Mortgage Company Accused of Defrauding Katrina Victims

August 31, 2007 7:14 PM

Joseph Rhee Reports:

Angry homeowners hit hard by Hurricane Katrina are accusing Countrywide Home Loans of reneging on a promise to help them by temporarily suspending their mortgage payments. 

According to a class-action lawsuit filed in Louisiana today, homeowners say the mortgage giant is now demanding any deferred payments be paid up immediately, often with interest and penalties attached. Plaintiffs' attorneys say that as a result, many struggling homeowners have been sent into foreclosure.

In a goodwill gesture after Katrina hit two years ago, Countrywide announced it would suspend mortgage payments for hurricane victims for up to 90 days. Homeowners say they were told by Countrywide agents that any deferred payments would be added to the back end of the loan term, and that no lump sum, interest or penalties would be imposed.

According to the lawsuit, however, homeowners have been notified by Countrywide that they have to either pay the entire deferred amount immediately or restructure their loan in a way that would cost them thousands of additional dollars. 

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Plaintiff Donna Hellmers of Hammond, La., told the Blotter on ABCNews.com that she was "dumbfounded" by the change in policy, and when she demanded an explanation from a Countrywide agent, she was told "the lender has changed their mind." Hellmers, who said her family faced severe financial hardship after Katrina, accused Countrywide of "taking advantage of people when they're down."

A similar class-action lawsuit was filed against Countrywide earlier this year by Texas homeowners affected by Hurricanes Katrina and Rita. A homeowner in that case reportedly recorded a telephone call with a Countrywide agent who explained the company's apparent change of heart.  According to the agent, "Unfortunately, we were telling people things that we should not have been telling people."

Countrywide Home Loans had no immediate comment on today's lawsuit.

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August 31, 2007 in Hurricane Katrina | Permalink | User Comments (44)

Extortion Bomb Threat Plot Widens -- Known Fugitive Sought as Suspect

August 31, 2007 6:30 PM

Jason Ryan Reports:

The widening investigation involving bomb threats called into stores and banks demanding that money be sent to overseas bank accounts has expanded to include about 24 incidents in 17 states.

Today the extortion calls included four bomb threats called into three grocery stores and a Wal-Mart in northeast Ohio, and calls received at stores in Daytona, Fla. and Richmond, Va.

In an interview with ABC News today, FBI Deputy Assistant Director Salvador Hernandez said, "We have bomb threats reported on a daily basis to the FBI and other law enforcement, but this extortion type of serial bomb threat activity is somewhat unusual."

The FBI and Secret Service have become more involved in the investigation after the extortion calls increased in frequency since Sunday. The FBI believes several of the incidents have been copycat calls.

The FBI and law enforcement officials are focused on suspects overseas in Europe, particularly in Portugal. Federal law enforcement officials believe one potential suspect has been involved in other scams in the United States and told ABC News the suspect is a fugitive in a previous case overseen by the U.S. Secret Service. There is a warrant out for his arrest.

Although the extortion threats have largely asked for Western Union wire transfers, other money transfer methods have been made during the calls.

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In a statement, Sherry Johnson, director of media relations for Western Union, said, "The suspect involved is known to law enforcement and has a history of fraudulent activity. He has issued these threats in an attempt to extort money from money transfer agents. Western Union is cooperating fully with both the Secret Service and FBI in their ongoing investigations." 

In recent days, there have been several copycat calls demanding money from the stores. Local law enforcement working with the FBI have made several arrests. Police in Hutchinson, Kan. arrested Tony Palmatier, 24, Thursday for allegedly making copycat calls to three stores in the Hutchinson area. He has been charged with making an aggravated criminal threat.

The FBI is also investigating a call that was made to a Dillon's store in Hutchinson from the suspect overseas on Tuesday.

FBI officials emphasize that this is a criminal investigation. At this time, there is no connection to terrorism, but authorities anticipate the threatening calls will continue.

"The FBI's viewing this at this point as strictly a criminal matter. There's no connection to terrorism. No nexus to terrorism. In every case thus far, the device that's been claimed has been bogus. There hasn't been anything there. And so while we caution the public not to send money, we also caution them to be careful," Hernandez told ABC News.

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August 31, 2007 | Permalink | User Comments (10)

Dem Fundraiser Turns Himself In

August 31, 2007 2:09 PM

Justin Rood Reports:

Disgraced Democratic party fundraiser Norman Hsu is out of jail tonight, after surrendering to authorities for a 15-year-old arrest warrant.

After being led away in handcuffs this morning, Hsu posted the $2 million bail set by California Superior Court Judge H. James Ellis and was released.

Hsu, an apparently wealthy apparel magnate, had pleaded no contest in 1992 for what authorities have called a Ponzi-like fraud scheme involving latex gloves that cost investors more than $1 million.

But after entering his plea, Hsu failed to appear for sentencing. At the time, he reportedly faced up to three years in prison. When Hsu didn't show, a warrant was issued for his arrest.

Until news of his criminal past broke two days ago, Hsu was a major donor and fundraiser for Sen. Hillary Clinton, D-N.Y.'s presidential bid. He has also donated to the presidential campaigns of Democratic Sens. Barack Obama, Ill., and Joseph Biden, Del.

Hsu reportedly raised well over $1 million for Clinton's 2008 presidential campaign, by eliciting donations from others and giving generously from his own pockets. Questions have been raised in the last few days about many big contributions from Hsu's contributors, which appeared incommensurate with the modest incomes of the individuals and families who gave them. (Photo of Norman Hsu with Sen. Hillary Clinton, D-N.Y., courtesy of Stephen Schwartz.)

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While suspicious, no evidence has surfaced that any donations are illegal. Both Hsu and the Clinton campaign have denied wrongdoing. Clinton's presidential campaign confirmed an upcoming fundraiser Hsu was slated to host has been cancelled. The campaign recently said it would donate $23,000 to charity, the same amount that Hsu had personally given her.

Hsu is described as warm and generous, but an air of mystery surrounds him and his wealth. He was reportedly the alleged victim of a 1990 kidnapping by Chinese gang members in San Francisco, possibly over a debt. After his arrest and alleged kidnapping, Hsu returned to Hong Kong for several years, returning to the United States in 1996, according to his attorney.

Since 2004, Hsu has raised hundreds of thousands of dollars for Democratic candidates and committees, and personally donated nearly a quarter million dollars. He has reportedly hosted several fundraisers, including pricey birthday parties for at least two congressmen.

On Thursday, Obama's campaign said he would give to charity the $2,000 Hsu contributed to his 2004 Senate campaign and the $5,000 Hsu gave to his political action committee, Hopefund. Hsu's $43,700 in donations to the Democratic Senatorial Campaign Committee and $2,500 to the Democratic Congressional Campaign Committee also will go to charity, both groups announced Thursday.

Associated Press writer Paul Elias contributed to this report.

This post has been updated.

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August 31, 2007 in Norman Hsu, Clinton Fundraiser | Permalink | User Comments (31)

Bush E-Mail Mystery Deepens: White House Won't Name Tech Contractor

August 31, 2007 11:20 AM

Justin Rood Reports:

The White House will not identify a private company which appears to be involved in the disappearance of potentially millions of White House e-mails.

The company was responsible for reviewing and archiving White House e-mails, a White House official told congressional staff in May, according to a letter yesterday from House Oversight and Government Reform Committee Chairman Henry Waxman, D-Calif. Congressional investigators asked then for the name of the company and "have repeatedly requested" the information since then, according to Waxman.

They are still waiting for an answer, the chairman wrote to White House counsel Fred Fielding. Waxman asked the White House to come up with the company's name by Sept. 10.

White House spokesman Scott Stanzel declined to tell the Blotter on ABCNews.com the company's name or explain why the White House would not provide it to Congress.

