PLEASE CLICK

Replacement Parts
How the FDA allows faulty, and sometimes dangerous, medical devices onto the market
By Kit R. Roane
Posted 7/21/02

As a busy urologist in Madison, Wis., Michael Kuglitsch saw firsthand the pain and suffering of the more than 10 million American women afflicted with incontinence. The condition was more than embarrassing; it was debilitating. So Kuglitsch was intrigued when a salesman from Boston Scientific Corp. came by with a new product back in 1997 that promised to make corrective surgery less painful and more effective. The ProteGen Sling, a synthetic material designed to support the bladder, had just been approved by the Food and Drug Administration. And if the salesman was to be believed, it worked like a charm.

Kuglitsch began implanting the device in patients. But many soon developed problems. Instead of returning to their normal lives, as expected, most of the patients began to experience extreme discomfort and infection around their implants. Three lost all their hair and fingernails, Kuglitsch said. Later investigation revealed that many of the devices were wearing through patients' vaginal or urethral walls. "It finally reached the point," Kuglitsch said, "where I was removing them every week."

What Kuglitsch didn't know, until the product was pulled from the market and the first of some 600 lawsuits was filed, was that Boston Scientific had received more than 100 similar complaints by the time he stopped implanting the device in September 1998. Internal company documents show that the manufacturer didn't tell the FDA about nearly 400 more. More shocking to Kuglitsch was that the FDA had approved the sling for incontinence surgery without requiring any new testing. In fact, the sling, like 98 percent of the 80,000 medical devices on the market today, was approved through a streamlined process that requires data to show only that a product is similar to one already in use.

Big business. Today, 1 in 10 Americans is walking around with some kind of synthetic body part. Pacemakers, defibrillators, heart valves, knee joints, and spinal-fusion screws help make the lives of many of these people less painful and more livable. They have also created a big business. Industrywide, revenues top $78 billion a year. Unsurprisingly, lots of upstart companies want a piece of the pie. In just the past five years, the number of manufacturers of medical devices has risen from just over 9,000 to more than 13,000. An aging population and new technologies are expected to fuel substantial growth for some time to come.

Amazing as these devices are, many of them have caused chronic pain and crippled patients. In rare cases, they have killed people. There are few hard statistics, but from 1990 to 1999, according to the independent medical research organization ECRI, the number of recalls of implantable devices has nearly tripled, from 35 to 104 a year, with a single recall sometimes affecting thousands of patients. The problem, critics say, is an FDA approval process that allows faulty devices to be marketed before they have been properly tested and the agency's inability to adequately monitor devices once they are in use. "If we keep this up," says Arthur Kaplan, chairman of the Department of Medical Ethics at the University of Pennsylvania, "we will end up with a device that slips through and takes a lot of lives."

Pendulum. Not long ago, it was generally agreed that the FDA took far too long to approve new drugs and devices. Following the furor over silicon breast implants in the early 1990s, the FDA tightened controls to such an extent that the approval time for new devices doubled--often to two years--and many good products were stalled. The successful Omnicarbon Heart Valve, for instance, was approved for American patients only this year--15 years after it had been approved overseas. Manufacturers also say the old FDA was too aggressive in pushing for recalls and nitpicked during inspections. "Companies were afraid to complain about warning letters received at a factory," said Thomas Thompson, who helped form the Medical Device Manufacturers Association, "because if they said something, the FDA would shut down two more plants in retaliation." Such fears caused some manufacturers to hide bad data from the FDA, he said. "There were reasons to do it."

But now, after intense congressional lobbying by manufacturers to speed up the process, the pendulum has swung too far the other way, critics say. Under the FDA Modernization Act of 1997, the agency allows many new devices to be marketed before full-scale clinical trials--a system that essentially approves products first and asks questions later.

The system can be problematic even when companies are honest and their data thorough and true. But a U.S. News examination of several recent approvals shows that the FDA is often unable to guarantee that medical devices are safe or effective. Manufacturers can exacerbate the problem. Some have tried to push new products through with as little testing as possible. Others have fudged clinical data. Still others have failed to notify the FDA, as required, when their products malfunction. "The safety net is weak," says Robert E. Baier of the University at Buffalo, "and sometimes it seems like it is actually not installed."

By law, all of the approximately 7,500 manufacturers of the highest-risk devices must be inspected once every two years. But the FDA division charged with device safety, the Center for Devices and Radiological Health, has long complained that its annual funding--about $177 million--fails to keep up with its exploding workload. In addition to reviewing some 17,000 device submissions a year and inspecting more than 15,000 manufacturers, the division also must inspect more than 29,000 mammogram facilities, radiological health firms, and clinical trial investigators.

The result? Between 1995 and 2000 the number of inspections of medical-device firms in the United States dropped by nearly half--from 3,602 to 1,841. Clinical trial sites run by these companies are inspected even less often; FDA inspectors examined only 575 of more than 15,000 clinical sites in 1999. When the FDA does inspect manufacturers and lab sites, according to the private consulting firm warningletters.com, it finds violations in 1 out of every 7 or 8 cases. Common violations include failing to assure that a device is being made correctly and failing to submit data about deaths and injuries.

Under pressure from Congress and the Bush administration, the FDA has instituted industry-friendly measures that critics say further compromise safety. One policy requires inspectors to notify manufacturers in advance of inspections. The agency has also loosened requirements to track certain high-risk devices, although it says it intends to keep tracking many. It has exempted companies from submitting many adverse-event reports after a device has been recalled or repaired. And it is considering allowing manufacturers with good records to inspect their own facilities.

Yet it is the policy of allowing companies to collect most clinical data after a device is marketed that most troubles longtime FDA observers like Jeffrey Lerner, president of ECRI. It is, he says, nothing short of "experimenting on people." The policies look even worse, he says, in light of reports that manufacturers are violating requirements to keep patient registries and to closely monitor their products. "If a company doesn't follow through, we don't have much clout to force them," one FDA official concedes.

Risky business

Medical devices can be approved in one of two ways, depending on how risky or innovative they seem. Under the pre-market approval (PMA) process--generally used for new implantable devices that might do medical harm--manufacturers must conduct rigorous clinical tests before the products can be used on the public. However, the vast majority of devices are approved under the faster process known as 510(k), for the section of the law that applies. Usually under 510 (k) approval, manufacturers need only show that their new device is "substantially similar" to an existing approved product. The intent of 510 (k) was to fast-track approval for devices--from next-generation catheters to new pectoral implants--that the FDA considered less worrisome. As the ProteGen sling shows, however, the absence of fresh data can have grave consequences.

Boston Scientific is a company known for a diverse line of products, including cardiovascular catheters and stents. In 1988, seeking to expand, the company entered a number of new fields, including urology. In 1995, it bought Vesica Medical Inc., which made a special kind of anchoring system used in incontinence surgeries. The anchor was paired with a woven polyester fabric coated with bovine collagen to make a vaginal sling. The fabric had been used predominantly as a patch in cardiovascular surgeries. The company claimed--and the FDA ultimately agreed--that the intended new use was substantially similar to its previous use. It was not.

According to a lawsuit filed against the company, Boston Scientific pushed for approval of the new use despite serious safety concerns raised by its own investigators. A class action lawsuit filed last year notes that on at least two occasions, Aug. 8, 1995, and Jan. 8, 1996, doctors urged caution with the intended new use, speaking of the "erosive qualities of synthetics" and the need for "animal data . . . before we give it serious consideration." Yet two months later, according to the complaint, Boston Scientific decided to seek immediate approval. It relied on a 90-day rat study by a company that originally tested the material as a vascular graft.

When a device contains more than one part, or is tailored for use with another device, the manufacturer is expected to inform the FDA about both pieces and how they will be used together. Boston Scientific, FDA documents show, submitted data describing only the material, not the anchoring system it would be used with. Critics say such omissions deprive regulators of important information that would be likely to lead to more scrutiny.

The FDA approved the sling on Nov. 15, 1996, agreeing that the product was "substantially equivalent" to other devices used to repair hernias, lungs, and hearts. But shortly thereafter, Kuglitsch, now a witness against the company, said he told Boston Scientific that many of his patients were not healing properly. Although he repeated these concerns throughout the year, Kuglitsch says company officials told him that he was the only one having trouble. But by November of the next year, when the company started its first study of the sling's long-term biocompatibility, the company already knew of at least 125 adverse reactions, FDA data show.

There was reason to worry, according to an April 1998 internal memo obtained by U.S. News. The author, apparently a consultant hired by Boston Scientific, complained that "[t]here is general concern among [sales representatives] regarding ongoing ProteGen complications and impact on overall business/company image." Twenty-seven percent of doctors who used the product most consistently had already decided to stop, the memo said. It went on to say that some sales representatives "question ProteGen's ability to foster tissue ingrowth," quoting one as saying he watched six removals and noted that the sling was "white and clean as out of the package; tissue doesn't want to heal into it." Far from expressing worry about patients, the memo questioned whether Boston Scientific's problems might make it lose out to competition from other "hot" sling products that were "setting [the] world on fire."

By June 12, 1998, according to another internal memo, salesmen had confirmed a 3.5 percent dehiscence (failure to adhere) and erosion rate and were saying that the rate of such complications was probably as much as 10 percent. Finally, in January, the company recalled the nearly 24,000 remaining slings on the market. The FDA later said it believed the product was not safe and effective for its prescribed use.

Boston Scientific claimed little responsibility for the sling's problems in a recall letter to doctors on Jan. 28, 1999. "Since the release of ProteGen, our reported adverse events have remained below 1 percent of units shipped," the letter says. Three months later, however, Boston Scientific sent its lawyers a study of 99 patients, which found that more than 30 percent of the patients experienced vaginal erosion after only five months. Paul Donovan, a spokesman for the company, said that "[w]hile the ProteGen Sling met or exceeded FDA requirements, the use of the product didn't produce the outcomes we wanted."

Fudging the data

Even when a medical device goes through the long and grueling post-market approval process, the product is not assured of being safe. Between 1994 and 1999, according to the FDA's Office of the Inspector General, medical device trials were twice as likely as trials for drugs and biologics to violate FDA regulations. The review of 189 regulatory letters found that 107 were issued against device manufacturers and that 78 percent of them cited violations such as missing data, poor data collection, and falsification of data. The findings "cast reasonable doubt on the efficacy and reliability of the current oversight process," the review said. Arthur M. Horowitz, a respected regulatory consultant to medical companies, estimates that research fraud and misconduct occur in up to 5 percent of all trials. "It's an industrywide problem that I believe is growing," said Horowitz.

Data falsification is particularly worrisome since it can lead to deaths and serious injuries. In 1993, C. R. Bard Inc., one of the world's largest catheter producers, pleaded guilty to 391 charges of healthcare fraud for submitting false data to the FDA when it applied for approval through the lengthy PMA process. Critics claim a defect caused some of the catheters to break, leading to at least one death and 22 emergency surgeries.

The scientific community has become increasingly concerned about data corruption, noting the large financial stakes investigators often have in the products they are testing. Unlike with capital-intensive drug research, the inventor of a medical device may also be the product's lead investigator, as well as the company CEO. Even with less severe conflicts, ethical questions remain. Just before the FDA approved the ProteGen sling, for instance, members of Boston Scientific's urological advisory board submitted a paper for publication by the American Urological Association saying the sling material was "a safe, biocompatible substance." The abstract failed to mention, although such disclosure was required, that two of the research doctors had received compensation--approximately $320,000 combined--from Boston Scientific.

The growing worry is that in hopes of a big payday or out of fear of losing their jobs, researchers with vested interests will rejigger tests to get the "right" results or hide data that raise concerns about the product. But even when investigators speak up about problems, the company paying for the research does not always want to listen. At least that was what two prominent doctors say happened when they tested an implantable weight-loss device and didn't like what they found.

The gastric LAP-BAND, made by California-based Inamed Corp., has been billed as a safe and easy weight-loss device for thousands of morbidly obese Americans. The band is inserted, wrapped around the middle of the stomach, and then tightened, making an hourglass shape that causes patients to feel full sooner. But the results of this procedure did not impress two researchers who conducted U.S. clinical trials between 1996 and 1998.

More than one third of the implants, the doctors say, had to be removed because of complications, and another third of the patients didn't lose anywhere near the weight advertised or necessary. Harvey J. Sugerman, chief of general and trauma surgery at the Medical College of Virginia and one of BioEnterics' research leaders, says the company discouraged him from publishing his data and attempted to circumvent the three-year trial mandated by the FDA. The company petitioned the FDA for approval after two years--without submitting the disagreeable data, he said. The FDA panel rejected the company's PMA application only after Sugerman presented his data without invitation.

Robert McIntyre Jr., who helped run another trial of the device at the University of Colorado-Denver, said he believed the company wanted early approval so it could "make the safety profile look better, so the true complication rate would not be discovered." Patricia Choban, one of the panel of experts brought in by the FDA to evaluate the LAP-BAND, agreed. "The data at three years was only going to get yuckier," she said. Despite these objections, the FDA granted BioEnteric's PMA application the following year. The FDA did demand new post-market trials, however. So far this year, the agency has received 469 adverse-event reports. One death, 34 injuries, and 446 malfunctions have been reported since January 2001. An FDA official says the agency is "very concerned" about these reports. The company has denied doing anything improper. Spokesman Peter Nicholson said that although the data from the U.S. studies were "not strong," other data were and the adverse events span many years.

Slaps on the wrist

Presenting the FDA with misleading or incomplete data can lead to recalls, civil fines, and even prosecution. Last year, for instance, an official of catheter maker Micro Interventional Systems was sentenced to 10 months in jail for submitting false testing data, concealing adverse events, and covering up test failures. And earlier this year, Gliatech, a Beachwood, Ohio, medical device company, agreed to pay $1.2 million in fines for submitting false data and committing other violations while testing an internally applied gel used to inhibit scarring.

But in most cases, the FDA seeks no punitive action--a reluctance to enforce the law that even its own chief counsel finds baffling. "Our review," said Daniel Troy in a recent speech to the Drug Information Association, "has often caused us to ask why [FDA investigators are] proposing a letter instead of a [law]suit."

More often, when a company fails to provide crucial data to the FDA, it gets a slap on the wrist. A case in point is the troubled history of a product known as the AneuRx aortic stent. The aortic stent is manufactured by device giant Medtronic, a leader in the development of implantable devices with $5 billion in annual revenue last year. In September 1999, Medtronic and a competitor, Guidant Corp., obtained FDA approval to market a product that both had long sought--a stent that would shore up weak areas of the aortic artery. Inserted through the groin and fished up to the aneurysm site, the stents can help patients avoid open surgery. More important for the manufacturers, they have a market estimated at 3 million people worldwide. But not long after the stents were introduced, they ran into trouble. How the two manufacturers handled the problems could not have been more different.

Guidant was the first to report difficulties. In March 2001, it revealed to the FDA that its salesmen had failed to report hundreds of device malfunctions and adverse events, mainly related to doctor error. An internal audit revealed numerous other problems. Guidant fell on its sword, recalling all of the stents it had on the market. (Later, the FDA allowed the stent for limited use with experienced doctors.) The effect on the company was devastating; it lost $15 million, and its stock plunged.

While Guidant was fighting for its survival, demand for Medtronic's stent, the AneuRx, surged. But it turns out that Medtronic's stent was not necessarily any better than Guidant's--just luckier. During the approval process, Medtronic committed its own omissions of fact. The sole purpose of the stent is to prevent ruptures, and the Medtronic data showed the device ruptured only twice among the 416 patients taking part in Phase II clinical trials. In fact, Medtronic had been informed of five other ruptures during its trials, yet it failed to report the ruptures to the FDA until at least a month after the product went on the market.

"Rampant" problems. Medtronic Vice President Tom Wilder said that the FDA and Medtronic had "differences of opinion over how these should have been reported" and that the company did nothing wrong. But FDA documents reveal that Medtronic has been cited for numerous similar and repeated violations at testing sites for other devices in recent years. One December 1997 letter noted a consistent underreporting of adverse events and called data problems "rampant." FDA officials were equally pointed after they investigated the AneuRx trials. In a sharply worded letter from May 2000, the FDA described repeated "violations of FDA regulations [and] repeated deviations from the requirements of the investigational plan." The agency concluded that it had lacked the data necessary to evaluate the safety and effectiveness of the AneuRx stent.

All the while, however, the product remained on the market. Medtronic did not recall it, nor did the FDA seek any restrictions on its use. In the months that followed, Medtronic did send letters to doctors warning of "the continuing risk of aneurysm rupture." The United Kingdom's Medical Devices Agency sent out a cautionary public-health notice about the AneuRx stent in June 2000. But the FDA waited until April 27, 2001, to send a similar letter to doctors here, citing reports of approximately 25 aneurysm ruptures, as well as leaks, suture breaks, fabric tears, and migration of the device. In what appears to have been its most serious enforcement action concerning the stent, the FDA required Medtronic to continue collecting more clinical data. An FDA spokeswoman said no further restrictions were warranted because of the "low frequency" of ruptures and the seemingly "high percentage" of successful use.

Meanwhile, independent studies are showing that while aortic stents have been called less risky than open surgery, they may be worse. One recent study of the stents, including the AneuRx, found that 95 percent of those with open surgery had survived and needed no corrective surgery a year later, versus 71 percent of patients treated with stents. While the FDA approved the devices on the basis of just 12 months of data, British researchers found an "alarming" increase in failures after one year. Medtronic counters that at three years its rupture rate is only 2 percent among approximately 400 of the patients in its clinical trials.

Yet not all of Medtronic's stent patients are pleased. William Anderson, 60, a technology consultant from Houston, had the stent implanted in November 1998, hoping to return to work soon. But problems soon emerged. The stent relies on a pressure fit to keep it in place, and in Anderson's case, the fit didn't hold; the stent started migrating right after surgery. By November 2000, he says, the device was bent, broken, and leaking, with one wire puncturing his artery wall. The next month, Anderson's doctor had to remove the stent and fix his damaged artery. Later, Anderson underwent another surgery to repair a hernia along his scar line. He says he has not been able to work steadily for four years.

