Waxman Slams Military Contract Fiasco

On Tuesday military officials testified before a House Committee about a huge military contract somehow awarded to a company run by a 22-year-old man from Miami Beach to provide arms to coalition troops in Afghanistan, despite the fact that Diveroli is on a State Department watch list designed to monitor suspected international arms dealers. A $298 million contract was issued to Efraim Diveroli's company, AEY. AEY and a supplier the company worked with were also on the list.

In March, The New York Times published a story about how Diveroli's company, with only a handful of employees, managed to become a successful military contractor. The company, AEY, then supplied ammunition to coalition forces operating in Afghanistan that was more than 40 years old and "in decomposing packaging". That ammunition was cobbled together from aging stockpiles in old Communist bloc and China.

Committee Chairman Henry Waxman lashed out at the contracts saying, "It appears that anyone--no matter how inexperienced or unqualified--can win a lucrative federal contract worth hundreds of millions of dollars." He added that it was "hard to imagine a less-qualified company than AEY." Officials from the defense department could not confirm whether or not AEY is currently supplying troops in Iraq.

Although he was invited, Diveroli did not testify. He cited his fifth amendment right not to incriminate himself, which Waxman accepted because last week Diveroli and three other associates were indicted in Miami on a variety of fraud charges.

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