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----- Original Message ----- From: American Progress Action Fund <progress@americanprogressaction.org> Date: Thursday, May 4, 2006 11:51 am Subject: Progress Report: Sex, Lies, and Government Contracts To: xxxx
> AMERICAN PROGRESS ACTION FUND > The Progress Report > by Judd Legum, Faiz Shakir, Nico Pitney > Amanda Terkel and Payson Schwin > www.progressreport.org > 5/4/2006 > > For news and updates throughout the day, check out our new blog at > ThinkProgress.org. > CORRUPTION > Sex, Lies, and Government Contracts > > The most extensive federal corruption scandal in a century is > growing. In March, former Rep. Randy "Duke" Cunningham (R-CA) was > sentenced to more than eight years in federal prison (the longest > sentence ever given to a member of Congress) for accepting $2.4 > million in bribes in exchange for lucrative defense contracts. Yet > Cunningham's crimes, the "magnitude and duration" of which are > compared to the Teapot Dome scandal of the 1920s, may end up a > mere prelude. According to recent reports, federal investigators > have traced the outlines of a far more extensive network of > suspected corruption, involving multiple members of Congress, some > of the nation's highest-ranking intelligence officials, bribery > attempts including "free limousine service, free stays at hotel > suites at the Watergate and the Westin Grand, and free > prostitutes," tens of millions of dollars in federal contracts > awarded under dubious circumstances, and even efforts to influence > U.S. national security policy by subverting democratic oversight. > > THE RINGLEADER: At the center of the storm is California defense > contractor Brent Wilkes -- aka "Co-Conspirator #1" in government > documents -- "who gave more than $630,000 in cash and favors" to > Cunningham "for help in landing millions of dollars in federal > contracts." Wilkes devoted much of his 20-year career to > "developing political contacts in Washington," a task at which he > excelled, serving recently both as a county finance co-chairman of > Gov. Arnold Schwarzenegger's (R-CA) campaign and as the state > finance co-chairman for President Bush. "Wilkes, his family > members and his employees were heavy campaign contributors to > several members of Congress," and he frequently invited members -- > including Cunningham, Rep. Tom DeLay (R-TX), and House Speaker > Dennis Hastert (R-IL) -- on chartered corporate jets. The efforts > paid off handsomely: "Wilkes won tens of millions of dollars worth > of defense contracts for his companies through the process of > closed-door congressional earmarking of the federal budget." > Indeed, "many of the contracts Wilkes secured" were for projects > the Pentagon never even requested. Wilkes has thus far avoided any > criminal charges, but federal officials are investigating > instances of quid pro quo, since the "timing of Wilkes' many > political donations closely parallels the approval of earmarks for > Wilkes' companies." > > 'RED LIGHTS ON CAPITOL HILL': For more than a decade, Wilkes > curried favor with lawmakers and CIA officials by hosting weekly > parties at lavish hospitality suites at the Watergate and Westin > hotels in Washington. Guests would gamble, socialize, and > sometimes receive prostitutes; according to Harper's magazine, the > festivities "began early with poker games and degenerated" into > what one source described "as a 'frat party' scene -- real > bacchanals." Mitchell Wade, another defense contractor who pleaded > guilty in February to bribing Cunningham, has "told federal > prosecutors that he periodically helped arrange for a prostitute > for the then-congressman." But investigators are digging for more: > FBI agents "have fanned out across Washington, interviewing women > from escort services, potential witnesses and others who may have > been involved in the arrangement," attempting to determine > "whether any other members of Congress, or their staffs, may also > have used the same free services." Last week, a reporter for the > San Diego Union-Tribune said that "as many as a half dozen other > Congressmen" may ultimately be implicated in the scandal. (Several > have already denied ever attending Wilkes' parties.) Also, > investigators are reportedly "trying to determine whether > Cunningham and other legislators brought prostitutes to the hotels > or prostitutes were provided for them there"; there is speculation > that Wilkes may be subject to felony federal sex-trafficking > charges if the Virginia-based limousine service he used > transported the prostitutes into Washington. > > CIA'S NO. 3 ADMITS ATTENDING PARTIES: The highest-ranking CIA > official to admit he attended the poker parties thrown by Wilkes > is Executive Director Kyle "Dusty" Foggo, the agency's third- > ranking official. (Foggo even "occasionally hosted the poker > parties at his house in northern Virginia," though he denies ever > seeing prostitutes at the gatherings.) Foggo's relationship with > Wilkes goes back 30-plus years; the two were roommates in college, > best men at each others' weddings, and even "named their sons > after each other." By the 1980s, Foggo had joined the CIA and "was > sent to Honduras to assist the Nicaraguan Contra rebels," where > his "position was essentially a contracting officer -- he could > get anyone anything they needed." Meanwhile, Wilkes had > established himself in Washington and made his living "ferrying > congressmen to Central America, where he would introduce them to > Foggo and the