This should do the trick.

Blackwater Worldwide, the contractor that emerged over the last few years as Exhibit A for ugly Americans in Iraq, has decided that the best response is to ... change its name.

And check out the name they picked: "Xe." (Apparently it's pronounced like the letter 'Z.' Raising the question: Why not just call it "Z"?)

They've also renamed Blackwater Lodge & Training Center, the subsidiary that does much of their controversial overseas operations. It's now the "U.S. Training Center Inc." (Which doesn't exactly mesh with "Xe," but whatever.)

According to the Associated Press, Blackwater (or should we say "Xe"?) president Gary Jackson said in a memo to employees, announcing the changes, that they reflect a shift in the company's focus away from private security and toward operating training facilities around the world.

You can see how "Xe" would be the obvious name to reflect such a shift.

It's not hard to guess why Blackwater (or wait, Xe) wants to get out of the private security business. In 2007, Blackwater guards opened fire in a Baghdad square, killing 17 Iraqis. Five ex-Blackwater guards were charged with voluntary manslaughter and are awaiting trial.

And recently, thanks largely to that incident and other cases where Blackwater has been accused of using excessive force, the Iraqi government declined to renew the company's contract to operate in the country. Soon after, the State Department announced that, in any case, it wouldn't renew Blackwater's contract to operate in Iraq.

No word yet on whether Iraq and State will reconsider now that that the company is called "Xe."

Et tu, State Department?

Earlier this week, we told you that the Iraqi government had decided not to renew Blackwater's contract to operate in Iraq, thanks to a 2007 incident in which Blackwater guards opened fire in a Baghdad square, killing 17 Iraqis, among several other cases of excessive force. Five ex-Blackwater guards were charged with voluntary manslaughter and are awaiting trial in connection with the 2007 incident.

Now, the State Department, which depended on Blackwater as its biggest contractor providing security to US diplomats in Iraq, has followed suit, according to the Associated Press, declining to renew the controversial company's contract to protect department personnel in Iraq when it expires in May.

The decision was a result of the Iraqi government's move, according to a department official.

In the AP's words, the state Department is "still considering its options" as to how to proceed.

Moments ago, officials with the Department of Justice wrapped up a press conference at which they are publicizing the charges -- previously contained in a sealed indictment -- against the five former Blackwater guards charged with manslaughter in the deadly September 2007 shootings of 17 unarmed Iraqi civilians.

The case has been assigned to a US District Court in Washingotn DC, but defense lawyers want the case moved to Utah, where one of the former guards lives, and where they would presumably find a more conservative, pro-gun jury, reports the Associated Press.

The ex-guards could face 30-year sentences under an anti-machine gun law designed to target drug offenders.

We're also seeing an interesting emerging defense strategy of suggesting that DOJ is bowing to Iraqi pressure: "We are confident that any jury will see this for what it is: a politically motivated prosecution to appease the Iraqi government," Steven McCool, who represents one of the defendants, told the AP.

One ex-Blackwater guard, Jeremy Ridgewater, has already come to a plea deal with prosecutors, pleading guilty to voluntary manslaughter.

Blackwater is the largest security contractor in Iraq.

Late Update: In a lengthy statement emailed to TPMmuckraker, Blackwater responds:

Blackwater does not have access to all of the information gathered by federal investigators. Based on the information available to us, we understand that these individuals acted within the rules set forth for them by the government and that no criminal violations occurred.

...

As noted by the Department of Justice during its press conference, Blackwater as a company has not been charged with any crimes, and neither have any of the hundreds of other Blackwater professionals serving in Iraq.

Late Late Update: Read the court documents:
- Indictment against Blackwater
- Jeremy Ridgewater charges
- Jeremy Ridgewater plea deal

Contracting giant Blackwater has confirmed the existence of multiple federal investigations into its work in shipping weapons to Iraq, reports Congress Daily.

The North Carolina company is facing separate investigations by a grand jury in the state, and by the State Department.

But in a statement, it took issue with some details from news reports last week. "The investigations ... do not allege that the company failed to obtain licenses or failed to ensure the government was aware of its actions," it said.

Rather, it said, "[t]he investigations concern Blackwater's not properly annotating the licenses, not timely submitting required reports, and not retaining required records."

Still, it essentially admitted the most eyebrow-raising charge -- that it had shipped weapons inside sacks of dog food -- saying that this was done to prevent theft.

