Lawmaker Charges State Department Covered Up for U.S. Contractor

A 22 year-old is charged with selling Chinese ammo to the Pentagon.

ByABC News
June 23, 2008, 3:12 PM

June 23, 2008— -- A U.S. ambassador may have helped cover up for an American defense contractor now accused of selling ammo from China to the Pentagon, according to a senior House lawmaker.

And the State Department may have continued the cover-up by hiding information from Congress, charged House Oversight and Government Reform Committee chairman Henry Waxman, D-Calif., in a letter to Secretary of State Condoleezza Rice Monday.

Federal officials last week arrested top executives at defense contractor AEY Inc., including its 22-year-old CEO, Efraim Diveroli, and charged them with acquiring old Chinese ammo from the Albanian government and supplying it to forces in Afghanistan under a Pentagon contract, a violation of the Arms Export Control Act. Diveroli's lawyer has said his client did nothing wrong.

In his letter, Waxman charged that John L. Withers II, U.S. ambassador to Albania, may have conspired with the Albanian defense chief to hide the source of the ammunition from the New York Times, which first reported on the AEY scandal.

According to Waxman, Withers' defense liaison told his investigators earlier this month that Withers "held a late-night meeting with the Albanian Defense Minister at which the Ambassador approved removing evidence" showing that the ammunition sold to the Pentagon by AEY came from China.

State Department spokesman Tom Casey told reporters Monday afternoon he had "no information that would support" Waxman's allegations.

Then-Albanian Defense minister Fatmir Mediu was accused of taking kickbacks as a part of the deal, a charge he has denied. He has since resigned, maintaining his innocence.

Withers has taken a hard public stance against corruption in Albania, which is perceived to be widespread. A U.S.-funded survey released in May found that 92 percent of Albanians said corruption was widespread among public officials. That figure is down from 100 percent a year ago.

"Corruption is not an Albanian problem; corruption exists everywhere. There is a great deal of corruption in my own country," Withers told an Albanian audience in a speech announcing the survey's findings.