"We are reviewing Rep. Waxman's letter and will respond expeditiously," Stanzel said in an e-mailed statement.

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According to the White House, as many as five million e-mails may not have been properly archived and may be lost forever, in apparent violation of the Presidential Records Act. The post-Watergate law states that communications relating to official activity in the offices of the president and vice president are owned by the American public and cannot be destroyed.

The unnamed firm "was responsible for the daily audits of the e-mail system and the e-mail archiving process," Waxman said a White House briefer had attested in a May meeting.

The firm worked for the Information Assurance Directorate, under the White House chief information officer, Waxman said he was told.

In addition to requesting the firm's name, Waxman's staff has also asked to see a White House report which detailed the days on which few or no e-mails were archived; the White House has been similarly unresponsive to that request, Waxman charged, and asked it provide the document by Sept. 10 as well.

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This post has been revised.

August 31, 2007 | Permalink | User Comments (203)

Chemical Weapons Scare at U.N. Headquarters

August 30, 2007 12:01 PM

Brian Ross Reports:

United Nations weapons inspectors discovered six to eight vials of a dangerous chemical warfare agent, phosgene, as they were cleaning out offices at a U.N. building in New York, federal authorities tell the Blotter on ABCNews.com.

The federal authorities said the office, in a U.N. building near headquarters, was being evacuated and the White House had been notified at 10 a.m.

The vials were discovered at the headquarters of the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC), which led the inspections of possible chemical and biological weapons in Iraq. The items were recovered from a former Iraqi chemical weapons facility, Al Muthanna, back in 1996, but just noticed on an inventory list yesterday, according to UNMOVIC.

A WMD investigative team and hazmat units are responding to the incident, according to a law enforcement source.

The FBI New York Field Office will be disposing of these vials.

New York police and fire officials reported to the scene around 12:15 this afternoon.

The Department of Homeland Security notified the New York City police commissioner later this morning.

The United Nations said today that following the discovery of the items, "UNMOVIC chemical weapons experts sealed the packages and placed them in a safe, which was then isolated in a secured room."

Former U.N. weapons inspectors told ABCNews.com that vials of phosgene had also been used by inspectors in Iraq to help calibrate air sampling instruments.

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The former inspectors said the remaining vials were supposed to have been destroyed.

"If it is properly sealed, it should not pose much of a threat unless it is dropped," said former New York City emergency services director Jerry Hauer, an ABC News consultant.

"They need to get it out of there and put it in a safe canister," Hauer said. "It shows immense stupidity to have that kind of thing sitting around as a souvenir."

UNMOVIC said today that normally such items would have been transported directly to a laboratory, not sent to headquarters in New York, but that now they believe the items "are properly secured and pose no immediate risk or danger to the immediate public."

According to the Web site of the Centers for Disease Control, phosgene at room temperature is a poisonous, colorless gas with a suffocating odor like newly mown hay.

According to an article in Foreign Affairs, the chemical was allegedly used by Iran in the Iran-Iraq war in 1987.

Phosgene was used extensively during World War I as a "choking agent" and, according to the CDC Web site, among the chemicals used in the war, it was responsible for the large majority of deaths.

The chemical also has numerous commercial applications in the manufacture of plastics and pesticides.

This post has been updated.

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August 30, 2007 | Permalink | User Comments (49)

Top Taliban Leader Killed in Afghanistan

August 30, 2007 9:22 AM

Gretchen Peters and Aleem Agha Report:

Mullah Berader, a top Taliban commander, was killed early this morning in a U.S. air strike in volatile Helmand province, a senior Afghan general tells ABC News.

A convoy of British troops and Afghan National Army (ANA) soldiers was traveling through Salwan Qala district when they came under attack by Taliban forces, said Gen. Ghulam Mohiauddin Ghoori, the commander of ANA ground troops for Helmand.

Amid an intense firefight, the British troops called in air support. American warplanes struck the Taliban positions, causing dozens of casualties, said Gen. Ghoori. Among the dead, his men on the ground confirmed, was Mullah Berader.

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In Kabul, the Defense Ministry also confirmed the report, saying Berader was killed in a pre-dawn raid.

Berader, also known colloquially as Mullah Brother, was close to Taliban leader Mullah Omar. His death will come as a major blow to the Taliban hierarchy and follows the deaths of senior commander Mullah Dadullah Lang in May and the arrest of Defense Minister Mullah Obaidullah in Quetta, Pakistan in March. Many believed Berader succeeded Obaidullah as defense minister, though his exact rank was in dispute.

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August 30, 2007 | Permalink | User Comments (45)

Bodyguards for Iraqi Judges Prohibited From Carrying Guns

August 29, 2007 12:37 PM

Justin Rood Reports:

Despite death threats and attempts on their lives, Iraqi judges are not allowed to have armed bodyguards, a senior U.S. official told the Blotter on ABCNews.com.

"The Ministry of the Interior has not approved for them to carry weapons," U.S. Special Inspector General for Iraq Reconstruction (SIGIR) Stuart Bowen said in an interview Tuesday of judicial security details. "That exposes the judges to a very serious personal threat, and intimidation."

Bowen said he learned of the situation during a recent three-week visit to the country, where he spoke to Iraqi judges and prosecutors about the country's judicial system.

Trying to uphold the law is a deadly job in Iraq. More than 30 judges have been killed in the line of duty in recent years, the Iraqi Higher Judicial Council disclosed this month.

Bowen said the Interior Ministry's position was perplexing.

"There's not a good rationale for that," he said. "I'm concerned."

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The ministry has long been considered a haven and armory for Shiite Muslim militias operating in the country. Its commando units have been known to operate as sectarian death squads, although its new chief has vowed to replace any commanders who have been implicated in kidnappings or murder.

Despite promises of reform, the Italian police busted a secret $40 million arms deal the Interior Ministry had apparently struck with Italian traffickers to buy weapons without U.S. knowledge.

Judges aren't the only officials of Iraq's rule of law system who receive death threats, according to Bowen. Fear haunts the staff of the Commission on Public Integrity, who are currently working nearly 1,000 open investigations of fraud and abuse by Iraqi officials.

"I met with the commissioner here in Washington yesterday," Bowen said. "He has been subjected to very serious threats and intimidation tactics. Just a couple days ago, the house next to his was mortared in the Green Zone. He's very fearful for his life and the lives of his family."

Despite this, prosecutions are occurring, although they are mostly of Sunni officials, Bowen said.

And when prosecutors manage to convict a criminal, the victory can be short-lived, said Bowen.

The inspector general said a judge in Baghdad told him about encountering a convicted murderer in public recently.

"[It was] someone who he convicted and sentenced for life -- he ran into him on the street," Bowen said. The judge, whom Bowen declined to name out of concern for the judge's safety, confronted the man. "He said, 'You're right, I was guilty. You ran a good trial. But I was able to keep myself out of prison by paying $40,000,'" said Bowen. "I'm concerned about the capacity of Iraq's rule of law system to enforce the law."

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August 29, 2007 | Permalink | User Comments (15)

Recipient of U.S. Aid Wages Campaign Against Homosexuality

August 29, 2007 12:01 PM

Dana Hughes Reports:

An African leader involved in organizations that have received millions of dollars from the president's Emergency Plan for AIDS Relief is leading a campaign to criminalize homosexuality in Uganda.

Pastor Martin Ssempa, who runs the Makere University church in Kampala, Uganda, led a demonstration last week of at least 200 protesters, calling homosexuality "a criminal act against the laws of nature."

"We were organizing the rally to protest an organized effort to force Africa, especially Uganda, to change our laws and to legalize homosexuality," says Ssempa. "We consider homosexuality to be abnormal, anti-cultural and criminal behavior. The government must uphold the law."

