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Scandal in Baghdad: Millions Missing - French, Chinese Companies Involved
NewsMax ^ | Thursday, Feb 24, 2005 | Charles R. Smith

Posted on 02/23/2005 12:50:25 PM PST by Jim Robinson

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To: piasa
Defense official faces corruption probe for cell phone contract
Associated Press
via Lexington [KY] Herald-Leader
google cache

LOS ANGELES - The Pentagon is investigating allegations that a Defense Department official attempted to alter a contract proposal in Iraq to benefit friends and colleagues, a newspaper reported for its Thursday editions. John Shaw, the deputy undersecretary for international technology security, tried to turn a small communications proposal into a contract to create an Iraq-wide commercial cellular network, sources told the Los Angeles Times.

He then allegedly pressured officials in the U.S.-led Coalition Provisional Authority in Baghdad to grant a noncompetitive bid to a mobile phone consortium called Guardian Net, which included Shaw's friends and telecommunications giants Lucent and Qualcomm.

His efforts on behalf of the consortium led to a dispute that has delayed the contract and angered some officials, who say a better communications infrastructure could have improved coordination between U.S. and Iraqi forces and prevented numerous deaths, the paper reported.

Shaw defended his support of the consortium, saying he was backing the best available technology.

"Hey, we won the war," he told the newspaper. "Is it not in our interests to have the most advanced system that we possibly can that can then become the dominant standard in the region?"

Shaw was supporting the adoption of CDMA-type cell phone technology, which was rejected last year in favor of a European platform. He maintained that competition for commercial licenses was rigged.

According to e-mails obtained by the newspaper, Shaw allegedly tried to get around the bidding process by creating a new consortium - Guardian Net - with a small business owned by native Alaskans.

Native Alaskan-owned businesses can be awarded large government contracts without having to go through the standard competitive bidding process.

The Pentagon's inspector general began an investigation after two officials quit, saying Shaw had pressured them to change the contract.

Shaw said he has been friends with one of Guardian Net's directors, Don DeMarino, for decades. Another board member is Julian Walker, who is under contract with Shaw's office to perform research.

Shaw told the newspaper he does not have any financial ties to Guardian Net and has no agreement for future employment. Criminal charges could result if Shaw does have financial ties to the consortium.

21 posted on 02/24/2005 6:34:48 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: fight_truth_decay
From the above article:

John Shaw, the deputy undersecretary for international technology security, tried to turn a small communications proposal into a contract to create an Iraq-wide commercial cellular network, sources told the Los Angeles Times.
He then allegedly pressured officials in the U.S.-led Coalition Provisional Authority in Baghdad to grant a noncompetitive bid to a mobile phone consortium called Guardian Net, which included Shaw's friends and telecommunications giants Lucent and Qualcomm. His efforts on behalf of the consortium led to a dispute that has delayed the contract and angered some officials, who say a better communications infrastructure could have improved coordination between U.S. and Iraqi forces and prevented numerous deaths, the paper reported.

Lucent?

See this thread : Squeeze here

Lucent awarded $25 million reconstruction subcontract Bechtel National, Inc has recently awarded Lucent Technologies a $25 million subcontract to carry out emergency repair and rehabilitation on Iraq's communications network.

(Thanks to Jack Shaw?)

Alleged Violations Could Cost Lucent Millions
By Tom Becker
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Lucent Technologies Inc.'s (LU) alleged violation of a federal statute could cost the company millions of dollars and land some of its employees in jail.

The Justice Department and the Securities and Exchange Commission are investigating whether Lucent violated a provision of the Foreign Corrupt Practices Act of 1977 by bribing a Saudi Arabian official with money, gifts and free use of private jets to make business decisions in Lucent's favor. The alleged bribes are valued at roughly $15 million.

Any employee found guilty of violating the statute could face up to five years in prison and the telecommunications-maker could be forced to shell out millions to cover a large fine, a spokesman with the U.S. Department of Justice said.