Medtronic, which is now fending off numerous lawsuits related to the stent, including one filed by Anderson, contends that doctor error, among other problems, is often the cause of the device's failure. Experts agree that this often is the case. At an FDA panel meeting in July 2001, one of the original researchers, Kim Hodgson, president-elect of the Society of Clinical Vascular Surgery, said that physicians who did not take part in clinical trials were unlikely to have the skills to succeed with the stent. He said that the AneuRx was "far from a mature technology" and placed blame not just with doctors but also with manufacturers and the FDA.

Whatever the case, Medtronic argues--and courts have sometimes agreed--that the FDA's approval of the stent shields the company from liability for the device's failure. It is an argument that serves to only further outrage injured patients. "This has just stopped my life," says Anderson. "I don't know how they snuck this thing past the FDA; I just can't imagine how this got shoved through."

BETTER THAN SURGERY? The AneuRx aortic stent, shown shrinking the balloon aneurysm at left, is billed as less risky than open surgery. But the FDA approved the device despite serious questions about its clinical data and the ability of doctors to properly use it. The manufacturer, device giant Medtronic, is fighting numerous lawsuits related to the stent, including one filed by William Anderson (right). Anderson had the stent implanted in 1998. The device broke, damaging his artery. He says that he has not been able to work steadily for four years.

This story appears in the July 29, 2002 print edition of U.S. News & World Report.

Getting out of jail free
Deadbeat felons owe the government billions in fines and restitution
By Kit R. Roane
Posted 12/15/02

For a man who had spent three years in South Dakota's Yankton Federal Prison Camp and still owed the government more than $3.5 million in restitution, Louis Reese seemed well at ease as he sat in a Milan, Italy, hotel suite outlining his latest real-estate deal to potential investors. And why not? Since his release from prison for a 1991 fraud conviction in connection with a savings and loan collapse, the government had pretty much left him alone. As Reese himself explained, the loss of several hundred million dollars had been upsetting but not enough to affect his lifestyle. If the government ever pressured him to pay, he said, he would settle "for a few hundred thousand dollars." But for now, he said, "my life is as calm and quiet as if I were at sea on a clear morning."

It was, at least, until that August day in 1997. Even though the federal government had done little to collect the millions he owed, at least one creditor was intent on being paid. The Milan meeting was actually a sophisticated ruse set up by Advantage Capital Group, a collection agency with a $29 million judgment against Reese. The agency wanted to know where Reese was hiding his money, and on that subject he was quite talkative. In a transcript of the meeting, Reese reveals how he set up a series of family trusts and companies, escaping wage garnishment by having the companies cover his bills instead of paying him a salary. It had taken Advantage nearly five years and $1 million to find these assets, and it was only then that the government coaxed Reese into settling its own $3.5 million claim. He did, so far for $500,000--or, as Reese himself had predicted, pennies on the dollar.

It is not supposed to work this way. When white-collar criminals are convicted, judges usually attach hefty fines to their sentences, as well as orders to pay restitution--money to compensate victims for their losses. These assessments, often announced with great publicity, take on even greater importance because white-collar prison terms tend to be short when they are imposed at all. But a U.S. News investigation into the federal government's collection record has found what felons like Reese already know: It is highly unlikely that the government will ever make them fully pay. Reese, saying he has now paid for his mistakes, says that the feds didn't even notice when he stopped sending checks after his probation ended in 1996. "I expected to get a letter," he says, "but nothing."

According to the General Accounting Office, the amount of criminal debt owed but not collected in federal cases has risen from $5.6 billion in 1995 to over $13 billion today. Although some of that includes mandatory restitution orders that take no account of a felon's ability to pay, experts say far more money could be retrieved if the system simply worked the way it should. Consider:

In many restitution cases, investigators don't even look for forfeitable assets. In others, clearly unencumbered assets go untouched.

When liens are filed, the GAO found, prosecutors typically wait from 400 to 600 days after the judgment date--a delay that significantly increases the risk that offenders will liquidate their assets and escape their obligations.

There is often little pattern to the way restitution is ordered or the manner in which it is collected, GAO reports show. Offenders with substantial assets may be asked to pay as little as $25 a month, while those with virtually no income may be assessed hundreds more.

Expanding on the GAO's general findings, U.S. News examined several large restitution cases to determine whether felons made any efforts to pay and whether anyone was trying to make sure they did. The magazine reviewed property and trust records and other business filings, and interviewed investigators and associates. Several courts refused access to case files, but out of more than a dozen cases for which information was obtained, the magazine found only two felons still making regular payments and just one default based on lack of funds. Other felons had stopped making payments years ago. And three had been released from their orders after paying a fraction of what they owed.

Now, investigators with the Federal Deposit Insurance Corp.--owed more than $1 billion in restitution--say there appears to be cause to open at least two new investigations, possibly with federal prosecutors. The FDIC has postponed one settlement discussion and reviewed one previously approved. Two felons are under investigation by federal grand juries. And another was arrested on new fraud charges. Of the many cases reviewed, a few illustrate the problem with the system:

Edwin McBirney III

Before his 1990 conviction for fraud and tax evasion relating to the $70 million collapse of Sunbelt Savings, Edwin "Fast Eddie" McBirney III jetted associates around on a private 727, used bank deposits to hire hookers, and held lavish wild-game dinners with roast lion and antelope steaks. McBirney was ordered to pay $7.46 million in restitution. But, to date, he has paid only $32,910 -- and nothing at all for more than a year. Although McBirney pleads poverty, other associates of McBirney's, including his ex-wife and a real-estate developer, say he remains well connected and well funded. Public records appear to bear this out.

One real-estate partnership named for McBirney--and in which McBirney has held an interest, according to another investor--contains land parcels assessed at several million dollars. McBirney's lawyer also confirmed that McBirney, who works in real estate, was a beneficiary of something called the Oslin Nation 1993 Trust. The trustee, Daniel L. Jackson, said that while McBirney does not control the trust, he has received consulting fees from it.

Although it is virtually impossible to determine its full assets, records show the trust owns more than 3 million shares of a Dallas financing company and a Lincoln limousine registered to McBirney's address. The trust also shows previous ownership of a large, well-situated Dallas commercial suite and a 6,549-square-foot home with cabana and pool. McBirney still lives in the home despite its sale to another trust, and he has recently put up the house for sale himself--for just under $1 million--according to his mother, Jeanne, who says he asked her to list the house.

Larry Vineyard

Larry Vineyard, the former owner of Key Savings & Loan Association of Englewood, Colo., claimed he was indigent after being convicted in the late 1980s on charges of conspiracy and bank fraud. But on the day he was indicted, he took out a $2.66 million advance on a loan, using the cash to buy a $963,000 house, to set up trusts for his sons, and to pay expenses. In 1990, Vineyard was sentenced to another three years for fraud related to the loan.

At the time, Vineyard owed more than $5 million in restitution. He says prosecutors leveraged possible charges against relatives to wring $1 million out of him. But that was back in 1996, and according to the FDIC, Vineyard hasn't paid a cent since. It's not as if he is without income. He is the executive vice president of Dunhill Partners, a large Dallas real-estate firm, and a former executive with Breck Construction Co., which specializes in high-end projects. Records reveal he is also a top executive of other real-estate concerns. His family owns or leases four SUVs, and they own a home in an exclusive section of Dallas. Asked about his failure to pay, Vineyard said, "There just seemed better things to do with the money." But he added: "If I had known this would have resulted in a phone call from you, I would have paid the $50 a month." Vineyard also said that he was negotiating to settle his remaining restitution "for a substantial sum." But the FDIC says that deal--which would have allowed Vineyard to walk away for about $200,000--is now under review.

Jack L. Sternberg

In 1993, Jack L. Sternberg was sentenced to less than two years in prison on mail fraud charges related to a complex housing scheme and ordered to repay more than $1 million to scores of people he scammed out of homes. Among them was Henry Singer Jr.'s 93-year-old mother. Singer says Sternberg still hasn't paid him a dime of the $78,700 that he owes. He believed the U.S. attorney's office was keeping the heat on Sternberg, but records show that the office released Sternberg from his debt four years ago after he had paid less than $23,000--or just 2 percent. The office settled even though it had previously argued that Sternberg was hiding assets and should be returned to prison. Prosecutors noted that Sternberg said he lived off $1,600 a month in loans from his wife's company at the same time he was declaring the same amount as income on his tax returns. Although Sternberg said he worked for his wife, prosecutors said he was the sole signatory on the company's checking account. And although he claimed to be poor, his wife had recently purchased a $400,000 home.

A judge, however, denied prosecutors' requests to reincarcerate Sternberg because he had kept up with his payments of $25 a month and officials had never sought to increase the schedule. Public records show that Sternberg still owns dozens of housing lots and land parcels in Louisiana, including some registered "in care of" a development company based in his mother's Arizona home. A Louisiana real-estate agent said the Sternbergs had recently contacted him about selling several of the properties. Sternberg said that he has paid what he could but "certainly" feels an obligation to pay more.

Jack Dean Franks

Jack Dean Franks pleaded guilty to mail and wire fraud in the early 1980s for his part in a failed California golf course and to fraud charges in 1987 for contributing to the collapse of two savings and loans. In addition to jail time, he agreed to pay more than $1.2 million in restitution. But, according to the FDIC, Franks never paid anything. Instead, he spent his money--and allegedly a good deal of other people's money--on the high life. He kept a home until recently at the exclusive Balboa Bay Club Resort & Spa in Newport Beach, Calif. He owned Equity Funding Corp., a California firm that bought the first 1,000 acres of a $30 million California golf course development, according to investors who allege that he fleeced them out of $3.5 million. And an FBI affidavit says Franks owns more than $2.13 million in property in Mexico, other California properties, a yacht, and two airplanes.

Federal officials, it appeared, weren't going to interrupt that lifestyle until reporters started calling. According to lawyers for different parties in the case, Franks was close to striking a deal in which he would settle his restitution order with $600,000 in cash. The lawyers, speaking on condition of anonymity, said the deal would also have allowed Franks to keep his Mexican estate till he and his wife died, and enabled him to avoid prosecution on new charges. The FDIC denies planning to settle so cheaply, but the deal collapsed two months ago when Franks was arrested on wire fraud charges relating to the alleged golf course swindle.

Lawyer William Bishop, who represents several disgruntled investors, questions why officials never kept an eye on Franks, considering the money he already owed. "You'd think they would follow up on him," he said. "Let's face it, he's charming, he brilliant, and he's dangerous."

Justice officials declined to comment on these cases and on uncollected restitution in general. Likewise, the GAO says, Justice officials have denied the GAO's repeated requests for a progress report. But federal prosecutors say the Civil Division's financial litigation units are often too understaffed to follow up on cases they close. And in many states, including Texas and Florida, unlimited homestead exemptions and other laws prevent the seizing of otherwise recoverable assets. As for probation officers, court officials said they must focus almost exclusively on keeping felons from committing new crimes.

Still, critics say more could be recovered if Justice made asset recovery a priority. "Collecting this stuff is just not in anyone's job description," says Pat Nolan of Justice Fellowship, which advocates for victims. "No one is graded, promoted, or fired based on their helping victims collect the money they are owed." These civil prosecutors often have little interest in following up on restitution claims. They have also been slow to freeze assets in ongoing criminal cases, other prosecutors complain.

Some jurisdictions have successfully tried new ways of collecting restitution, including allowing criminals to avoid jail time by paying up front and contracting out collections to private agencies. But collection firms take a hefty cut of whatever is recovered, and critics say they wouldn't be needed at all if the Justice Department and the courts put some teeth in the system.

The results seen by more dogged financial litigation units also prove that aggressive follow-up works. In Boston, Assistant U.S. Attorney Christopher Alberto joins probation departments and other agencies to track down the assets of deadbeat criminals. Most recently, Alberto's office forced William Lilly, once known as Boston's "Condo King," to start coughing up the $5 million he owed after a 1991 conviction for bank fraud. It turns out that Lilly had amassed a real-estate fortune in prison; had Alberto not intervened, transcripts of Lilly's jailhouse conversations suggest, Lilly would probably have paid restitution only during probation and then stopped altogether. Now Lilly is paying in $500,000 installments over five years, with his girlfriend's assets on the line.

Yet until other prosecutors follow suit, critics say felons will respond like Woodrow Brownlee, a former Texas banker who has paid only $8,150 toward the $1 million he owes and not a dime since 1995. When asked to appear for settlement talks with the FDIC, officials say, he showed up driving a brand new Lexus and wearing an expensive Rolex watch. The outcome might have been different, says an FDIC investigator, had Brownlee been facing a federal prosecutor. Instead, Brownlee just "told us no," the investigator said, then walked out the door.

Unpaid debt

Criminals owe billions in restitution, and numbers keep soaring.

[Complete chart data are not available]

[labels]

1985

'99

$12

$10

$8

$6

$4

$2

0

In billions

Source: Executive Office for United States Attorneys

Name: Edwin McBirney

CRIME Convicted of fraud and tax evasion relating to the $70 million collapse of Sunbelt Savings.

STATUS McBirney was ordered to pay more than $7 million in restitution. He has paid $32,910--and nothing at all for more than a year.

Paid $32,910 $7.46 million

Name: Jack Dean Franks

CRIME Convicted of fraud in connection with a failed California golf course and fraud related to a thrift failure.

STATUS The FDIC says he has paid nothing of $1.2 million in restitution.

Paid nothing $1.2 million

Name: Woodrow Brownlee

CRIME Convicted in the early 1990s of defrauding Commodore Savings Association, a Dallas thrift of which he was president.

STATUS He has paid $8,150 toward his $1 million in restitution and nothing since 1995.

Paid $8,150 $1 million

Name: Larry Vineyard

CRIME The former owner of Key Savings & Loan Association of Englewood, Colo., was convicted of conspiracy and bank fraud in the late 1980s.

STATUS He paid $1 million of his $5 million in restitution to avoid new charges and has paid nothing since 1996.

Paid less than $1.4 million $5 million

This story appears in the December 23, 2002 print edition of U.S. News & World Report.

U.S. News & World Report

July 19, 2004

Hell On Earth

BYLINE: By Edward T. Pound; Kit R. Roane

SECTION: NATION & WORLD; Vol. 137 , No. 2; Pg. 10

LENGTH: 3157 words

HIGHLIGHT: Life in Iraq's Abu Ghraib prison, newly available documents show, would have made Satan quake

