May 13, 2006
C.I.A. Aide's House and Office Searched
By MARK MAZZETTI and DAVID JOHNSTON

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WASHINGTON, May 12 - Federal agents conducted searches on Friday at the office and home of Kyle Foggo, who stepped down this week as the Central Intelligence Agency's third-ranking official.

The searches were part of a widening criminal investigation of possible contracting fraud that has also focused on lawmakers on the House Appropriations Committee.

The searches followed a week of tumult for the C.I.A. that began with the resignation last Friday of its director, Porter J. Goss. Mr. Goss had promoted Mr. Foggo.

Officials say that Mr. Goss had clashed with John D. Negroponte, the director of national intelligence, and that Mr. Negroponte joined with White House officials to force Mr. Goss out of his position.

The searches, including the one at agency headquarters in McLean, Va., were carried out by agents of the F.B.I. and investigators from the Defense Criminal Investigative Service and the Internal Revenue Service, all of which are involved in the inquiry, officials said.

Mr. Foggo announced on Monday that he was stepping down, after it became known that he was under scrutiny by the C.I.A. and federal investigators in the inquiry into the awarding of government contracts. That case has brought a prison term for former Representative Randy Cunningham of California.

Current and former intelligence officials said they could not recall another time in the 59-year history of the agency that a senior official had been involved in a criminal investigation. Intelligence officials said that although Mr. Foggo had resigned as executive director, he remained an agency employee, but without access to headquarters.

The searches were conducted at the request of federal authorities in San Diego, who are pursuing leads in a case that began with the prosecution of Mr. Cunningham, the Republican on the House Appropriations Committee who resigned and pleaded guilty to taking more than $2 million in cash and gifts in return for helping supporters obtain contracts.

Among those identified as a co-conspirator in his plea agreement was Brent Wilkes of San Diego, according to lawyers in the case. Mr. Wilkes was identified, although not by name, as a person whose company had obtained military contracts through Mr. Cunningham's efforts on the defense subcommittee of the Appropriations panel.

Mr. Wilkes has not been charged but has been a subject of months of scrutiny. Lawyers with clients in the case said the searches of Mr. Foggo's house and office were part of an effort by the authorities in San Diego to determine whether Mr. Wilkes had improper dealings with Mr. Foggo. Mr. Wilkes and Mr. Foggo have been close friends from childhood in California, and investigators are also pursuing trips that the two men took together to places like Florida and Hawaii.

Mr. Wilkes's nephew Joel Combs led a company with a multimillion-dollar contract to provide bottled water for the C.I.A. in Iraq, a contract reissued through a local company to disguise the agency's role.

A spokeswoman for the F.B.I. office in San Diego, April Langwell, said Mr. Foggo's house and office had been searched under a sealed warrant. Senior officials at the intelligence agency were notified of the search shortly before agents carried it out, a spokeswoman for the agency, Jennifer Dyck, said.

Intelligence officials have said Mr. Goss asked Mr. Foggo to step down from his post because his association with the corruption scandal had become a distraction and could damage the agency's reputation. Ms. Dyck said that the inquiries about Mr. Foggo had nothing to do with Mr. Goss's decision to resign.

"Absolutely not," she said. "Nothing whatsoever."

Agency officials said Mr. Goss had met Mr. Foggo just once before interviewing him for the No. 3 post.

Mr. Foggo was recommended by staff members whom Mr. Goss, a former representative, had brought with him from the Capitol, current and former intelligence officials said. The officials added that one of the former Congressional aides who recommended Mr. Foggo was Brant G. Bassett, who had been a covert operative for the clandestine service of intelligence agency before working for Mr. Goss on the House Intelligence Committee.

Before ascending to the top tier of the agency, Mr. Foggo had spent more than 20 years as an undercover logistics officer in stations in Central America and Europe.

William G. Hundley, a lawyer here who represents Mr. Foggo, said on Thursday that investigators were looking into at least one contract that Mr. Foggo might have awarded when he ran a logistics base in Frankfurt. The base supports agency operations in the Middle East and Africa.

Mr. Hundley said the contract, with Archer Logistics Inc. of Chantilly, Va., was for supplying bottled water to agency operatives in Iraq. Archer Logistics is run by Mr. Combs, Mr. Wilkes's nephew.

Mr. Hundley did not return calls on Friday for comment.

