Informal Information Exchange or Espionage? Contractor Employee to Find Out Soon
The
U.S. Department of Justice (DOJ) release on Friday, August 27, 2010,
wasted no words in announcing that a Washington, D.C., federal grand
jury had indicted Stephen Jin-Woo Kim for “unlawfully
disclosing national defense information to a reporter for a national
news organization and making false statements to the FBI.” According to
the DOJ press release,
Kim (age 43) “was an employee of a federal contractor who was on detail
to the State Department” at the time of the alleged crimes.
The DOJ provided the following details of the alleged crimes—
Kim
knowingly and willfully disclosed information contained in an
intelligence report classified Top Secret/Sensitive Compartmented
Information (TS/SCI) to a reporter for a national news organization who
was not entitled to receive it. The classified information related to
the national defense, specifically, intelligence sources and methods and
intelligence concerning the military capabilities and preparedness of a
particular foreign nation.
… in
September 2009, Kim made false statements to the FBI when he denied
having had any contact with the reporter for a national news
organization since meeting the reporter in March 2009, when in fact, Kim
had had repeated contact with the reporter in the months following that
meeting.
The Washington Post had a few more details, in this article.
The Post article noted that Kim was “a senior adviser for intelligence
on detail to the State Department’s arms control compliance bureau.” The
Post reported that the “national news organization” to which Kim
allegedly disclosed the classified information was Fox News, and noted
that in June, 2009, Fox News reporter James Rosen reported that “U.S.
intelligence officials had warned that North Korea planned to respond
to a new round of U.N. sanctions with another nuclear test. Rosen
reported that the CIA warning was developed through sources inside North
Korea.”
The
foregoing is not good. The DOJ press release stated what most everybody
already knew—i.e., “The willful disclosure of classified information to
those not entitled to it is a serious crime.” It noted that, “If
convicted, [Kim] faces up to 10 years in prison for the unlawful
disclosure of national defense information and up to five years in
prison for the making of false statements.”
Kim’s attorneys are already spinning his defense. The Post article reported that the attorneys “faulted
the government with criminalizing exchanges ‘that happen hundreds of
times a day in Washington.’" According to Kim’s attorneys—
“In
its obsession to clamp down on perfectly appropriate conversations
between government employees and the press, the Obama Administration has
forgotten that wise foreign policy must be founded on a two-way
conversation between government and the public."
Um, how about “no”?
We’re
not talking about policy; we’re talking about Top Secret SCI stuff
here. Before anybody gets briefed into the compartment, they are told,
in crystal clear language, just what unauthorized disclosure of such
information would mean to the country—and to them personally.
The
Post article also noted that Mr. Kim is not the first person to be
charged with unauthorized disclosure of sensitive or classified
information in recent months. The Post article stated—
Since
December, prosecutors have indicted Thomas A. Drake, a National
Security Agency official, with improperly handling classified
information with a Baltimore Sun reporter; secured a guilty plea from
Shamai Kedem Leibowitz, a former FBI contract linguist, for leaking
documents to a blogger; and arrested Army Pfc. Bradley E. Manning, 22,
suspected of giving a classified video of a U.S. military helicopter
firing at civilians in Baghdad to the WikiLeaks.org site. Manning is
also suspected of leaking 76,000 classified documents about the
Afghanistan war that WikiLeaks posted this month.
The Post article didn’t mention the case of Dongfan
“Greg” Chung, who was sentenced to 15 years in federal prison in
February, 2010, for “six counts of economic espionage and acting as an
unregistered foreign agent of the People’s Republic of China (PRC), for
whom the engineer stole Boeing trade secrets related to several
aerospace programs, including the Space Shuttle.” We reported that story
here. Chung, a
naturalized U.S. citizen, held a Secret clearance and, according to
reports, spent the years between 1979 and 2003 working for both U.S.
defense contractors (as an employee) and the People’s Republic of China
(as a spy).
Nice.
We have no sympathy for such people, whether they have cute code names such as “The Falcon and The Snowman” or more mundane names, such as “Greg”.