In October last year, Army Capt. Donald Reese visited the Abu Ghraib prison complex near Baghdad for the first time. He had plenty of reason to be there. He had just been installed as the warden of part of the prison, and as he toured cellblock 1, he was stunned to see a bunch of naked prisoners. He would later tell Army investigators: "My first reaction was, 'Wow, there [are] a lot of nude people here.'" Army intelligence officers assured him, he testified, that "nothing was illegal or wrong about it"--that, in fact, stripping the prisoners was a tried-and-true intelligence tactic used to make the prisoners uncomfortable. By his own account, Reese, a reservist and window-blinds salesman in civilian life, was ill-prepared for the job. He had never before set foot in a prison, even as a visitor, and he knew nothing of the Geneva Conventions, which specify conditions for humane treatment of enemy prisoners of war and others. "I, myself, have never been in a prison," Reese told Maj. Gen. Antonio Taguba, who was assigned to investigate the issue of abuses at Abu Ghraib. "So I had no experience at all as far as a warden or that type of thing."
As things turned out, of course, there was plenty wrong with the treatment that some of Reese's soldiers inflicted on Iraqi detainees at Abu Ghraib. The Army admonished Reese for failing to supervise his subordinates, but he is not alone: Criminal charges have been brought against seven soldiers in Reese's 372nd Military Police Company, while other military police and intelligence officers have been reprimanded. Several Defense Department investigations are underway, and the Senate is planning a close look.
These various inquiries may answer the most pressing questions: How did the mess at Abu Ghraib happen? Was it, as the Bush administration says, the work of just a few rogue soldiers, a few bad apples? Or did some senior military leaders, despite their denials, know what was going on inside the prison walls late at night? For now, the most compelling evidence of what happened is contained in a report completed in March by General Taguba. He found, the report says, "sadistic, blatant, and wanton criminal abuses."
Chaos. Over the past two months, many of the classified documents supporting Taguba's findings have emerged in various news accounts, including in U.S. News. But the magazine now has obtained all 106 classified annexes to the report, and the several thousand pages of material provide the most comprehensive view yet of what went wrong at Abu Ghraib and in the Army's management of the teeming prison system in Iraq after Saddam Hussein's government was toppled. Taguba focused mostly on the MP s assigned to guard the inmates at Abu Ghraib, but the classified files in the annex to his report show that military intelligence officers--dispatched to Abu Ghraib by the top commander in Iraq, Lt. Gen. Ricardo Sanchez--were intimately involved in some of the interrogation techniques widely viewed as abusive.
The abuses took place, the files show, in a chaotic and dangerous environment made even more so by the constant pressure from Washington to squeeze intelligence from detainees. Riots, prisoner escapes, shootings, corrupt Iraqi guards, unsanitary conditions, rampant sexual misbehavior, bug-infested food, prisoner beatings and humiliations, and almost-daily mortar shellings from Iraqi insurgents--according to the annex to General Taguba's report, that pretty much sums up life at Abu Ghraib.
It was an environment for which not just Reese's reservists but many regular Army troops were singularly unprepared. Col. Henry Nelson, an Air Force psychiatrist who prepared a report for Taguba on Abu Ghraib, described it as a "new psychological battlefield" and detailed the nature of the challenge faced by the Americans working in the overcrowded prison. "These detainees are male and female, young and old," Nelson wrote; "they may be innocent, may have high intelligence value, or may be terrorists or criminals. No matter who they are, if they are at Abu Ghraib, they are remanded in deplorable, dangerous living conditions, as are the soldiers."
The documents provide new insight into how Abu Ghraib was spiraling out of control even as top military commanders battled behind closed doors over how best to run the facility and obtain more usable intelligence information from detainees. General Sanchez and Brig. Gen. Janis Karpinski, a reservist who commanded the 800th MP Brigade, to which Reese's unit was attached, were often at loggerheads over the management of Abu Ghraib. In her secret testimony, Karpinski, who was criticized for leadership failures in the Taguba report, said Sanchez refused to provide her with the necessary resources to run Abu Ghraib and other prisons. Sanchez, she said under oath, didn't "give a flip" about his soldiers, and added: "I think that his ego will not allow him to accept a Reserve brigade, a Reserve general officer, and certainly not a female succeeding in a combat environment. And I think he looked at the 800th MP Brigade as the opportunity to find a scapegoat . . . . "
As the commanders battled it out, soldiers at Abu Ghraib were confused over who was in charge, the documents show. At one point, someone smuggled a handgun to one of the detainees, and Karpinski ordered a report on the incident but was told that Lt. Col. Steven Jordan, the senior military intelligence officer in the prison, had issued a gag order to her MP s. Karpinski blew up. "Bullcrap," she replied, according to her interview by General Taguba. " . . . They're still my MP s."
Weak leadership in the prison meant soldiers couldn't accomplish basic tasks, like feeding their detainees. Without a clear chain of command, especially after Sanchez informed Karpinski that military intelligence authorities would assume responsibility for running a key area of Abu Ghraib where Iraqis were detained for interrogation, some soldiers just ran wild. "One of the tower guards was shooting prisoners with lead balls and a slingshot," a company commander testified. Karpinski, in her interview with Taguba, said some soldiers likened the place to "the wild, wild West." Soldiers ran around in civilian clothes and covered latrines with so much graffiti a commander had them painted black. An Army captain photographed female subordinates showering in outside stalls while private contractors smuggled beer into the prison.
"A hodgepodge." The place, the documents suggest, was bedlam. Colonel Jordan, when questioned by General Taguba about how out of hand the camp had become, said: "I mean every time I turned left, sir, there was all this stuff coming up." The intelligence officer noted that in one 18-hour period he had had to deal with two soldiers abusing a prisoner, another soldier being sexually propositioned by an officer, and a third sick and vomiting in her room after drinking too much alcohol. He also worried, he testified, that "hookers" were living in some bunks.
Abu Ghraib wasn't the only prison where abuses took place. The problems there, the newly available documents show, had their roots months earlier at another U.S.-run detention center in southern Iraq called Camp Bucca. Evidence showed that MP s viciously attacked prisoners there, including one who had his nose smashed in. Four soldiers were given less than honorable discharges but were not prosecuted. "I'm convinced that what happened [at Abu Ghraib] would never have happened if" the Camp Bucca cases had been prosecuted, Maj. Michael Sheridan, who worked at Abu Ghraib, told General Taguba.
Abu Ghraib housed several thousand detainees of all kinds, in the "hard site" and in two tent encampments, Camp Vigilant and Camp Ganci. "We had juveniles, we had females, we had the crazy," Reese told Taguba. "I don't want to call them crazy, but the psych ward was also dumped on Wing One [of Abu Ghraib]. So we had quite a hodgepodge of people in there." Included in the hodgepodge were hardened criminals, plus security detainees who might be of "intelligence value" in terms of identifying those responsible for the Iraqi insurgency and attacks on American and allied forces. An intelligence officer who testified in the Taguba inquiry said he felt the pressure: "Sir, I was told a couple times . . . that some of the reporting was getting read by [Defense Secretary Donald] Rumsfeld, folks out of Langley [the Central Intelligence Agency], some very senior folks."
But at the same time, soldiers complained in testimony, there seemed little interest from the top brass in providing the prison facility with what it needed to get the job done. None of the top commanders wanted to hear about the lack of prison guards, lack of guns for MP s or floodlights to bathe the compounds at night and prevent escapes, almost a constant threat at Abu Ghraib. Soldiers complained that there weren't enough of them to properly man guard towers or patrol perimeters. The detainees were often separated from freedom by little more than a few strands of wire and were always on edge because of the dismal living conditions and the shortage of edible food. Six prisoners, including the suspected murderer of an American soldier, escaped from Abu Ghraib during Ramadan. None was caught.
Rioting was also a constant problem. In one instance, prisoners at Camp Vigilant tossed "baseball-size rocks" at MP s, complaining about the lack of "basic needs, such as showers, shampoos, blankets, and toilets," an Army review shows.
The most serious riot, at Camp Vigilant, took place on the night of November 24, when guards shot and killed four detainees. "The prisoners were marching and yelling, 'Down with Bush" and 'Bush is bad,' " another Army review said. "They became violent and started throwing rocks at the guards, both in the towers and at the rovers along the wire. . . ." Guards feared for their lives--"the sky was black with rocks," the report said--and a mass breakout appeared imminent. The review of the November riot cited the failure of guard commanders to post rules of engagement for dealing with insurrections. Soldiers were hesitant to shoot, and when they did shoot, they often didn't know whether they were using lethal or nonlethal ammunition because they had mixed the ammo in their shotguns.
"Simple fixes." The review, which also evaluated a shooting incident inside tier 1 of the "hard site" prison building, found that MP s there were confused over whom to report to--their own commanders or military intelligence officers who controlled the interrogation wing. "Clear-cut chain of command," the Army review found, "does not exist in the prison."
Another classified annex reported that the prison complex was seriously overcrowded, with detainees often held for months without ever being interrogated. Detainees walked around in knee-deep mud, "defecating and urinating all over the compounds," said Capt. James Jones, commander of the 229th MP Company. "I don't know how there's not rioting every day," he testified.
Among the more shocking exchanges revealed in the Taguba classified annexes are a series of E-mails sent by Maj. David Dinenna of the 320th MP Battalion. The E-mails, sent in October and November to Maj. William Green of the 800th MP Brigade and copied to the higher chain of command, show a frantic attempt to simply get the detainees at Abu Ghraib edible food. Dinenna pressed repeatedly for food that wouldn't make prisoners vomit. He criticized the private food contractor for shorting the facility on hundreds of meals a day and for providing food containing bugs, rats, and dirt. "As each day goes by, tension within the prison population increases," Dinenna wrote. " . . . Simple fixes, food, would help tremendously." Instead of getting help, Major Green scolded him. "Who is making the charges that there is dirt, bugs, or whatever in the food?" Major Green replied in an E-mail. "If it is the prisoners, I would take that with a grain of salt." Dinenna shot back: "Our MP s, medics, and field surgeon can easily identify bugs, rats, and dirt, and they did." Ultimately, the food contract was not renewed, an Army spokeswoman says, although the company holds other contracts with the military.
The problems at Abu Ghraib were exacerbated by the friction between the intelligence and military police commanders--not surprising in light of General Sanchez's decision to have military intelligence officers assume control of the facility from Karpinski's MP s in November. Sanchez also gave the military intelligence officers more resources--something he didn't do for the 800th MP Brigade, according to Karpinski and others--in his drive to obtain more intelligence from detainees.
Breaking tables. The Taguba report shows that the major abuses at Abu Ghraib occurred between October and December, almost all of them in the early hours of the morning, when senior officers were not present. Most of the abuses were committed by members of the 372nd MP Company, but others were committed by personnel under the control of Col. Thomas Pappas, the commander of the 205th Military Intelligence Brigade, and Colonel Jordan, one of his top aides, the annexes show.
In a sworn statement, Torin Nelson, a civilian interrogator at Abu Ghraib, told investigators that they should look into two other interrogators who he believed were roughing up detainees. One of the men, he said, "has a reputation for breaking the tables in the room" while interrogating prisoners. He described an incident in which one of the men allegedly threw a prisoner from a vehicle, then "started dragging . . . the detainees by the cuffs."
The annexes show that most detainees were questioned, many times naked, in interrogation booths near the hard-site prison, though some interrogations were conducted in tier 1. In some cases, military dogs were used to intimidate prisoners, the classified annexes show; sometimes they were muzzled, and sometimes they were not. Interrogators also used sleep deprivation--sometimes keeping prisoners awake for all but four hours in a 24-hour period, according to the testimony of Steven Stephanowicz, a civilian interrogator. In his report, Taguba said he suspected that Stephanowicz; another civilian interrogator, John Israel; Pappas; and Jordan "were either directly or indirectly responsible for the abuses at Abu Ghraib."
In his 80-page interview with Taguba's investigators, Captain Reese, the warden, said he relied on Jordan for guidance that everything being done in the prison was permissible. He recounted this conversation with Jordan: "Why does everybody have their clothes off? And he just said, 'It's an interrogation method that we use,' and from that point on I said, 'OK.' "
Pappas, interviewed three times last February by Taguba's staff, insisted that he sought to curtail abuses. "There once was an incident where the detainees . . . were naked," Pappas said. "I told them to have the detainees put their clothes back on and that it was inappropriate." He knew of only two instances of detainee abuse by his interrogators, he said, and disciplinary action was taken in each case. He also said General Sanchez had given him approval to use dogs in interrogations, as long as they were muzzled. As for the Geneva Conventions, Pappas said, they were "not specifically posted in any of the facilities where the detainees were being held."
Pappas's role at Abu Ghraib did not sit well with Karpinski, who had originally taken control of the facility, along with 15 other Army prisons in Iraq, last summer. The classified annexes show that tensions ran high. Simply put, one hand did not know what the other was doing. Informed by another officer of Sanchez's decision to have Pappas assume control at Abu Ghraib, Karpinski said, according to her statement to General Taguba: "If Colonel Pappas is going to take charge of the MP Battalion . . . I still want them to send me information. I want to know what's going on with my MP s. Because I'm the one that's going to be asked the questions [about any problems]." The officer, Karpinski recounted, said, "Ma'am, I don't think so." Making matters worse, Karpinski said, was the fact that Sanchez and his deputy, Maj. Gen. Walter Wodjakowski, consistently ignored her pleas for more resources. "They did not want to be bothered by me," she testified. "And--were they blowing me off because I was a reservist? Yes. . . . We asked, and we got nothing."
She laid out a litany of complaints: When she asked for force protection at Abu Ghraib to suppress incoming mortar fire, Sanchez gave her no troops. Worried about the safety of her soldiers, she complained loudly "up the line," including to Wodjakowski, about how military intelligence was using a former Iraqi soldier--who had been a prisoner--as a translator. "Nobody seemed to care that this guy was out there and had full access to everywhere on the compound," she testified. Karpinski said she had reason not to trust the Iraqi: He had fought against U.S. forces as a member of Saddam Hussein's Republican Guard.
Bathrooms. At one point, Taguba asked Karpinski if she recalled a memo issued by General Sanchez requiring prisoners to be treated with "respect and dignity." Karpinski said she did. Known for her sharp tongue, she then described the lousy food, lack of showers, and violations of prisoner rights--all issues she had taken up with Sanchez. "Soldiers recognize that the person [Sanchez] who signed that policy letter about dignity and respect," she testified, "has about as much interest in dignity and respect for prisoners as he does about the cleanliness of bathrooms."
Sanchez formally admonished Karpinski last January for leadership failures. A spokeswoman in Iraq says Sanchez and Wodjakowski both have been strong supporters of their troops and suggested that Karpinski wasn't all that worried about problems at Abu Ghraib. Karpinski, the spokeswoman said, "chose not to participate" in twice-weekly meetings with Wodjakowski where she could have discussed problems at Abu Ghraib. Wodjakowski, she says, was "very distressed by the conditions of the troops" at the prison and sent other general officers there to "assess and improve the living conditions."
Whatever battles there were between the top generals, many soldiers felt abandoned by their chain of command. In testimony, they complained about the lack of toilet facilities, unsanitary conditions, and their unnecessary vulnerability to frequent mortar attacks when they slept out in the compounds. "If you are talking about soldier life support, it's been horrible," Capt. Mark Hale, an MP at Abu Ghraib, told Taguba's staff last February. He added: "The only guidance my guys got was the guidance I gave them. . . . When you tried to go up, you basically got blown off."

LOAD-DATE: July 12, 2004

LANGUAGE: ENGLISH

GRAPHIC: Picture, INSIDE. An inmate handcuffed in Abu Ghraib prison. Detainees were hooded when moved to interrogation rooms. (THE WASHINGTON POST--AP); Picture, Q&A. A memo on interrogation prepared by military intelligence was illustrated by smiling, ghostlike figures.; Picture, TAGGED. A detainee recently released from Abu Ghraib wears his identification bracelet. Some detainees not logged into the prison were called "ghost" inmates. (MUHAMMED MUHEISEN--AP); Picture, "HARD SITE." The soldiers charged with abusing detainees have been mostly MPs, but the new evidence shows that military intelligence officers also played a role. (THE WASHINGTON POST--AP); Pictures: CAST OF CHARACTERS. Staff Sgt. Ivan Frederick (left) and Spc. Charles Graner are described by Army investigators as the leaders of the small group of soldiers charged with abusing detainees at the prison. Both traveled to Iraq with the 372nd Military Police Company, in which Capt. Donald Reese (below, center) served. Despite having absolutely no experience in a prison, Reese was named warden of an area of Abu Ghraib that held detainees for interrogation by military intelligence officers. The Taguba inquiry found that the "sadistic, blatant, and wanton criminal abuses" were due to a failure of command authority. (COURTESY JO ANN FREDERICK--AP ; From top: THE WASHINGTON POST--AP; REESE FAMILY--AP); Picture, KARPINSKI. General Sanchez's decision to have military intelligence officers run part of the prison resulted in a confused chain of command and poor soldier morale there. (SAED HINDASH--THE STAR-LEDGER /POLARIS); Picture, INSIDE THE WIRE. Escapes were a matter of routine, with not enough soldiers to man guard towers and patrol perimeters. In just a few months, 32 detainees slipped away. (JOHN MOORE--AP)

The Weekend Warrior Wars
Posted 2/15/04
Questions about President Bush's military service with the Air National Guard during the Vietnam War have long haunted his political career. New doubts have emerged in recent weeks--specifically whether he completed his six-year commitment to the National Guard after taking a break from military activities in 1972 to work for Winton Blount's failed Senate campaign in Alabama. Bush has repeatedly said that he made up missed time while still in Alabama that year.
But his critics have always demanded proof, and last week the White House set out to offer some by releasing the president's military records. They included a dental evaluation he received at Dannelly Air National Guard Base in Montgomery, Ala., in January 1973, as well as payroll records purporting to show that Bush completed his six-year service requirement. Late in the week, the White House disclosed hundreds of pages more. "There were some who sought to leave a wrong impression that there was something to hide when there is not," said Scott McClellan, the White House press secretary. Bush was honorably discharged from the National Guard.
Trashed? Earlier, a retired guardsman, Bill Burkett, repeated accusations that some portions of Bush's military record had been destroyed in what he feared was a political coverup. Burkett, who first made his complaint in a letter to several Texas state senators in 1998, told U.S. News that a Bush aide reviewed the then governor's military file in 1997 for possible embarrassments. Burkett says he later saw another guardsman going through the file and tossing portions of it in a trash can. That officer, Gen. John Scribner, strongly denied Burkett's assertions in an interview with U.S. News. Bush aides also have disputed the assertions.
The president has plenty of defenders. Retired Col. Maury Edell, who trained Bush to fly in the Guard, says he is tired of people questioning Bush's service record. "He was a damn fine kid and a good fighter pilot" who was eager to fly in Vietnam, says Edell. For the White House, this kind of spirited defense was welcome news. Democrats have questioned whether Bush ever reported for duty in Montgomery with the 187th Tactical Reconnaissance Group in 1972, as he has said, to make up the necessary time to qualify that year on his service record. The newly released records don't give a clear answer.
So far, people who might be in a position to corroborate his presence have been unable to do so. Retired Brig. Gen. William Turnipseed, the 187th's deputy commander for operations, said in an interview that he did not remember Bush reporting to him for duty, as he had been ordered, "and I don't think he did." Turnipseed says, however, that it was possible that he was absent from the base and might not have seen Bush, but he added that no other guardsmen who had contacted him could recall Bush's presence. Bush was not well known in the early 1970s, though his father was ambassador to the United Nations. Lonnie Slauson, a squadron commander at the 187th, says that if Bush received pay from duty in Alabama, then it was likely he did the necessary drills. "There are too many checks and balances," he says. Guardsmen say that roll-call records and any "equivalent training cards" that Bush would have collected during unscheduled service performed at the base could settle the question. But it is unclear whether such records still exist.
Meanwhile, some who question Bush's service record now find themselves under assault. Following news reports of Turnipseed's statements, the Bush-Cheney re-election campaign hinted late last week that the elderly man had a political ax to grind and that he had contributed $500 to Democratic presidential hopeful John Edwards's campaign. "Never happened," responded Turnipseed. "I'm a Republican." -Kit R. Roane
This story appears in the February 23, 2004 print edition of U.S. News & World Report.

All in the Family
Connecting the dots between an Alaska senator, his kin, and some fat U.S. contracts
By Kit R. Roane
Posted 11/28/04

Senate staffers meet with constituents all the time. But in some cases, maybe they shouldn't. Last month, staffers for Alaska Sens. Ted Stevens and Lisa Murkowski summoned officials from the Transportation Security Administration (TSA) to a meeting in Murkowski's Senate office to discuss awarding a multimillion-dollar, sole-source contract to Chenega Corp., an Alaska Native firm that is represented by Stevens's brother-in-law.

The contract is to provide logistics support for about 13,000 baggage and checkpoint scanners at 450 of the nation's airports. The contract's exact value has been classified by the TSA, an agency in the Department of Homeland Security. The TSA had been preparing to put the contract out for competitive bids next month, government officials say, but about two weeks after the October 19 meeting in Murkowski's office, homeland security officials put that process on hold. A homeland security official, speaking on condition of anonymity, said the department had instructed TSA contract officials to consider "other alternatives" to an open bidding process.