Searches at the offices and homes of intelligence officials have been carried out in criminal cases, almost always in connection with counterespionage investigations. In two inquiries in the 1990's, investigators searched the offices of Aldrich H. Ames and Harold J. Nicholson, who pleaded guilty to spying.

Sex, Lies, and Government Contracts
Alternet, The Progress Report
Posted on May 5, 2006, Printed on May 13, 2006

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The most extensive federal corruption scandal in a century is growing. In March, former Rep. Randy "Duke" Cunningham (R-CA) was sentenced to more than eight years in federal prison (the longest sentence ever given to a member of Congress) for accepting $2.4 million in bribes in exchange for lucrative defense contracts. Yet Cunningham's crimes, the "magnitude and duration" of which are compared to the Teapot Dome scandal of the 1920s, may end up a mere prelude.

According to recent reports, federal investigators have traced the outlines of a far more extensive network of suspected corruption, involving multiple members of Congress, some of the nation's highest-ranking intelligence officials, bribery attempts including "free limousine service, free stays at hotel suites at the Watergate and the Westin Grand, and free prostitutes," tens of millions of dollars in federal contracts awarded under dubious circumstances, and even efforts to influence U.S. national security policy by subverting democratic oversight.

The ringleader

At the center of the storm is California defense contractor Brent Wilkes -- aka "Co-Conspirator #1" in government documents -- "who gave more than $630,000 in cash and favors" to Cunningham "for help in landing millions of dollars in federal contracts." Wilkes devoted much of his 20-year career to "developing political contacts in Washington," a task at which he excelled, serving recently both as a county finance co-chairman of Gov. Arnold Schwarzenegger's (R-CA) campaign and as the state finance co-chairman for President Bush. "Wilkes, his family members and his employees were heavy campaign contributors to several members of Congress," and he frequently invited members -- including Cunningham, Rep. Tom DeLay (R-TX), and House Speaker Dennis Hastert (R-IL) -- on chartered corporate jets.

The efforts paid off handsomely: "Wilkes won tens of millions of dollars worth of defense contracts for his companies through the process of closed-door congressional earmarking of the federal budget." Indeed, "many of the contracts Wilkes secured" were for projects the Pentagon never even requested. Wilkes has thus far avoided any criminal charges, but federal officials are investigating instances of quid pro quo, since the "timing of Wilkes' many political donations closely parallels the approval of earmarks for Wilkes' companies."

'Red lights on Capitol Hill'

For more than a decade, Wilkes curried favor with lawmakers and CIA officials by hosting weekly parties at lavish hospitality suites at the Watergate and Westin hotels in Washington. Guests would gamble, socialize, and sometimes receive prostitutes; according to Harper's magazine, the festivities "began early with poker games and degenerated" into what one source described "as a 'frat party' scene -- real bacchanals." Mitchell Wade, another defense contractor who pleaded guilty in February to bribing Cunningham, has "told federal prosecutors that he periodically helped arrange for a prostitute for the then-congressman."

But investigators are digging for more: FBI agents "have fanned out across Washington, interviewing women from escort services, potential witnesses and others who may have been involved in the arrangement," attempting to determine "whether any other members of Congress, or their staffs, may also have used the same free services." Last week, a reporter for the San Diego Union-Tribune said that "as many as a half dozen other Congressmen" may ultimately be implicated in the scandal. (Several have already denied ever attending Wilkes' parties.) Also, investigators are reportedly "trying to determine whether Cunningham and other legislators brought prostitutes to the hotels or prostitutes were provided for them there"; there is speculation that Wilkes may be subject to felony federal sex-trafficking charges if the Virginia-based limousine service he used transported the prostitutes into Washington.

CIA's third in command admits he attended parties

The highest-ranking CIA official to admit he attended the poker parties thrown by Wilkes is Executive Director Kyle "Dusty" Foggo, the agency's third-ranking official. (Foggo even "occasionally hosted the poker parties at his house in northern Virginia," though he denies ever seeing prostitutes at the gatherings.) Foggo's relationship with Wilkes goes back 30-plus years; the two were roommates in college, best men at each others' weddings, and even "named their sons after each other."