Separately, federal prosecutors have drafted an indictment against Blackwater guards in connection with the deadly shooting of 17 Baghdad civilians last year, though no decisions on charges have been made.

Yesterday, we noted that the State Department plans to fine Blackwater USA for illegally shipping weapons to Iraq without the proper permits.

Now, ABCNews.com adds some more detail to the picture, reporting that a federal grand jury is probing whether the company used sacks of dog food to hide weapons and silencers it was shipping into Iraq.

State Department rules forbid Blackwater from using "offensive" weapons, including silencers, which, an expert tells ABCNews.com, would only be used for assassinations.

The report adds:

Larger items, including M-4 assualt weapons, were secreted on shipping pallets surrounded by stacks of dog food bags, the former employees said. The entire pallet would be wrapped in cellophane shrink wrap, the former employees said, making it less likely US customs inspectors would look too closely.

Earlier today, the Associated Press reported that an indictment had been drafted in connection to the deadly shootings of 17 Iraqi civilians last year, in which 6 Blackwater guards have been implicated. No decision has yet been made to file charges.

Federal prosecutors have drafted an indictment against 6 guards working for Blackwater USA, who were involved in deadly shootings last year of 17 Baghdad civilians, according to the Associated Press.

But it's not yet certain that charges will be filed. AP reports:

The draft is being reviewed by senior Justice Department officials but no charging decisions have been made. A decision is not expected until at least later this month, people close to the case said.

The shootings by Blackwater guards, which witnesses described as an unprovoked attack, took place at a busy Baghdad intersection in September of last year.

Earlier this week, the company was fined by the State Department for shipping automatic weapons to Iraq without permits.

Blackwater USA, the State Department's largest personal security contractor in Iraq, is set to be hit with a multi-million dollar fine for shipping automatic weapons to that country without the necessary permits, reports McClatchy. Some of the weapons are believed to have ended up on Iraq's black market.

The State Department has been looking into whether Blackwater employees shipped weapons hidden in shrink-wrapped pallets from the companies headquarters in North Carolina to Iraq. No criminal charges have been filed in the case.

But according to one official, the department found that Blackwater shipped 900 weapons to Iraq without the paperwork required by arms export control regulations.

Since the weapons case became public in September 2007, Blackwater has received $1.2 billion in federal contracts, by one estimate.

The company is also being investigated by the Justice Department in connection with the killing last year of 17 Iraqi civilians.

We've previously followed some of Sharon Weinberger's coverage at Wired on former Representative Curt Weldon's ties to shady arms-dealings. Weldon, a defeated Republican from Pennsylvania was employed as Chief Strategic Officer for Defense Solutions after losing his election in November 2006.

Lost in the holiday weekend traffic was a Wired story on the Pennsylvania based arm dealer's multiple contracts, potentially worth hundreds of millions of dollars, to corner the supplier market from Eastern Bloc countries to to Iraq. The deals, which the magazine describes as "often legally murky" were brokered by Weldon, who is currently under investigation by the FBI for corruption stemming from his work in Congress.

In an update yesterday, Weinberger expanded on Defense Solution's claim that they had an exclusive deal with Ukraine to supply their armored vehicles to Iraq. The boast was bolstered by a signed letter from Ukraine's Deputy Minister of Foreign Affairs, Andri Veselovsky, to the U.S. Ambassador to Ukraine, Stephan Minikes.

Defense Solution's CEO, Tim Ringgold, bandied the letter about as proof of their relationship -- that is until Veselovsky told Wired the letter was a fake, and that it wasn't his signature. Now Ringgold seems to be taking it all back.

In an update on Weinberger's Wired blog DANGER ROOM:

Timothy Ringgold, the CEO of Defense Solutions wrote DANGER ROOM to express some objections with this post. His letter, with our answers, follows......

Ringgold writes: Your article of July 7, 2008 11:07 a.m. has a number of significant inaccuracies, not he least of which deals with your allegation of forgery:
As I informed you during our phone conversation, I have no knowledge of a "letter" from Ukraine's Deputy Foreign Minister, but I am aware of an email dated February 25, 2008 received from the Deputy Foreign Minister. Since I spoke with the Deputy Foreign Minister after receiving it, I think it safe to conclude the email was genuine.
[DR: The forgery allegation is not ours; it is Veselovsky's. He stated quite clearly it is not his signature on the letter. When asked about the Veselovsky letter during the interview, Ringgold acknowledged it, until he was told the Veselovsky denied signing it.]