Ssempa has been considered the public face for the president's Emergency Plan for AIDS Relief (PEPFAR) in Uganda. Organizations he's active in such as the Inter-Religious Council of Uganda (IRCU) have received millions of dollars of USAID funding.

According to the State Department Web site, "In June 2006, USAID/Uganda signed a three-year direct contract of $15 million with IRCU to further roll out prevention, care and treatment services."

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In 2005, Congressional Republicans invited him to testify before Congress on the success of abstinence-based programs. He's toured the United States speaking on the issue and endorsements on his own Web site include a former deputy assistant secretary from the U.S. Department of Health and Human Services.

Ssempa is also the spokesperson for the "Interfaith Rainbow Coalition Against Homosexuality," a group of Ugandan pastors, priests and imams who say they are fighting against the "homosexual victimization of Ugandans."

"Homosexuality is repugnant because it simultaneously breaks three major laws: 1) The law of nature where male goes with female, 2) The law of the man spelled in our penal code as above, 3) The Law of God as seen in the Bible and the Koran," the group's Web site states. "We need government to enforce the laws of this country...It needs to take action against the promoters of this criminal lifestyle by investigating them, cutting off their funding and stopping their propaganda."

The group also wants the Ugandan government to deport an American journalism intern from Stanford University, Katherine Roubous, who's written articles this summer about court challenges to anti-homosexual laws for the country's newspaper, The Monitor.

Ssempa says he googled Roubous and discovered she is president of a gay rights organization at Stanford. He accuses her reporting of being biased.

"We find a conflict of interest when a lesbian leader from Stanford comes to Uganda and begins writing sensational stories from only one view of homosexuality," he says.

Roubous, who says she is not gay, is involved in promoting gay rights at Stanford. She says, "I'm a human rights activist, so I've done a lot in environmental activism, domestic violence, immigration rights."

Roubous and her editor at The Monitor stand by her reporting. She says that despite her own activism background, she saw this internship as an opportunity to practice and learn about journalism in another country and is surprised and hurt by Ssempa and others' accusations against her.

"For every article I included a variety of voices," says Roubous, who also says she interviewed Ssempa for the majority of her stories. "It's not any of my business to voice my opinion on any of these issues. The fact that I'm giving a voice to people that the press hasn't allowed to speak is just good journalism."

But Ssempa says Ugandans are angry at Roubous actions.

"We resent an American journalist coming to change our laws," says Ssempa.   

Calling her reporting "criminal propaganda," his group's Web site states, "It is important that government takes appropriate action to ensure that the issue of homosexuality is not covered by homosexuals who are bent on giving Ugandans one side of the story."

Roubous is now considering returning to the U.S. early because of threats against her.

A State Department spokesperson declined to comment on whether it's appropriate for someone receiving U.S. funding to make anti-homosexual remarks.

"He's a private citizen," said the spokesperson.

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August 29, 2007 | Permalink | User Comments (47)

Abramoff Still Cooperating, Say Feds

August 28, 2007 1:00 PM

Justin Rood Reports:

For his continued cooperation with federal prosecutors, Jack Abramoff may get another delay in his bribery case.

Lawyers for the government and the disgraced former GOP superlobbyist are asking to postpone for another three months sentencing Abramoff for fraud, tax evasion and conspiracy to corrupt public officials, to which he pleaded guilty more than 18 months ago.

During that time, Abramoff is expected to continue helping the government's investigators "for the foreseeable future," the two groups said in their request to U.S. District Court Judge Ellen Huvelle. The delay would be the fourth so far in Abramoff's bribery case and would push his sentencing date at least into December.

Photos: In the Wake of the Abramoff Scandal

A delay wouldn't keep Abramoff out of jail. Since last November, he has already been serving a five-year, 10-month sentence in a federal prison in Cumberland, Md., after pleading guilty to separate wire fraud and conspiracy charges. In all, Abramoff is expected to serve between nine and 11 years.

To date, the Abramoff investigation has obtained guilty pleas or convictions in 10 cases, including ones against former Rep. Bob Ney, R-Ohio, former White House official David Safavian, and former deputy Interior secretary Stephen Griles. At least four current or former lawmakers are reportedly under investigation for improper activity related to Abramoff.

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August 28, 2007 in Abramoff Lobbying Scandal | Permalink | User Comments (11)

Controversial Catholic Group Alleges Critics Stole Inside Info

August 27, 2007 1:06 PM

Maddy Sauer Reports:

A controversial Catholic group is taking its critics to court in the latest escalation of the decades-long battle between the Legion of Christ and former members of the Legion, some of whom have accused its founder of sexual abuse.

Former members of the order, known as Legionaries, have formed an online community to discuss, among other things, the sexual abuse allegations against the founder, Father Marcial Maciel.

Last year, the Vatican asked Maciel to give up all of his ministry appearances following accusations that decades ago he molested young priests in training.

The Legion has filed a complaint against one of the organizations, Regain Inc., and its president, a former Legionary, John Paul Lennon.

The complaint alleges that "private and proprietary materials have been stolen" and posted on the organization's Web site "as part of a concerted effort to wage a malicious disinformation campaign against the Legion." The items the Legion is seeking include private letters of Maciel's. The Legion estimates the material is worth $750,000.

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Along with seeking the seizure of the property, the Legion is also requesting information related to the identities of individuals who have used the message boards using screen names.

Last week, a judge ruled that Lennon must turn over any property of the Legion's within 14 days, following a pre-trial seizure petition by the Legion.

"There was nothing criminal here," Lennon told the Blotter on ABCNews.com. Lennon said some documents circulating among the ex-Legionary community had been posted online, but as far as he knew, nothing was obtained improperly.

He equated the Legion's search for the identities of those posting on the discussion board to McCarthyism.

"It's a witch hunt," he said. "It is proving that the Legion is a cult which controls information, stifles freedom of expression and goes after dissenters."

Lennon and other former Legionaries began speaking out publicly when they became frustrated that allegations of sexual abuse against Maciel had not led to a formal investigation.

The allegations were presented to Pope Benedict XVI in 1998 when he was a cardinal. Some of the accusers said then-Cardinal Ratzinger attempted to cover up the case because of Maciel's prominence and close relationship with Pope John Paul II.

The then-Cardinal Ratzinger became visibly upset when asked about the Maciel case by ABC News' Brian Ross in April 2002.

"You do not ask such questions," he said and then slapped Ross's hand.

The Legion of Christ has long stood by Maciel, and they issued a statement on his behalf last year, saying that despite the allegations against Father Maciel, "he declared his innocence and, following the example of Jesus Christ, decided not to defend himself in any way."

A spokesman for the Legion said that because the litigation is ongoing, he couldn't comment further than what is contained in the complaint.

"Our job is just to love Christ, serve people and build the church," he said, "and we want to be able to focus on that."

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August 27, 2007 | Permalink | User Comments (96)

Iraqi With CIA Ties Hires D.C. Lobby Firm

August 24, 2007 10:39 AM

Justin Rood Reports:

A political rival of the current Iraqi prime minister has hired a well-known Republican lobbying firm to promote his candidacy among the Washington elite.

On the same day U.S. intelligence officials briefed reporters on their lack of confidence in Iraqi Prime Minister Nouri al-Maliki to solve the problems facing his country, the U.S. Justice Department released documents showing that Dr. Ayad Allawi, a Maliki rival with close ties to the CIA, was paying the GOP firm Barbour Griffith & Rogers (BGR) more than a quarter-million dollars to lobby on his behalf.

The story was first reported on the Web site Iraqslogger.com, which obtained the documents.

It has been widely reported that Ayad Allawi and his political group, the Iraqi National Accord, received CIA funding from the early 1990s until as late as 2004 and consulted with CIA officials about setting up a domestic intelligence service for the Iraqi government. In 2004, Allawi was made the interim prime minister until elections could be held. Experts also believe he is supported by Gulf states wary of Iran's influence in the Iraqi government.