By the 1980s, Foggo had joined the CIA and "was sent to Honduras to assist the Nicaraguan Contra rebels," where his "position was essentially a contracting officer -- he could get anyone anything they needed." Meanwhile, Wilkes had established himself in Washington and made his living "ferrying congressmen to Central America, where he would introduce them to Foggo and the Contras." Foggo's connections to Wilkes and fellow contractor Mitchell Wade are now the focus of an investigation into CIA contracts by the agency's inspector general, first made public in March. One of Wilkes' companies, Archer Logistics, won a contract to provide supplies to CIA agents in Afghanistan and Iraq despite having "no previous experience with such work, having been founded a few months before the contract was granted."

CIA director Goss tied to scandal?

Last week, Harper's magazine reported that party-goers "under intense scrutiny by the FBI are current and former lawmakers on Defense and Intelligence committees -- including one person who now holds a powerful intelligence post." CIA Director Porter Goss is perhaps the only individual who fits such a description. ("This is horribly irresponsible. He hasn't even been to the Watergate in decades," a CIA spokeswoman said. When asked if Goss had attended Wilkes' parties at the Westin or other locations, she repeated the denial. "It's horribly irresponsible. Flatly untrue.") But the alleged links between Goss, Foggo, and Wilkes have led some to return to questions raised when Goss initially selected Foggo to be executive director in November 2004.

At the time, the decision was viewed with skepticism since Foggo's previous position was as a "midlevel procurement supervisor," and because following his unexpected selection, "Porter Goss lieutenant Patrick Murray went to then-Associate Deputy Director of Operations for Counterintelligence Mary Margaret Graham and informed her that if anything leaked about other Goss appointments -- in particular, Foggo's -- she would be held responsible." Project on Government Oversight fellow Jason Vest reported last week that much of Foggo's counterintelligence file "has to do with various social encounters over the years, none of which he's been deceptive about when polygraphed, and all of which have been deemed to be of no threat to operational security -- but are still the types of things that could be embarrassing for Goss and the Agency." Vest suggests the latest reports raise important questions about the "relationship between Foggo and Wilkes, and the relationship of each with Goss."

Even the limo service is corrupt

Another piece of the puzzle is Shirlington Limousine and Transportation Inc., the firm that Wilkes used to "transport congressmen, CIA officials, and perhaps prostitutes to his Washington parties." Shirlington's president, Christopher Baker, has a "lengthy history of illegal activity," detailed in his 62-page rap-sheet which "runs from at least 1979 through 1989 and lists charges of petty larceny, robbery, receiving stolen goods, assault, and more." Shirlington Limo also "operates in what looks to be a deliberately murky way. The limo company does business under at least four different names; in addition, the office addresses listed on its business filings regularly change. A number of those office addresses are actually at residential buildings or business suites, and calls to the listed phone numbers are taken by an answering service."

The company was sued in 2004 for failing to make payments on buses it had purchased, has received eviction notices from its offices, and even had its federal license revoked by the Federal Motor Carrier Safety Administration in both 2001 and 2004. Despite all of this, the Department of Homeland Security last fall awarded Shirlington a $21 million contract "to provide transportation, including limo service for senior officials." Shirlington also won contracts "with the Department of Housing and Urban Development (for $519,823) and...the Federal Highway Administration (for $142,000)." What role did Wilkes play in Shirlington receiving these federal contracts?

The Defense Appropriations Committee 'Cabal'

A common thread links the members of Congress that Wilkes courted most aggressively, such as Cunningham and Reps. Jerry Lewis (R-CA), Duncan Hunter (R-CA), and John Doolittle (R-CA). All were (or still are) on subcommittees overseeing defense and intelligence spending. On Monday, prominent conservative strategist Ed Rollins described the main players in the scandal as a "real little cabal on the defense appropriations committee." In particular, the House Appropriations subcommittee on defense is "aggressively courted not just by defense contractors, but by lobbyists for foreign governments interested in swinging US defense spending in certain directions," investigative journalist Laura Rozen notes. "It is really where the checks are signed, and decisions about funding sometimes wholly un-debated aspects of U.S. national security policy are made."
Indeed, many of the figures tied to the scandal have histories of involvement in reactionary conservative elements of U.S. foreign policy: Kyle Foggo worked extensively with the Nicaraguan contras, Mitchell Wade headed a White House-contracted group called the "Iranian Democratization Foundation", and Wilkes was reportedly set to receive a contract to "create and run a secret plane network" for the CIA before his links to Cunningham were made public. The roots of this scandal may be as much in profiteering as they are in "this club's conviction that the law is an impediment to the national security cause, that the way to run things is through these informal networks."