This week, we learned that the White House knew about last year's deal between Texas-based Hunt Oil and the Kurdish Regional Government.

Apparently the threat it posed to the fragile negotiations in Baghdad didn't concern the president as much as he suggested in public.

The Kurds have made a lot of friends in Washington during the past few years -- especially among Republicans.

It's a relationship that's bolstered by aggressive lobbying by the Kurds. The Kurdish Regional Government has 11 active contracts with U.S. lawyers and lobbyists, according to the State Department's database maintained under the Foreign Agents Registration Act. The Kurds have been shelling out far more money on K Street than any other group or government in Iraq.

A key ally for the Kurds is the firm Barbour Griffith Rogers, the lobbying shop founded by Mississippi Gov. Haley Barbour, formerly head of the Republican National Committee. BGR receives $700,000 a year from the Kurdish Regional Government. Their agreement says the firm will "arrange meetings" with U.S. media and government officials.

The firm has a separate agreement with the Kurdistan Democratic Party for a $262,500 annual fee, according to the FARA database.

The Kurdish Regional Government also has a deal with the Republican-linked firm Russo, March and Rogers for running a "media campaign" and a "public relations campaign."

The Washington Post last year also noted the Kurds efforts to reach out to evangelical Christians.

In the past year, the Kurds have spent more than $3 million to retain lobbyists and set up a diplomatic office in Washington. They are cultivating grass-roots advocates among supporters of President Bush's war policy and evangelicals who believe that many key figures in the Bible lived in Kurdistan. And they are seeking to build an emotional bond with ordinary Americans, like those forged by Israel and Taiwan, by running commercials on national cable news channels to assert that even as Iraq teeters toward a full-blown civil war, one corner of the country, at least, has fulfilled the Bush administration's ambition of a peaceful, democratic, pro-Western beachhead in the Middle East.

As we reported earlier, Chairman Waxman of the House Oversight Committee claimed today that the Bush Administration knew about the Hunt Oil deal way before it happened-- something the administration has denied regularly.

According to Waxman, there were nearly a dozen contacts between various levels of the administration and Hunt Oil as the deal was taking place. Hunt regularly informed the President's Foreign Intelligence Advisory Board of his intentions to seek a deal with the Kurdistan government. Management at Hunt also regularly met and communicated with the U.S. Regional Reconstruction Team (RRT), as well as State Department personnel.

So let's go through a little time line of the events and communication leading up to Sept. 8, 2007-- the day the Hunt Oil deal was finalized with the Kurdistan government.

June 12 and 15: Hunt Oil officials meet with officials from the RRT for the Kurdistan region, "to investigate investment prospects" in the Kurdish region. Hunt Oil General Manager Ken McDonald, asks RRT members if the deal between Hunt Oil and Kurdistan is in violation of U.S. policy:

I specifically asked if the USG had a policy toward companies entering into contracts with the KRG and [redacted] replied that there was no policy, neither for nor against.

July 12, 2007: Ray Hunt, president and CEO of Hunt Oil sends a letter to the President's Foreign Intelligence Advisory Board, letting them know he is pursuing an oil deal in Kurdistan:

We were approached a month or so ago by representatives of a private group in Kurdistan as to the possibílity of our becoming interested in that region. We had one team of geoscientists travel to Kurdistan several weeks ago and were encouraged by what we saw. We have a larger team going back to Kurdistan this week but who they will actually meet with while they are there and what the relationships of those people might be with the Government of Kurdistan are both unclear at this time.

August 2007: Hunt Oil representatives exchange a series of emails with State Department personnel discussing their return to Kurdistan.

August 30, 2007: Ray Hunt sends another letter to the Advisory Board to let them know he will be in Kurdistan the week of September 3:

While my schedule is still fluid, there is a high likelihood that I will meet with President Masoud Barzani, the Prime Minister, the Oil Minister and various other individuals associated with the government of Kurdistan.

September 5, 2007: McDonald informs the RRT in Erbil that "Hunt is expecting to sign an exploration contract" with the Kurdistan Regional Government. That same day, the RRT leader sends an e-mail summary of the meeting to the Embassy in Baghdad and the State Department headquarters in Washington. A second synopsis of the meeting is sent to the Embassy in Baghdad in a situation report the following day.

September 8, 2007: The Hunt Oil contract is finalized with the Kurdistan Regional Government.

