Remember when the Walter Reed story broke? I hope this munitions story has the same effect, as in exploding in the Bush Administration’s faces. People will understand this story. May it travel far and wide, and may it hang around George Bush’s and the Republican party’s necks like a bloody stone.
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.
But an examination of AEY’s background, through interviews in several countries, reviews of confidential government documents and the examination of some of the ammunition, suggests that Army contracting officials, under pressure to arm Afghan troops, allowed an immature company to enter the murky world of international arms dealing on the Pentagon’s behalf — and did so with minimal vetting and through a vaguely written contract with few restrictions.
Which contracting officials? What are their names? Please note - so far they remain protected from public scrutiny. This story probably has deep and interesting roots. As any working stiff struggling to pay the mortgage knows, some 22 year old kid doesn’t land a $300 million government contract because he’s a business prodigy. This is a story about networking.
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.
…But problems with the ammunition were evident last fall in places like Nawa, Afghanistan, an outpost near the Pakistani border, where an Afghan lieutenant colonel surveyed the rifle cartridges on his police station’s dirty floor. Soon after arriving there, the cardboard boxes had split open and their contents spilled out, revealing ammunition manufactured in China in 1966.
…In January, American officers in Kabul, concerned about munitions from AEY, had contacted the Army’s Rock Island Arsenal, in Illinois, and raised the possibility of terminating the contract. And officials at the Army Sustainment Command, the contracting authority at the arsenal, after meeting with AEY in late February, said they were tightening the packaging standards for munitions shipped to the war.
And yet after that meeting, AEY sent another shipment of nearly one million cartridges to Afghanistan that the Combined Security Transition Command-Afghanistan regarded as substandard. Lt. Col. David G. Johnson, the command spokesman, said that while there were no reports of ammunition misfiring, some of it was in such poor condition that the military had decided not to issue it. “Our honest answer is that the ammunition is of a quality that is less than desirable; the munitions do not appear to meet the standards that many of us are used to,” Colonel Johnson said. “We are not pleased with the way it was delivered.”
Several officials said the problems would have been avoided if the Army had written contracts and examined bidders more carefully.
No shit. But that still doesn’t answer the question: how did young Efraim get the contract in the first place? Surely somebody must have brought him forward and approved his contract. After all, we are talking about the War on Terror here, which everyone knows is Extremely Important. Western Civilization hangs in the balance. Furthermore, American soldiers and our coalition forces deserve the Very Best because we Support the Troops.
Public records show that AEY’s contracts since 2004 have potentially been worth more than a third of a billion dollars. Mr. Diveroli set the value higher: he claimed to do $200 million in business each year.
Several military officers and government officials, speaking on condition of anonymity because of the investigations, questioned how Mr. Diveroli, and a small group of men principally in their 20s and without extensive military or procurement experiences, landed so much vital government work.
“A lot of us are asking the question,” said a senior State Department official. “How did this guy get all this business?”
Now you must go and read about the charming Diveroli men. First they helped themselves to the customer base of a relative running a police and military supply company. Then within the space of a year (2004-2005) they had a whole stable of US government agencies under contract. The Diverolis must have some great contacts. This success appears all the more remarkable because AEY (what does that stand for anyway?) quickly developed a reputation as unreliable and full of excuses. Young Efraim, perhaps suffering stress from his incredible good fortune, took to terrorizing a young woman and ended up in court. But Efraim has the Best Hallpass Evah.
Mr. Diveroli sought court delays on national security grounds. “I am the President and only official employee of my business,” he wrote to the judge on Dec. 8, 2005. “My business is currently of great importance to the country as I am licensed Defense Contractor to the United States Government in the fight against terrorism in Iraq and I am doing my very best to provide our troops with all their equipment needs on pending critical contracts.”
He got a new girlfriend and terrorized her, too. Unfortunately, after Efraim and his partner got in more trouble beating up a parking attendant, he was charged with a misdemeanor (simple battery) and a felony (possession of a stolen or forged document - a fake license). Since his ‘business’ requires a federal firearms license, this felony charge posed a real problem. But he wriggled off that hook too thanks to his great contacts, whoever they are, and wouldn’t we love to know.
The week after a relative paid his bail [$1,000…couldn’t he afford that himself?], the Banc of America Investment Services in Miami provided Mr. Diveroli a letter certifying that his company had cash on hand to begin buying munitions on a large scale. It said AEY had $5,469,668.95 in an account.
AEY was awarded the contract in January 2007. Asked why it chose AEY, the Army Sustainment Command answered in writing: “AEY’s proposal represented the best value to the government.”
Oh my gosh. You get what you pay for. It seems that the Army allowed this garbage ammunition because it went for foreign weapons, primarily Russian, and therefore it’s Not Our Problem. (Hey, that’s the way to help your allies in the War on Terror. The bullets we gave you are 50 years old? So?) The Albanians were looking to get rid of this ancient ammunition before it exploded (too late), and AEY helpfully bought 100 million cartridges to fill the Pentagon’s order.
And now, after all that background, comes the part where AEY gets involved with shady foreigners dealing illegal arms. I’m not going to try and summarize it except to say that clearly, young Efraim is in way over his head, and he’s looking for a good Administrative Assistant on Craigslist. The Army suspended his contract and all his former colleagues, including pops, have moved on.
Michael Diveroli, the company’s founder, told a reporter that he no longer had any relationship with the company. Mr. Packouz, who was AEY’s vice president, and Levi Meyer, 25, who was briefly listed as general manager, had left the company, too.
Mr. Meyer offered a statement: “I’m not involved in that mess anymore.”
The most important questions: Who helped the Diveroli’s get all those contracts with the US Government, and who protected them from the consequences of their bad reputation? Why did they do this? Cui bono?
Indeed, who benefits from this whole affair? Certainly not our American soldiers or our allies fighting the War on Terror. If the Pentagon was serious about the War on Terror, would they allow such a joke to supply something as critical as ammunition? Doesn’t this whole episode illustrate the real reasons for the War on Terror: to keep Americans afraid, the world in turmoil, and the profiteers swimming in cash?
I think it does.
I think it would be very interesting to know who used Young Efraim and all these other cocky punks in their 20s, for surely they were tools for people who remain safely ensconced behind layers of security and plausible deniability. The handlers simply dissolve their shell companies and move on, laughing, having siphoned streams of US taxpayer money into their Swiss bank accounts and without regard for any related deaths.