Pentagon Investigator Resigns--suspected of
blocking investigations of senior Bush officials.
LA Times
By T. Christian Miller, Times Staff Write
September 3, 2005
WASHINGTON — The Pentagon's top investigator has resigned amid
accusations that he stonewalled inquiries into senior Bush administration
officials suspected of wrongdoing.
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
last year.
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
obtained by The Times.
Grassley's office said Friday that the inquiry was continuing.
"Many questions need to be answered," spokeswoman Beth Levine said. Grassley
has long acted as a watchdog over the inspector general.
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.
A Schmitz spokesman, Gary Comerford, declined to comment on the allegations
in Grassley's letters, saying: "This is a matter between the senator and the
inspector general."
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, who was the subject of a series of articles in The Times last year,
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 had signed an unusual agreement with Schmitz that gave him some
investigative authority. Shaw told U.S. officials in Iraq that he was
conducting investigations under that agreement during a trip to Iraq in
December 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,
according to the whistle-blowers.
Shaw, who was forced out of office last year after refusing to resign, has
denied any wrongdoing.
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, according to Grassley's
letter.
The FBI has not placed a high priority on the investigation, which has since
stalled, according to one person with knowledge of the case.
Schmitz then helped craft a news release in which his office denied ever
investigating Shaw, according to Grassley's letter. Grassley has repeatedly
asked for an explanation of the news release, most recently in a letter Aug.
8.
"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 Air Force Academy has been rocked by controversies in the last few
years, including allegations of the rape of female cadets. Separately, an Air
Force procurement officer was sentenced to nine 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.
The Air Force said Friday that Schmitz's office had cleared Walker of
wrongdoing.
"Ms. Walker's conduct was looked at by the [Department of Defense inspector
general] and … no negative findings were made," said Air Force
spokeswoman Jennifer Stephens.
Grassley also expressed concern that Schmitz had withheld information from
Congress on the Boeing investigation. Schmitz was criticized this year 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. 8 letter.
Finally, Grassley reprimanded Schmitz this year for planning to take a
ceremonial trip to Potsdam, Germany, that would have cost taxpayers $16,000.
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 chief operating officer 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.
Still, Schmitz's departure to the private sector raised concerns among
government watchdog groups.
"He's a person who did not put the appearance of ethics above all else,"
said Danielle Brian, the executive director of the Project on Government
Oversight. "That is not the way the government should function. These are the
kind of things that make the general public distrust government."
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