Contras." Foggo's connections to Wilkes and fellow > contractor Mitchell Wade are now the focus of an investigation > into CIA contracts by the agency's inspector general, first made > public in March. One of Wilkes' companies, Archer Logistics, won a > contract to provide supplies to CIA agents in Afghanistan and Iraq > despite having "no previous experience with such work, having been > founded a few months before the contract was granted." > > CIA DIRECTOR GOSS TIED TO SCANDAL? Last week, Harper's magazine > reported that party-goers "under intense scrutiny by the FBI are > current and former lawmakers on Defense and Intelligence > committees -- including one person who now holds a powerful > intelligence post." CIA Director Porter Goss is perhaps the only > individual who fits such a description. ("This is horribly > irresponsible. He hasn?t even been to the Watergate in decades," a > CIA spokeswoman said. When asked if Goss had attended Wilkes' > parties at the Westin or other locations, she repeated the denial. > "It's horribly irresponsible. Flatly untrue.") But the alleged > links between Goss, Foggo, and Wilkes have led some to return to > questions raised when Goss initially selected Foggo to be > executive director in November 2004. At the time, the decision was > viewed with skepticism since Foggo's previous position was as a > "midlevel procurement supervisor," and because following his > unexpected selection, "Porter Goss lieutenant Patrick Murray went > to then-Associate Deputy Director of Operations for > Counterintelligence Mary Margaret Graham and informed her that if > anything leaked about other Goss appointments -- in particular, > Foggo's -- she would be held responsible." Project on Government > Oversight fellow Jason Vest reported last week that much of > Foggo's counterintelligence file "has to do with various social > encounters over the years, none of which he?s been deceptive about > when polygraphed, and all of which have been deemed to be of no > threat to operational security -- but are still the types of > things that could be embarrassing for Goss and the Agency." Vest > suggests the latest reports raise important questions about the > "relationship between Foggo and Wilkes, and the relationship of > each with Goss." > > EVEN THE LIMO SERVICE IS CORRUPT: Another piece of the puzzle is > Shirlington Limousine and Transportation Inc., the firm that > Wilkes used to "transport congressmen, CIA officials, and perhaps > prostitutes to his Washington parties." Shirlington's president, > Christopher Baker, has a "lengthy history of illegal activity," > detailed in his 62-page rap-sheet which "runs from at least 1979 > through 1989 and lists charges of petty larceny, robbery, > receiving stolen goods, assault, and more." Shirlington Limo also > "operates in what looks to be a deliberately murky way. The limo > company does business under at least four different names; in > addition, the office addresses listed on its business filings > regularly change. A number of those office addresses are actually > at residential buildings or business suites, and calls to the > listed phone numbers are taken by an answering service." The > company was sued in 2004 for failing to make payments on buses it > had purchased, has received eviction notices from its offices, and > even had its federal license revoked by the Federal Motor Carrier > Safety Administration in both 2001 and 2004. Despite all of this, > the Department of Homeland Security last fall awarded Shirlington > a $21 million contract "to provide transportation, including limo > service for senior officials." Shirlington also won contracts > "with the Department of Housing and Urban Development (for > $519,823) and...the Federal Highway Administration (for > $142,000)." What role did Wilkes play in Shirlington receiving > these federal contracts? > > THE DEFENSE APPROPRIATIONS COMMITTEE 'CABAL': A common thread > links the members of Congress that Wilkes courted most > aggressively, such as Cunningham and Reps. Jerry Lewis (R-CA), > Duncan Hunter (R-CA), and John Doolittle (R-CA). All were (or > still are) on subcommittees overseeing defense and intelligence > spending. On Monday, prominent conservative strategist Ed Rollins > described the main players in the scandal as a "real little cabal > on the defense appropriations committee." In particular, the House > Appropriations subcommittee on defense is "aggressively courted > not just by defense contractors, but by lobbyists for foreign > governments interested in swinging US defense spending in certain > directions," investigative journalist Laura Rozen notes. "It is > really where the checks are signed, and decisions about funding > sometimes wholly un-debated aspects of U.S. national security > policy are made." Indeed, many of the figures tied to the scandal > have histories of involvement in reactionary conservative elements > of U.S. foreign policy: Kyle Foggo worked extensively with the > Nicaraguan contras, Mitchell Wade headed a White House-contracted > group called the "Iranian Democratization Foundation", and Wilkes > was reportedly set to receive a contract to "create and run a > secret plane network" for the CIA before his links to Cunningham > were made public. The roots of this scandal may be as much in > profiteering as they are in "this club's conviction that the law > is an impediment to the national security cause, that the way to > run things is through these informal networks." >
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