You will be redirected to the page you want to view in  seconds.

Army bars propaganda firm principal from deals

Jun. 20, 2012 - 08:25AM   |   Last Updated: Jun. 20, 2012 - 08:25AM  |  
  • Filed Under

The Army has suspended the co-owner of the military's top propaganda firm in Afghanistan from receiving federal contracts after revelations about the owners' tax debts and the admission by one owner that he launched an online campaign against journalists, according to government documents.

Rep. Hank Johnson, D-Ga., a member of the House Armed Services Committee, asked Defense Secretary Leon Panetta on Tuesday to expand the Pentagon investigations into Leonie Industries. In a letter, Johnson cited allegations that the company may have misrepresented its finances while bidding for federal contracts and had started an online smear campaign directed against two journalists.

Those actions, Johnson wrote, "suggest a pattern of malice, dishonesty, and incompetence that renders Leonie Industries unsuitable for continued service as a federal contractor. The intimidation of journalists, in particular, is unacceptable. The notion that taxpayers' dollars would go to such a company is abhorrent."

Camille Chidiac, who owns 49 percent of Leonie Industries, was placed on a list of people ineligible to receive federal contracts, effective May 30.

Chidiac acknowledged May 24 that he established websites in the names of journalists who had written about the company and Chidiac's unpaid taxes.

The Pentagon denounced the sites as a smear campaign.

Despite the suspension,Chidiac retains his ownership stake in the company, which has been paid more than $120million in federal contracts since 2009. He announced May 24 he would "divest" from Leonie but has not done so, Leonie spokesman Gar Smith said.

Lt. Col. Wayne Wallace, an Army debarment and suspension official, said Chidiac is the only person connected to Leonie the Army is currently pursuing debarment against.

Chidiac's suspension should not affect Leonie's contracts, Smith said. Chidiac is not an employee or officer of the company and has not been involved in its contracts since 2008, Smith said. He set up the websites on his own, not on behalf of Leonie, Smith said.

The Army does not comment on proceedings regarding specific contractors, Army spokesman George Wright said.

This month, Pentagon criminal investigators started an inquiry into taxes paid by Leonie's owners and treatment of the company's Afghan employees.

USA Today reported in February that Leonie's owners owed more than $4 million in unpaid federal taxes. That debt was settled in March, federal records show.

Last month, Johnson introduced an amendment that would have cut $122 million for military information operations, calling the program a "fiasco." He withdrew the amendment over concerns that it might harm troops in combat.

Answers by RallyPoint

Join trending discussions in the military's #1 professional community. See what members like yourself have to say from across the DoD.

More In News

Start your day with a roundup of top defense news.

VA Home Loan

Search By:

Product Options:
Zip Code:

News for your in-box

Sign up now for free Military Times E-Reports. Choose from Money and Education. Subscribers: log in for premium e-newsletters.

This Week's Army Times

This Week's Army Times

CrossFit vs. unit PT
Troops will do the training plans in a $2.5 million study

Subscribe for Print or Digital delivery today!

MilitaryTimes Green Trusted Classifieds Looking to buy, sell and connect on Military Times?
Browse expanded listings across hundreds of military installations.
Faces of valorHonoring those who fought and died in Operations Iraqi Freedom and Enduring Freedom.
hall of valorThe Hall of Valor is a searchable database of valor award citations collected by Doug Sterner, a Vietnam veteran and Military Times contributing editor, and by Military Times staff.

All you need to know about your military benefits.

Benefits handbook

Guard & Reserve All you need to know about the Guard & Reserve.

guard and reserve handbook