GOP's Ed Rollins: Hookergate is "Big"
By Justin Rood - May 3, 2006, 10:15 PM

GOP super-strategist Ed Rollins (late of the Katherine Harris campaign) made a couple interesting comments on Charlie Rose last night. First, he indicated strongly that he believes a number of the other lawmakers in trouble with Hookergate are Defense appropriators. He also says as many as 15 lawmakers could get indicted over the mess in the next few months.

Maybe Ed's playing the expectations game: if voters buy the 15 number, and only seven actually get busted, well then the kids aren't so bad after all. Still, it's interesting speculation from an insider. I just found the show transcript on Nexis -- emphasis is mine:

ED ROLLINS. . . If this House scandal is as big as I think it is from talking to people that are around it -- of course it started with Cunningham and it`s moving beyond that.

GEORGE STEPHANOPOULOS: Duke Cunningham.

ED ROLLINS: Duke Cunningham, a congressman from San Diego who took bribes. There was a real little cabal on the Defense Appropriations Committee in which a couple of people who basically made an awful lot of money off of defense contractors and basically rewarded a bunch of members, Republicans.

GEORGE STEPHANOPOULOS: Including a story that broke over the weekend, perhaps the use of prostitutes.

ED ROLLINS: The use of prostitutes and what`s occurred in Washington that I think everyone`s disgusted at, is we promised we were going to be different than the Democrats; we weren`t going to basically be beholden to K Street, we were going to be term limits and we weren`t going to be the big PACs and all the rest of it. That`s all gone by the boards, and if anything we may even be worse.

In order to be a chairman of a committee today, you have to go raise millions and millions of dollars to be able to dole out. Not that there`s competitive races, but that`s part of the process. So we have -- let me just finish. We have created a culture in which a whole bunch of people have taken a whole bunch of money, and now that you`ve earmarked this stuff -- if you end up with eight or nine or as many as 15 members of Congress, even a couple Democrats, getting indicted in the next three or four months, that may be sufficient.
Permalink | TOPICS: Brent Wilkes: Duke Cunningham: Hookergate

Co-conspirator's possible links to prostitutes eyed
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
April 28, 2006

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Federal prosecutors are reviewing records of two Washington, D.C., hotels where Poway defense contractor Brent Wilkes rented suites as part of their investigation into whether prostitutes were involved as he tried to curry favor with lawmakers and CIA officials.

Wilkes, whom federal prosecutors have identified as a co-conspirator in the bribery case of former Rep. Randy "Duke" Cunningham, rented hospitality suites in the capital on behalf of his flagship company, ADCS Inc.

As The San Diego Union-Tribune reported in December, the suites - first at the Watergate Hotel and then at the Westin Grand Hotel - had several bedrooms where lawmakers and other guests could relax.

Federal investigators are trying to determine whether Cunningham and other legislators brought prostitutes to the hotels or prostitutes were provided for them there, according to a report in yesterday's Wall Street Journal that was confirmed by the Union-Tribune.

A source close to the bribery case, who spoke on the condition of anonymity because of the ongoing investigation, told the Union-Tribune that Mitchell Wade, who pleaded guilty in February to bribing Cunningham, told federal prosecutors that he periodically helped arrange for a prostitute for the then-congressman.

A limousine would pick up Cunningham and a prostitute and take them to the ADCS hospitality suite, Wade reportedly told investigators. Federal agents are investigating whether other legislators had similar arrangements with Wilkes or Wade, a business associate of Wilkes who ran his own defense contracting company, MZM Inc.

Wilkes' attorney, Michael Lipman, denies that his client hired prostitutes.

Two of Wilkes' former business associates say they were present on several occasions when Shirlington Limousine & Transportation Service of northern Virginia brought prostitutes to the suite. They say they did not see lawmakers in the suites on those occasions, though both had heard rumors of congressmen bringing women to the rooms.

Shirlington's attorney, Bobby S. Stafford, confirmed in a letter that from the company's founding in 1990 through the early 2000s, Shirlington President Christopher Baker "provided limousine services for Mr. Wilkes for whatever entertainment he had in the Watergate."

Stafford's letter stated that Baker was "never in attendance in any party where any women were being used for prostitution purposes."

Last year, Shirlington won a $21 million contract from the Department of Homeland Security.