September 13, 2007: A State Department official contacts Hunt Oil to describe another "good opportunity for Hunt" in Iraq, prompting a Hunt Oil official to write Ray Hunt: "This is really good for us. . .I find it a huge compliment that he is 'tipping' us off about this . . .This is a lucky break."

We pointed out this morning the New York Times story that suggested KBR was over charging the military on Iraq-related contracts and threatening to cut off services to combat troops if the bills weren't paid.

Now here's another one about KBR's billing. This time from the Department of Defense Inspector General. And it looks at the company's role in the clean-up efforts after Hurricane Katrina.

The Houston Chronicle reports:

The Pentagon Inspector General said he could find no documentation in Navy contracting files to back up KBR claims it paid fair and reasonable prices to subcontractors that served meals in New Orleans.

"The prices KBR agreed to pay were greatly inflated," the 86-page audit said.

"The Navy paid approximately $4.1 million for meals and services we calculate should have cost $1.7 million, more than a $2.3 million difference," said the audit, signed by Assistant Inspector General for Acquisition Management Richard Jolliffe.

. . . Altogether, the audit requested that the Navy seek refunds of at least $8.5 million for "inappropriate" payments to KBR.

Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army reports for The Nation on the shadowy Blackwater's growing foray into the world of private espionage.

The privatization of intelligence has grown dramatically under President Bush, with Washington paying $42 billion annually in private intelligence contracts, compared to just $17.5 billion in 2000. As Scahill points out, it means that 70% of the U.S. intelligence budget is going to private companies, which creates an interesting market for government operatives.

Erik Prince, founder of Blackwater, started Total Intelligence Solutions in April 2006 in order to capitalize on this growing demand for privatized intelligence services:

"Total Intel brings the...skills traditionally honed by CIA operatives directly to the board room," [Blackwater's vice chair Cofer] Black said when the company launched. "With a service like this, CEOs and their security personnel will be able to respond to threats quickly and confidently -- whether it's determining which city is safest to open a new plant in or working to keep employees out of harm's way after a terrorist attack."

As Scahill writes, Total Intel's leadership "reads like a Who's Who of the CIA 'war on terror'":

In addition to the twenty-eight-year CIA veteran Black, who is chair of Total Intelligence, the company's executives include CEO Robert Richer, the former associate deputy director of the agency's Directorate of Operations and the second-ranking official in charge of clandestine operations.

From 1999 to 2004, Richer was head of the CIA's Near East and South Asia Division, where he ran clandestine operations throughout the Middle East and South Asia. As part of his duties, he was the CIA liaison with Jordan's King Abdullah, a key US ally and Blackwater client, and briefed George W. Bush on the burgeoning Iraqi resistance in its early stages.

Scahill points out there are drawbacks to this kind of free-market approach to national security and intelligence:

In Iraq, Blackwater has banked on the idea that it is a sort of American Express card for the occupation. But for the future, Prince has a different corporate model, as he indicated in his speech. "When you send something overseas, do you use FedEx or the postal service?" he asked.

There are serious problems with this analogy. When you send something by FedEx, you can track your package and account for its whereabouts at all times. You can have your package insured against loss or damage. That has not been the case with Blackwater. The people who foot the sizable bill for its "services" almost never know, until it is too late, what Blackwater is doing, and there are apparently no consequences for Blackwater when things go lethally wrong. "We are essentially a robust temp agency," Prince told his fans in Michigan. He's right about that one. A temp agency serving the most radical privatization agenda in history.

Nearly a year and a half after the incident, the Justice Department has sent a team to investigate a former Blackwater contractor for drunkenly gunning down a bodyguard to Iraqi Vice President Adil Abd-al-Mahdi on Christmas Eve, 2006.

To refresh your memory on this singularly ugly case: after the shooting, Blackwater and the State Department got together to hustle the contractor, Andrew Moonen, out of Iraq (when Blackwater CEO Erik Prince was asked about this, he replied, "It could easily be.").

Part of the effort to keep the thing under wraps was a payment to the victim's family. Emails showed that when U.S. Embassy officials suggested either $100,000 or $250,000, a State diplomatic-security official countered with $15,000. The figure needed to be lower, the diplomatic-security official contended, so Iraqis wouldn't "try to get killed to set up their family financially."

And they managed to keep the thing so quiet that Moonen soon went back to Iraq working for another contractor.

