War contracts tell sad story about America

amenendez@MiamiHerald.com

To the young man, caught in the tawdry glamour of South Beach, it must have seemed a hallucinatory dream: millions in military contracts simply for the asking.

So Efraim Diveroli asked, bidding for the right to supply munitions to the Afghan Army. Nevermind that Diveroli, president of AEY Inc., was barely out of his teens. Or that AEY's specialty was not arms-dealing but scrap-brokering. What mattered is that AEY offered the winning bid. And by 2007, the U.S. Army -- clearly impressed -- had awarded the company contracts worth almost $300 million. This week, embarrassed, it reconsidered.

''You are hereby suspended from future contracting with any agency in the executive branch of the United States Government,'' begins the sternly worded letter the Army mailed Diveroli March 25.

The story -- very Miami and very 2008 America, in both its corruption and comeuppance -- was first reported by The New York Times. Now the full rage of the U.S. government is upon Diveroli, Miami Beach bon vivant, businessman and erstwhile arms dealer at age 22.

The Army wants to know if Diveroli misled them by supplying junk Chinese munitions. And Rep. Henry Waxman wants to investigate how it all happened.

NEW DOORS FOR FRAUD

To help answer that last question, one needs to go back to World War II. War profiteering is as old as war itself. But it wasn't until the government began to contract out much of the business of war-making that the market in scandal really took off.

''Privatization'' -- expanded in the Reagan era -- was supposed to end government waste, fraud and abuse by contracting private firms to do the work more efficiently. Instead, the scheme's lasting accomplishment was that it transferred fraud and abuse into private hands.

The ill-planned wars in Afghanistan and Iraq -- with their management blunders and poor oversight -- have become especially profitable ventures for the unscrupulous.

Last year, five men in Iraq were charged with directing $8 million in reconstruction funds to a construction firm in exchange for computers, airline tickets and jewelry.

Halliburton -- the gargantuan contractor with ties to Vice President Dick Cheney -- has been pursued by persistent allegations of fraud related to fuel purchases. In 2005, an employee of a Halliburton subsidiary was indicted for defrauding the military of $3.5 million. Separately, the Army has opened some 50 criminal investigations involving bribery and bid-rigging among contractors in Iraq.

UGLY TRUTH OF OUR TIMES

Last week, no one was answering the door to Suite 211 at the Giller Building on Arthur Godfrey Road in mid-Beach. The building's owner, Ira Giller, says AEY moved in about 10 months ago:

``They've been good tenants, they pay their bills.''

Defrauding the government -- if that's what Diveroli did -- has become so commonplace as to blunt outrage. Providing shoddy equipment to allies would be the bigger sin.

For now, the saddest part of the scandal is what it says about the country we have built. Even if Diveroli is proved innocent, he has already exposed the hypocrisies and inequalities of a war where one man's son is sent to die in battle, while another stays home, scrounging for a way to turn the violence into handsome profit.

 

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