Department officials told U.S. News that the only alternative now being considered is to award the contract to a Chenega subsidiary, Chenega Technology Services Corp. Stevens's brother-in-law, William Bittner, a partner in the lobbying and law firm of Birch, Horton, Bittner & Cherot, has acted as a financial adviser to Stevens. He also represents a number of Alaska Native corporations, including Chenega. The company, which has paid Bittner $40,000 so far this year, said it did not use him in this case. Bittner did not return repeated phone calls seeking comment.

Stevens, in an interview, acknowledged talking to Bittner about some of the lobbyist's Alaskan clients. But he said he had no knowledge of the meeting in Murkowski's office until a week ago and added that he believes it was set up by her staff. "I want you to know that I never had any involvement at all," the senator said. "One member of my staff attended the meeting without my knowledge. . . . I'm happy to take an oath."

Stevens, who chairs the powerful Appropriations Committee, said his staff has been instructed not to advocate for specific constituents in gaining sole-source contracts, but he added that he did not believe the staff member involved did anything improper by attending the October 19 meeting. Chuck Kleeschulte, a spokesman for Murkowski, says the meeting was of the sort his office conducts all the time on behalf of constituents who are having trouble navigating the Washington bureaucracy. Kleeschulte later listed several Alaska Native firms that had gotten Murkowski's office to hold "informational meetings" with agencies to discuss each firm's interest in specific contracts. Jeff Hueners, the CEO of Chenega, said his company first sought help from the two Alaska senators after "getting the impression that [TSA] was going to go down their own procurement path." Hueners added that it is sometimes difficult to "get the attention" of contracting officials without bringing them to "such a forum." "We thought they should look at Chenega Technology's option to sole-source it [because] we had just stood up an operation that was analogous in scope for Customs and Border Protection, a sister department," Hueners said. "We thought there were clearly some synergies, both in terms of cost savings and operations efficiencies."
TSA officials declined to provide details of the meeting in Murkowski's office. Amy von Walter, a TSA spokeswoman, said: "The senators wanted to ensure Chenega's proposal would be evaluated during the procurement process. We advised that we will follow applicable procurement procedures." She then referred all other questions to Stevens's office, which she said made the original request for TSA contracting and legislative affairs officials to attend the meeting.

$15,000 an acre. The TSA contract sought by Chenega wouldn't be the first awarded to the firm on a sole-source basis by Washington. Hueners estimated that of the 60 or so federal contracts that Chenega is the prime contractor on, only about six have been competitively bid. The Customs and Border Protection contract cited by Hueners is valued at $500 million. Several other firms that had planned to compete were unhappy about the sole-source award to Chenega.

Stevens has been the subject of criticism for his advocacy of these Alaska Native corporations (whose shareholders must be Native Alaskans but whose employees need not be) because he and his family have business relationships with some of them. The Los Angeles Times reported in December that one large Alaska Native corporation, Arctic Slope Regional Corp., pays $6 million a year for a 20-year lease at an office tower in Anchorage that is owned by Stevens and a few other partners. Stevens was also instrumental in Chenega Corp. and Arctic Slope's jointly receiving a $2.2 billion sole-source contract from the National Imagery and Mapping Agency in 2001. The companies used $2 million stuck into the omnibus spending bill to prepare their proposal. According to published reports quoting agency officials, the money had been inserted after agency officials discussed with Stevens their interest in contracting with an Alaska Native firm. More recently, Stevens was criticized for inserting up to $2.5 million into the Defense Department spending bill, with the money earmarked to pay the family of Jacob Adams, the president of Arctic Slope, $15,000 an acre for one 160-acre tract contaminated by the Air Force. Asked by U.S. News of the status of this payment, Stevens's spokeswoman, Courtney Schikora, said that another appraisal had been sought and that the wording of the bill had been changed. Stevens's son, Ben Stevens, is a state senator in Alaska. But he also runs a consulting firm that is employed by Alaska Native firms, such as Cook Inlet Region Inc. That company, which has benefited financially from legislation backed by his father in Washington, paid Ben Stevens $145,854 in 2002, according to financial disclosure filings with the Alaska Public Offices Commission.

Sometimes called "Stevens Act" corporations, the Alaska Native firms, as a result of Stevens-sponsored legislation, have an important edge in winning federal contracts because they do not have to bid on them competitively. Chenega, as a result, is now ranked as one of the fastest-growing government contractors in the United States. Its revenues have increased 10-fold since 2001.

Asked if his relationship to both Alaska Native corporations and to those representing them before the Appropriations Committee might be of concern, Stevens said absolutely not. "There is hardly anyone in Alaska that does not intersect with me," he says, "because I am a senior senator in Alaska. One is my brother-in-law; one is my son. What are they supposed to do, drop anything I have business with? I have talked to people that Bill Bittner has brought to my office on various matters. There is nothing illegal about that."

With Edward T. Pound

The U.N.'s Dirty Laundry
Should Kofi Annan shoulder all the blame, or do the problems go deeper?
By Kit R. Roane and Dan Morrison
Posted 4/10/05

A secretary general on the ropes. A powerful former backer agitating for change. Mounting scandals. Overdue promises of reform. A grasp at legacy. For Kofi Annan, it must look a lot like 1996. That was the year the United States called for the ouster of then U.N. Secretary General Boutros Boutros-Ghali. By the following year, Boutros-Ghali was out and the suave Annan was in, promising a new era of openness and accountability.

Now Annan, 67, finds himself similarly bruised, allegedly unable or unwilling to control the elephantine bureaucracy he was brought in to reform. Backers say it isn't for a lack of trying. And Annan has pushed, particularly recently, for major reforms. Brian Urquhart, a respected former U.N. under secretary general, says he still can't understand how, in the minds of some, Annan has suddenly become "this shady man everyone is calling on to resign." Adds Urquhart, "He is making a serious attempt at reform, but it takes two to tango, so the countries also have to get involved." But, as the oil-for-food scandal is increasingly illustrating, Annan, a career U.N. bureaucrat, has missed prime opportunities to change an ossified institutional culture that obstructs accountability.

Earlier this month, former Federal Reserve Chairman Paul Volcker, the old friend Annan appointed to look into misdeeds in the U.N.-run Iraq oil-for-food program, directly criticized the secretary general for failing to launch a formal investigation into the award of a large oil-for-food contract to Cotecna Inspection SA once Annan learned that the company had employed his son, Kojo, and was the subject of a Swiss criminal investigation pertaining to previous work for the United Nations.

Blind eye? To many Annan supporters, the Cotecna controversy is minor and one that solely concerns his son. But Volcker's report carries the ring, and sting, of truth. To critics, it's part of a pattern. Annan, himself exempt from staff ethics rules, recently allowed the U.N. high commissioner for refugees, Ruud Lubbers, to remain at his post despite a June 2004 internal report substantiating allegations of sexual harassment. Lubbers did not resign until February, when the scandal hit the papers.

Consider that two thirds of U.N. employees surveyed by Deloitte Consulting last year admitted being privy to unethical conduct--and that almost half said they were too scared to ever report it. Those who do air dirty laundry typically find themselves shunned, and their employment contracts often aren't renewed. Although new whistleblower shields are being proposed, those who step forward currently have few protections. And internal audits reveal how little has happened on Annan's watch when misdeeds are reported. From 1998 to 2001, a U.N. staff member forced defense lawyers to pay him kickbacks to process their payments at the International Criminal Tribunal for the genocide in Rwanda. In September 2003, frustrated investigators found that the man had not been fired but, instead, had been shifted to other clerical duties.

In another case, a staff member at the U.N.'s Geneva office was allowed to take early retirement after he was found viewing child pornography on his office computer. And auditors have long complained that U.N. peacekeepers believed to have committed serious crimes, such as rape, face little more than return to their home country as punishment. That's one outrage the United Nations has recently promised to rectify.

There is no time like the present. Last November, auditors reported that the number of serious allegations leveled against peacekeepers was rising at a fast clip and seemed only to abate when no one was there to answer the phone and take a report. This January, auditors again complained, noting that the sexual exploitation of young refugee girls by peacekeepers in the Democratic Republic of Congo continued even as they walked about the camp investigating those crimes. Investigators, who say the victims were often paid with food, reported that they continued to stumble over condoms and fresh allegations until the last days of their visit. The trip was marred by interference from troop commanders and the Department of Peacekeeping Operations' insistence that auditors not embarrass the countries whose troops were involved by actually naming them.

Why aren't wrongdoers fired? Blame the system, one no secretary general has yet been able to tame. A management review conducted in October found that it took, on average, two to three years to fire an employee for whatever reason. "Meanwhile, you still have to pay them; they just don't do any work," says one longtime U.N. staffer. "So normally you just keep them on and the standards go down in your office." And what if the employee actually commits a crime? "If you want to fire, it still takes years," he adds.

The system seems designed for failure. U.N. staff members say there is virtually no training for new employees and no clear career path. Promotions are based on seniority, not performance. And those in charge of complex issues may be chosen for whom they know, not what they know. "They throw people from this mass of incompetence into posts where they have no experience," complains a former U.N. worker, recalling a large peacekeeping operation in Africa where the chief procurement officer "was a former air conditioner repairman who just happened to be related to the right person." Sometimes it's even worse. In Kosovo, Jo Hans Dieter Trutschler was hired to a senior-level position requiring knowledge of public works engineering. A 2003 audit reveals that he was hired without any background check because he was a friend of the program manager. His resume turned out to be a lie. Trutschler was later convicted in a German court of diverting $4.3 million into an offshore account.

Deadwood. Simmering frustration has driven many good people from the U.N., particularly motivated young recruits. Although a September 2004 U.N. report saw fewer departures, "neither the quality of candidates nor career prospects for junior staff have improved." U.N. officials are considering buyouts to speed retirements. But clearing out the deadwood will end with just another lost opportunity, staffers say, unless there is a focus on recruitment, accountability, and a newly defined mission.

Such facts are arrows in the quiver for Annan's conservative American critics. They are bolstered by this week's anticipated confirmation of outspoken U.N. critic John Bolton as U.S. ambassador to the world body.

In the end, Annan may be the easiest target, not the right one. The secretary general has only as much power as he is given by the countries that make up the United Nations. "Half the member states don't want reform, don't want democracy," says Nancy Soderberg, who represented the United States in the U.N. Security Council during President Clinton's second term. Sweeping reforms, particularly of the type now being proposed by Annan, would require member nations, particularly powerful ones like the United States, to agree on what sort of United Nations they really want and allow its leader to accomplish the mission. Even critics acknowledge that the secretary general can't clean up the institution alone.

Despite howls from many internationalists (and foreign governments) over Bush's choice for ambassador, Bolton could turn out to be a gift to the organization that he has so famously derided. If the Bush administration embraces Annan's reform plans, Soderberg says, "Bolton will be well placed to sell those reforms to conservatives in Congress" who have been calling for Annan's scalp.

"I think there is a strong temptation to lay all these problems at the feet of the secretary general," says former Attorney General Richard Thornburg, who conducted an extensive study of the U.N. bureaucracy in 1993. "But in fairness, he is really a captive of the culture and hamstrung by the pressure exerted by a 191-member-nation organization."

This story appears in the April 18, 2005 print edition of U.S. News & World Report.

When the Poor Go to Court
Across the nation, many indigents wind up being sentenced to jail time without ever seeing a lawyer
By Kit R. Roane
Posted 1/15/06

Last July, a homeless man named Hubert Lindsey was stopped by police officers in Gulfport, Miss., for riding his bicycle without a light. The police soon discovered that Lindsey was a wanted man. Gulfport records showed he owed $4,780 in old fines. So, off to jail he went.

Legal activists now suing the city in federal court say it was pretty obvious that Lindsey couldn't pay the fines. According to their complaint, he lived in a tent, was unemployed, and appeared permanently disabled by an unseeing eye and a mangled arm. But without a lawyer to plead his case, the question of whether Lindsey was a scofflaw or just plain poor never came up. Nor did the question of whether the fines were really owed, or if it was constitutional to jail him for debts he couldn't pay. Nobody, the activists say, even bothered to mention alternatives like community service. The judge ordered Lindsey to "sit out" the fine in jail. That took nearly two months.

Lindsey isn't the only poor American to face a judge on dubious charges without adequate legal representation. Far from it. More than 40 years after the Supreme Court ruled that competent counsel was a fundamental right of all Americans accused of crimes, the American Bar Association says thousands of indigent defendants still navigate the court system each year without a lawyer, or with one who doesn't have the time, resources, or interest to provide effective representation. Whether they face serious felony charges or misdemeanors, the poor often find themselves alone in a sometimes-Kafkaesque system where they have little, if any, voice.

Without advocates, some poor defendants serve jail time longer than the law requires or plead guilty to crimes they didn't commit just to get out of jail. A few, as has been documented, receive the death penalty or life in prison because their court-appointed lawyers were incompetent, lazy, or both. Most shocking, says Norman Lefstein, who chaired the American Bar Association's Indigent Defense Advisory Group, "is the lack of overall real success, the lack of progress" given the overwhelming evidence that inadequate counsel often leads to wrongful conviction. The many cases we know about "likely are only the tip of the iceberg," he says. "This is an enormous problem."

Kicking and screaming. It's also quite a complicated one. The federal government has been slow to the game, both in providing funds or setting rules. That means that each state, and often each county, is left to its own devices on deciding how to fund and institute indigent-defense programs. Funding is a perpetual problem. In New York alone, there are more than 95 different systems. Sometimes, representation is determined by whichever lawyer bills taxpayers the least, no matter that the lawyer could have a full load of other pending cases.

It's not hard to see why the bottom line has such pull. Most states have a hard time coming up with the necessary dollars for indigent-defense programs, and only 27 attempt to provide full funding. That leaves already-strapped cities and counties on the hook for most of the costs--costs that must be weighed against local needs, from new roads to sewer upgrades and firehouses.

Shortfalls in some places are acute. In Alabama, pay cuts have caused lawyers representing indigent death penalty clients to flee the system. In New Mexico, a lack of funds to hire lawyers for indigent defendants caused the court of appeals there to place an ad for lawyers willing to work free.

While several states have enacted some reforms in recent years, most have been dragged kicking and screaming to the table, often on the heels of civil rights lawsuits, court orders, or striking examples of injustice made public. And while such reforms are welcome, critics say the jury is still out on how well they are implemented. In Georgia, for instance, new public defenders are required to contact their clients within 72 hours of their arrest, but there is no requirement that they do much else until a defendant has his day in court. In one case, a public defender representing a severely mentally ill woman facing a parole violation had contacted his client only once after her arrest and was not scheduled to see her again until a bond hearing set for nearly two months later. John Cole Vodicka, director of the Prison and Jail Project, a watchdog group active in southern Georgia, says the public defender didn't even meet with the woman personally on the first occasion; he sent her a form letter. Cole Vodicka left several messages for the lawyer, saying that he knew the woman from his church and that he could help get in touch with character witnesses with knowledge of her troubles and her mental illness. The lawyer failed to call him back, Cole Vodicka says. The woman's case is pending. Asked about the case, Samuel Merritt, the head of the public defender's office in that circuit, said his office should have fought more aggressively to schedule the woman's bond hearing for an earlier date, but he says the new system is generally working very well.

At least Georgia is trying. In many cities and states, advocates say, it appears officials have just ignored the law. The New York Civil Liberties Union has threatened to file suit against New York State. While New York City, which has a well-funded legal-aid office, is in many ways a model for other locales, the rural counties upstate are another story. In Schuyler County, lawyers for the National Association for the Advancement of Colored People's legal defense fund say an investigation they conducted revealed a system where indigent defendants routinely sat in jail for weeks or months without seeing a lawyer. Often they went through the entire court process, from arrest, to arraignment, on through bail hearings and even through plea bargains, without ever consulting an attorney. One public defender, they say, deliberately kept his phone off the hook.

Then there's Gulfport, the second largest city in Mississippi, which, up until Hurricane Katrina hit, was beating the pavement looking for those who owed fines for things like public profanity--at $222 a pop. The result of Gulfport's fine-reclamation project was that while it collected modest sums of money, it also packed the county jail with hundreds of people who couldn't pay. The Southern Center for Human Rights filed a federal civil rights lawsuit against Gulfport last July. Attorney Sarah Geraghty says that before bringing the case against the city, she witnessed hundreds of court adjudications involving Gulfport's poor in which no defense attorney was present or even offered. Many defendants, Geraghty said, were obviously indigent, mentally ill, or physically disabled, like Hubert Lindsey; some had been jailed for fines they had already paid. One mentally ill woman attempted suicide by jumping from an elevated cell in the county jail after she was picked up for having failed to pay several city fines; the lawsuit alleges that police then grabbed her again on the same charge a few months later, causing her to miss the surgery scheduled to fix the broken bones in her feet.

The city says it is still reviewing the lawsuit, but there is talk of a settlement. And Geraghty, who recently sat in on the court's proceedings again, says judges are now advising indigent defendants of their rights. But it never should have taken a lawsuit, adds Geraghty, noting that the problem with the city's actions was clear: "It's illegal. Period."

This story appears in the January 23, 2006 print edition of U.S. News & World Report.

Pitfalls for Parents
International adoption has become big business, but regulation still lags
By Kit R. Roane
Posted 5/29/05

All Carrie West wanted was a chance to care for an orphaned child. But when she traveled to Vietnam five years ago, she says, she got something else: a quick lesson on the murky world of international adoptions. Here's how she tells the story: Informed by her adoption facilitator that Thuy, the little girl she had planned to adopt, had fallen deathly ill with tuberculosis, she ended up taking a different child. But Thuy's plight stayed with her, and she sought out updates on her condition. Eventually, she learned that the child, far from being ill or convalescing, had been adopted by someone else--long before.

With no official government agency to handle the incident, West took her story to the Internet, writing on adoption blogs and other websites about the facilitator she says did her wrong. The facilitator, Mai-Ly Latrace, responded with a libel lawsuit, which so far names three couples, including West and her husband.