Awesome Plea Bargain Saves former NASA Bigwig from Big Time in the Big House
Far
be it for us to criticize the recent plea bargain that the Department
of Justice recently entered into with Courtney Stadd, who “previously
served as NASA Chief of Staff and White House Liaison”—especially when
“Attorney Burkhalter and NASA Inspector General Martin commended the
outstanding investigative work of the agents from the NASA Office of
Inspector General and prosecutive work of the U.S. Attorneys Office in
the Southern District of Mississippi.” To the contrary, we commend Mr.
Stadd and his attorneys for accepting the sweetheart deal.
According to the August 18, 2010 press release
from the DOJ and the NASA Office of Inspector General, Mr. Stadd
pleaded guilty to “conspiracy charges in connection with actions he took
to obtain and receive funds from a $600,000 sole-source contract”
awarded from the Stennis Space Center to Mississippi State University
(MSU).
According
to the plea hearing, Stadd admitted to conspiring with the NASA Deputy
Chief Engineer of Programs to give the contract to MSU. MSU, in turn,
awarded a $450,000 subcontract to Stadd’s consulting business.
Apparently, Stadd ran a consulting business (on the side?) called either
Capitol Solutions or Capitol Alliance Solutions. Hmm, can anybody say
“criminal conflict of interest”?
We previously reported on another NASA “felony conflict of interest charge” in this article.
That situation involved a former NASA scientist who participated in
awarding contracts to his wife’s company. That scientist received a
fine, probation, and community service. As we reported, “Prosecutors
agreed Schoeberl did not deserve to go to jail, noting in court
documents that he quickly accepted responsibility for his conduct, had
no criminal history and had a lengthy record of service at NASA.” In
contrast to that scientist, Mr. Stadd “met with senior government
officials in an ill-fated attempt to stop the NASA Office of the
Inspector General from continuing to investigate his activities.”
But that’s not all.
According
to the press release, Stadd and the Deputy Chief Engineer of Programs
had an agreement that the Deputy Chief Engineer would work on the
subcontract received from MSU, after he left NASA. Under that
subcontract--
Stadd
received over $287,000 on the subcontract and admitted to inflating
hours billed and falsifying invoices to MSU. Stadd further admitted to
sending two false Quarterly Reports to MSU in August of 2005 stating
that Valador Incorporated of Herndon, Virginia, ‘a service-disabled,
veteran-owned small aerospace business with extensive satellite
engineering experience,’ was also working on the contract, when he knew
that in fact, Valador Incorporated was not involved on that contract.
Stadd admitted to having paid the former Deputy Chief Engineer over
$87,000 for his work on the subcontract. That Deputy Chief Engineer
earlier plead guilty to a charge of conflict of interest.
So we know that Stadd admitted to submitting false claims and to making false statements. In addition—
Stadd
admitted that, to further conceal the conspiracy, he created false
documents in response to a Federal Grand Jury subpoena. The false
documents included four invoices reflecting billing work unrelated to
the Mississippi State University contract, documents purporting to
calculate composite rates for billing Mississippi
State University, and documents supporting the authorization for
composite rates of billing when no such authorization existed.
Violations
of the False Statements Act and the False Claims Act are serious,
serious business. Each count can subject a person to huge fines and up
to five years in Federal prison. Near as we can tell, Mr. Stadd was
looking at least six counts of false statements and nearly $300,000 in
false claims. Based on our rough back-of-the-envelope calculation, Mr.
Stadd could have been fined nearly $1 million and been sentenced to more
than 30 years in jail.
But
Mr. Stadd’s defense team worked a miracle on his behalf. Instead of
the foregoing, the press release reported that, “Stadd faces up to five
years in prison and $250,000.00 in fines.” That’s some damn fine
defense lawyering right there, in our opinion. On the Government’s
side? Not so much—despite the words of praise found in the press
release.