Lucent denies the allegations, which were originally made in a lawsuit filed by National Group for Communications and Computers Ltd., a Saudi telecommunications company, and said it is cooperating with the Justice Department and SEC investigations.

The Foreign Corrupt Practices Act was penned to discourage U.S. businesses from bribing foreign officials to steer business their way. Along with bribery, entities can be charged with failing to properly book the payments made to foreign officials and for failing to have adequate controls in place to prevent such acts, legal experts said.

Two of the biggest cases under the act involved General Electric Co. (GE), which paid $69 million in penalties in 1992 after an employee was found to have bribed a former Israeli general, and Lockheed Martin Corp. (LMT), which paid $24.8 million in 1995 after an executive was found to have bribed an Egyptian politician to win a contract. The Justice Department is currently investigating whether Exxon Mobil Corp.

(XOM), formerly known as Mobil Oil Corp., participated in a scheme to route $78 million to Swiss bank accounts belonging to Kazakhstan's president and others.

A former Mobil vice president, J. Bryan Williams, recently pleaded guilty to tax evasion after he neglected to pay taxes on $2 million he allegedly received in association with the scheme.

"This is not slap-on-the-wrist type stuff," said Robert N. Kaplan, a partner with the law firm of Kaplan & Fox, which has defended entities accused of violating the act. "When the government investigates you for violating this act, it's serious business and it comes with serious penalties."

The Securities and Exchange Commission can levy its own fines and place restrictions on the violating businesses. The fines are typically smaller than the Justice Department fines. Only violations pursued by the Justice Department can result in jail time.

Kaplan said Lucent's best bet is to cooperate with the federal investigations. Fines are generally smaller in cases where settlements are reached.

The attorney said a typical defense is for an entity to claim it didn't know it was actually bribing anyone when it made the payments.

"You'll hear companies say we hired this consultant because he is a guy who knows his way around and said he could help put us in a position to get business but we had no idea he was just putting money into some official's bank account," Kaplan said.

In addition to the federal investigations, Lucent executives may wind up defending themselves from derivative actions for their role in the alleged violation, Kaplan said. In a derivative action, a shareholder can sue officers and directors of a corporation on behalf of the company for failing to instill proper controls to prevent the violations. The shareholder can seek to recover monetary damages from the officers and directors.
-By Tom Becker; Dow Jones Newswires; 201-938-2020

(END) Dow Jones Newswires
08-25-03 1715ET

1 posted on 09/04/2003 4:14:30 PM PDT by fight_truth_decay

22 posted on 02/24/2005 6:50:39 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: Jim Robinson; Shermy; Fedora
See what I mean about Newsmax interviewing Shaw on a story about Shaw's own report:

Shaw sent his report to the inspector general's office, which turned it over for further investigation to the FBI. An FBI official confirmed that the agency had received the report and had just begun looking into the allegations of bribery. -----"Official: Pentagon Deputy Used Unauthorized Probes to Secure Lucrative Contracts," By: T. Christian Miller, Los Angeles Times, July 07, 2004, http://www.latimes.com/news/nationworld/iraq/complete/la-fg-probe7jul07,1,7195550.story?coll=la-iraq-complete

23 posted on 02/24/2005 6:54:24 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: Fedora

this couldn't be the Sunni Saudis trying to get a little dirt in on Shi'a Ibrahim al-Jafferi before the Iraqis select their next PM, could it?