According to the Journal, FBI agents have interviewed women employed at escort services in Washington, as well as other potential witnesses.

In his guilty plea in November, Cunningham said Wilkes, referred to as "co-conspirator No. 1," gave him more than $630,000 in cash and gifts in order to gain government contracts. Wade, known as "co-conspirator No. 2," also named Wilkes in his guilty plea. Wilkes has not been indicted in the case, and his companies continue to receive money from government contracts.

Several of Wilkes' former employees and business associates say he used the hospitality suites over the past 15 years to curry favor with lawmakers as well as officials with the CIA, where both Wilkes and Wade sought contracts.

Wilkes hosted parties for lawmakers and periodic poker games that included CIA officials as well as members of the House Appropriations and Intelligence committees. Cunningham, who sat on both committees, was a frequent guest, according to some of the participants in the poker games.

People who were present at the games said one of the regular players was Kyle Dustin "Dusty" Foggo, who has been Wilkes' best friend since the two attended junior high school in Chula Vista in the late 1960s. In October, Foggo was named the CIA's executive director - the agency's third-highest position.

Another player was a CIA agent known as "Nine Fingers," so named because he lost one of his digits while on assignment.

"I remember big spreads of food and alcohol, but mostly cigars," said former Rep. Charlie Wilson of Texas, who attended a couple of the poker parties during the 1990s.

Wilson said nearly all the poker players at the two games he attended were CIA officials, including Foggo and Nine Fingers. He said there were no women or other lawmakers present, but added that he had to leave the games early "because the cigar smoke was too thick, and I don't deal well with that."

Foggo, who occasionally hosted the poker parties at his house in northern Virginia, is under investigation by the CIA's inspector general to determine whether he helped Wilkes gain CIA contracts.

CIA spokesman Paul Gimigliano said such an investigation is routine when questions are raised about an official's actions at the agency.

"Because the inspector general's review is ongoing, it would be inappropriate to discuss specific matters that may fall within that review," Gimigliano said. "The fact that the inspector general is looking into something should in no way be seen as lending credibility to any assertion."

One of Wilkes' companies, Archer Logistics, won a contract to provide bottled water, first-aid kits and other supplies to CIA agents in Afghanistan and Iraq. The company had no previous experience with such work, having been founded a few months before the contract was granted.

Critics familiar with the contract, valued at $2 million to $3 million, say the CIA overpaid for the work. The contract was approved by the CIA office in Frankfurt, Germany, where Foggo oversaw acquisitions. Foggo did not personally sign the contract, however, said unnamed CIA officials who spoke with Newsweek

"Mr. Foggo maintains that the contracts for which he was responsible were properly awarded and administered," Gimigliano said.

Foggo Partied, But Hooker Charges "False, Irresponsible," CIA Says
By Justin Rood - May 2, 2006, 8:45 AM

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The CIA confirmed to the Wall Street Journal what we knew already from multiple eyewitness accounts: Kyle "Dusty" Foggo, the CIA's #3 official, attended Wilkes' poker parties at hotel suites around Washington, D.C. where prostitutes allegedly entertained.

But that's it, the agency says. He never saw any hookers -- at least not while they were playing cards.

"If he attended occasional card games with friends over the years, Mr. Foggo insists they were that and nothing more," CIA spokeswoman Jennifer Millerwise-Dyck told the WSJ:

She said Mr. Foggo says he never witnessed any prostitutes at the games and that any allegation to the contrary would be "false, outrageous and irresponsible."
Good to have that on the record. Foggo's an interesting character -- with ties to Wilkes that go back more than 30 years, and have stretched as far as Central America and the Middle East. More on the two later.

Permalink | TOPICS: Brent Wilkes: Dusty Foggo: Hookergate

Prostitution Alleged In Cunningham Case
Investigators Focus on Limo Company
By Jo Becker and Charles R. Babcock, Washington Post Staff Writers
Saturday, April 29, 2006; A01

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Federal authorities are investigating allegations that a California defense contractor arranged for a Washington area limousine company to provide prostitutes to convicted former congressman Randy "Duke" Cunningham (R-Calif.) and possibly other lawmakers, sources familiar with the probe said yesterday.

In recent weeks, investigators have focused on possible dealings between Christopher D. Baker, president of Shirlington Limousine and Transportation Inc., and Brent R. Wilkes, a San Diego businessman who is under investigation for bribing Cunningham in return for millions of dollars in federal contracts, said one source, who requested anonymity because the investigation is ongoing.