But now prosecutors have evidently determined that the law will allow them to charge Moonen. They say they'll reach a decision at the end of the summer. Don't confuse this case with the Nisour Square shooting -- the Justice Department is also investigating that incident, and a handful of contractors are reportedly still on the hook.

From the AP:

Blackwater Worldwide, the security contractor blamed by an angry Iraqi government for the shooting deaths of 17 civilians, is not expected to face criminal charges -- all but ensuring the company will keep its multimillion-dollar contract to protect U.S. diplomats.

Instead, the seven-month-old Justice Department investigation is focused on as few as three or four Blackwater guards who could be indicted in the Sept. 16 shootings, according to interviews with a half-dozen people close to the investigation.

So what does this mean? Well, for one thing, it would certainly seriously damage the company's prospects for government business -- especially its contracts in Iraq and Afghanistan -- if Blackwater were indicted. It also certainly wouldn't help the search for investors. But if a few bad apples get put to justice, well, prospects improve. Blackwater spokeswoman Anne Tyrrell tells the AP, "If it is determined that there are any individuals who need to be held accountable, we support that."

Earlier this week, ABC reported that the investment firm Cerberus Capital was in talks to buy Blackwater for around $200 million, but Cerberus, which had apparently been exploring the deal since the beginning of this year, got cold feet as soon as the news went public.

It turns out that it's part of a concerted push, The Times reports, to expand Blackwater's business because "whatever the outcome of the US presidential election Blackwater, run by Erik Prince, the Republican former Navy Seal, may find itself without friends in Washington." So there's an effort to prepare for the future, when all those federal investigations and scandals might actually affect the bottom line:

Blackwater has advertised in security industry journals repositioning itself as a peacekeeping force. The adverts show mothers feeding babies and Blackwater guards smiling as children play in a street. It has also set up a division called Greystone, which is seeking to win protection work from the UN, aid organisations and foreign companies.

A defence industry source said: "Theirs is nearly all US government work and if that goes they are in trouble."

(Here's more on Greystone from Mother Jones.)

It looks like the Pentagon is just in a lesson-learning mood lately. While they're busily reviewing whether the carefully-orchestrated use of military analysts was improper, the Army is reviewing whether it should have known better than to award a $300 million contract to supply arms to the Afghan security forces to a company run by a 22 year-old.

As The New York Times reports, the key lesson seems to be that if a contractor's price seems too good to be true, then it probably is.

Prepare to have your credulity tested.

Back in February, the AP broke the story that the White House had secretly modified a proposed rule to crack down on contract fraud. The rule, originally drafted by the Justice Department, was intended to force contractors to police themselves and report evidence of fraud or abuse. But the White House's version of the rule specifically exempted contractors working overseas on contracts that exceeded $5 million.

The Justice Department, which needs all the help it can get in busting corrupt contractors, was dismayed. But it made the major overseas contractors (like, say, Blackwater, KBR, CACI International, etc.), who had been opposing the rule, very happy.

When the AP asked why the White House had inserted the loophole, no answers were forthcoming. A spokeswoman from the Office of Management and Budget would only say that it was a "proposed rule," and that they were reviewing public comments.

And that was it. Over the ensuing months, members of Congress from both parties denounced the rule and vowed investigations. Even the Special Inspector General for Iraq Reconstruction publicly criticized the rule. But the White House otherwise stayed mum.

The first Congressional hearing was set for today. And the White House has let it be known that the loophole is gone -- and that it was all a big misunderstanding:

Reversing itself after months of criticism, the administration closed the loophole that was quietly slipped last year into a proposed Justice Department crackdown on government contract fraud....

Government policywriters said the original rule was drawn up quickly, and chided the Justice Department for not explicitly making sure that overseas contracts should be included in the crackdown. "It was only after publication of the proposed rule ... that DoJ and other respondents expressed concern about the overseas exemption," the draft states....

A Bush administration official on Monday called the loophole "a drafting error" that happened when policywriters merely cut and pasted a 20-year-old Defense Department regulation into the contracting crackdown.

Oh well. Mistakes do happen.

Rep. Peter Welch (D-VT), who had called for the hearing, seems not to take the White House's story at face value: "This investigation proves why oversight works.... The question is why it required a congressional investigation to prevent the Bush administration from giving overseas contractors a free pass to defraud taxpayers."

For those of you waiting to hear from the senior executives behind AEY, Inc., you'll have to wait a little longer. The House oversight committee, which had set a hearing for 22 year-old AEY President Efraim Diveroli, his 25 year-old VP (and masseur) David Packouz, and the company's general manager, also 25, to testify, has indefinitely postponed the hearing.

