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Blackwater is based in Moyock, N.C.
Howard Krongard initially said his brother had no ties to Blackwater. But during the Nov. 14 oversight hearing, he recused himself from inquiries related to the company, explaining that Alvin Krongard had just told him he had attended an advisory board meeting. Alvin Krongard resigned from the board two days later because of the uproar the arrangement created.
While Democrats claimed a glaring conflict of interest, Krongard said he pulled his staff off the Blackwater probe so they wouldn't step on work being done by Stuart Bowen, the special inspector general for Iraq reconstruction.
Bowen had sought help from Krongard's office to audit two Blackwater contracts - the same ones Militana was helping the U.S. Attorney's office examine, according to Krongard, who said alarms went off when he realized the potential overlap.
"To be assisting a criminal investigation into the exact same two contracts that we were already assisting a civil audit into, raised a question of parallel proceedings, which needed to be deconflicted before one infected or contaminated the other," he said.
Krongard did not say what the contracts are for or give their value. The State Department pays Blackwater and two other firms $570 million a year for security services.
In a deposition to the oversight committee, Todd, the deputy inspector general, supported Krongard. "We had basically several of the same organizations looking at the exact same stuff," Todd said.
But Waxman rejected the rationale. "You halted an investigation, demanded a personal briefing from the Justice Department, (and) assigned your congressional affairs director to keep tabs on the investigation," Waxman said to Krongard at the hearing. Waxman called the moves "highly unorthodox."
Heide, the congressional affairs director Krongard called his "alter ego," was collecting the documents needed by Bowen and the U.S Attorney's office, e-mails show.
But members of Krongard's own staff, along with Higdon and Candelmo of the U.S. attorney's office in North Carolina, saw her as a roadblock. Rubendall told the committee Candelmo and Higdon planned in advance to raise grand jury information during the July 31 meeting in order to force Heide out of the room.
"We weren't going to discuss grand jury material, but that was the ruse that they were going to use to get her out of the meeting," Rubendall said.
Heide referred questions to her attorney, David Laufman, who said an e-mail exchange between Krongard and Heide indicated she was doing as directed.
"I am trying to stay only situationally aware," she wrote Aug. 8, "so I can keep any conflicts at bay."
Justice Department spokesman Dean Boyd would not comment on the investigation, but said, "The suggestion that the Justice Department engaged in a ruse in this matter is flatly incorrect."
According to Waxman, the problems hampering the Blackwater probe persist. Justice investigators have been unable to get needed documents. Militana has not been allowed to give his full attention to the criminal investigation even though Krongard said he would.
"I think that the State Department is responsible for investigating crimes perpetrated against the State Department," Militana said in an October interview with the committee. "The (Justice Department) can do it, of course, but there has to be some involvement by the State Department."
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