The suit, filed last year, highlighted some of what can go wrong in the fast-growing world of international adoptions. Last year, there were nearly 23,000 adoptions from overseas by American parents, a number that has been increasing as domestic adoptions become more rare. "Your neighborhood health club is more heavily regulated," says Trish Maskew, executive director of Ethica, a nonprofit outfit that advocates for better international adoption laws. "The industry allows unlicensed facilitators to work without oversight. The U.S. government refuses to act, and consumers walk into this blind."

The libel lawsuit filed by Latrace is based on some contentious issues. Latrace asserts that she has been unjustly maligned by West and the other defendants in the case who criticized her role in facilitating adoptions for them. The critics, on the other hand, point to, among other things, a letter from the Embassy of Vietnam in Washington from March 2005 stating that Latrace is "a child trafficker for money." She was deported from Vietnam, the letter says, on Oct. 18, 2002. The embassy's press attache, Chien Bach, confirmed the authenticity of the letter and added that Latrace "is banned from entering" Vietnam. Latrace says she knows nothing about any of this, saying that she encountered problems with Vietnamese immigration authorities who revoked her visa when she used the wrong type on a trip to the country. But, she says, she traveled to Vietnam just last year and encountered no legal troubles there. Latrace's attorney says that the embassy's letter about Latrace's alleged child-trafficking activities is based on inaccurate and unsubstantiated information.

Latrace proudly defends her work, saying she has helped hundreds of people adopt children overseas and that she filed her lawsuit only after critics forced her hand by falsely accusing her of improper and unethical conduct. Any bad experiences would-be adoptive parents may have had, she says, were the result of miscommunication. She adds that some difficulties were the fault of her mother, Marie Latrace, with whom she has worked in the past, including West's adoption. (Marie Latrace, who lives with her daughter, denies that she did anything wrong while facilitating adoptions.) Latrace says that the defendants in her lawsuit, along with U.S. immigration agents in Vietnam, have long been out to get her. She also says that she has an affidavit from a Vietnamese couple that shows that they gave up their child willingly. "I never sold a child. I have never bought a child," Latrace told U.S. News . "And I don't know why anyone in Vietnam is saying that I was involved in anything that was criminal. Especially when it comes to kids." Latrace is seeking monetary damages, as well as expenses, interest, and attorney's fees.

The dispute with West and the other defendants in the lawsuit is not the only source of contention involving Latrace. In 1995, a South Carolina adoption agency filed a criminal complaint against her. The local police department incident report says that the owner of the adoption agency accused Latrace of hoarding "clothes, shoes, medicine, etc." that were supposed to have been delivered to an orphanage in Vietnam. A judge ordered Latrace to complete 40 hours of community service; she did so, and the charges against her were dropped. Latrace blames the incident on a custody dispute with her husband, and says she always intended to deliver the items to Vietnam.

There were other issues as well, and like many in the often-confusing world of international adoptions, they are tangled. Tedi Hedstrom, the owner of Tedi Bear Adoptions, worked with Latrace during the period in which West was attempting to adopt. Hedstrom voluntarily relinquished her license to Florida authorities in March 2003 after the state found several violations, including having personnel files that lacked proof that workers had been screened or met training requirements. But Hedstrom, who now works in Georgia, blames Latrace. "My agency had only one registered complaint in seven years; we had an excellent reputation," she says. "After I began working with Mai-Ly, we had approximately 30 complaints all directly related to her within a very short period, a couple of months. I believe that choosing to work with Mai-Ly Latrace was the worst business decision I have ever made in my entire life." Latrace says Hedstrom caused her own difficulties and points out that the state's complaint never mentions her.

Adopting a child from overseas is anything but simple. Federal agents who investigated a Seattle adoption agency run by two sisters, for instance, documented evidence of visa fraud and money laundering. The agents spent more than two years tracking international money flows and searching Cambodia for witnesses and found that children were being bought from their Cambodian parents and brought to the United States with fraudulent identification documents. Some Cambodians thought they were sending their children to an orphanage school and could always pick them up. "There were huge amounts of money being made, being promised to orphanages in Cambodia, that was instead being diverted for bribes and for luxury items," says Michael Barr, the lead prosecutor. In the course of the investigation, agents found that "facilitators would line up several different groups of parents for a child," says Bill Strassberger, a spokesman for the Department of Homeland Security, which now handles immigration crimes.

Happy clients. In the Florida lawsuit, West says, she spoke out because of similar issues. She says she stuck her neck out "and sometimes you get it cut off. I'm paying tens of thousands of dollars to say what is true." Thuy, the child she had initially been set to adopt, is living today in Saipan with Judi Mosley who is also named in Latrace's lawsuit. West says that several months after Thuy had been adopted by Mosley, Latrace wrote West, stating that Thuy and her sister were now living with a social worker and that "Thuy is still receiving medical care." Latrace maintains that she conducted her relationship with West properly and that she relied on a Vietnamese social worker for the information she conveyed to West.

In 2002, West says, Latrace began soliciting funds to build an orphanage in Thuy's name. It was only a few months before this time, West says, that she found out that Thuy wasn't ill and had already been adopted by Mosley. West and Mosley then contacted Latrace to arrange another adoption for Mosley. Latrace, West says, offered Thuy. Latrace says that the Vietnamese social worker lied to her about Thuy's status and blames that for the mix-up.

Latrace has many happy and satisfied clients, she says, among them Bruce and Debbie Hofman in Florida, who used Latrace to facilitate the adoption of three babies and a toddler in Vietnam. "Mai-Ly made things happen that wouldn't have happened," Debbie Hofman says, adding that Latrace successfully shepherded them through a very complicated process.

Requirements. Whatever the outcome of the dispute, it appears to show how adoption agencies, and the facilitators they work with, can sometimes leave would-be adoptive parents in agonizing dilemmas. With so few rules and regulations, many have nowhere to turn. In Florida, full-time employees of adoption agencies must pass background checks and meet minimum degree and experience requirements. But that does not apply to those who call themselves "consultants," such as Latrace, who says that her only qualification is on-the-job training. Following calls by U.S. News , the Florida Department of Children and Families did an unannounced check of Little Pearls, the adoption agency Latrace has been working with in Tampa. Andy Ritter, a DCF spokesman, says investigators found evidence suggesting that Latrace should be deemed an employee of the agency for regulatory purposes, such as her use of a company cellphone. They also found that Latrace was telling prospective clients that she was Little Pearl's facilitator for Guatemalan adoptions and soliciting fees "in excess of $25,000" that could be paid either to Little Pearls or to her own consulting firm, HQ Online.

The DCF also found some licensing violations at Little Pearls, including evidence of employees working in the agency who had not been screened and approved by the department. Ritter said that the agency's paperwork was not in order, among other problems. Asked about further documentation, Ritter provided a follow-up letter stating that the agency's owner, a bankruptcy attorney named Richard Feinberg, told DCF investigators as far back as June 2004 that Latrace "was not involved as an employee or as an independent contractor facilitating or assisting in adoptions" and that her only work for Feinberg had consisted in her designing the website for another adoption agency he sought to license. "You stated that the website design was her only activity . . . and that she no longer had, nor would she have, any relationship with your practice and Little Pearls," the letter says.

But Feinberg told U.S. News that Latrace has worked directly with clients, answered their E-mails, and generally helped facilitate adoptions. Feinberg added that Latrace does an "excellent job" and is "the most devoted and dedicated adoption advocate" he has ever met. Feinberg says that he is currently restructuring the business and that the agency is not taking on any new adoptions at this time.

Ritter acknowledges that the state's power over adoption facilitators is very limited. Even if the state had done a background check on Latrace, "problems in another country probably would not come back," says Ritter. He adds that Latrace's consulting firm is not licensed to do adoptions in Florida. But the state is powerless if she continues to work with clients outside the state, Ritter says.

In other words, caveat adopter. Advocates are hopeful that the Hague Convention on international adoption, signed by President Bill Clinton in 2000 but yet to be ratified, will provide greater oversight and transparency of at least some international adoptions if it is correctly implemented; some experts have their doubts. For one thing, says Maskew, it will apply only when both countries involved in an adoption have ratified it. And the hottest countriesfor foreign adoptions haven't. Still, it has to be better than the options parents have now: scouring the Internet or trying to pry useful information out of state regulators. Maskew says that facilitators and agencies have been known to post glowing referrals about themselves online under fake screen names. She adds that some also try to curtail complaints by making prospective clients sign blank confidentiality agreements and liability waivers. The states have been no more helpful: According to a 2004 Ethica report, when would-be parents "do manage to reach a licensing specialist, they are often told that the state does not keep complaints on file or that they cannot be released to the public." More often still, Ethica says, regulators just don't answer the phone.

A FOREIGN BABY BOOM

Overseas adoptions by U.S. citizens

[Chart data are incomplete]

1990 7,093

2004 22,884

[Chart labels]

6,000

10,000

14,000

18,000

22,000

Source: State Department; USN&WR

WHERE ALL THOSE BABIES COME FROM

From 1990 to 2004 the list of countries allowing the most foreign adoptions changed dramatically.

1990

S. KOREA 2,620

COLOMBIA 631

PERU 440

PHILIPPINES 421

INDIA 348

CHILE 302

PARAGUAY 282

GUATEMALA 257

BRAZIL 228

HONDURAS 197

2004

CHINA 7,044

RUSSIA 5,865

GUATEMALA 3,264

S. KOREA 1,716

KAZAKHSTAN 826

UKRAINE 723

INDIA 406

HAITI 356

ETHIOPIA 289

COLOMBIA 287

Source: State Department; USN&WR

This story appears in the June 6, 2005 print edition of U.S. News & World Report.

Everyone Loves Eliot
Even people who might be investigated by him want to give to New York's top cop
By Kit R. Roane
Posted 2/20/05

They say politics makes strange bedfellows. New York State Attorney General Eliot Spitzer, famous for protecting America's millions of small investors with uncommon regulatory zeal, is finding out just how strange. Meet J. Morton Davis, one of Wall Street's most controversial penny-stock mavens and, as of last December, a proud contributor to Spitzer's political coffers.

Spitzer, who recently announced his candidacy for New York governor, accepted a $10,000 campaign donation from Davis, a former supporter of Spitzer's likely opponent, current Republican Gov. George Pataki. The donation was all the more unusual because regulators like Spitzer have not been kind to the Davis clan. Davis, his family, and his investment firms have been the subject of numerous investigations, lawsuits, and fines over the past four decades.

For most politicians, such a donation wouldn't even be noticed. But Spitzer's political capital rests on his reputation as a crusader. And that is a problem for his fundraisers. As one of the most aggressive law enforcement officials in the country, Spitzer can barely swing a stick without hitting someone whose business, like Davis's, might fall under his legal purview. Since winning election as New York's attorney general in 1998, Spitzer has investigated brokerage firms, mutual funds, insurance companies, drug companies, real-estate developers, Internet spammers, and private utilities, just to name a few.

Ponying up. Meanwhile, his campaign has received donations from members of nearly all these groups. And, on occasion, conflicts have arisen. Last year, the campaign returned two $5,000 donations--one from KPMG, the other from American International Group--because each company became the subject of an investigation by Spitzer's office.

Declining donations from people who are under investigation by the attorney general's office is the Spitzer campaign's only hard and fast rule. But sticking to even this has proved tricky. Because campaign fundraisers don't know about investigations before they are announced, they have set up an Internet-alert system that flags every mention of Spitzer's office in the press. "Last week we saw he went after Simon [Property Group]," a campaign official says, adding that the campaign was just about to dial for dollars there.

Plenty of folks with good intentions want to give to Spitzer, who has raised nearly $8 million so far. Former Washington Capitals co-owner Jonathan Ledecky, who was the victim of a bank swindle, donated $25,000. But Spitzer's campaign is also attracting money from business interests whose motives seem a bit more calculating. James Featherstonhaugh and his lobbying firm, for example, gave Spitzer a campaign contribution two months after Spitzer and the state lobbying commission proposed prohibiting most forms of lobbying on government contracts. This is a lucrative area for top-shelf lobbyists like Featherstonhaugh, who has vowed to fight any new regulation.

Then there's Davis. In 2002, both his sons-in-law were convicted of securities fraud and collusion to fix the prices of several small-cap companies brought public by the Davis-controlled D. H. Blair Investment Banking Corp. As part of the scheme, brokers in a separate retail operation would pay a premium to buy back stock in the companies from important investors, usually celebrities or other wealthy individuals, then resell the stock to ordinary clients at artificially high prices. This retail arm, which Davis had sold to the two men, other family members, and some longtime employees, was shuttered after reaching a $4.3 million settlement with regulators. More recently, the New York Stock Exchange censured and fined Davis's firm $13,500 for violations. Although it remains unclear why Davis sent the attorney general's campaign the money, a Spitzer spokesman says that because of new information brought to his attention by U.S. News, "the contribution will be reconsidered."

This story appears in the February 28, 2005 print edition of U.S. News & World Report.

Desert Desperadoes
How the United Nations' oil-for-food program was transformed into a piggy bank for Saddam Hussein and the biggest financial scandal in the world body's 60-year history
By Kit R. Roane
Posted 1/16/05

Fallen behind on your scandal news lately? Well, don't look now, but the doozy the United Nations has brewed up in its Iraqi oil-for-food program is about to come to full boil. The Treasury Department, the Department of Justice, the Manhattan district attorney's office, five legislative committees, at least three foreign governments, and, oh yes, the United Nations itself are asking who's responsible for the more than $4 billion in illegal kickbacks on Iraqi oil sales and goods from suppliers exporting food, medicine, and other materials to Baghdad. Former Federal Reserve Board Chairman Paul Volcker, who is heading the U.N.'s investigation of itself, is due to weigh in later this month with his findings and has already given a glimpse of the mess with a "provisional" assessment of a program plagued by sloppy, myopic management that may or may not turn out to have included criminal conduct. The Volcker report should be good reading, as the former Fed chief has had unfettered access to U.N. documents and personnel. U.S. News has learned that the Justice Department has lent him some experienced federal prosecutors, while the Manhattan district attorney's office is providing information gained through its subpoena power.

What's emerging is a story of good intentions gone awry. As originally conceived, the U.N. program was to have used proceeds from officially monitored sales of Iraqi oil to purchase food and humanitarian aid for Iraqi civilians. The aid was meant to cushion them from the effect of punishing sanctions imposed on Saddam Hussein's regime after the Gulf War. But the program was so mismanaged that it allowed Saddam and his cronies to pocket millions of dollars and curry favor with businessmen and important politicians who obtained contracts to either sell Iraq's oil or supply the U.N.-approved aid to Iraq.

The U.N. sanctions committee, which included representatives from the United States and other Security Council members, had final authority over the oil-for-food program. Volcker wants to know why they didn't plug the holes and if any were influenced by the ongoing trade their countries had developed through the oil-for-food program. Senate investigators have obtained minutes of the sanctions committee meetings, but Volcker so far has been denied access to the massive bound volumes. Asked about the disparate treatment, a Volcker confidant said: "The U.S. has not been terribly helpful. They are very reluctant to demonstrate the degree to which they either overlooked or approved the contracts, the monitoring of them, and the smuggling."

The scandal, wherever it ultimately leads, has only deepened the already considerable woes of U.N. Secretary General Kofi Annan. Some U.N. officials close to Annan--including Benon Sevan, named by Annan to run the program's day-to-day operations--have been tarred by the mess. Annan's son, Kojo, who had business dealings with a Swiss company that had a U.N. contract to inspect humanitarian goods brought into Iraq by the program, has also come under scrutiny. Both men have denied any wrongdoing.

Unhappy birthday. The investigations, into what may be the largest financial scandal in U.N. history, come at a time when Annan is grappling with a host of other public-relations disasters, among them allegations that U.N. peacekeepers raped Congolese girls and a no-confidence vote on senior management by U.N. staffers. Annan has begun a management shake-up and promised to focus on reform in the coming year. But as the U.N. lurches toward its 60th birthday, critics of the agency, including many prominent Republicans angry over its failure to support the U.S.-led invasion of Iraq, are using the scandal to bash both the U.N. and Annan. Some, for instance, have attempted to conflate the oil-for-food scandal with the well-documented smuggling of nearly $6 billion in Iraqi oil during the U.N. sanctions regime. One Republican estimate placed the amount of fraud at an astounding $21 billion, more than one third of the entire $60 billion program. However, there is virtually no evidence to support that estimate, investigators and other experts say. The U.S. Government Accountability Office places the amount of fraud in the oil-for-food program at $4.4 billion. And as Juan Carlos Zarate, the Treasury Department's assistant secretary for terrorist financing and terrorist crimes, puts it, "All the estimates are a little soft."

Politics aside, there is abundant evidence of substantial fraud and mismanagement in the U.N. program. A Pentagon audit that examined just 10 percent of the oil-for-food contracts pending at the time of the U.S.-led invasion in 2003 found that the costs of nearly half the contracts appeared to be inflated. On just the food contracts alone, Pentagon auditors found evidence of overpricing in 87 percent of them. The audit, reviewed by U.S. News , also found five contracts that included "after sales service charges" of between 10 and 20 percent. It is now believed that Saddam and his agents tacked on such surcharges to the aid contracts in order to siphon money out of the program and divert it to the regime's purposes, using millions meant to buy food to instead shore up his army and construct lavish presidential palaces. In order to pay the surcharge fees, it appears, some companies either inflated the cost of goods sold or delivered fewer goods than called for in their contracts. Former Iraqi ministries, the Pentagon report related, said surcharges and kickbacks were "standard practice."

How did the U.N. let it happen? It is known now that U.N. audits flagged millions of dollars in waste from flawed contracts as well as evidence of overcharging by companies hired to monitor Iraq's sale of oil and its purchase of humanitarian supplies. In a July 1999 report, U.N. auditors found that one of the original monitors hired to police the oil-for-food program, Lloyd's Register Inspection Ltd., appeared to have overcharged the U.N. by more than $1 million. The audit also found that the U.N. was approving Lloyd's invoices without ever verifying that the work billed had actually been done. After the Swiss firm, Cotecna, took over the monitoring of the program, other red flags were raised. An April 2003 audit noted that Cotecna failed to provide the number of employees specified in the contract or have its employees work the number of hours required. Both Lloyd's and Cotecna have denied any wrongdoing.

