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WORD COUNT
504
MAY 7, 2008
SPENDING GOOD MONEY
FOR BAD BULLETS – by Ryan Alexander
It sounds like the
plot of a Tom Clancy thriller: A tiny company run out of an unmarked
Miami Beach office by a barely legal troublemaker siphons hundreds of
millions of dollars from the Pentagon by selling it rusting weapons from
aged Communist stockpiles.
A company called AEY
Inc., run by 22-year-old Efriam E. Diveroli, managed to do exactly that
for four years—yet another example of unchecked corruption and
incompetence in the explosion in ”war on terror” defense contracting.
AEY began contracting
with the defense and state departments in 2004 for weapons, ammunition,
clothing and “research and development,” according to an internal Army
memo . The value of AEY’s contracts grew from $1 million in 2004 to
nearly $200 million in 2007, due to a 2006 Army contract for providing
ammunition to Afghanistan’s police and army. The Army issued five task
orders under the contract, bringing AEY’s total take to nearly $300
million.
Diveroli filed
documents with the Army certifying that his ammunition came from
Hungary, though an Army investigation revealed in January that most of
it actually came from China, in contravention of Pentagon procurement
law. By then, complaints about the ammunition had already surfaced: An
Afghan lieutenant colonel told the New York Times that the Chinese
ammunition he received from AEY last fall dated to 1966 and arrived in
decomposing packaging. And AEY reportedly continued to make shipments
even after American officers in Kabul told the Army about the company’s
failings earlier this year.
The issues raised by
these events are numerous and disturbing. First is the ease with which a
rogue company run by a then-18 year old was able to obtain contracts
worth hundreds of millions of dollars when thousands of small businesses
regularly complain to Congress about their difficulty getting work with
Uncle Sam. Then there are the missed opportunities for oversight:
According to the memo, when a bidder on the contract asked the Army
whether ammunition from China was acceptable, the Army responded that it
was the contractor’s job to figure out whether any restrictions would be
breached.
We commend the Army
for finally suspending AEY’s contract last week, but it is too little,
too late. And the Army’s response to the scandal has been disingenuous
at best: The Army Sustainment Command, which took over responsibility
for Iraq and Afghanistan contracting, said in a press release that their
job is only to make sure ammunition works safely and that they have not
received any complaints about the ammunition’s failure to function—only
“packaging and corrosion.” Would you send a corroded tank to a soldier
in a combat zone?
We also commend House
Oversight Committee Chairman Henry Waxman (D-CA) for immediately calling
a hearing on the matter. It is an important, albeit obvious, first step
to figuring out how something so outrageous could happen – and to ensure
that it never happens again. If nothing else, the exploits of Efriam
Diveroli show that serious contract reform is necessary not only for
saving taxpayer dollars, but for saving American lives.
--
Ms.
Ryan Alexander is President, Taxpayers for Common Sense --
a non-partisan
federal budget watchdog.
www.taxpayer.net
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