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Oil So Plentiful in Southwest Asia You Can Just Steal It
Pundits and Internet trolls have engaged in protracted debates
regarding whether the U.S. invasion of Iraq in 2002 was more about oil
than it was about WMD. The American Conservative website notes that—
Controlling
Iraq’s oil has historically been a vital factor in America’s
involvement in Iraq and was always a crucial element of the Bush
administration’s plans for the post-Saddam era. Of course, that’s not
how the war was sold to the American people. A few months before the
invasion, Secretary of Defense Donald Rumsfeld declared that the looming
war had ‘nothing to do with oil, literally nothing to do with oil.’ The
war was necessary, its planners claimed, because Saddam Hussein
supported terrorism and, left unchecked, he would unleash weapons of
mass destruction on the West.
Nevertheless,
oil was the foremost strategic focus for the U.S. military in Iraq. The
first objectives of the invading forces included the capture of key
Iraqi oil terminals and oilfields. On March 20, 2003, Navy SEALs engaged
in the first combat of the war when they launched a surprise invasion
of the Mina al-Bakr and Khor al-Amaya oil loading terminals in the
Persian Gulf. A few hours later, Marine Lt. Therral Childers became the
first U.S. soldier to die in combat in the invasion when he was killed
fighting for control of the Rumaylah oil field in southern Iraq.
Oil
was also the first objective when U.S. forces reached Baghdad on April
8. Although the National Library of Iraq, the National Archives, and the
National Museum of Antiquities were all looted and in some cases
burned, the oil ministry building was barely damaged. That’s because a
detachment of American soldiers and a half-dozen assault vehicles were
assigned to guard the ministry and its records.
After
all, the war’s architects had promised that oil money was going to
rebuild Iraq after the U.S. military took control. In March 2003, Paul
Wolfowitz told a Congressional panel, ‘The oil revenues of that country
could bring between $50 and $100 billion over the course of the next two
or three years. Now, there are a lot of claims on that money, but … we
are dealing with a country that can really finance its own
reconstruction and relatively soon.’ As Michael Gordon and Bernard
Trainor explained in their 2006 book, Cobra II,
‘The Pentagon had promised that the reconstruction of Iraq would be
‘self-financing,’ and the preservation of Iraq’s oil wealth was the
best-prepared and -resourced component of Washington’s postwar plan.’
Our various articles covering the official DOD reports to Congress regarding progress made in Iraq (example: here)
have noted the importance of oil—and of the oil infrastructure—to
stability in the region. The armed forces of the United States are huge users of oil. In March, 2010, we posted
an article about the importance of oil to the armed forces, and the
theft of approximately 10 million gallons of fuel from the U.S. Army at
Camp Liberty, Iraq.
Well,
here’s another story about theft of fuel from the U.S. armed forces.
This time, the location is Afghanistan. On August 19, 2010, the
Department of Justice announced that
Michael Dugger, age 27, a former U.S. Army Sergeant, had pleaded guilty
to one count of receiving a bribe as a public official. Another former
U.S. Army Staff Sergeant, Steven Ringo, was also charged, but did not
plead guilty; his case is still pending.
According to the DOJ press release—
Ringo
and Dugger were stationed at Forward Operating Base (FOB) Shank, a U.S.
Army installation in the Logar Province of Eastern Afghanistan. … the
Army stores large quantities of fuel at FOB Shank and redistributes
that fuel to installations in the surrounding area through government
contractors. Dugger’s responsibilities included supervision of FOB
Shank’s fuel redistribution process.
Dugger
admitted that between January and February 2010 he aided and abetted a
co-conspirator’s solicitation and acceptance of more than $400,000 in
bribes from a government contractor, all in exchange for his
co-conspirator’s creation and submission of fraudulent paperwork
permitting that contractor to steal fuel from FOB Shank. Dugger also
admitted that he helped his co-conspirator conceal the money in various
locations in and around FOB Shank. The total value of the fuel stolen
during the course of the scheme was at least $1.39 million.
The
amount of fuel stolen was not disclosed, but we guess it was a
substantial amount, given the $1.4 million value ascribed to the theft.
One
of the guys who stole the 10 million gallons of fuel from Camp Victory
(for subsequent resale on the black market) was sentenced to three years
in prison. How does Mr. Dugger fare in comparison? The DOJ announced
that, “At sentencing, Dugger faces
a maximum penalty of 15 years in prison and a fine of $250,000; twice
the gross gain or loss from the scheme; or three times the value of the
payments solicited or received.” Ouch!