24 posted on 02/24/2005 7:05:16 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: Jim Robinson
WASHINGTON — A senior Defense Department official conducted unauthorized investigations of Iraq reconstruction efforts and used their results to push for lucrative contracts for friends and their business clients, according to current and former Pentagon officials and documents. John A. "Jack" Shaw, deputy undersecretary for international technology security, represented himself as an agent of the Pentagon's inspector general in conducting the investigations, sources said.
In one case, Shaw disguised himself as an employee of Halliburton Co. and gained access to a port in southern Iraq after he was denied entry by the U.S. military, the sources said.
In that investigation, Shaw found problems with operations at the port of Umm al Qasr, Pentagon sources said. In another, he criticized a competition sponsored by the U.S.-led Coalition Provisional Authority to award cellphone licenses in Iraq.
In both cases, Shaw urged government officials to fix the alleged problems by directing multimillion-dollar contracts to companies linked to his friends, without competitive bidding, according to the Pentagon sources and documents. In the case of the port, the clients of a lobbyist friend won a no-bid contract for dredging.
---- "Official: Pentagon Deputy Used Unauthorized Probes to Secure Lucrative Contracts," By: T. Christian Miller, Los Angeles Times , July 07, 2004
25 posted on 02/24/2005 7:09:24 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: Shermy
Shaw's actions are the latest to raise concerns that senior Republican officials working in Washington and Iraq have used the rebuilding effort in Iraq to reward associates and political allies. One of Shaw's close friends, the former top U.S. transportation official in Iraq, is under investigation for his role in promoting an Iraqi national airline with a company linked to the Saddam Hussein regime. The inspector general's office — which investigates waste, fraud and abuse at the Pentagon — has turned over its inquiry into Shaw's actions to the FBI to avoid the appearance of a conflict of interest, the sources said. --------- "Official: Pentagon Deputy Used Unauthorized Probes to Secure Lucrative Contracts," By: T. Christian Miller, Los Angeles Times , July 07, 2004

OK, now that we're thoroughly confused...

26 posted on 02/24/2005 7:12:48 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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The schmitz is about to hit the fan- lots more going on here than any one article can show; looks like I have to update my timeline more:

Shaw justified his investigations under a special agreement with the Pentagon inspector general, Joseph E. Schmitz. The August agreement created a temporary office headed by Shaw called the International Armament and Technology Trade Directorate. Its mission was to cooperate with the inspector general on issues related to the transfer of sensitive U.S. technologies or arms to foreign countries.

Shaw frequently cited the agreement in his dealings with reporters and the military, telling them it allowed him to "wear an IG hat" to conduct investigations. In a recent letter to the inspector general, he said the agreement gave him "broad investigatory authority."

That contention is the subject of dispute, however. The agreement states that Shaw "may recommend" that the inspector general initiate audits, evaluations, investigations and inquiries, but it does not appear to give him investigative powers.

"Jack Shaw was never authorized to do any kind of investigation or auditing on his own," said one source close to Schmitz. "The agreement was not for that. He's trying to cram more authority into that agreement than it gives him."

Schmitz canceled the agreement two weeks after Shaw was first accused of tampering with the emergency phone network contract. Schmitz declined to comment, but in his letter canceling the arrangement, he praised Shaw for "outstanding leadership." ---------- "Official: Pentagon Deputy Used Unauthorized Probes to Secure Lucrative Contracts," By: T. Christian Miller, Los Angeles Times , July 07, 2004

Of course, the LA Times can have its own agenda going on, too.