In January 2005, elections pushed Allawi and other members of his party out of power. He has made no secret of desiring a return to the prime minister's seat.

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A spokeswoman for BGR declined to answer questions Thursday, saying only that her firm would "be providing strategic counsel and representation" to Allawi "before the U.S. Government, Congress, the media and opinion leaders."

A representative for Allawi reached Friday declined to answer questions for the record concerning the lobbying contract or Allawi's ties to the CIA. Allawi was not available for comment, he said.

The Bush administration and BGR have close ties; two of its principals have played important roles in the president's election campaigns. But the White House said yesterday the firm's work had "no connection whatsoever" to White House policy.

"Maliki is a good man with a tough job and the president supports him," Bush spokesman Scott Stanzel told the Blotter on ABCNews.com Thursday, two days after Bush made comments many interpreted as a shift away from supporting the prime minister.

Two issues remain unclear: exactly what the firm is doing for Allawi, and how Allawi can afford such representation.

Beyond a handful of pro-Allawi e-mails that have hit Capitol Hill offices from a BGR-controlled address, there have been few outer signs of activity.

On Saturday, the Washington Post published an opinion article featuring Allawi's byline which slammed Maliki's leadership of Iraq. On Sunday, Allawi met with Sens. Carl Levin, D-Mich., and John Warner, R-Va., the chair and ranking member of the Senate Armed Services Committee, in Jordan. That day, the two men released a pessimistic statement about Iraq's political future.

A Levin spokesman said the BGR firm played no role in arranging the meeting; a Warner spokesman referred questions about the meeting to Levin's office.

Experts said Allawi does not have the resources to pay $50,000 a month plus expenses for Washington representation.

"He doesn't have that kind of money," said Bruce Reidel, who spent 25 years with the CIA and the National Security Council, covering the Middle East. "Somebody's paying for it, and it's not him."

A former U.S. intelligence community Middle East expert who left  the government in 2005 said that while the agency backed Allawi financially for many years, he doubted BGR's bills would be paid with agency money. 

"Obviously, if there were any trace of [CIA] funds into this sort of thing it would be illegal," said Paul Pillar, the national intelligence officer for Near East and South Asia from 2002 until his retirement in 2005. "But I'd be extremely surprised if that had happened."

A CIA spokesman told ABCNews.com, "If you have any questions about where Mr. Allawi gets his money, I would refer you to Mr. Allawi."

In the past, Allawi has funded his Washington efforts through the generosity of wealthy expatriates. In 2003 and 2004, an Iraqi doctor living in London paid $340,000 to the lobbying firm Preston Gates Ellis and others to promote Allawi in the nation's capital.

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August 24, 2007 | Permalink | User Comments (27)

Congress: For Plane That Won't Fly, $63 Mil Is Enough

August 24, 2007 9:17 AM

Justin Rood Reports:

Millions of dollars later, Congress has effectively killed a military plane program the Pentagon repeatedly rejected, and which never had a successful flight.

The $63 million Congress poured into the DP2 program over 20 years was not requested by the Department of Defense. Instead, it was mandated through obscure provisions in bills known as "earmarks." Most of those earmarks for the DP2 were inserted by Rep. Duncan Hunter, R-Calif., in whose district the plane was designed and built, in prototype.

The 2008 defense spending bill does not include an earmark for the DP2. Hunter had wanted to direct $6 million toward the plane's development.

Hunter said he still supported the project.

"One-third of our present vertical takeoff aircraft have crashed," he said by phone from Texas, where he was campaigning for president. "Continued research and development of the DP2 is warranted."

The DP2 project was the subject of an ABC News investigation in June and a calamitous congressional hearing.

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Designed as a plane that can take off straight up and then fly at 700 miles per hour, the DP2 has never attained a height of more than a few feet in prototype tests before crashing to the ground.

The experimental plane was panned by most of the government engineers who were assigned to review and manage the project.

The plane's creator, Anthony DuPont, has donated $36,000 to Hunter's congressional campaigns.  Hunter has denied the contributions had any connection with his continued support of the aircraft. He said he makes "decisions on what I think is right for the country," and that he has rejected other projects backed by large campaign contributors, like General Dynamics and Boeing.

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August 24, 2007 | Permalink | User Comments (49)

New Worries That Ferries Could Be Al Qaeda Targets

August 24, 2007 8:00 AM

Richard Esposito and Maddy Sauer Report:

There have been a number of suspicious incidents this summer aboard Washington state ferries, which prompted the Department of Homeland Security (DHS) and the Coast Guard to increase security along the ferry lines and to issue a warning to law enforcement.

"On several occasions since May 2007, members of the public and employees of the Washington State Ferry (WSF) have reported a number of suspicious activities aboard state ferries," said the note, sent out Wednesday to state and local law enforcement by the chief intelligence officer at DHS.

The warning was issued as the hunt continues for two potential suspects that were observed on multiple Washington state ferries. The individuals "exhibited unusual behavior and undue interest in the layout and workings of the ferries and ferry terminals," said the note.

Security is always high on the ferries, according to a spokesman for the Washington State Patrol, but current security levels are no higher now than usual.

The spokesman said all of the incidents still considered suspicious involved the same two individuals who authorities are now searching for. The FBI released photos of the two men on Monday.

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Ferry employees, however, also often question passengers who seem more interested in the inner-workings of the ferry than the scenery, but most of those incidents are resolved on site.

Just Wednesday, service on one ferry was suspended for an hour when a ferry worker found a suspicious package during a routine sweep. A bomb squad was called to the scene and determined the package was not a threat.

Al Qaeda has demonstrated an interest in various types of maritime targets. They were, of course, successful in October 2000 with the attack on the USS Cole in the Gulf of Aden.

"Many ferries operate in close proximity to energy-related critical infrastructures, such as petroleum and chemical facilities and power plants," a law enforcement source told the Blotter on ABCNews.com, "making them attractive targets to terrorists."

While DHS has increased security on the ferries and ferry facilities, there is no credible intelligence indicating a specific threat to the ferry system in Washington state or anywhere else in the U.S., a spokesman for DHS told ABCNews.com.

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August 24, 2007 | Permalink | User Comments (20)

House Lawyers Refuse to Turn Over Foley's Computers

August 23, 2007 4:04 PM

Vic Walter and Krista Kjellman Report:

Lawyers for the U.S. House of Representatives have denied Florida law enforcement officials access to former Congressman Mark Foley's office computers. Investigators believe Foley may have used the machines to send illegal sexually explicit messages to former congressional pages.

Instant messages reviewed by ABC News last October indicated the one-time Florida representative interrupted a House vote to engage in Internet sex with a high school student who had served as a congressional page and had been 18 for just six weeks at the time of the exchange.      

The message, according to its time stamp, was dated April 2003, at approximately 7 p.m. -- the same time the House was voting on H.R. 1559, Emergency War Time supplemental appropriations.

Maf54: I miss you
Teen:  ya me too
Maf54: we are still voting
Maf54: you miss me too

The exchange continues in which Foley and the teen both appear to describe having orgasms in sexually explicit terms.

Maf54: ok..i better go vote..did you know you would have this effect on me
Teen:  lol I guessed
Teen:  ya go vote…I don't want to keep you from doing our job
Maf54: can I have a good kiss goodnight
Teen:  :-*
Teen:  <kiss>

Click Here for Full Blotter Coverage.

But a Florida Department of Law Enforcement (FDLE) spokesperson told ABC News that House lawyers denied the agency's request to turn over the computers, citing the Speech or Debate Clause of the Constitution, which protects congressional papers. The House claims Foley's computers are the equivalent of congressional papers, and that only Foley can waive his congressional privilege and grant access to them. 