Baker has a criminal record and has experienced financial difficulties, public records show. Last fall, his company was awarded a $21 million contract with the Department of Homeland Security to provide transportation, including limo service for senior officials. Baker and his lawyer declined to comment yesterday.

The Cunningham investigation's latest twist came after Mitchell J. Wade, a defense contractor who has admitted bribing the former congressman, told prosecutors that Wilkes had an arrangement with Shirlington Limousine, which in turn had an arrangement with at least one escort service, one source said. Wade said limos would pick up Cunningham and a prostitute and bring them to suites Wilkes maintained at the Watergate Hotel and the Westin Grand in Washington, the source said.

Cunningham resigned from Congress after pleading guilty last November to accepting $2.4 million in bribes from four co-conspirators, including Wilkes and Wade. The former lawmaker was sentenced to eight years and four months in prison. Wade pleaded guilty to his part in the scheme in February and is cooperating with investigators. Wilkes has not been charged.

The allegations about prostitutes were reported this week by the Wall Street Journal. Asked yesterday about the allegations, Wilkes's attorney, Michael Lipman of San Diego, said: "My client denies any involvement in that conduct." Cunningham's lawyer, K. Lee Blalack II, declined to comment.

The San Diego Union-Tribune yesterday cited a letter from Baker's lawyer, Bobby Stafford, saying that Baker "provided limousine services for Mr. Wilkes for whatever entertainment he had in the Watergate" from the company's founding in 1990 through the early 2000s. The letter also stated that Baker was "never in attendance in any party where any women were being used for prostitution purposes." Reached by telephone yesterday, Stafford would not comment on the letter.

Before starting Shirlington Limousine, public records show, Baker compiled a lengthy criminal record. Between 1979 and 1989, he was convicted on several misdemeanor charges, including drug possession and attempted petty larceny, as well as two felony charges for attempted robbery and car theft, according to D.C. Superior Court records.

The Internal Revenue Service filed a tax lien against Baker in 1996. He lost his house in 1998, and he filed for personal bankruptcy protection in 1998 and again in 1999.

Although Baker's company began receiving small federal contracts in 1998, it also fell into debt, records show. In early 2002, Arlington County Circuit Court ordered Shirlington Limousine to pay American Express Travel Related Services Co. $55,292.

That summer, Howard University terminated a contract with Shirlington Limousine to supply shuttle bus service, citing poor service and other problems.

In 2003 and again in 2004, the company received eviction notices for an office it maintained in a luxury D.C. apartment building. And in September 2004, the company was sued in D.C. Superior Court for $1.8 million, for failing to make payments on buses it bought for the Howard contract. The case was settled last month, with Shirlington Limousine agreeing to pay $300,000.

During these financial troubles, Baker's company won a contract worth $3.8 million with the Department of Homeland Security in April 2004. It appears from federal records that Shirlington Limousine was the only bidder. The contract was awarded under a program that limited competition to businesses in poor neighborhoods.

Baker was able to close his bankruptcy case last April after he made nearly $125,000 in payments to creditors, according to court records.

The Homeland Security Department said it awarded Shirlington Limousine, one of three bidders, another one-year contract for $21.2 million in October.

Homeland Security spokesman Larry Orluskie said the department does not routinely conduct background checks on its contractors. Instead, it relies on a list the government keeps of vendors who have had serious problems with federal contracts, he said.

In Shirlington Limousine's case, only the drivers were subject to criminal background checks, he said.

Past performance is one key factor the government weighs in awarding a contract, Orluskie said. But he said he did not know whether contract officers checked with Howard University before awarding Shirlington Limousine its first contract.

He stressed that Shirlington Limousine has performed well, saying: "We have not had any problems with this service -- we don't question whether they can deliver because they are delivering."

Steven L. Schooner, an associate professor and contracting expert at George Washington University Law School, said that although there is no explicit prohibition against giving contracts to felons or people with poor business histories, the government is obligated to ensure that potential vendors have a satisfactory record of business ethics and integrity, and that they have the financial resources to meet contractual obligations.

"There's a fundamental government responsibility to investigate," he said.

Researcher Alice Crites contributed to this report.

Another Bush Scandal Looms, This Time at the CIA