Official said to steer Iraq work to friends

Deputy undersecretary conducted unauthorized investigations, sources say

July 08, 2004|By T. Christian Miller | T. Christian Miller,LOS ANGELES TIMES

WASHINGTON - A senior Defense Department official conducted unauthorized investigations of reconstruction efforts in Iraq and used their results to push for lucrative contracts for friends and their business clients, according to documents and current and former Pentagon officials.

John A. "Jack" Shaw, deputy undersecretary for international technology security, represented himself as an agent of the Pentagon's inspector general during the probes, sources said.

In one case, Shaw disguised himself as an employee of Halliburton and gained access to a port in southern Iraq after being denied entry by the U.S. military, the sources said.

In that investigation, Shaw found problems with operations at the port of Umm Qasr, Pentagon sources said. In another, he criticized a competition sponsored by the U.S.-led Coalition Provisional Authority to award cell phone licenses in Iraq.

In both cases, Shaw urged government officials to fix the alleged problems by directing multimillion-dollar contracts to companies linked to his friends, without competitive bidding, according to the Pentagon sources and documents. In the case of the port, the clients of a lobbyist friend won a no-bid contract for dredging.

Shaw's actions are the latest to raise concerns that senior Republican officials working in Washington and Iraq have used the rebuilding efforts in Iraq to reward associates and political allies. One of Shaw's close friends - the former top U.S. transportation official in Iraq - is under investigation for his role in promoting an Iraqi national airline with a company linked to the Saddam Hussein regime.

The inspector general's office has turned over its inquiry into Shaw's actions to the FBI to avoid the appearance of a conflict of interest, the sources said.

The FBI is also looking into allegations, first reported by the Los Angeles Times, that Shaw tried to steer a contract to create an emergency phone network for Iraq's security forces to a company whose board of directors included a friend and one of Shaw's employees.

Shaw, who held top positions in the Reagan and first Bush administrations, declined to comment for this article. In previous interviews, he has denied having any financial links to the companies involved or receiving any promises of employment.

Shaw justified his investigations under an agreement with the Pentagon inspector general, Joseph E. Schmitz. The agreement, reached in August, created a temporary office led by Shaw called the International Armament and Technology Trade Directorate. Its mission was to cooperate with the inspector general on issues related to the transfer of sensitive U.S. technologies or arms to foreign countries.

Shaw frequently cited the pact in his dealings with reporters and military officials, telling them it allowed him to "wear an IG hat" to conduct investigations. In a recent letter to the inspector general, he said the deal gave him "broad investigatory authority."

That contention is the subject of dispute, however. The agreement states that Shaw "may recommend" that the inspector general initiate audits, evaluations, investigations and inquiries, but it does not appear to give him investigative powers.

"Jack Shaw was never authorized to do any kind of investigation or auditing on his own," said one source close to Schmitz. "The agreement was not for that. He's trying to cram more authority into that agreement than it gives him."

Schmitz canceled the agreement two weeks after Shaw was first accused of tampering with the emergency phone network contract. Schmitz declined to comment, but in his letter canceling the arrangement, he praised Shaw for "outstanding leadership."

The Los Angeles Times is a Tribune Publishing newspaper.

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