As U.S. DOD Looks for Efficiency and Affordability, So Does U.K. MoD
We’ve
published several articles on the current drive for “efficiency” and
“affordability” by the U.S. Department of Defense. Our most recent article
provided details regarding how Secretary of Defense Gates proposed to
reduce Pentagon bureaucracy, and noted the almost immediate creation of a
group of politicians united in opposition to any cuts that might take
place in their states. But the U.S. is not alone in trying to rein-in
out of control defense spending.
As this article
at FlightGlobal.com reports, the U.K. government has unveiled plans to
reorganize its Ministry of Defense, in order to “stop programme delays
and cost overruns.” This is not the first time we noted acquisition
system reform attempts within the government of our former colonial
masters. In October, 2009, we reported—
It seems that the USA is not alone in seeing an urgent need to reform the aerospace/defense acquisition system. The UK MoD faces
similar problems and has received several recommendations to address
them. Just as in the U.S., true reform will require a fundamental shift
in how the legislative branch (i.e., Parliament) authorizes funds to the
Defense Department (i.e., MoD). In the U.S.,
though, such heresy has not been well received. Perhaps the UK will
undertake the difficult yet necessary reforms, and will reap
commensurate benefits. We wish them the best of luck.
In
that same article, we noted with approval the publication of a nearly
300 page-long report from an independent review team, in which problems
were catalogued with candor, and feasible recommendations were put
forward. We asked if the U.S. DOD could benefit from those
recommendations, since the problems reported seemed so familiar. Nearly
a year later, the MoD seems to be moving forward on those
recommendations.
Not
only is the MoD going to be reorganized, but the U.K. armed forces will
also be reformed, so as to ensure “more efficient provision of defence
capability and generation and sustainment of operations". According to
the FlightGlobal article—
The
department is to be ‘reorganised into three pillars’, namely: policy
and strategy; the armed forces; and procurement and estates. The new
three pillar structure is designed to ‘stop the constant
over-specification and then respecification of programmes which has led
to so many cost overruns and programme delays’.
The envisaged cultural shift would render the department ‘leaner and less centralised’.
Addressing the efforts to reform the armed services, the article reported—
The
armed forces review, meanwhile, is intended to ‘challenge some of the
fundamental assumptions which drive force generation, such as tour
lengths and intervals’, says [the MoD spokesperson], noting that it
takes armed forces of over 180,000 to sustain a combat force of under
10,000 in Afghanistan.
The article also noted—
Estimating
the unfunded liability in defence at £37 billion ($57.6 billion) over
the next 10 years - £20 billion of it attributable to the equipment and
support programme – [the MoD] said that ‘short-term reductions’ were
required to ‘return defence to a sound footing’ and that the SDSR was
being faced with ‘unavoidably constrained finances’.
Moreover, the MoD spokesperson stated—
The
defence reform unit will liaise with senior personnel to ‘find ways of
devolving greater responsibility for the running of the services’, says
Fox, adding: ‘We must get away from the over centralising tendency that
has become the hallmark of the MoD in recent years.’
He
anticipates changes to the services' senior rank structure, commenting:
‘We cannot demand efficiency from the lower ranks while exempting those
at the top.’
As
we noted above, the U.K. and U.S. seem to be facing similar problems,
and also seem to be addressing those problems along similar lines. Yet
we can’t help noticing that the U.K. reform efforts seem to have both an
overall strategy and concrete, implementable short-term plans.
Although the U.S. is also moving ahead with its Defense reform efforts,
we do not see a similar picture. Instead, we hear Secretary of Defense
Gates’ intentions without much support … and with some die-hard
opposition already emerging from the politicians who control the purse.
Once
again, we suggest that the U.S. DOD can learn something from its U.K.
kin, and it ought to be actively liaising with the MoD to see how it can
accelerate and improve on its on efforts. We wonder why DOD leadership
appears to be ignoring this obvious force-multiplier?
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