Ken Boehm, chairman of the National Legal and Policy Center, a conservative anti-corruption watchdog group, said at the time of the FBI's raid on Rep. William Jefferson's Capitol Hill office, he was very opposed to then Speaker Dennis Hastert, R-Ill., and current Speaker Nancy Pelosi's, D-Calif., assertion that House offices cannot be searched. A federal appeals court ruled earlier this month that although the search of a congressional office is constitutional, the FBI violated the Speech and Debate Clause in searching Rep. Jefferson's office because the agents gained access to all of the congressman's records without giving him the chance to argue some of his records concerned legislative business.

"There's nothing that distinguishes a congressional office from any other office," Boehm said. "If you have something privileged, a letter from your attorney, investigators can't take that letter."

But the House's refusal to turn over Foley's computers appears to grant congressional offices special privileges -- something Boehm says no longer exists. 

"The type of all-purpose you-can-never-search-our-offices position is out," Boehm, who has advocated for a narrower interpretation of the Speech and Debate Clause, told ABC News. 

FDLE spokesperson Kristen Perezluha said the department has moved on and is currently working with Foley's attorney and the FBI to gain access to the computers.

Even without access to Foley's government computers, Perezluha says her department is "hoping to wrap up its investigation in seven to 10 days," at which time it will be up to the state attorney in Pensacola, Fla., to press charges. Unlike federal law, the Florida statute makes it a crime simply to use lewd or explicit language that is harmful to minors. 

Foley resigned Sept. 29, 2006, hours after ABC News questioned him about sexually explicit messages with former congressional pages, some of whom were under the age of 18 at the time of the exchanges.

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August 23, 2007 in Mark Foley Internet Scandal | Permalink | User Comments (31)

Embattled Bush Official Resigns Justice Post

August 22, 2007 1:03 PM

Justin Rood Reports:

Facing multiple investigations, a senior Justice Department appointee has resigned his post.

Bradley Schlozman stepped down from his position as a counsel in the Executive Office of U.S. Attorneys, a branch of the Department of Justice, last week, a Justice spokesman confirmed Wednesday.

Schlozman, a key figure in several political controversies, is under investigation by the department's inspector general and Office of Professional Responsibility for allegations he was involved in politicizing hiring and firing decisions at the Justice Department. He is also a subject of the congressional probe into the U.S. attorneys firing scandal.

Last year, the 36-year-old Kansas native took a U.S. attorney post in Missouri after its previous holder, Todd Graves, was dismissed. Graves has said he refused to sign off on a lawsuit involving the state's voter rolls. The suit went forward anyway. This year, a court ruled against the Justice Department in the matter. The department is appealing the ruling.  Schlozman had backed the case from Washington.

Click Here for Full Blotter Coverage.

Once he became a U.S. attorney, Schlozman apparently broke with Justice Department policy, by filing a criminal voter fraud indictment against a liberal activist group within a week of the 2006 election. A department manual instructs staff that "most, if not all, investigation of an alleged election crime must await the end of the election to which the allegation relates."

His actions sparked concerns from many quarters, including veteran Justice Department attorneys, that he was attempting to influence the election for a U.S. Senate seat, which was close. They also fueled a growing belief among congressional Democrats that the dismissal of Graves and several other U.S. attorneys was part of an effort to use U.S. attorneys' offices for the benefit of the Republican party.

A federal judge dismissed the case in April. Schlozman told a Senate panel in June he did not believe his actions were going to influence the election, and that he was unaware of the group's political leaning.

During his time at Justice, Schlozman was no stranger to controversy. He was reportedly one of the handful of Bush appointees at the Justice Department who signed off on a 2003 plan to redraw Texas congressional districts and create more Republican-controlled seats, designed by then-House Majority Leader Tom DeLay, R-Tex. The plan was opposed by career lawyers under him, who believed it disenfranchised minority voters. The Supreme Court later ruled parts of the plan were unconstitutional.

In 2003, Schlozman became a senior official at the department's Civil Rights division, which reviews and prosecutes cases of voter disenfranchisement. During his tenure, dozens of career lawyers left the office after sharply disagreeing with him and other political appointees over how to handle important cases.

Those departures, along with boasts by Schlozman that he increased the number of Republicans he had hired into the department, have driven concern that Schlozman brought an improper focus on political affiliation and activity at the Justice Department. Schlozman has denied those accusations, although he acknowledges he may have boasted about the number of Republicans he had hired.

Schlozman's resignation, which was first reported by the Web site TPMmuckraker.com, makes him the sixth figure connected to the U.S. attorney scandal to resign in recent months.

A Justice Department spokesman said Schlozman was moving to the Midwest to join a law firm there. Schlozman did not immediately respond to a request for comment for this story.

Photo courtesy of the Justice Department.

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This post has been revised.

August 22, 2007 | Permalink | User Comments (58)

CIA Report Blames Tenet for 9/ll Failure

August 21, 2007 2:22 PM

Brian Ross Reports:

Former CIA director George Tenet "bears ultimate responsibility" for failing to create a strategic plan to stop al Qaeda prior to 9/ll, according to a review by the CIA's inspector general that was made public today, more than two years after it was written.

The report says that while Tenet wrote he wanted "no resources or people spared" in going after al Qaeda and Osama bin Laden, neither he, nor his deputy, "followed up these warnings and admonitions by creating a documented, comprehensive plan to guide the counterterrorism effort."

"I know now why Tenet worked so hard to kill this report," said former White House counterterrorism official Richard Clarke, now an ABC News consultant.

World News Video: CIA Failures Leading Up to 9/11 Exposed

In a written statement, Tenet, who received the Medal of Freedom from President Bush, said the report was "flat wrong." Tenet said the inspector general failed to interview him. "He fails to understand how intensely I pushed the counterterrorism issue," Tenet said.

The current CIA director, Gen. Mike Hayden, said the report was being made public "against his wishes" but as required by law. Hayden said he, like his predecessor Porter Goss, had no plans to punish CIA officials cited in the report.

Click Here for Full Blotter Coverage.

In recounting intelligence failures prior to 9/ll, the inspector general said there was neither "a single point of failure nor a silver bullet" that would have enabled the CIA to predict or prevent the 9/ll attacks.

But the report concludes there were "failures to implement and manage important processes, to follow through with operations, and to properly share and analyze critical data."

The report says Tenet "did not use all his authorities in leading the IC's (intelligence community's) strategic effort" against bin Laden.

"That's not fair," said ABC News consultant Clarke. "Of course there was a strategic effort, and he did raise the issue at the highest levels of government."

Vote: Do you think Tenet is to blame for failing to stop al Qaeda before 9/11?

And the report provides new details of the CIA's failure to alert the FBI that two al Qaeda operatives, who would be among the 9/ll hijackers, had entered the United States.

According to the report, "some 50 to 60" inside the CIA read "one or more of six Agency cables" that reported the two men had flown through Bangkok to Los Angeles.

The cables "were read by overseas officers and Headquarters personnel, operations officers and analysts, managers and junior employees," the report says, but over the course of 18 months, no one from the CIA shared the information with the FBI or sought to put the names on the State Department's terror watch list.

"That so many individuals failed to act in this case reflects a systemic breakdown," the report concludes. "Basically, there was no coherent, functioning watch listing program," it says.

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August 21, 2007 | Permalink | User Comments (126)

Book: Wanted Criminal Flew U.S. Supply Missions in Iraq

August 21, 2007 12:53 PM

Justin Rood Reports:

The U.S. government paid a wanted international criminal roughly $60 million to fly supplies into Iraq in support of the war effort, a new book alleges.

Intelligence officials have considered arms merchant and international trafficker Viktor Bout one of the greatest threats to U.S. interests, in the same league as al Qaeda kingpin Osama bin Laden. Interpol has issued a warrant for his arrest; the United Nations Security Council has restricted his travel.