27 posted on 02/24/2005 7:20:48 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: Fedora
OCTOBER 28, 2003 (JACK SHAW WRITES LETTER TO GEN ABIZAID, BUT DOESN'T TELL HIM EVERYTHING - See Port of Umm al Qasr, lobbyist Richard E. Powers, Seattle based SSA Marine, and Nana Pacific) Shaw used the agreement to win permission to visit Iraq last fall. In an Oct. 28 letter to Army Gen. John P. Abizaid, head of the U.S. Central Command, Shaw said he wanted to "investigate those who threatened the national security of the United States through the transfer of advanced technologies to Iraq."
Specifically, Shaw said he planned to identify countries that had smuggled contraband weapons into Iraq and catalog existing conventional weapons stockpiles.
Although he did not mention it in the letter, Shaw also was interested in investigating operations at the port of Umm al Qasr.
Last summer, Shaw was visited by Richard E. Powers, a longtime friend and lobbyist. Powers was representing SSA Marine, a Seattle- based port operations company that had won a controversial limited-bid contract in the early days of the war to manage the troubled port. He also was representing a small business owned by Alaskan natives called Nana Pacific. ...
Powers suggested there were serious problems with dredging at the port that could be quickly remedied by having a no-bid contract awarded to Nana, which then could subcontract to SSA Marine, sources said. Powers did not respond to requests for comment. Public lobbying records show that Nana and SSA Marine paid Powers $80,000 last year for his work. ---------- "Official: Pentagon Deputy Used Unauthorized Probes to Secure Lucrative Contracts," By: T. Christian Miller, Los Angeles Times , July 07, 2004
28 posted on 02/24/2005 7:26:23 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: piasa
When Shaw was denied entry into Iraq by U.S. military officers (yes, a top level official of the Defense Department was denied access to Iraq by U.S. military personnel!), he decided to sneak into the country disguised as a Halliburton contractor. Using the cover of Cheney's old company to get the goods on Cheney's friends' illegal activities was yet another masterful stroke of genius by Shaw. But it also earned him the wrath of the neo-cons. They [?] soon leaked a story to the Los Angeles Times claiming that Shaw actually snuck into Iraq to ensure that Qualcomm (on whose board sat a friend of Shaw's) was awarded a lucrative cell network contract.

Pulled this from a "subjective" piece by journalist, author,Wayne Madsen.

29 posted on 02/24/2005 9:20:52 AM PST by fight_truth_decay
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To: piasa
2003 before mid April : (CHALABI AND 600 FIGHTERS OF HIS FREE IRAQI FORCES ARE AIRLIFTED TO IRAQ BUT ARE STALLED FOR 10 DAYS OUTSIDE NASIRIYA WAITING FOR US APPROVAL TO TRAVEL TO BAGHDAD; CHALABI FINALLY HEADS OUT ON HIS OWN) After being airlifted from northern Iraq by the American military, he and 600 fighters of his Free Iraqi Forces were stuck for 10 days outside Nasiriya in a flea-ridden, bombed-out airbase awaiting American approval to travel to Baghdad. In the end Chalabi bought cars in Kuwait and drove to Baghdad in a sandstorm. Halfway through the eight-hour journey, an American officer called. “We are told you are headed to Baghdad,” she said. “We request: what are your intentions?”

I wonder who this was?

30 posted on 02/24/2005 2:53:11 PM PST by Fedora
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To: piasa
Shaw, 65, is a longtime government employee who served in the White House under Presidents Ford, Nixon and Reagan and was an associate deputy secretary in the Department of Commerce. [* My note: So we're supposed to believe he SKIPPED serving under Carter and Clinton? How did he manage that?

Also wonder how Ford managed to become President before Nixon there--sounds like Chevy Chase helped Yahoo write that paragraph and managed to trip backward in time :-)

If Shaw started in the Nixon administration, what department was he with and who did he work with? I wonder if he was linked to the leakers in the administration. A fuller background on Shaw's activities in previous administrations would be useful.

31 posted on 02/24/2005 3:01:27 PM PST by Fedora
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To: piasa
this couldn't be the Sunni Saudis trying to get a little dirt in on Shi'a Ibrahim al-Jafferi before the Iraqis select their next PM, could it?

Would that fit with the Lebanon/Patrick Lang interest in the Iraqi political situation?--which I guess could be transposed into the broader question, how does that fit into Iran and Syria's interests in the situation?

32 posted on 02/24/2005 3:08:25 PM PST by Fedora
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self-ping, 2005 topic.


33 posted on 02/19/2007 10:53:16 AM PST by SunkenCiv (I last updated my profile on Thursday, February 15, 2007. https://secure.freerepublic.com/donate/)
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