[JURIST] US Ambassador to Albania John L. Withers [official website] colluded with Albanian officials to hide evidence of an illegal ammunition selling plan [NYT report] from New York Times reporters, Chairman of the House Oversight Committee Henry Waxman (D-CA) alleged in a letter [PDF text; materials] Monday. Government arms contractor AEY allegedly sold ammunition produced in China to the US Department of Defense in violation of a military acquisitions prohibition [clause 252.225-7007 text] against trading Chinese arms; Albanian officials allegedly repackaged the Chinese arms to appear as if they were manufactured in Albania. On Thursday, a grand jury indicted [text, PDF; press release] government arms contractor AEY, Inc., 22-year-old company president Efraim Diveroli, and three other company executives on charges of conspiracy to commit offenses against the US, making false statements to a federal agency, and major fraud against the US [US code sections text]. Withers has denied that he conspired with Albanian officials to hide the operation and said he plans to formally refute the charges [statement]. The International Herald Tribune has more.
In late 2006, AEY responded to an Army solicitation seeking bids on an arms contract for Afghanistan. The Army awarded AEY the contract, which prohibited "delivery of ammunition acquired, directly or indirectly, from a Communist Chinese military company." The indictment said that the company and its executives regularly and fraudulently completed Certificates of Conformance [template form, PDF] certifying that the ammunition was wholly legal. In 2007, Congress enacted the 2008 defense authorization bill [HR 1585 materials] as an additional measure [JURIST report] to bring all civilian contractors [Parameters backgrounder] in Iraq under the military's jurisdiction. Such prosecutions had previously been impossible [USAF guidance document] because of court rulings [Grisham v. Hagan opinion text] that the military did not have such jurisdiction absent a declaration of war by Congress.