Yet from 2003 through at least 2005, Pentagon contractors used air cargo companies known to be connected to Bout to fly an estimated 1,000 supply trips into and out of Iraq, according to "Merchant of Death: Money, Guns, Planes, and the Man Who Makes War Possible."

It could have been worse, the authors report. Shortly after the Sept. 11, 2001 attacks, Bout -- whose arms shipments to the Taliban regime in Afghanistan were believed to have aided al Qaeda -- pitched the CIA a multi-million dollar proposal to help rout the Taliban from the country and capture Osama bin Laden, according to Douglas Farah and Stephen Braun.

Farah is a former reporter for the Washington Post; Braun is a national correspondent for the Los Angeles Times.

Click Here for Full Blotter Coverage.

The deal never came together. But Bout found business with the United States in 2003, flying supplies into newly-invaded Iraq as a subcontractor to U.S. military contractors, including Fluor and Kellogg, Brown and Root (KBR), the authors say, citing military flight records as evidence. The flights continued even after President Bush signed an order banning Americans from doing business with Bout or his associates, the authors report.

A spokeswoman for KBR acknowledged to the authors the company had hired a Bout-connected cargo firm through an intermediary, but that it had no knowledge of the ties at the time. A request for comment to the Fluor Corporation from ABC News was not immediately answered.

In a January 2005 letter to Congress, then-Assistant Defense Secretary Paul Wolfowitz admitted the Defense Department "did conduct business with companies that, in turn, subcontracted work to second-tier providers who leased aircraft owned by companies associated with Mr. Bout."

Defense officials were busy making sure Bout's planes no longer flew for the United States, he wrote. Nine days after Wolfowitz's letter, a Bout-controlled plane touched down in Mosul, Iraq, according to the book's authors.

Bout's work in Iraq first became public in a May 2004 article in the Financial Times newspaper. CIA officials in Washington secretly warned colleagues in Baghdad of the ties in fall 2003, the authors report. "It would appear...that it did not make its way to the correct folks," the two quote an unnamed CIA official as saying.

In an interview with the Blotter on ABCNews.com, Farah said he and Braun calculated the number of flights by Bout-owned planes by reviewing U.S. Air Force fueling logs, military flight records and interviewing U.S. military officials and private air cargo contractors.

Bout didn't just walk away with millions of taxpayer dollars, the authors found. The military issued Bout's pilots supply cards allowing them to gas up their planes for free when landing in Iraq. A Defense Department spokesman confirmed to the authors that Bout's fleet made off with nearly 500,000 gallons of fuel from the Baghdad airport courtesy of the U.S. Air Force.

Bout made his fortune in the 1990s selling Soviet-era weaponry to Third World despots and insurgent groups. Using a "veiled, complex corporate structure," Bout dispatched fleets of Cold War-era Soviet cargo planes to some of the most inhospitable corners of the earth, running guns for dictators, including Liberia's Charles Taylor and Zaire's Mubuto Sese Seko, as well as rebel leaders in Angola, Sierra Leone and beyond. By 2000, U.S. government officials considered him one of the leading threats to the United States, on par with Osama bin Laden and global warming.

Bout was the inspiration for the 2005 film, "Lord of War," starring Nicolas Cage as an international arms dealer who will sell to all sides of any conflict. Bout reportedly rented his planes to the movie's producers for use in the film.

Bout's net worth is not known, Farah told ABCNews.com, but a conservative estimate is "in the tens of millions of dollars." Bout now lives in Moscow, Russia, he said, and travels on false passports because of an international travel ban. An e-mail to Bout's lawyer for comment was not returned.

"Bout pulled off the ultimate metamorphosis," the authors write, "from hunted international criminal to the U.S. military's secret deliveryman."

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This post has been revised.

August 21, 2007 | Permalink | User Comments (32)

Pakistan Computer Expert With Alleged Al Qaeda Ties Released

August 21, 2007 11:21 AM

Habibullah Khan and Maddy Sauer Report:

The man whose arrest in Pakistan three years ago led to a terror alert at financial centers in New York, New Jersey, and Washington D.C., has been released in Pakistan.

While the arrest and computer seizure of Mohammed Naeem Noor Khan made big headlines in August 2004, it turns out he may have been cooperating with Pakistani authorities before his arrest.

"Khan apparently had agreed to cooperate with Pakistani officials and was engaged in a sting operation against al Qaeda when his name showed up in the U.S. press as part of a story about planned attacks in the U.S., which appeared during the U.S. presidential election," according to Richard Clarke, an ABC News consultant and former U.S. counterterrorism official. "Khan may have bargained for an early release because he cooperated."

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A lawyer for Khan told the Blotter on ABCNews.com his client was never charged with any crime since his detention in July 2004.

U.S. officials said following Khan's arrest, they believed he had played a key operational role in gathering information about American targets.

When authorities recovered Khan's laptop computer, they said they found detailed pictures and surveillance reports on several financial targets in the U.S. along with what was then identified as plans for a coordinated series of attacks on the London subway systems.

The computer files were written in English and contained narration of the travels of al Qaeda members throughout the financial buildings in the U.S., offering step-by-step commentary with rich details, according to law enforcement sources.

Following his arrest, Khan reportedly provided information that led to a series of arrests in the United Kingdom.

The State Department did not immediately reply to requests for comment on his release today.

This post has been updated.

Click Here for Full Blotter Coverage.

August 21, 2007 | Permalink | User Comments (5)

Senate Acts, Bureaucrats Stall on FOIA Requests

August 20, 2007 3:52 PM

Mike Mitchell and JR Santo Report:

Just days after the Senate unanimously passed the OPEN Government Act, a new report asserts that information grants from federal agencies to Freedom of Information Act (FOIA) solicitations remain infrequent and limited.

"There's always been a tendency for agencies to look at information as their own and be possessive about it," said Pete Weitzel of the Coalition of Journalists for an Open Government, a government watchdog group that produced the report. 

According to the analysis, of all FOIA requests processed by the government in 2006, only 64 percent received information grants, and less than two-thirds of these recipients received full grants, or grants that hand over all requested information. The lowest response rate ever recorded for a given year is 63 percent, set in 2005.

The report also states that backlog -- requests not processed at all during a given year -- hit a record high of 39 percent in 2006, even though the number of incoming requests hit a record low. 

Although the government has allocated more taxpayer dollars to FOIA-related expenses over the years, efficiency in response service has declined.

Click Here for Full Blotter Coverage.

Weitzel believes that some solutions to government secrecy "will follow the passage of the OPEN Government Act," which passed in the Senate two weeks ago and contains the first major reforms to FOIA in over a decade. The Act, if passed in the House, plans to create a FOIA ombudsman position and restore meaningful FOIA deadlines across all federal agencies.

He also calls for the "full implementation of the president's executive order from December 2005," in which President Bush urged government agencies to improve their FOIA services.

According to the Coalition, most agencies repeatedly miss the 20-day deadline for responding to information requests. In fact, some agencies missed the government's annual deadline for reporting their FOIA performance data by up to four months.

FOIA solicitations in recent years have induced the release of significant information, such as last year's release of video footage showing the 9/11 attack on the Pentagon.

While the Coalition calculates a 42 percent decrease in full grants from 1998 to 2006, their portrait of the government's FOIA services may be overly condemnatory.

The group's analysis ignores that fewer overall requests were submitted in 2006 which accounts for much of the decrease in grants. The true percentage of decline in full grants is actually only 15 percent.

Nevertheless, the group's fundamental analysis reveals a growing problem with FOIA responses.

"You can look at these numbers in a lot of different ways," Weitzel told the Blotter on ABCNews.com when asked about this calculation. "I thought the way we did it highlighted it more dramatically."

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August 20, 2007 | Permalink | User Comments (4)

Court Ruling Challenges Feds' Secrecy

August 20, 2007 12:41 PM

Justin Rood Reports:

A new court decision could begin to roll back some post-9/11 government secrecy that has forced nearly two dozen intelligence-related cases out of federal courts without rulings.

