage. Baton Rouge did suffer some storm damage and did have widespread power outages for a few days following Katrina but Baton Rouge was back up and running within a week or so. "Brownie" complained to a subordinate in an email just a few days after Katrina that all the good restaurants in Baton Rouge, where he was staying at the time, were still closed. He also asked for advice on which tie he should wear for his TV appearances. This was before Bush or Skeletor even bothered to show up down here. Bush and Skeletor showed up on Day 5, which is when Bush famously said that Brownie was "doing a heckuva job."

P.P.S. -- On one of my trips to Baton Rouge just a few days after Katrina, I went to Sears and the various home improvement stores looking for gas cans (the red plastic 5-gal gas containers) because we needed gas for our generator and our neighbor's generator and we needed gas to take to Mississippi for my nephew's wife's relatives. I was struck by the fact that all of those nice stores had pallets of new generators blocking the store aisles and all of them had literally doubled the price!!! They had shipped in truckloads (trainloads?) of generators immediately after the storm. Baton Rouge was the closest main city that was pretty much still up and running.

Baton Rouge is 80 miles northwest of New Orleans. So that was as far as they could get the generators. The traffic was so bad in Baton Rouge in the months following Katrina that it could sometimes take two hours to get across town in the middle of the day. It took one to two hours in line to buy gas at the gas stations -- the ones that were open -- and the prices went up by about 70 cents two days after Katrina. And some stations limited you to only 10 gallons. And most gas stations took only cash because their terminals were down. The same thing happened to the supermarkets. The terminals that cleared credit cards didn't work for weeks because the hub was in New Orleans and New Orleans was submerged. It took me several days to find a credit union in Baton Rouge that had an ATM terminal working that accepted VISA and Mastercards for cash withdrawals. It seems that this credit union was on a different authorization system and they were not knocked out by the storm. That was the only place that I could withdraw cash for about the first 10 days following the storm. All of the local bank ATMs gave you a message that they were "unable to complete transaction." If you think you're about to get hit with a major natural disaster, stock up on gas in advance (even if it's just for your car) and withdraw enough cash to last you at least two or three weeks. And, it goes without saying that you should stock up on drinking water just in case. We actually lost our water service for about 36 hours at one point. And almost all cell phones were down for several days. All cable TV and cable internet connections were out for weeks, months in some areas.

Wal-Mart finally agreed to accept your credit card for a purchase up to $99.99 even though there was no way for them to get authorization. And for a couple of weeks after the storm, you had to wait in line outside the Wal-Mart and wait for the National Guardsman in charge to let you in the store. It sometimes took 45 minutes just to get into the store. And once you got inside you found out that there was no bread at all, etc. And if you told the National Guardsman at the door that you just needed to pick up your prescription from the Wal-Mart pharmacy, they would call for someone to escort you to the pharmacy to make sure you didn't try to buy groceries.

Wal-Mart, as well as all the other supermarkets and gas stations, were running on generator power for weeks following Katrina. There was no frozen food and usually no fresh fruits and vegetables for the first few weeks. You were really lucky if you got there just after the bread delivery. I'm talking about my area, which is 50 miles from New Orleans. My area was without power for about four weeks, except that our house had power restored after only four days. That was a small miracle. Even if I drove 38 miles to the Wal-Mart in Baton Rouge where they had electricity and frozen foods, it could take an hour in line to check out and they would have their shelves stripped of bread within a couple hours after delivery. It took about 10 days for things to settle down at the Baton Rouge supermarkets. Most of the New Orleans supermarkets were out for months. Even the Baton Rouge Wal-Mart, for example, was forced to get re-supplied from a distribution center in Texas because their local distribution center was in the New Orleans area and it had been knocked out by the storm.

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Efraim Diveroli's Lawyer Says There's A Catch 22

All that money young Efraim made selling obsolete ammo to the U.S. Army has allowed him to hire a hot-shot Miami lawyer, Howard Srebrick, who released the following statement explaining why young Efraim is innocent of all charges:

The federal regulation cited in the indictment (paragraph 10) prohibits delivery of ammunition acquired "directly or indirectly, from a Communist Chinese military company." The regulation does not prohibit an American from selling Chinese-made ammo to the U.S. Army if the ammo was acquired before the 1989 Chinese munitions embargo. Indeed, pre-embargo Chinese-made ammo is readily available on the internet.

The U.S. Army solicited bids for the ammo to arm Afghan (not U.S.) soldiers fighting the Taliban. The government knows that Mr. Diveroli purchased the Chinese-made ammo from the Albanian government, which had acquired the ammo back in the 60's and 70's, before the Chinese embargo and before Mr. Diveroli was even born. Mr. Diveroli did not acquire the Chinese-made ammo, "directly or indirectly," from ANY Communist Chinese military company.

The government has misconstrued the statute as a ban on all Chinese-made ammo so that the U.S. Army can avoid its multi-million dollar contractual obligation to Mr. Diveroli. Fortunately, a federal judge and jury -- not a government bureaucrat -- will decide who's right.

In other words, young Efraim bribed the Albanian Defense Minister (who has now been charged in Albania) to allow him to purchase obsolete Chinese ammo that the U.S. and NATO paid millions of dollars to have destroyed so that young Efraim could re-sell this crap to the U.S. Army for use by Afghan forces fighting the Taliban. Notice how the attorney makes a point of the fact that the ammo wasn't going to U.S. soldiers, just Afghan soldiers.

Another interesting fact that has come up since my previous post is that the State Department itself actually gave Efraim's company several State Department contracts AFTER they had placed both him and his company on their so-called "watch list." The Defense Department awarded the $298 million contract for ammo for Afghan troops and they admitted that they never both to check the State Department's "watch list," but now we know that even the State Department does NOT check their own "watch list." It's all one big sorry joke.

P.S. -- In case you forgot, Efraim became president of AEY on his 18th birthday. It was a birthday present from daddy. He was 21 when the Defense Department awarded him that $298 million contract.

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Waxman Needs to Go After Blackwater's Ties to Bush Administration

This kid Efraim Diveroli is small potatoes compared to Blackwater. Diveroli and his entire extended family have a long history of international arms dealing but they're really small change compared to the Blackwater connections to the Bush administration and the Defense Department. Talk about an evil web of corruption!

After feds arrested Efraim Diveroli, the 22-year-old arms dealer with a $300 million military contract, for selling banned Chinese ammunition, Rep. Henry Waxman alleged that the State Department and the ambassador to Albania had conspired to hide the ammo's origins. An investigation by the House Oversight and Government Reform Committee, which Rep. Waxman chairs, further revealed that Diveroli's company, AEY, had been on the State Department's watch list in 2006 -- but had nonetheless won contracts from both the Pentagon and the State Department afterwards.

The military contractor Blackwater allegedly skirted a law that forbids private parties from carrying automatic weapons by ‘donating' AK-47s to the local police department and kindly offering to house them in their own facilities. ATF subsequently raided the premises.

Considering all the flak the military is getting over its contracting, one might think an overhaul of the process -- and its oversight -- would be on the way. But the White House rejected the Army's plan to do so.

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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.