Each of the ongoing investigations into the oil-for-food program is focusing on specific areas of interest. Volcker, for instance, is primarily concerned with what went on at the U.N., while the Federal Reserve hopes to trace the source of millions of dollars in new U.S. currency seized by the United States in Iraq after it invaded. Manhattan District Attorney Robert Morgenthau wants to find out which American companies and oil brokers might have paid kickbacks to Saddam in exchange for gaining access to the oil-for-food program.

There are few American companies on the official lists of those trading with Iraq through the oil-for-food program, but investigators say that most of the oil shipped through the program wound up in the United States. Marc Rich and his partner, Ben Pollner, are two well-known oil traders who have drawn the interest of investigators. But so far they aren't talking. New York Police Department detectives attempted to interview Pollner recently as he was boarding a plane for Switzerland. Pollner would only say that he hadn't broken any American laws, says one law enforcement official, noting: "We haven't heard from him since."

Investigators add that some American oil companies placed explicit language in contracts with middlemen stating that the money being provided to purchase oil was not to be used to pay kickbacks. Whether or not those contracts will shield them from possible prosecution is another question. Asked how the criminal investigations are going, one prosecutor says that there is now a road map for Saddam's oil dealings. News of some criminal charges, he says, could begin hitting the papers within four to five months.

A conflict. In creating the oil-for-food program in 1996, the United Nations sanctions committee intended to accomplish two things: Lighten the burden of the U.N.-imposed sanctions on ordinary Iraqis and make sure that Saddam and his henchmen didn't use the money from the permitted oil sales to buy or build banned military weapons. Simple enough. But the problem was that Saddam was allowed by the Security Council to both sell the oil and negotiate with foreign suppliers. It is clear now that the inspection companies hired by Sevan's office to keep track of the flow of oil and goods operated really at the pleasure of Saddam. After the U.N. replaced Lloyd's, Cotecna was assigned to monitor the shipments of humanitarian aid. A company called Saybolt was contracted to monitor the oil sales. Neither, it turns out, had sufficient leverage to force the Iraqis to abide by the U.N. rules. Representatives from Cotecna, which U.S. News learned recently hired a Washington firm to lobby on the oil-for-food issue, have testified that they were often threatened by Iraqi officials. Seth Goldschlager, a spokesman for Cotecna, adds that his company was authorized only to "check paperwork." "The first contract called for verification inspections," Goldschlager said, "but the Iraqis refused that." Congressional investigators tend to agree that the inspection companies faced an impossible task. "They were paper tigers with no authority at all," says Tom Costa, a staff member of the House Government Reform subcommittee. "If someone wanted to just drive by a checkpoint, they just drove by."

Summaries of U.N. sanctions committee meetings make it clear that member countries, including the United States, were aware that Saddam was attempting to game the system. More than once, committee members were shown evidence that kickbacks were being paid by aid suppliers, that Saddam was diverting aid to his military, and that Iraqi oil was being smuggled illegally. The question now for everyone examining the sieve like oil-for-food program is why so little was done to stop such abuses and what responsibility Washington may have. A Senate investigator who has reviewed some of the sanctions committee minutes told U.S. News that, overall, U.S. performance looks to have been pretty good. "When the U.S. or the Brits or the Dutch bring up a concern with the program," the investigator explained, "the Russians and the French and the Chinese stop the proper oversight." Other investigators say it is too soon to allot responsibility for the program's many failures. "At this point," one says, "we don't know if the U.S. was up against a brick wall or not, and if the laxity was coming from the U.N. or if it was really at the member states."

Even if the United States weathers these investigations, other oil-related probes now ramping up could give it a black eye. Audits of how the U.S. Coalition Provisional Authority handled Iraq's oil revenue after the invasion have shown some similar problems in oversight and execution, with millions of dollars given out for work where no contracts could be found and middlemen apparently fabricating receipts and pocketing hundreds of thousands of dollars more.

Another investigation is about to be launched that will look purely at whether Washington had any culpability in the scandal. That investigation by the GAO will begin at the end of the month, with the results to be reported to 12 separate congressional committees. Joseph Christoff, a GAO investigator, says the investigation will look at what actions the United States took to uncover fraud in the program. "The U.S. has stated repeatedly that they were one of the more aggressive reviewers of these oil-for-food contracts, with the purpose of looking for WMD s," he says. "The question we have is: What was also done to look at prices, and was there any effort to see if they were inflated in order to produce kickbacks?"

Illicit Iraqi Revenue

The $10.1 billion generated from 1997 to 2002 breaks down like this:

Oil-for Food Program

Kickbacks and other illicit deals $4.4 billion

Oil Smuggling

Via Syria, Jordan, Turkey, Iran and others $5.7 billion

Source: General Accountability Office

USN&WR

This story appears in the January 24, 2005 print edition of U.S. News & World Report.

Burial Plots
Cemetery abuses mean your loved ones may not be resting where you think
By Kit R. Roane
Posted 3/3/02

For a little over $2,000, Gladys Bohn was going to be sent off in style. With a decade's worth of regular payments from her Social Security check, the Sonora, Calif., grandmother ensured that she would greet the afterlife in a fully lined satin-finish "princess casket," her hair teased, her makeup and nails done just right. A clergyman would eulogize her at the grave, and wreaths of yellow mums and peach carnations would flank her sides.

But when Bohn died two years ago, at the age of 96, family members say the funeral home first lost her body, then delivered her to the graveside in a Styrofoam-like box. Her body was later placed in a coffin, but the promised clergy and flowers never materialized. A few months later, when Bohn's family had her disinterred, the family says in a lawsuit, they found her clothed in a hospital gown and stuffed in a vinyl bag, her head resting on a Kaiser Permanente hospital pillow. "They treat animals better," says her nephew Don Brady. A lawyer for Oakwood Memorial Chapel and Cunningham's Affordable Cremation and Burial Centers says the companies fulfilled their contract--minus the flowers.

Although the recent gruesome goings-on at Tri-State Crematory in Noble, Ga., have horrified the nation--investigators have discovered that more than 300 corpses intended for cremation were instead strewn about the property--Bohn's family's experience and dozens of similar cases show abuse of the dead is nowhere near as rare as the reaction to the Georgia case suggests.

While the "death care" business has long been criticized for price gouging and sleazy sales tactics, mistreatment is hard-

ly limited to the living. From state investigators, lawsuits, and countless consumer complaints emerges a picture of a scandal-plagued cemetery industry in which even well-intentioned operators seem to have trouble burying bodies in the right place or cremating the proper person, and where less scrupulous operators knowingly stack bodies and siphon funds intended to cover burials and graves.

Authorities say there is no way to even guess how many bodies may be misburied or otherwise mistreated, partly because few cemeteries come under any regulation at all. But Maryland alone gets hundreds of complaints a year, according to Steve Sklar, director of the state's Office of Cemetery Oversight. And in just the past few years, cases of fraud and abuse have been alleged against cemeteries, crematories, and mortuaries in a number of other states, including Florida, California, Kentucky, Michigan, Texas, Washington, Wisconsin, New York, Georgia, and Hawaii. "It's a national problem," says Gilford Robinson of the Florida Department of Banking and Finance, which regulates for-profit cemeteries there. "We find two people buried where one is supposed to be, and we find plots being sold two or three times. We've had mothers go out putting flowers where they thought their children were buried, but it wasn't their child."

The disposal of the dead is a ritual sacred to all cultures, whether it is burning the deceased on a funeral pyre or burying a loved one in the shade of an oak tree in the family plot. The universal need is for closure, and the departed will often have left detailed instructions for how they want the mourning to be done. But recent lawsuits and criminal filings show that too often, among the 6,000 burials that take place in the United States each day, those wishes are not being honored. In Hilo, Hawaii, last month, the state attorney general's office raided Memorial Mortuary after two families claimed that loved ones were buried in nothing more than body bags. In Garden Grove, Calif., Evelyn Schild became convinced that she did not have her husband's ashes after the funeral home told her to come pick up his prosthetic hip. Her husband, she says, never wore a prosthesis. Separately, the owner of a funeral home in Lake Elsinore, Calif., faces charges that he dismembered more than 80 bodies meant for cremation and sold the parts for medical research. And last June, police in Connecticut discovered the remains of five people stacked in a funeral-home operator's garage.

Complaints. Florida, with its large population of retirees, is the country's death-care capital. It is also a hotbed of death-care complaints, several of them against giant Service Corp. International, which controls nearly 4,000 mortuaries, cemeteries, and crematories nationwide. In a lawsuit filed last December, consumers accused two of Service Corp.'s South Florida cemeteries of dumping bones in the woods, burying bodies on top of one another, and mixing human remains in a careless farrago within crypts. Service Corp. is hardly the only operator under fire. Transcripts from meetings of the Florida Cemetery Board show regulators in constant battle with cemeteries that have not properly handled prepaid funds, failed to build mausoleums paid for by customers, or buried several people in the same plot.

At Cedar Hill and Bellevue Memory Gardens in Daytona Beach last year, investigators said the owners had misplaced more than 50 bodies, illegally buried or burned medical waste, and broken open vaults to shove other remains inside. Robinson said cemetery workers were even stealing gold teeth and selling them to pawnshops.

Robert Fells, executive director of the International Cemetery and Funeral Association, counters that serious allegations such as those in Florida and Georgia are "extremely rare." He notes that the U.S. General Accounting Office investigated the industry in 1999 and found "as a whole, a low volume of complaints." But the GAO report also points out that comprehensive information was not available because the many agencies that receive calls do not coordinate with one another and record complaints differently. The GAO also said that consumers often did not report problems "because of the emotional component of death care."

Mortuaries, cemeteries, and crematories are notoriously underregulated. Of the 115,000 cemeteries in the country, only about 10 percent are termed "for profit" and fall under any state regulatory oversight at all. And after they are full, some cemeteries become exempt from regulation altogether. Some religious, municipal, and other not-for-profit cemeteries are completely unregulated, even though many are affiliated with for-profit mortuaries. What regulation exists is often dismal; the Texas Funeral Commission, for example, employs only two people to investigate nearly 1,300 funeral homes, and it does not inspect crematories without a complaint. While most states regulate mortuaries, only about half regulate crematories, and only 10 have boards whose sole job is to keep track of cemeteries. Seventeen states roll cemetery oversight into a state agency tasked mainly with regulating businesses such as securities and real estate.

With so few laws on the books, officials say they are often hard pressed to find a violation to charge offenders with. Veronica Genco, a lawyer for the state of Florida, cites a current case in which a mortician allegedly buried people on top of those already interred at a municipal cemetery. Because there was no law against stacking bodies, prosecutors resorted to charging the mortician with mismanagement of funds.

Reforms. Even before the macabre revelations in Georgia, burial abuses have sparked a flurry of reform efforts. The California Department of Consumer Affairs, for instance, increased its staff of cemetery inspectors last year, and investigations have more than doubled to 528. But penalties also need to be strengthened, critics say. Sen. John Breaux, a Louisiana Democrat, is working to expand the Federal Trade Commission's authority to crematories, cemeteries, and funeral merchandise sellers. New York legislators have proposed making the improper disposal of a human body a felony, punishable by up to four years in jail. Colorado, which does not regulate the death-care industry, is now looking into the idea. And the Maryland legislature is reconsidering a bill to bring crematories under the purview of state regulators.

In the past, such initiatives have been defeated by strong lobbying by the death-care industry. But Wisconsin state Rep. Johnnie Morris-Tatum is among those now hopeful that times have changed. Morris-Tatum began pushing for tighter regulation after learning of the dismal caretaking at Milwaukee's Evergreen Cemetery, where bodies, she says, were stacked so high in the ground that a metal rod "didn't even go down 6 inches." Milwaukee resident Eudell Harris, 52, has been searching for his grandfather's grave there for three years. "There are questions about where my niece is, too," said Harris. He says he did find his father's grave recently but that there appears to be another casket stacked on top. "My mother isn't dead," Harris notes, "so I don't know who's buried on top of him."

This story appears in the March 11, 2002 print edition of U.S. News & World Report.

More unusual interrogations inside Iraq's Abu Ghraib prison
By Edward T. Pound and Kit R. Roane

A civilian interpreter who worked at the teeming Abu Ghraib prison near Baghdad had access to highly sensitive intelligence even though he did not have a Pentagon security clearance to deal with classified information, according to the Army's investigation of abuses at the Iraqi prison.

In interviewing witnesses, Maj. Gen. Antonio Taguba expressed outrage over the situation—at one point telling Col. Thomas Pappas, the military intelligence officer in charge of interrogations at Abu Ghraib, "I will advise you that one particular individual is working on a special project of a highly sensitive nature whereby he's collecting intelligence information...which he [should] not have access to."

The interpreter, John Israel, admitted in an interview with General Taguba that he did not have a security clearance. The Israel incident further supports the conclusion, reached by Taguba in his final report, that the Army failed to monitor operations at Abu Ghraib.

Taguba cited Israel's lack of a clearance in his report but provided no details. The classified annexes to Taguba's report shed more light on the incident. U.S. News has obtained all 106 annexes. In this week's issue, [Hell on Earth, July 19-26], the magazine provided the most detailed report yet of the chaos at Abu Ghraib—not only the beatings and sexual humiliation of prisoners, but the riots, shootings, escapes, unsanitary conditions, and the everyday danger faced by U.S. soldiers. Seven soldiers from the Army's 372nd Military Police Company are accused in the beatings of prisoners, more charges may be brought against others, and several military investigations are underway.

Taguba was clearly worried not only that some translators had abused prisoners but also that sensitive intelligence information could fall into the wrong hands. Under sharp questioning last February 21, Lt. Col. Steven Jordan, a senior intelligence officer at the prison, acknowledged that there had been problems with some translators supplied by the Titan Corp., a San Diego company.

When he first arrived at Abu Ghraib last September, Jordan testified, he warned a group of Titan translators that they were to stay out of Cell Block 1, where security detainees of potentially high value intelligence were held. "When I first came on board," Jordan said, he told the translators, "You're not authorized to be down in that facility." He later told Taguba that "the FBI came and said that one of the Titan. . .linguists, and they didn't know where in the country, or maybe two, was possibly providing information leading to possible anti-coaltion force type attacks. So, we kept a very tight hold."

Ralph Williams, a spokesman for Titan, says the Army had not informed the company of any such allegations. "Our policy is very clear," he says. "If any of our employees have been involved in wrongdoing, we would take action ourselves." Williams adds that the Army has been very pleased with the work of Titan translators both in Iraq and Afghanistan.

The Taguba files show that some of the intelligence collected at Abu Ghraib was sensitive—and valuable. A "situation update" report, dated January 14, shows that the Joint Interrogation and Debriefing Center at Abu Ghraib, run by the 205th Military Intelligence Brigade, had collected "actionable intelligence" that might have led to the capture of Saddam Hussein and, perhaps, several close associates. An Iraqi who worked for the Kurds as a spy provided information on Ansar al Islam, an Iraqi terrorist group. He "provided information on [Ansar al Islam] members, safe-house locations, foreign travel, and weapons storage locations," the report says.

The situation report also revealed that U.S. forces, based on intelligence obtained from detainees at Abu Ghraib, executed a "capture/kill operation"—codenamed the "Al Ghrafika Project"—at a facility where insurgents made improvised explosive devices. Further, the report showed, Abu Ghraib held at least 21 alleged al Qaeda members, three "confirmed" members of Ansar al Islam, and "foreign fighters" from Syria and Iran.

The annexes also reveal the size of the interrogation effort. In all, as of last January, 149 people were detailed to interrogations—97 soldiers, 20 private translators, and 32 other civilians who were affiliated with CACI International, a military contractor based in Arlington, Va. According to Colonel Pappas, who commanded the 205th MI Brigade, some on the interrogation team had Middle Eastern backgrounds. "There are interpreters who are nationals from the Middle East that can get a secret [security] cleance who are now U.S. citizens," Pappas testified. "Recently, we had British and Jordanian interrogators."

According to CACI, it had nine interrogators at Abu Ghraib in January, including Steven Stefanowicz. Along with Israel, the translator, Stefanowicz has emerged as a central figure in the Iraqi prison scandal. In his report, General Taguba says that he suspected that Stefanowicz, Israel, Colonel Pappas and Lt. Col. Jordan were "directly or indirectly responsible for the abuses" at Abu Ghraib. In their testimony, all four men denied any such involvement.

Little is known about Stefanowicz, although more information emerged in his interview with Taguba on February 12. Asked what he did before joining CACI, Stefanowicz said he had served as a Navy intelligence specialist, detailed to the Defense Intelligence Agency. People familiar with his work for DIA say Stefanowicz served in Muscat, Oman, from November 2001 until early last year. Taguba asked, "Was your background pretty much on Navy intelligence, HUMINT (human intelligence)?" Stefanowicz replied, "My last, basically two years, have been involved on the HUMINT side."

Stefanowicz said he wasn't involved in abusing prisoners, and had reported one incident of abuse to an officer. He acknowledged, however, that he had directed MPs to put some detainees in the "hole," which he described as a cell on the first floor of Cellblock 1A, enclosed with "a metal door, and it's just a room in the wall, a concrete room." The door, he explained, had a peephole. "I've never seen anybody use it," he testified. "I actually think it's welded shut." Stefanowicz said that under the interrogation rules of engagement at Abu Ghraib detainees could be placed in the hole for 30 days without approval from Lt. Gen. Ricardo Sanchez, then the top commander in Iraq who had placed military intelligence in charge of the prison complex.