In a ruling unsealed last month, a federal appeals court questioned the application of the so-called "state secrets" privilege, which government lawyers can use to encourage a judge to drop a case by arguing it jeopardizes national security.

By using the privilege, government lawyers assert that if the case were to continue, they could be forced to divulge secrets that are vital to the nation's security. If judges agree -- as they nearly always do -- they dismiss the case.

In a secret June ruling, the D.C. Circuit Court of Appeals overturned the dismissal on those grounds of a 1994 suit by a former Drug Enforcement Administration official who claimed the U.S. government had illegally wiretapped his communications when he was working out of Rangoon, Burma.

The state secrets privilege was not broad enough to throw out the entire case, the court ruled. With sufficient unclassified evidence already on hand, the court determined the case should be allowed to proceed.

Click Here for Full Blotter Coverage.

The ruling could have an impact on current lawsuits involving classified programs, including suits against AT&T and the National Security Agency over the Terrorist Surveillance Program (TSP), which is alleged to have involved data and communications of Americans, according to experts.

The government has tried to get some of those cases dismissed in their early stages by claiming the state secrets privilege; so far, the courts have allowed the suits to proceed.

The U.S. government used the state secrets claim sparingly from its creation in 1953 to 2001, but it has invoked it in roughly two dozen cases between the Sept. 11, 2001 terrorist attacks and last year, according to a 2006 report by the watchdog coalition OpenTheGovernment.org.

Government lawyers have used the state secrets claim to successfully derail a suit by Maher Arar, the Syrian-born Canadian citizen who was detained in the U.S. and then "rendered" to Syria, where he says he was tortured. Subsequent investigations have determined Arar had no ties to terrorism. In a separate trial in Canada, Arar recently won a $15 million judgment against the Canadian government for its role in his mistreatment.

The state secrets claim also derailed a suit by German national Khaled el-Masri, who said he was mistakenly kidnapped, tortured and held for five months by U.S. operatives as part of the controversial anti-terrorist "extraordinary rendition" program.  A State Department official has reportedly said el-Masri was released because there was insufficient evidence to justify his detention, and U.S. government officials have repeatedly denied that the CIA engages in torture.

"We are starting to slowly see the courts take a step back and raise legitimate questions about the executive branch's invocation of the privilege," said Mark Zaid, a Washington, D.C. lawyer who specializes in intelligence-related lawsuits.

Steven Aftergood, a government secrecy expert, noted the ruling coincided with a new resolution from the American Bar Association urging federal courts not to toss civil cases "solely on the state secrets privilege."

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August 20, 2007 | Permalink | User Comments (8)

Report: Governmental 'Turf Wars' May Put Nation at Risk

August 20, 2007 10:33 AM

Alexandra Bahou Reports:

A terrorism case in Miami, Fla. may have been jeopardized because of infighting between government agencies, according to a new joint report issued by the departments of Homeland Security and Justice.   

A lack of information exchange between the FBI and Immigration and Customs Enforcement (ICE) threatened the investigation, according to the report. After the case was transferred to the Joint Terrorism Task Force, the report says ICE field agents refused to interview a suspect and train the FBI agents. Four targets were eventually indicted, but the investigation of one other suspect had to be transferred to another team. 

"Historically, all these agencies have squabbles...it's all about territory and control," said Brad Garrett, a former FBI agent and now an ABC News consultant. "It's like battle lines...fight for a while, retreat and fight again...agencies don't like anybody intruding."

The Department of Homeland Security would not disclose the details of the Miami case to ABC News, but denied that problems with the FBI put the case at risk.

"The report is not an accurate characterization of our relationship with the FBI, and we have a strong history of working together to protect national safety," said Barbara Gonzalez, a Homeland Security spokeswoman in Miami.

Click Here for Full Blotter Coverage.

According to the report, however, "turf wars" are nothing new.

The report found that seven out of 10 terrorist financing cases lacked the proper attention because of poor cooperation between the FBI and ICE.

Nine ICE agents from three field offices and ICE headquarters have said they or other agents ignore or drop leads that may be terrorist-related in order to go forward in the case without involving the FBI, according to the report.

Members of ICE have also accused the FBI of delaying or refusing investigative actions that require court approvals, such as obtaining search warrants.

Sen. Charles E. Grassley, R-Iowa, requested the departments conduct an investigation after former ICE special agent in charge out of Texas, Joseph Webber, accused the FBI of delaying approval for an electronic surveillance warrant in a terrorist financing investigation, according to the report.

"Unfortunately, the committee is aware of at least one case where national security may have been the casualty of bureaucratic infighting," Sen. Grassley wrote in a letter to the attorney general and the secretary of the Department of Homeland Security. "Such infighting should never be tolerated when national security is on the line, and America needs strong leadership from both of you to ensure that it is not."

The infighting stems from a 2003 memorandum of agreement (MOA) that was designed to improve the working relations between the two organizations in cases dealing with possible terrorist financing operations after 9/11, according to the report. The report says problems arise from misperceptions surrounding the agreement and the lack of training for both ICE and FBI agents.

"Quite simply, I have witnessed the horrors of a terrorist attack upon our Homeland and I am appalled that any Government entity in a post 9-11 environment would engage in such subterfuge," Webber wrote in a letter to Sen. Grassley.

The MOA credits the FBI as the leader in terrorist financing cases and created a system designed to identify and transport ICE terrorism cases to the FBI-controlled Joint Terrorism Task Force. This is where the "turf-wars" result in ignored or dropped leads by customs enforcement to avoid interaction with the federal agents, according to the report.

The report stated that of the roughly 7,274 ICE cases and leads the DHS reviewed, only 11 were transferred to the Joint Terrorism Task Force under the memorandum.

Dennis Lormel, former head of the FBI terrorist financing unit and senior vice president of Corporate Risk International, said the non-transferred cases were likely to be of lower priority.

"I don't think there were any threats that were not addressed, or any terrorist issue that didn't go addressed by virtue of this problem," he told ABC News.

Lormel also said that although interagency issues are inevitable, the memo has been positive in trying to improve cooperation. 

"I haven't heard of problems like there were prior to that memo...for the most part, cases have been handled better than they were earlier on, but there is always room for improvement," he said.

The apparent shortcoming of the memorandum has caused the DHS to issue two recommendations to both the FBI and ICE in an attempt to establish a more functional cooperation and coordination with the two organizations. According to the report, all four recommendations were acknowledged, but the changes have yet to be seen.

Cooperation between the two agencies is critical and will require more training and communication, according to Lormel.

"First, it starts with training and an understanding of what the purpose of this memo is and its importance. [Also] leadership on both sides to demonstrate that cooperation needs to filter down to the working level agents...lines need to be open as much as they can be for exchange of information and ideas," he said.

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August 20, 2007 | Permalink | User Comments (3)

$25.8 Million Verdict in Walgreens Wrongful Death Suit

August 17, 2007 9:40 PM

Dana Hughes Reports:

A Florida jury has awarded damages of $25.8 million to the family of a mother who died following a misfilled prescription by a high school technician at a Florida Walgreens store.

A "20/20" report last March investigating prescription drug errors featured the case of Beth Hippely, a stay-at-home mother of three children who suffered a massive stroke after Walgreens dispensed the wrong dosage of a powerful blood thinning medication to her.

Watch the video of Brian Ross' Investigation on "20/20."

The mistake crippled her and forced her to stop her needed chemotherapy. She died earlier this year after her cancer returned.

"The jury found that the negligence of Walgreens not only caused her initial brain injury, but also found it was the cause of her breast cancer recurring and subsequently her death," said Hippely attorney Chris Searcy.