Packouz's lawyer had informed the committee that his client would be pleading the Fifth unless he received immunity to testify -- something which seems unlikely. So that likely has something to do with the postponement. Diveroli and his boyz are under federal investigation for allegedly lying about the source of the ammunition he provided to the Afghan army.

Why is this man smiling? From the AP:

The State Department says it will renew Blackwater USA's license to protect diplomats in Baghdad for one year, but a final decision about whether the private security company will keep the job is pending.

A top State Department official said that because the FBI is still investigating last year's fatal shooting of Baghdad civilians, there is no reason not to renew the contract when it comes due in May. Blackwater has a five-year deal to provide personal protection for diplomats, which is reauthorized each year.

Iraqis were outraged over a Sept. 16 shooting in which 17 civilians were killed in a Baghdad square. Blackwater said its guards were protecting diplomats under attack before they opened fire, but Iraqi investigators concluded the shooting was unprovoked.

Since the "top State Department official" seems so blithe about the FBI investigation, it's worth recalling that Justice Department faces probably insurmountable obstacles in bringing a prosecution based on the Nisour Square shootings. That's despite the fact that the FBI determined that the guards had indeed opened fire without provocation.

Update: More from Reuters:

"I have requested and received approval to have task order six -- which Blackwater has to provide personal protective services in Baghdad -- renewed ... for one year," the head of diplomatic security, Gregory Starr, told reporters....

Asked whether the Blackwater Baghdad deal could be scrapped if the FBI investigation found wrongdoing, Starr said: "We can terminate contracts at the convenience of the government if we have to."

"I am not going to prejudge what the FBI is going to find in their investigation. I think really, it is complex. I think that the U.S. government needs protective services," he said.

"Essentially I think they do a very good job. The September 16th incident was a tragedy. It has to be investigated carefully," he added.

House oversight committee Chair Henry Waxman (D-CA) wants the twenty-something senior executives of AEY, Inc. to appear for a Congressional hearing. You know, just to hang out and chat about how they managed to bag a $300 million contract to provide munitions to Afghan forces, and then allegedly lied about where they were coming from.

But they're not going to come easy, The New York Times reports:

Marc D. Seitles, the lawyer who represents David M. Packouz, the licensed massage therapist who is AEY’s former vice president, said he had sent a letter to Congress saying Mr. Packouz would speak publicly only if he was granted immunity from prosecution.

Mr. Packouz, 25, left AEY last spring and had no contact with the company since, Mr. Seitles said. Without immunity, he said, “I cannot allow my client to testify in this matter, and if he is subpoenaed he will invoke the Fifth Amendment.”

AEY and particularly its president Efraim Diveroli do have a lot to worry about. Federal investigators are digging to see if Diveroli committed a crime by promising in a contract to deliver Hungarian ammo, when he was in fact delivering forty year-old Chinese ammo (itself prohibited). And Government Executive reports today that AEY might have also misrepresented itself as a disadvantaged business, allowing it to pick up much more business.

It seems highly unlikely that Congress would even consider immunity for either Diveroli or Packouz, so either Waxman's planned hearing later this month will be deferred, or the two will spend a lot of time respectfully pleading the Fifth.

Oh, man. Not cool. Not only has the Army suspended any further contracts for AEY (the shady contractor run by 22 year-old Efraim Diveroli), but the U.S. attorney in Miami along with Department of Justice prosecutors in Washington have picked up the case, The Miami Herald reports.

The probe launched as a result of an audit by the Army's Procurement Fraud Branch (it's unclear whether the probe launched as a result of The New York Times' inquiries), where officials determined that Diveroli appeared to have lied when he claimed that the ammunition he was providing came from Hungary when it in fact was made in China -- which he would have done because the Army prohibits using Chinese ammo.

If Diveroli did lie to the government, that would be a crime. You can read the Army's audit letter, in addition to the letter to Diveroli suspending his ability to win any further contracts, here.

The Herald also uncovered a second arrest for Diveroli: one for drunk driving earlier this month. That's the mugshot above. The earlier one, as the Times reported in the initial story, was for beating up a parking valet and getting busted with a fake ID (ironically just after his 21st birthday). The mugshot for that one is to the right. I guess sometimes the pressures of being a big time defense contractor are just too much.