Taguba pointedly asked Stefanowicz if he was employed by the CIA or the DIA. He said he was not. However, says Brig. General Janis Karpinski, who commanded the MPs at the prison, Stefanowicz told her a different story. Karpinski–sharply criticized by Taguba for failed leadership, a charge she denies—told U.S. News that Stefanowicz claimed to have been with defense intelligence when she ran into him at the Abu Ghraib complex late last year. She said she knew him slightly. "Who are you working for?" Karpinski says she asked him. "He did not say, 'I am a contractor with CACI,' but he said he was doing the same thing—OGA [other government agency]—not the CIA, but. . .the Defense Intelligence Agency."

Stefanowicz's attorney, Henry Hockeimer, says Karpinski is "flat wrong." He added, "Steve is employed by CACI." That company's CEO, J.P. (Jack) London said it was "presposterous" to believe that Stefanowicz was working under cover for DIA while employed at CACI. "We certainly have no knowledge of that, for goodness sake," London said in an interview. He said Stefanowicz remains on the payroll, and added that he had not seen any evidence indicating that his employee had abused detainees.

Stefanowicz worked closely with Israel, the translator, on a sensitive special intelligence-gathering project, not further defined, according to the Taguba files. Israel, an interpreter who was born in Iraq and became an American citizen, was asked about his work on the project in an interview with Taguba on February 12. "Lately, I work with the same interrogator [Stefanowicz]," Israel testified, "because we have a special case." Asked if there was rule prohibiting him from discussing interrogations with other translators, Israel said, "Yeah, absolutely, absoltuely, especially in my case with Steve. I have to be quiet. Even, I can't tell you anything unless if you want to ahead and ask, that's up to you. . .I usually keep quiet. He tells me to keep quiet, but he knows I'm quiet. I don't like to elaborate on my cases."

Taguba pressed as to whether Israel had a security clearance. Israel replied that his "case is pending." Taguba said, "You don't have a security clearance at this time?" Israel replied, "No, sir. I wish I could have one, sir. At least I'd know I have a job for the whole year."

Israel appeared to relish the excitement of his new job, noting that before becoming a translator, he had been trained as an accountant and worked for the last 12 years as a service technician repairing printers and other office products. Israel works for SOS International, Ltd., a subcontractor to the Titan Corp. at Abu Ghraib. An SOS spokesman, Bruce Crowell, said Israel "met all the security requirements that the Army had to deploy him into the job."

Despite the many soldiers who reported seeing naked prisoners at Abu Ghriab, Israel said he saw no such thing. "That I didn't see," he testified, "and I hate to see people naked." Israel, who is married, could not be reached. When a reporter called his home in California, a woman who answered the phone defended him, but said he did not wish to comment. At the conclusion of his interview with General Taguba, however, Israel offered to help investigators in any way he could. "The United States gave me a home, so they made me feel at home," he said. "That wasn't my original home, and I'm dedicated to serve the United States. . ."

Taguba was unimpressed. Israel's claims that he had not witnessed abusive interrogations, Taguba said in his final report, were "contrary to several witness statements."

U.S. News & World Report

June 7, 2004

Up in the cellblocks

BYLINE: By Edward T. Pound; Kit R. Roane

SECTION: NATION & WORLD; Vol. 136 , No. 20; Pg. 23

LENGTH: 784 words

HIGHLIGHT: A Pentagon memo defines just who gets to see some inmates at Abu Ghraib--and when

Just days before the Abu Ghraib abuse scandal was disclosed to criminal investigators in mid-January, Army lawyers and intelligence officers executed a plan to restrict Red Cross access to the facility west of Baghdad. The new rules were developed by the office of Army Col. Marc Warren, the top legal adviser to Lt. Gen. Ricardo Sanchez, who heads coalition forces in Iraq, and officers of the 205th Military Intelligence Brigade, which controlled the prison.
According to a memo obtained by U.S. News, military police and intelligence personnel at Abu Ghraib were told on January 2 about the new plans. Two days later, a Sunday, inspectors from the International Committee of the Red Cross (ICRC) visited Abu Ghraib. The Red Cross team was told that its access to cellblocks 1A and 1B, where most of the abuses had occurred, along with nearby interrogation booths located outside the facility, would be restricted.
After the Red Cross objected, the Army gave the inspectors access to 1A and 1B but kept them from interviewing nine "security internees" being interrogated at the time, the memo said. The Army also maintained a requirement that the Red Cross schedule future visits and be escorted by military personnel.
The restrictions were put in place despite the Army's avowed commitment to "free and unfettered access" to Abu Ghraib and other detention facilities in Iraq, in compliance with the Geneva Conventions. The new policy was drafted after the Red Cross, in visits to Abu Ghraib last October and November, uncovered abusive treatment. "They were not happy that the Red Cross had unfettered access in Abu Ghraib," says an Army officer familiar with the prison's procedures. "They did not want Red Cross people walking around in there where they were not supposed to be." After the ICRC complained to military commanders, the Army informed the agency that it was necessary to isolate some prisoners for interrogation to develop intelligence. The military was seeking the whereabouts of former high Iraqi officials.
The prison was guarded by military police from the 800th MP Brigade, but it was controlled by the 205th MI Brigade when many of the abuses occurred. Army investigators are examining whether intelligence personnel encouraged MP s to rough up and humiliate prisoners. Investigators first learned of the abuses when a soldier wrote them an anonymous note last January 13.
According to Army officers, detainees were kept isolated in cellblock 1A, often stripped, and then interrogated. In an E-mail to U.S. News, Colonel Warren defended the decision to control Red Cross visits. He said General Sanchez "had no role in this decision, which was temporary and did not deny access." The Red Cross, Warren said, was "temporarily denied the opportunity to conduct private interviews" of "specifically identified individuals who were undergoing active interrogation." He said they numbered eight. He added that the inspectors were allowed to view the conditions of those captives and to interview them during a later visit. "The legal authority for this exceptional and temporary denial of access," Warren said, was Article 143 of the Fourth Geneva Convention. It allows restrictions "for reasons of imperative military necessity."
No "free access." Antonella Notari, a Red Cross spokeswoman in Geneva, says she can't discuss the January visit but adds: "We are convinced that we had and still have appropriate access to persons detained in Iraq in such a manner which allows us to make an accurate assessment of their treatment and the conditions of detention . . . ."
Details on the January Red Cross visit are contained in the memo written by Maj. George O'Kane, an Australian officer who worked for Colonel Warren at U.S. military headquarters in Baghdad. O'Kane wrote that he briefed "MP and military intelligence staff" based at Abu Ghraib on January 2. The purpose: "to ensure a more coordinated visit by the ICRC." Two days later, O'Kane wrote, he and Maj. Laura Potter, deputy commander of the 205th MI Brigade, briefed the Red Cross visitors. "The purpose of the inspection briefing," O'Kane wrote, "was to control the inspection for security purposes . . . ." He went on: "It was briefed to the ICRC that their free access would be restricted in accordance" with the Geneva Conventions, "but only to those security internees undergoing interrogations in Units 1A, 1B, and interrogation booths."
After negotiations with the 205th MI Brigade, O'Kane said, the Red Cross was denied "free access" only to the "security internees" then being interrogated. The inspectors, he added, were given immediate access to prisoners in 1A and 1B.

The Service Question
A review of President Bush's Guard years raises issues about the time he served
By Kit R. Roane
Posted 9/12/04

Last February, White House spokesman Scott McClellan held aloft sections of President Bush's military record, declaring to the waiting press that the files "clearly document the president fulfilling his duties in the National Guard." Case closed, he said.

But last week the controversy reared up once again, as several news outlets, including U.S. News, disclosed new information casting doubt on White House claims.

A review of the regulations governing Bush's Guard service during the Vietnam War shows that the White House used an inappropriate--and less stringent--Air Force standard in determining that he had fulfilled his duty. Because Bush signed a six-year "military service obligation," he was required to attend at least 44 inactive-duty training drills each fiscal year beginning July 1. But Bush's own records show that he fell short of that requirement, attending only 36 drills in the 1972-73 period, and only 12 in the 1973-74 period. The White House has said that Bush's service should be calculated using 12-month periods beginning on his induction date in May 1968. Using this time frame, however, Bush still fails the Air Force obligation standard.

Moreover, White House officials say, Bush should be judged on whether he attended enough drills to count toward retirement. They say he accumulated sufficient points under this grading system. Yet, even using their method, which some military experts say is incorrect, U.S. News 's analysis shows that Bush once again fell short. His military records reveal that he failed to attend enough active-duty training and weekend drills to gain the 50 points necessary to count his final year toward retirement.

The U.S. News analysis also showed that during the final two years of his obligation, Bush did not comply with Air Force regulations that impose a time limit on making up missed drills. What's more, he apparently never made up five months of drills he missed in 1972, contrary to assertions by the administration. White House officials did not respond to the analysis last week but emphasized that Bush had "served honorably."

Some experts say they remain mystified as to how Bush obtained an honorable discharge. Lawrence Korb, a former top Defense Department official in the Reagan administration, says the military records clearly show that Bush "had not fulfilled his obligation" and "should have been called to active duty."

Bush signed his commitment to the Texas Air National Guard on May 27, 1968, shortly after becoming eligible for the draft. In his "statement of understanding," he acknowledged that "satisfactory participation" included attending "48 scheduled inactive-duty training periods" each year. He also acknowledged that he could be ordered to active duty if he failed to meet these requirements.

Slump. Bush's records show that he did his duty for much of the first four years of his commitment. But as the Vietnam War wound down, his performance slumped, and his attendance at required drills fell off markedly. He did no drills for one five-month period in 1972. He also missed his flight physical. By May 2, 1973, his superiors said they could not evaluate his performance because he "has not been observed."

Albert C. Lloyd Jr., a retired Air Force colonel who originally certified the White House position that Bush had completed his military obligation, stood by his analysis. After a reporter cited pertinent Air Force regulations from the period, he complained that if the entire unit were judged by such standards, "90 percent of the people in the Guard would not have made satisfactory participation."

Some other experts disagree. "There is no 'sometimes we have compliance and sometimes we don't,' " says Scott Silliman, a retired Air Force colonel and Duke University law professor. "That is a nonsensical statement and an insult to the Guard to suggest it."

The regulations must be followed, adds James Currie, a retired colonel and author of an official history of the Army Reserve. "Clearly, if you were the average poor boy who got drafted and sent into the active force," he says, "they weren't going to let you out before you had completed your obligation."

With Edward T. Pound

This story appears in the September 20, 2004 print edition of U.S. News & World Report.

A War Of Memories
50 years later, a former marine grapples with questions of murder--and an elusive search for the truth
By Eric Longabardi, Kit R. Roane and Edward T. Pound
Posted 10/26/03

Copyright 2003 Eric Longabardi / TeleMedia News Productions under license to U.S. News & World Report

SCOTT DEPOT, W.VA.--There are some things a man simply can't forget. For Carl Lamb, it's the image of bullet-riddled bodies piled one on top of another in the basement of a battle-scarred building in the middle of a burning hell called Seoul. The Marine Corps veteran can still see the bodies of the North Korean prisoners of war, he says, like it was yesterday, the memory of what he believes was an American war crime seared in his mind by years of nightmares and flashbacks. After all this time, more than half a century later, Lamb wants answers. But he has little hope, he says, that his government will ever give him any. "They couldn't deal with it back then," he says, "and they can't deal with it now."

Late one evening this July, Lamb talked about his 53-year odyssey and a gnawing sense that he will never know the truth. The neighbor's dogs had long ceased their plaintive howling, and the rabbits felt safe once more to hop between the old cars dying in the long grass outside his trailer home. Lamb is a big man with rugged features and hands the size of a basketball player's. The plywood floor creaked under his large feet as he sorted through his military records and the dog-eared photos of the marines he served with in Korea. He's 74 now, his memory sharp, and he speaks with the precision of a man fearful he will leave something out or be misunderstood.

Lamb's life isn't the stuff of a Norman Rockwell painting. Born dirt-poor in Arkansas, the teenage farm boy found his way into the nightmare of the Korean War, a kid soldier who finally made it back not quite whole--a wandering jobber who didn't suffer fools lightly, moved from place to place as the mood took him, all the while a grim image of death burned into his brain like a brand. To put it in its plainest terms, what turned Carl Lamb's life inside out, at least by his account, was murder--murder of the most coldblooded type. It was late September 1950, the circumstances a vicious street-to-street battle for Seoul, the South Korean capital. The bodies--naked POWs, their threadbare uniforms dumped unceremoniously on the floor beside them--were stacked in the basement of an old hotel, the Bando, Lamb believes. Who shot the North Koreans or why, Lamb doesn't know. He didn't see it happen. What he saw, he says, was the aftermath of the slaughter, and it made him sick--sick and angry.

U.S. News has attempted to piece together what happened on that terrible fall day in Seoul. The magazine's investigation did not corroborate all of the details of the incident Lamb described, but it turned up compelling evidence that prisoners were killed in Seoul. The magazine unearthed old court-martial records in which a marine testified that a sergeant with a machine-gun squad, a close friend, killed some North Korean prisoners. The sergeant belonged to Easy Company of the 2nd Battalion, 1st Marine Regiment--the same outfit Lamb believes murdered the POWs he says he later saw. But there is no reference to the Bando in the testimony. Separately, U.S. News obtained a February 1951 Marine Corps "after-action" report that refers to the killing of North Korean prisoners by members of Easy Company. The report strongly suggests that the killings occurred during the battle for Seoul. Finally, several former Easy Company marines recall hearing of POWs being killed in a Seoul hotel. Some in Lamb's company who fought alongside Easy Company also confirm that he complained at the time about a mass killing of North Korean prisoners.

"Something traumatic." Still, there are no easy answers. Many of those who fought in Seoul now are in their 70s and 80s. Memories differ on details, and the full truth may never be known. In mid-2001, the Marine Corps's Office of Inspector General, acting on a complaint from Lamb, opened an investigation. Investigators closed the case last year, saying that they could not substantiate his allegations that prisoners had been murdered in a Korean hotel. While the "sincerity" of Lamb's allegation that "he viewed something traumatic" is not disputed, the inspector general said, "our ability to reconstruct specific events that took place more than 50 years ago was hindered by the passage of time."

That investigation was far from thorough. Investigators made no attempt to find and interview possible survivors among the eight Easy Company marines who provided information for the 1951 after-action report obtained by U.S. News, saying the report was not relevant to Lamb's allegations. The investigators also failed to examine the court-martial records the magazine reviewed. And they discounted information from a former marine who says that, while clearing a large building in Seoul, he heard a burst of gunfire and then another marine exclaim that he had just shot several North Korean prisoners in a bathing area. The inspector general's office appears to have interviewed only 17 of the more than 500 men in Lamb's Marine battalion. Investigators also questioned a handful of ex-marines who served as guards at the U.S. Embassy, which had been located in the Bando Hotel.

Death In The `Pool'

Carl Lamb was a good marine. A squad leader with Fox Company of the 2nd Battalion, 1st Marine Regiment, Lamb killed the enemy, saw too many good friends die, was wounded, and put his life on the line to help save his buddies. The battle for Seoul was a major conflict in the early days of the Korean War, one of the fiercest engagements in the history of the Marine Corps. Lamb and his fellow marines took ground a foot at a time, fighting their way through barricaded streets, land mines, heavy-weapons fire, and North Korean snipers. By the early evening of September 26, Lamb says, sporadic fighting continued. Fires burned across the city. Fox Company halted its advance, and Lamb took refuge in a building on a main street.

This, Lamb says, is what happened next: Around 6:30 or 7 on the evening of the 26th, Lamb heard a burst of automatic gunfire that swelled to a crescendo, died away, then swelled again. Lamb jumped outside but couldn't locate the source of the gunfire. The next morning--under a bright sun, with temperatures in the 60s--Lamb decided to take a look inside the nearby Bando Hotel.

Lamb says he walked down a stairwell and came upon the bodies of North Korean prisoners, piled one upon another in what he thought was a small "swimming pool." The area measured about 15 by 20 feet and held no water. Scores of spent shell casings littered the tile floor in what was an eerie makeshift morgue illuminated only by shafts of light from two tall windows. Even today, Lamb shudders at the recollection: "I could see three layers of bodies. . . . They had obviously been killed the day before. Some had moved their bowels. There was excrement all over. . . . Whoever killed them, they just stood over them and sprayed the pile" with bullets. Lamb stumbled up the stairs, gasping for air--trying to get the stench of death from his nostrils.

That Lamb was upset when he confronted his captain, Goodwin C. Groff, is not in dispute. Groff, Lamb's commanding officer, is now dead. But several marines remember a heated confrontation between Lamb and Groff. "Captain, have you seen what is in the hotel?" Lamb remembers asking, tears streaming down his face. " `Yes, I've seen it, but I'll not hear another damn word about it,' " Lamb says Groff replied.

John S. Sullivan, then a private first class in Fox Company, remembers the confrontation, though his account differs in some respects from Lamb's. Marines from Easy Company, Fox's sister company, "were marching the prisoners into a building," Sullivan says, "and there were some shots, and [Lamb] was screaming, `They are shooting.' " Groff cut him off. Sullivan adds: "Everybody on the street heard the two of them." Sullivan says, however, that he cannot confirm that North Korean POWs were killed in the hotel.

For many, the confrontation with Groff might have ended the affair. But Lamb is a man of stubborn determination. He worried back in 1950--and fears to this day--that Easy Company marines executed the enemy soldiers he saw in the bathing area. The killings, he says, left him doubting his beloved Marine Corps--and it showed. In the year that followed, Lamb says, he was court-martialed for refusing an order to have his men carry firewood to a superior's tent, hurt his knee in combat, and, finally, was sent to a hospital, where his physical and mental health were evaluated. As the years passed, Lamb struggled with his painful past.