In Hippely's case, a 19-year-old pharmacy technician mistakenly gave her a prescription of Coumadin that was 10 times more powerful than what she was prescribed. The drug, a potent blood thinner, was prescribed to Hippely while she was being treated for breast cancer.

Walgreens' policy is that technicians are not supposed to fill actual prescriptions without the supervision and final approval from a pharmacist.

The jury deliberated less than four hours before rendering a verdict, according to Karen Terry, another Hippely attorney.

"This is a case of profits over safety where a company's aggressive growth strategy resulted in a tragic prescription error," said Terry.

She said the verdict's announcement was "the first time I've seen Mr. Hippely smile in the three years I've represented him...He lost his wife. He's never going to get her back, but he feels vindicated."

A spokesperson for Walgreens told the Blotter on ABCNews.com that the company is "truly sorry for what the Hippely family has been through, and we've personally apologized to them. We have been, and continue to be, the leader in pharmacy safety initiatives. We had hoped the verdict would have been fair and reasonable."

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August 17, 2007 in Pharmacy Investigation | Permalink | User Comments (48)

Secret White House Manual: How to Stop Anti-Bush T-Shirts

August 17, 2007 12:16 PM

Justin Rood Reports:

The Bush administration has agreed to pay $80,000 to a husband and wife who were ejected from a presidential rally because of their anti-Bush T-shirts.

The settlement ends a suit brought by a Texas couple and the American Civil Liberties Union, claiming the couple's First Amendment rights were violated when they were arrested and removed from a taxpayer-funded event featuring President Bush because their shirts read "Love America, Hate Bush" and "Regime Change Starts at Home."

Jeffery and Nicole Rank refused directions from event staff and law enforcement to cover up their shirts at a July 4, 2004, West Virginia rally featuring President Bush. The pair were arrested, detained and charged with trespassing. The charges were later dismissed.

Brian Ross Investigates: Campaign Rallies Against Wrong T-Shirts

The settlement, in which the government admitted no wrongdoing, came after the disclosure of an allegedly "sensitive" Presidential Advance Manual, which laid out the White House's meticulous efforts to protect the president and his public image from dissent.

"As a last resort, security should remove the demonstrators from the event," the manual instructs. The government turned over a heavily redacted version of the manual to the ACLU in the course of the lawsuit.

The first step to keeping demonstrators out of events, the manual tells the president's event staff, is to encourage the Secret Service to "ask the local police department to designate a protest area...preferably not in view of the event site or the motorcade route."

Watch Brian Ross' '04 Investigation on "Good Morning America"

Inside the event space, the manual advises, White House advance personnel should preposition "rally squads" that can swarm any protesters at the event and "use their signs and banners as shields between the demonstrators and the main press platform."

The rally squads can be formed using "college/young republican organizations, local athletic teams, and fraternities/sororities," the manual notes.

The squads can "lead supportive chants to drown out the protesters (USA!, USA!, USA!)," it suggests.

In a 2004 investigation, ABC News found such tactics were apparently used by the Democratic Kerry presidential campaign as well. In that investigation, ABC News producers wore T-shirts featuring the opposing candidate to campaign-sponsored rallies. Bush aides instructed producers to leave the presidential re-election rally; at a Kerry rally, they were surrounded and followed by a team of dancing Democratic campaign workers with large signs.

The manual is stamped "SENSITIVE – DO NOT COPY." Its cover warns readers that "it is a violation of Federal law to duplicate or reproduce this manual without permission. It is not to be photocopied or released to anyone outside of the Executive Office of the President, White House Military Office or United States Secret Service."  It is currently posted on the ACLU's Web site, and available here.

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August 17, 2007 | Permalink | User Comments (71)

Father of Kidnapped Toddler Dies

August 16, 2007 1:30 PM

Dana Hughes Reports:

The father of a 3-year-old British girl kidnapped at gunpoint last month by Nigerian militants has died, according to a spokesperson for the British Foreign Office. He apparently postponed needed medical treatment because of his daughter's abduction.

Mike Hill was a British expatriate oil worker living in the oil-rich Niger Delta region with his wife and their daughter, Margaret, when gunmen took the girl at gunpoint on her way to school. The captors warned the family they would kill the girl if her father did not swap places with her and pay a ransom.

The girl was released unharmed two days later, and according to another Nigerian militant group who pressured the child's captors, without any ransom being paid.

But British media reports say that because of the kidnapping, Hill postponed a trip back to the U.K. to receive medical treatment for kidney failure and has now died as a result.   

In the last three years, kidnap-for-cash has become an increasing problem in the Niger Delta. More than 150 foreign oil workers have been kidnapped in this year alone. In previous years, most of the kidnappings were undertaken by the organized militant group Movement to Emancipate the Niger Delta (MEND), or groups similar, who demand that the impoverished residents in the Niger Delta receive more of the billions of dollars of oil revenue. 

Click Here for Full Blotter Coverage.

Jack Cloonan, an ABC News consultant and hostage negotiator, deals with kidnappings in Nigeria frequently. He says families of hostages are under enormous stress in any situation, but says Margaret Hill's kidnapping was one of the more brazen acts he has seen. 

"Here's a guy living off the economy, married to a Nigerian, and they take his kid," Cloonan said. "To target kids is as nasty as it gets."

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August 16, 2007 | Permalink | User Comments (7)

Report: Governor's Allies Won Big After Katrina

August 16, 2007 1:08 PM

Justin Rood Reports:

Hurricane Katrina was a disaster for hundreds of thousands of residents of the Gulf Coast. But for some family and friends of Mississippi governor and GOP power broker Haley Barbour, it was quite profitable, according to a new report by Bloomberg News.

In particular, Barbour's nephew and the governor's former lobbying firm saw turns of good fortune from work connected to rebuilding Mississippi after the catastrophic storm, the news service reports.

There is no evidence the governor or his nephew have violated the law.

"Katrina brought in a tide of money. Some benefited," said Keith Ashdown of Taxpayers for Common Sense, a Washington, D.C.-based nonprofit that watchdogs government spending. "It looks like the folks close to the governor did very well."

The governor's office declined to comment for this story.

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Nephew Henry Barbour, a state lobbyist and former campaign adviser to his uncle, saw his income more than double after the storm hit, Bloomberg's analysis found. Firms paid large fees for his services, and his uncle made him executive director of the Governor's Commission on Recovery, Rebuilding and Renewal.

Two of Henry Barbour's clients won business with the state for tasks recommended by Governor's Commission, the news service reported.

Henry Barbour told Bloomberg he had taken "a leave of absence" from lobbying while he served on the panel, for which he received no pay. During that time, his annual lobbying income grew from $183,000 to $379,000, Bloomberg reported. The federal government later recognized him and his fellow panelists with a "Gulf Guardian Award" for their efforts.

Finance company Government Consultants paid Henry Barbour's firm $65,000 from July 2005 through 2006, according to records reviewed by the news service. Bloomberg reported the company earned at least $400,000 in fees for issuing Katrina-related bonds for Mississippi -- issuances that were recommended by the Governor's Commission. The firm did not return a request for comment from ABCNews.com.

A Massachussetts-based engineering firm, Camp Dresser & McKee (CDM), paid Henry Barbour's firm $15,000 in lobbying fees, Bloomberg found. Later, the state chose it to work on a $3 million study of water management systems in six counties. Another client of Henry's firm, Waggoner Engineering, also worked on the project, according to Bloomberg.

Henry Barbour told Bloomberg he played no role with state bond issues, and his firm had decided not to accept new recovery-related clients after Katrina hit.  A phone message left with his firm Thursday was not returned.

Henry Barbour managed his uncle's gubernatorial campaign in 2003. Senior executives at both Government Consultants and CDM contributed thousands of dollars to the governor's re-election campaign in 2006, the news service found.

Former colleagues at the governor's old Washingto