Update: A number of stories have featured Diveroli's sadly out of date MySpace page. How a multi-million dollar contractor only has one friend I cannot understand.

For the curious, Radar was also able to get in touch with AEY's 25 year-old masseur VP (or someone claiming to be him, at least) through his MySpace page.

Dude! It's time to testify before Congress!

House sleuth Henry Waxman (D-CA) read the news today, oh boy. And he wants 22 year-old AEY President Efraim Diveroli, his 25 year-old VP (and masseur) David Packouz, and the company's general manager, also 25, to testify before Congress about how they managed to get a $300 million U.S. contract to supply (sometimes forty year-old) ammunition to the Afghan Army, among other contracts. Waxman also wants officials from the Department of Defense and Department of State to appear as well. He's set the date of April 17th.

Update: Here's a copy of the letter that the Army sent AEY on Tuesday, suspending any further contracts. The attached letter also runs through all of the contracts AEY won since 2004.

Courtesy of The New York Times, I'm proud to present to you a brand new member of the Bush Administration War Profiteer Hall of Shame: 22 year-old Efraim Diveroli, whose company AEY has been awarded approximately $300 million in contracts by the Pentagon.

How does a 22 year-old get a multi-million dollar defense contract? you ask. “AEY’s proposal represented the best value to the government," the Army tells the Times. (Never mind that AEY was headed by a guy who'd been busted by the police for carrying a fake ID.)

AEY's fattest contract came in January of last year, when a Pentagon contract made AEY, "which operates out of an unmarked office in Miami Beach,... the main supplier of munitions to Afghanistan’s army and police forces." AEY's VP is 25 and a licensed masseur. AEY also had a $5.7 million contract for rifles for Iraqi forces, among others.

As the Times found out, AEY fulfilled that contract by dealing with a variety of shady arms dealers (one Czech, one Swiss) to get their hands on ammo stockpiles in the old Eastern bloc. And as far as ensuring the quality of the munitions? Here's how it went in Albania:

Albania offered to sell tens of millions of cartridges manufactured as long ago as 1950. For tests, a 25-year-old AEY representative was given 1,000 cartridges to fire, according to Ylli Pinari, the director of the arms export agency at the time of the sale.

No ballistic performance was recorded, he said. The rounds were fired by hand.

Not surprisingly, the Afghan army has been unhappy with the product. AEY shipped the decades-old ammo in cardboard boxes -- apparently to save money on shipping charges. And the Times reports that the boxes arrived in Afghanistan spilling out of the boxes, "revealing ammunition manufactured in China in 1966." It's illegal to deal in Chinese arms.

In response to the Times' questions, the Army has suspended AEY "from any future federal contracting, citing shipments of Chinese ammunition and claiming that Mr. Diveroli misled the Army by saying the munitions were Hungarian."

But surely the most memorable details of the story (which is well worth reading in full) have to do with a kid trying to wiggle out of legal trouble on the basis of his work fighting terror:

By [2005, when Diveroli became president of the company at the age of 19, taking over from his father], pressures were emerging in Efraim Diveroli’s life. In November 2005, a young woman sought an order of protection from him in the domestic violence division of Dade County Circuit Court….

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.”…

On Dec. 21, 2006, the police were called back to the condominium. Mr. Diveroli and AEY’s vice president, David M. Packouz, had just been in a fight with the valet parking attendant.

The fight began, the police said, after the attendant refused to give Mr. Diveroli his keys and Mr. Diveroli entered the garage to get them himself. A witness said Mr. Diveroli and Mr. Packouz both beat the man; police photographs showed bruises and scrapes on his face and back.

When the police searched Mr. Diveroli, they found he had a forged driver’s license that added four years to his age and made him appear old enough to buy alcohol as a minor. His birthday had been the day before.

“I don’t even need that any more,” he told the police, the report said. “I’m 21 years old.”

Diveroli would have been prohibited from dealing in contracts if he'd been convicted of possession of a forged document, which is a felony, the Times reports, but "to avoid a conviction on his record, Mr. Diveroli entered a six-month diversion program for first offenders in May 2007 that spared him from standing trial."

Unfortunately, it seems that AEY is unwinding with all this public attention:

[I]n Miami Beach, even before the suspension, AEY had lost staff members. 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.”

So it seems pretty clear that Diveroli is a shoo-in for the Hall of Shame. But the question becomes whether he's in competition to be the champ. Is he competition for Erik Prince, Brent Wilkes?