http://pogoblog.typepad.com/pogo/2008/03/aey-efraim-dive.htmlAEY & Efraim Diveroli: Subject to the Foreign Corrupt Practices Act?
Based on my quick Google search of the web for AEY, Efraim Diveroli and "Foreign Corrupt Practices Act," I haven't seen anyone ask the question (though someone may have): Is Efraim Diveroli's alleged bribery of Albanian government officials, if true, a violation of the Foreign Corrupt Practices Act? It seems that it would be the case. According to the New York Times:
As Mr. Diveroli began to fill the Army’s huge orders, he was entering a shadowy world, and in his brief interview he suggested that he was aware that corruption could intrude on his dealings in Albania. “What goes on in the Albanian Ministry of Defense?” he said. “Who’s clean? Who’s dirty? Don’t want to know about it.”
The way AEY’s business was structured, Mr. Diveroli, at least officially, did not deal directly with Albanian officials. Instead, a middleman company registered in Cyprus, Evdin Ltd., bought the ammunition and sold it to his company.
The local packager involved in the deal, Mr. Trebicka, said that he suspected that Evdin’s purpose was to divert money to Albanian officials.
The purchases, Mr. Trebicka said, were a flip: Albania sold ammunition to Evdin for $22 per 1,000 rounds, he said, and Evdin sold it to AEY for much more. The difference, he said he suspected, was shared with Albanian officials, including Mr. Pinari, then the head of the arms export agency, and the defense minister at the time, Fatmir Mediu.
...
The conversation, he said, showed that the American company was aware of corruption in its dealings in Albania and that Heinrich Thomet, a Swiss arms dealer, was behind Evdin.
http://www.miamiherald.com/news/columnists/fred_grimm/story/475617.htmlBut Sonnett was taken aback by Diveroli. ``Well, I think it is passing strange that a 22-year-old can sign a $300 million worth of weapons contract with the Pentagon. I suppose the American dream is always possible.''
Even by the mythical standards of South Florida, a 20-something Miami Beach party boy seems an unlikely entry in our gallery of rogue arms peddlers with the likes of Soghanalian. Or Nazi turned arms smuggler Klaus Altmann-Barbie. Or Fort Lauderdale's flamboyant Ken Burnstine, the drug smuggler and arms dealer who may -- or not -- have perished in a 1976 plane crash. Or Gerard Latchinian, whose arms dealings were interrupted when he was caught plotting a coup in Honduras. Or David Duncan, tripped up in a deal sending guns to Peru. Or the bevy of Miami arms dealers exposed in the Iran-Contra scandal.
http://www.exportlawblog.com/archives/313Of course, you didn’t expect that this blog would let a story about an arms company run by a 22-year-old kid and a 25-year-old “professional masseur” escape without comment, did you? The story, which the New York Times broke on Thursday, revealed how AEY, Inc., the company run by 22-year-old Efraim Diveroli and his massage therapist friend, was paid hundreds of millions of dollars by the United States Government to supply sub-standard ammunition to Afghan forces. Some of the ammo supplied by AEY is alleged to have been up to 40-years-old, i.e., manufactured before the AEY executives were even born.
There is at least one export law angle to the story. It arises from the discovery that some of the ammunition delivered by AEY had been procured from China. The Times story noted:
Tens of millions of the rifle and machine-gun cartridges were manufactured in China, making their procurement a possible violation of American law.
I’d say that’s more than a “possible” violation. When AEY arranged the export of ammunition from China to Afghanistan it would have been acting as a broker under Part 129 of the International Traffic in Arms Regulations (the “ITAR”). Section 129.5 of the ITAR notes that “no brokering proposals involving any country referred to in § 126.1,” e.g. China, “may be carried out by any person without first obtaining the written approval of” the Department of State’s Directorate of Defense Trade Controls. And we know that AEY would not have had such written approval because section 126.1 says that it is the policy of DDTC to deny licenses involving China.
http://edition.cnn.com/2008/US/03/28/arms.dealer/?iref=mpstoryviewDiveroli is president of AEY Inc., a South Florida company which, according to U.S. government documents, has done more than $10 million of business with the U.S. government since 2004
He's a genius about anything to do with weapons," the 72-year-old says. "Ever since he was a little boy, I would take him to gun shows and he could identify every model of guns. People would ask: How can he do that so young? He has a gift, I would tell them.''
Michael Diveroli, Efraim's father, told CNN affiliate WFOR-TV that he wished his son had turned his intellect elsewhere.
He said Efraim was "a boy genius" who is "hard to control." Read the WFOR story
"I would prefer he became a nice Jewish doctor or lawyer rather than an arms dealer," WFOR quoted Michael Diveroli as saying. Watch how father says son runs his own show »
For now, relatives say Efraim Diveroli is out of the country. CNN attempts to contact him have not been successful.
http://www.lindsayfincher.com/2008/03/aey_inc_wtf.htmlAnd that's not their only federal contract!
As Efraim Diveroli arrived in Miami Beach, AEY was transforming itself by aggressively seeking security-related contracts.
It won a $126,000 award for ammunition for the Special Forces; AEY also provided ammunition or equipment in 2004 to the Department of Energy, the Environmental Protection Agency, the Transportation Security Administration and the State Department.
By 2005, when Mr. Diveroli became AEY’s president at age 19, the company was bidding across a spectrum of government agencies and providing paramilitary equipment — weapons, helmets, ballistic vests, bomb suits, batteries and chargers for X-ray machines — for American aid to Pakistan, Bolivia and elsewhere.
It was also providing supplies to the American military in Iraq, where its business included a $5.7 million contract for rifles for Iraqi forces.
Two federal officials involved in contracting in Baghdad said AEY quickly developed a bad reputation. “They weren’t reliable, or if they did come through, they did after many excuses,” said one of them, who asked that his name be withheld because he was not authorized to speak with reporters.
Dudes, is everyone who works on these government contracts completely high? Is it too much to ask that you actually investigate who you will be handing out $300 million contracts to?!