Thread by @nimkef

3 Sept 2005

The Pentagon’s top investigator has resigned amid accusations that he stonewalled inquiries into senior Bush administration officials suspected of wrongdoing.

latimes.com/archives/la-xp…

Defense Department Inspector General Joseph E. Schmitz told staffers this week that he intended to resign as of Sept. 9 to take a job with the parent company of Blackwater USA, a defense contractor.

The resignation comes after Sen. Charles E. Grassley (R-Iowa) sent Schmitz several letters this summer informing him that he was the focus of a congressional inquiry into whether he had blocked two criminal investigations in 2004.

Grassley, chairman of the Finance Committee, accused Schmitz of fabricating an official Pentagon news release, planning an expensive junket to Germany and hiding information from Congress. Schmitz is the senior Pentagon official charged with investigating waste, fraud and abuse.

“I am writing to inform you that I intend to conduct an oversight investigation into allegations that you either quashed or redirected two ongoing criminal investigations last year,” Grassley said in a July 7 letter.

The inspector general’s office denied any connection between Schmitz’s resignation and the inquiries, saying Schmitz had previously said he intended to leave after President Bush’s first term.

The first of the criminal investigations in which Schmitz allegedly intervened involved John A. “Jack” Shaw, the former deputy undersecretary of Defense for international technology security.

Shaw tried to manipulate a lucrative contract in Iraq in 2004 to favor a telecommunications company whose board included a close friend, according to whistle-blowers who worked for the U.S.-led Coalition Provisional Authority in Iraq.

Shaw’s superior, Michael W. Wynne, then acting undersecretary of Defense for acquisition, technology and logistics, had signed an unusual agreement with Schmitz that gave Shaw some investigative authority.

Shaw told US officials in Iraq that he was conducting investigations under that agreement during a trip to Iraq in Dec 2003. The results of those investigations were later used in his effort to push for contracts of firms tied to his friends and their clients.

Shaw was forced out of office last year after refusing to resign.

Schmitz referred the whistle-blowers’ accusations to the FBI, despite the protests of senior criminal investigators in his office who had already found “specific and credible evidence” of wrongdoing by Shaw.

The FBI has not placed a high priority on the investigation, which has since stalled.

Schmitz helped craft a news release in which his office denied ever investigating Shaw. Grassley has repeatedly asked for an explanation of the news release, most recently in a letter Aug. 12.

“A formal investigation was conducted. The investigation was, in fact, completed and closed and referred to the FBI. How do you square that information with the press release?” Grassley wrote to Rumsfeld on July 27.

“There is a paper trail that appears to show that Mr. Schmitz was personally and directly involved in crafting the language in this press release. And second, I understand that Mr. Schmitz was repeatedly warned by his own staff ‘to take it down’ because it was ‘patently false.’ ”

The second investigation in which Schmitz allegedly interfered involves Mary L. Walker, the general counsel for the Air Force.

Grassley said in the July 7 letter that the information he had was “sketchy” but that the accusation appeared to involve Walker “lying under oath,” possibly during investigations of either the Air Force Academy or Boeing Co.

The AF Academy has been rocked recently by allegations of the rape of female cadets. Separately, an Air Force procurement officer was sentenced to 9 months in jail after receiving favors from Boeing officials during the negotiation of a $23-billion deal to lease refueling planes.

Grassley wrote that senior criminal investigators had “specific and credible evidence” regarding Walker but that the case was “allegedly shut down for unexplained reasons and possibly referred to the FBI.” Grassley’s letter said Schmitz was a “personal acquaintance” of Walker.

Grassley also expressed concern that Schmitz had withheld info from Congress on the Boeing investigation. Schmitz was criticized for redacting the names of top White House officials in his report on the Boeing deal. He first submitted his report to the White House for review.

“That decision ... raises questions about your independence,” Grassley wrote in his Aug. 12 letter.

Finally, Grassley reprimanded Schmitz this year for planning to take a ceremonial trip to Potsdam, Germany, that would have cost taxpayers $16k. Schmitz later canceled the trip.

Schmitz -- the son of John G. Schmitz, the fiercely conservative former congressman from Orange County -- was approved by the Senate as inspector general in March 2002. He previously worked for the Washington law firm Patton Boggs.

Schmitz will go to work for Prince Group, the Virginia-based parent company of Blackwater USA, as COO and general counsel. Schmitz formally recused himself in June from any cases involving Blackwater, a private security company with millions of dollars in contracts in Iraq.