The story of arms dealer AEY Inc., run by the 22-year-old Miami man who was indicted last week, is getting worse by the minute.

Four government officials are testifying on Capitol Hill today about how the company ended up with a $300 million U.S. military contract providing unusable and probably illegal weapons to the Afghan Army.

So far, the officials haven't discussed the alleged State Department cover-up yet. But they are delving into AEY's previous contracts with the government and it doesn't look good.

In his opening statement, Rep. Henry Waxman (D-CA) revealed a series of previous problems that the military had with AEY.

Documents produced to the Committee show that federal agencies terminated, withdrew, or canceled at least seven previous contracts with AEY. Under these contracts, AEY provided potentially unsafe helmets to our forces in Iraq, failed to deliver thousands of weapons, and shipped poor quality ammunition to U.S. Special Forces. Government contracting officials repeatedly warned of "poor quality," "damaged goods, " "junk" weapons, and other equipment in "the reject category. " And they complained the company repeatedly engaged in "bait and switch" tactics that were "hurting the mission."

One contracting official told us: " I just don't trust the guy. . . . I couldn't take anything he said credibly. " He told us that AEY was the single worst company he dealt with in Iraq, saying: "That was my lemon I had to make lemonade out of."

Nevertheless, AEY's formal record remained spotless, Defense Department officials said, party because the previous problems did not involve contracts large enough to trigger current reporting requirements.

"The system for vetting for contractors appear to be broken," Waxman said. "It's hard to imagine a less qualified contractor than AEY and yet this company was rated excellent by the Defense Department and it was awarded a contact worth $300 million. That is quite amazing to me."