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By Richard Lardner
The State Department's acerbic top auditor wasn't happy when Justice Department officials told one of his aides to leave the room so they could discuss a criminal investigation of Blackwater Worldwide, the contractor protecting U.S. diplomats in Iraq.
The episode reveals the badly strained relationship between Bush administration officials over the probe into whether Blackwater smuggled weapons into Iraq that could have gotten into insurgents' hands.
As a result of the bureaucratic crosscurrents between State's top auditor and Justice, the investigation has been bogged down for months.
A key date was July 11, when Howard Krongard, State's inspector general, sent an e-mail to one of his assistant inspector generals, telling him to "IMMEDIATELY" stop work on the Blackwater investigation. That lead to criticisms by Democrats that Krongard has tried to protect Blackwater and block investigations into contractor-related wrongdoing in Iraq.
"Instead of cooperating, Mr. Krongard apparently created a series of obstacles to the inquiry," said Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee examining Krongard's performance as the State Department official responsible for stamping out waste, fraud and abuse.
Krongard, whose credibility was damaged by the recent disclosure that his brother had a business affiliation with Blackwater, has disputed the charge, though he recused himself from Blackwater matters after the potential conflict of interest emerged.
His aide, Terry Heide, who was kicked out of the July 31 meeting, also says she's been unfairly blamed for slowing the Blackwater probe. Her role was to collect State Department documents for the investigators - a job she did well, according to her lawyer. But even Krongard's own staff saw her as a hindrance.
Brian Rubendall, a senior State Department investigator, has questioned the halt in the inquiry, telling the oversight committee in an October interview that there was no justifiable "reason for us to stop that investigation. None."
Krongard said he put the brakes on because he was concerned a separate audit of Blackwater contracts might "contaminate" the Justice Department's work.
Blackwater has called the smuggling allegations baseless. However, earlier this year two former Blackwater employees pleaded guilty to possession of stolen firearms that were shipped in interstate or foreign commerce. They are cooperating with federal agents. Blackwater said the two were fired after it was learned they were stealing from the company.
Altogether, the trail of internal e-mails, testimony from a Nov. 14 oversight hearing and interviews with participants form a picture of bureaucratic infighting with consequences far beyond Washington.
The State Department's role in the Blackwater weapons probe began months before the Sept. 16 Baghdad shootings by Blackwater guards that killed 17 Iraqis and escalated public scrutiny of the company.
In March, Ron Militana, a special agent in the investigations unit, received Rubendall's approval to interview State Department personnel and meet with Blackwater attorneys about allegations the company was illegally transporting arms into Iraq. Militana also discussed potential criminal proceedings in the case with a federal prosecutor.
In late June, John DeDona, then chief of the IG's investigative unit, e-mailed Krongard and his deputy, William Todd, to alert them to the probe. Krongard responded cryptically: "Please do not treat anything in the e-mail below as having been seen by me, advised to me, or understood or approved by me. If there is something significant in the message below, please come and tell me about it."
Two weeks later, as Militana was trying to obtain copies of Blackwater contracts from the department's Bureau of Diplomatic Security, DeDona sent another message to Krongard telling him of Militana's work.
In a July 11 e-mail to DeDona, Krongard told him Militana was to "IMMEDIATELY" stop the work. Krongard said he wanted a briefing from the U.S. Attorney's office in North Carolina on its Blackwater investigation before his agents went farther.
Waxman and other critics say Howard Krongard's order to halt came at the same time Blackwater CEO Erik Prince was considering whether to offer his brother, Alvin "Buzzy" Krongard, a spot on the company's newly forming advisory board.
On July 26, Prince invited Alvin Krongard to join Blackwater's advisory board. A week later, Robert Higdon, chief of the criminal division in the U.S. Attorney's office for the eastern district of North Carolina, and James Candelmo, Higdon's deputy, were in Washington for the July 31 meeting with Krongard and his investigators.
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