Killers. Every war produces atrocities. My Lai still lingers in the minds of many Vietnam vets and other Americans. In Korea, the United States had its problems with such crimes, but the North Koreans were especially skilled at cruelty and sadism--killing defenseless American POWs and innocent Koreans. James R. Hellman, an Easy Company veteran, remembers a haunting scene on his way to Seoul from Inchon; during one half-mile stretch, he passed American and other United Nations prisoners lying dead in ditches, shot by their North Korean captors. "We were gaining on them, so they executed the prisoners," he recalled in an interview. "There were [men] with their hands tied behind their backs and their heads blown off." Hellman also says he saw the bodies of Korean "women and children executed and grandparents hanging from trees." He explains, "You enter an innocent person and come out with nothing but hatred. So, if something like what Lamb says happened, an isolated incident where prisoners were shot, I would be surprised, but it happens. It happens in war."

Korean veterans emphasize that taking prisoners was risky business. Some prisoners faked surrender, then sprang upon marines with hidden weapons. During the Korean conflict, says Richard A. Caulley, who was an Easy Company corporal, prisoners usually had to be marched back to the rear--past mines, snipers, and deadly ambushes. "I risked my life to take them back," he recalls, "risked mines and everything else." Then: "I had to go back and try and find my unit. It seemed like a lifetime."

From Arkansas To Over There

To this day, Lamb can't remember when he didn't want to be a marine. He fell in love with the corps as a boy, while watching a newsreel of marines fighting their way across the Pacific in World War II. He admired the kind of man who could charge head-on into a hail of machine-gun fire. The Marines, the young man thought, always did what was right: honor, courage, Semper Fi.

It's easy to see why the Marines Corps held such allure for Lamb. He was born in a two-room shack in Jacksonville, Ark., in November 1928, the son of a sharecropper. His childhood revolved around working the farm. He didn't much like school and was expelled once. By age 15, he was asking his father, Fred, to let him enlist in the Marine Corps. His father refused, urging him to finish high school. He tried but dropped out after getting through just the 10th grade.

For a few months, the young man worked as an apprentice boilermaker, then tried his hand as a tire retreader. After hitchhiking to Houston with a brother to work in the shipyards, he returned home to Arkansas to ask his father's permission, once again, to join the Marines. The old man relented, figuring that World War II was nearly over and his boy wouldn't wind up dying on a foreign beach. His induction papers were signed in August 1945, in Little Rock. Carl Lamb was 16 years old.

The limitations of his world until then were clear, reflected in his Marine Corps paperwork. It showed two years of high school education and his work as a farmhand. Under occupation, Lamb, a skinny 6-foot-2, wrote in big block letters, "FARM HAND, GENERAL," noting that for 12 years he had "PLOWED, HARROWED, SOWED AND HARVESTED CORN, SURGUM, PEAS, WATERMELON, CANTELOPE AND ALL VEGETABLES, DROVE A TEAM OF MULES, MILKED COWS, RAN FARM (60 ACRES) IN ABSENCE OF FATHER." His hobbies: "WOODWORK, MODEL PLANES, HUNTING."

Lamb's next stop was boot camp. Then it was off to sea school in San Diego, where he worked on the USS Fargo CL-106 cruiser. By 1949, he had made sergeant, scaring the bejesus out of raw recruits as a drill instructor at Parris Island, S.C. There, he says, he first learned how to lead men. "Follow me!" became his credo. Lamb had found his calling. His performance reviews from then on confirmed a single fact: Carl Lamb was an excellent marine.

Korea exploded the following year. In July 1950, three weeks after he married his girlfriend, Nancy Kennell, whom he had met at a polka dance in Jerome, Pa., Lamb was assigned as an infantry unit leader of Fox Company. The next month, Fox Company shipped out, destination Korea. On September 15, the Marines landed at Inchon. Three days later, on the march to Seoul, Lamb was wounded. Trying to dig a foxhole under enemy fire, Lamb took a piece of shrapnel in the lower left back. "I put my hand back, saw the blood," he recalls, "and I began to panic." The wound wasn't serious. Lamb rejoined his men on the front lines the next day.

But the march to Seoul began to take a toll on Lamb. A few days before reaching Seoul, Lamb says, he witnessed a superior officer torturing a North Korean prisoner during an interrogation. The prisoner had a bullet wound in each arm, and the officer stuck his thumbs in both holes, then shook the prisoner violently, "trying to get him to talk." Lamb watched another officer execute an elderly, wounded Korean, he says, shooting the man three times above the ear. Lamb, stunned, kept his rage inside.

Before long, Lamb's unit was fighting in the streets of downtown Seoul, then a city of more than 1 million. James F. Baxter, another unit leader with Fox Company, remembers Lamb's actions vividly. Under fire, Lamb and three other marines threw Baxter on an old door and dragged him to an aid station after a sniper's bullet tore away a chunk of his buttocks. Lamb also helped save a wounded medic. "One of the blessings of my life," says Baxter, also a World War II veteran, "was serving with him." Lamb, Baxter says, was of "the finest moral and physical character of any man I ever served with."

Shooting Gallery

The bloody battle to retake Seoul for the South Koreans spanned only a few days, but many parts of the city were reduced to rubble. The North Koreans placed snipers in the buildings along the city's streets, then improvised barricades, some piled 8 feet high with rice bags filled with dirt and reinforced with debris--carts, barrels, streetcar rails, anything they could find. The roads were mined; the North Koreans were armed with antitank guns and heavy machine guns. The Soviet newspaper Pravda compared the scene to the Russian defense of Stalingrad in World War II. "This was a very bitter war, like any civil war, and, up to that time, this was its worst battle," recalls retired Brig. Gen. Edwin Simmons, a Marine historian who fought for the city that September with the 3rd Marine Battalion. "The fighting in Seoul was very fierce, close range, and a very hard fight."

Details of the fighting remain etched in the minds of those in the thick of it. "We were taking fire all through Seoul, going from roadblock to roadblock," recalls Peter L. Heckenlaible, a corporal at the time. Robert N. Hortie, then a private first class, remembers shaking in terror. "There was fear in our eyes," he says, "because we were not used to it."

Progress was slow. The 1st Marines had gained no more than 1,200 yards on September 26, according to Marine Corps reports. It was during this battle that marines from Easy Company recall taking heavy fire from a large building, now believed to be the old, eight-story Bando Hotel. The hotel figures prominently not just in Lamb's account but in the stories of other marines. "There was sniper fire coming from the hotel," says Donald F. Gillespie, a squad leader. "We had a bazooka man and everybody else putting everything into it." Orders were given to take the hotel to suppress the fire. Several marines were ordered inside, among them Cpl. Charles N. Garabedian, now 72. Garabedian describes a hellish, dangerous moment. Marines rushed through the building, going from room to room, bursting in on the North Korean forces shooting from the windows. Several marines were wounded, he says, as the squads ran through the hallways, killing some of the North Koreans. Garabedian recalls being on the second floor of the building. He set up by a window and had a view up and down the building's staircase. As some marines continued to clear out the building, others took prisoners down the stairwell to another marine in a bath area. There were about 12 prisoners. The marine in charge was guarding them with his Browning automatic rifle. All were forced to strip to make sure none still had weapons.

Gunfire inside the building began to subside, Garabedian says, when he heard a sudden burst and crouched down, afraid that one of the prisoners had regained a weapon. "It scared the hell out of me," he recalls. "I said, `Hey, what's going on?' Then I just peeked around the corner to see what had happened." Garabedian says the man guarding the prisoners walked into the hallway and snapped, "I shot those sons of bitches."

Garabedian, who spent more than two decades in the Marine Reserve, says he doesn't remember who that marine was. But he's convinced, he says, that this was not a war crime, though he concedes he doesn't know why the marine killed the prisoners--whether the marine was rushed by them, accidentally opened fire, or did so unprovoked and intentionally. A Marine chaplain who saw the dead prisoners "made a big stink about it," Garabedian recalls, "but to us, who were in this life-or-death situation, we took it in stride because we had won a battle."

Marine veterans from Fox and Easy companies who fought in Seoul told U.S. News they remember hearing of only one shooting incident involving POWs in a hotel. Garabedian believes that the incident he described involved the same prisoners whom Lamb says he saw the next day, the 27th. There are similarities in their accounts: a bath area, the bodies stripped naked and sprayed with bullets. But Lamb says the prisoners he saw were in the basement of the hotel--not on the second floor.

A former staff sergeant in Fox Company, Arthur Farrington, says that nobody doubted Lamb when he complained about the killings. Farrington told U.S. News that he and others watched several marines march a group of prisoners into the hotel and soon after heard a burst of shooting. "It was done," he told Marine Corps investigators two years ago. "Somebody shot them." Although he says he never saw the prisoners' bodies and differed with Lamb on some details, Farrington told investigators that he "firmly" believed that Easy Company marines had killed the POWs. According to a transcript of his testimony, he remembers telling other marines in Seoul in September 1950: "My God, they've killed all those prisoners over there." He added in the interview with investigators: "That's what everybody was telling me."

Many marines, in both Fox and Easy companies, talked about the purported killings in the days that followed, increasing the speculation about who had killed the prisoners and why. One former Fox Company marine, Donald Pettit, who was wounded and evacuated before the battle for Seoul, says he later heard reports of the POW killings while passing through 2nd Battalion headquarters on the way back to the front lines. Samuel L. McGowin, then a private first class with Easy Company, says he heard of the incident while recuperating in Bethesda Naval Hospital in Maryland from a gunshot wound, but he says he was told the shootings took place on a higher floor.

Settling a score. Easy Company's Capt. Charles Fredrick recalls "a fight between some marines" and either "soldiers or civilians in a building." But, he adds, "I don't know if they were prisoners or not." Fredrick says he has always thought the incident involved another Marine company. Many other Easy Company marines remember hearing about a POW killing, but their recollection of events is clouded by the passage of time.

When a reporter called James Huebner, for instance, the former sergeant said it was difficult to remember an event that occurred half a century ago. He later dug up his old papers and consulted a letter that he had written to his mother on Sept. 29, 1950, just three days after the alleged POW killings. The letter showed, he said, that a machine gunner had described to him the capture of about 30 "gooks" by marines, who then turned them over to South Korean forces. The enemy soldiers were "taken to the swimming pool in the basement" of the hotel, Huebner said, citing his letter. He said the machine gunner told him that the prisoners were killed by South Korean forces "settling an old score." But, he emphasized, he had no direct knowledge of such an atrocity.

Despite these assumptions, others in Easy and Fox companies say they did not see any South Korean forces in that immediate area. After Seoul, Lamb and his squad would fight other battles, but he was forever changed, he says--his psyche a prisoner of those few moments in hell, in the basement of the Bando Hotel.

Reopening Closed Wounds

Lamb was honorably discharged in November 1951 for medical reasons. He suffered from what physicians at the time called "battle fatigue." The doctors diagnosed it this way: "Anxiety reaction, chronic, moderate." When he returned home, all he could talk about was the war. "He was a completely changed person," says his wife during a telephone interview from the couple's other home in Boswell, Pa. "He was very difficult to get along with. He'd talk about the bad things he saw, and he'd break down." As he roamed the country, bouncing from job to job, town to town, she and their two sons and daughter couldn't keep up with him; the Lambs separated for a time.

Lamb kept trying to put it all down on paper, to purge his demons in a book. His first version, completed in 1965, was called The Land of the Morning Calm. An agent couldn't sell it. In the mid-1970s, he tried again, but no publisher wanted the story. In 1999, he paid to publish what he says is a purely factual account of his Korean War experiences, although he changed many names of combat buddies and called himself "Sam." He titled this effort The Last Parade! The book had little impact, but Lamb pushed on. In March 2001, he sent a letter to the Defense Department demanding an investigation. In July, the then Marine Corps inspector general, Maj. Gen. Paul Lee, opened a "preliminary" inquiry, giving Lamb hope. However, last February, the inspector general's office informed him that it couldn't "substantiate" his allegations after an "exhaustive inquiry."

But how exhaustive was it?

The investigative files, obtained after Freedom of Information Act requests, indicate that the inspector general's staff interviewed only two marines from Easy Company. The 200-or-so-member unit fought inside the Bando Hotel and on the streets in that area, and some might have had direct knowledge of the alleged POW killings. Most of the marines interviewed were with Fox Company and were only able to validate Lamb's actions that day. Some confirmed Lamb's assertion that he had had a heated argument with a superior officer after leaving a hotel, but they had not been inside the building themselves, they said, and had no direct knowledge of any POW killings.

The Marine Corps investigators failed to pursue a critical piece of evidence: the after-action report for Easy Company, written on Feb. 15, 1951. The 10-page report covered combat operations that began with the Sept. 15, 1950, landing at Inchon and included later fighting in Seoul. It was based on the recollections of eight Easy Company marines and was written by a captain, Kenneth A. Shutts. The report contains this question: "How long did it take you to go through Seoul?" The detailed response includes this damaging statement on Page 4: "The killing of prisoners is something that should be watched. We had some of that going on." The inspector general's staff, the Marine Corps says, made no attempt to determine if the eight men were alive or dead. U.S. News was unable to locate any of them but found evidence indicating that several are now dead, among them a staff sergeant named William G. Ferrigno.

"A toilsome chore." It turns out that Ferrigno was also a defense witness in a court-martial case that could be relevant to the Bando Hotel allegations. A machine gun squad leader under Ferrigno was accused of murdering a South Korean military translator; witnesses said he shot the man, at point-blank range, with a .45-caliber revolver, while bivouacked outside Masan, Korea. But there was other startling testimony in the case that had nothing to do with the translator's killing. It came from Staff Sgt. Robert P. Cornely, a close friend of the accused. "Well, in Seoul," Cornely admitted on April 12, 1951, his friend "did kill some prisoners," the court-martial files show. But, there was no mention of the Bando Hotel in the court case, and the circumstances of the killings described by Cornely were not detailed. Cornely died several years ago.

The accused developed a deep hatred of Asians after being held for more than three years in Japanese prison camps run by both Japanese and Korean guards during World War II, according to witnesses. He was beaten, saw fellow POWs murdered, and weighed 110 pounds when he was liberated in 1945.

The man, now 81, lives in the Northeast and declined repeated phone requests to be interviewed for this story. He also did not respond to two letters written by U.S. News. He was convicted of killing the translator but later acquitted in a second court-martial, after claiming temporary insanity. There is no indication that he was interviewed by the Marine Corps investigators assigned to review Lamb's allegations.

The investigators also paid little heed to information provided by Charles Garabedian, the Easy Company marine who says he heard a marine admit to killing POWs inside a hotel. According to the inspector general's report, Garabedian's account was discounted as being about a separate incident from the one described by Lamb, noting that "he [Garabedian] couldn't remember a name, didn't see it take place, and didn't see the aftermath."

The investigators were skeptical of Lamb and tended to discount his allegations by noting discrepancies in the sort of details that fade with time. Lamb, for instance, thought the name of the hotel was possibly the Chosun. Investigators also noted that the Bando did not have a "swimming pool," the term Lamb first used to describe the location of the dead bodies. Lamb's use of the term continued to trouble them, even after they learned from two former marines assigned to the embassy, which was located on the fifth floor of the hotel, that there were Japanese baths in the basement.

The investigators also wrote that Lamb's mental health was in question following the battle for Seoul. During that time, they said, a military physician diagnosed him as paranoid after he threatened to tell the secret of the POW killings. But the investigators, their files show, failed to note that when he was evaluated at Bethesda Naval Hospital a short time later in 1951, a doctor called the diagnosis an error, saying, "No paranoid ideation was evidenced at any time."

Their findings leave no doubt that events were difficult to reconstruct--"a toilsome chore" is the way the investigators described it. "Potential witnesses proved difficult to locate," they wrote. "Those who were located demonstrated that the passage of time takes a costly toll on one's faculties and memory." The report described how one witness "fell ill prior to interview" and how another "suffered seizures during interview."

Asked by U.S. News to grant an interview and explain the inquiry more fully, the inspector general's office declined but answered many specific questions through a Marine Corps spokesman, Maj. Douglas Powell. Noting that the after-action report covered several battles in a four-month period, Powell says that the "unspecific comments" about Easy Company marines' killing prisoners "were not determined to be within the scope of the investigation and not pursued." He adds, "The investigation speaks for itself."

Lamb is disappointed with the findings but makes no apologies for his own fight. Why, he is asked, has he persisted so long, when others would have buried the past? Sounding much like the drill instructor he once was, Lamb puts it this way: "Right is right, and wrong is wrong. The Marine Corps hymn says first to fight for right and freedom and to keep our honor clean."

"How are you going to keep your honor clean," he asks, "if you bury such a horrible thing?"

This story appears in the November 3, 2003 print edition of U.S. News & World Report.

U.S. News & World Report

October 8, 2001 October 8, 2001

Finger-pointing, fingerprints

BYLINE: By Edward T. Pound; Chitra Ragavan; Kit R. Roane

SECTION: NATION & WORLD; INVESTIGATIVE REPORT; COVER PACKAGE; Vol. 131 , No. 14; Pg. 27

LENGTH: 2913 words

DATELINE: New York

HIGHLIGHT: The hunt for evidence and, hard on its heels, charges about who screwed up;

In the spring of 1996, Congress gave law enforcement officials a new and seemingly important tool to combat terrorism. It created the Alien Terrorist Removal Court, assigning the special federal court the task of deporting terrorists operating on American soil. After the World Trade Center bombing in 1993, and the growing suspicion that foot soldiers for Osama bin Laden were slipping into the United States, the establishment of the court seemed an eminently sensible thing to do.
But terrorists had nothing to worry about--because the court is a court in name only. In the five years since its creation, U.S. News has learned, the five-judge panel has never deported a single terrorist. For that matter, it has never even heard a case. The Justice Department, the agency principally responsible for monitoring terrorists' movements within the United States, has never filed an application with the court seeking to deport a terrorist.
Former Justice Department officials say the agency couldn't use the court because the law requires disclosure of sensitive information to terrorists--evidence, they say, that would compromise intelligence gathering and identify sources. But critics say the government's refusal to bring suspected terrorists before the special court is a glaring example of its inability to use its vast counterterrorism resources effectively. In the past few years, Congress has authorized billions of dollars for new equipment and for thousands of personnel in law enforcement and intelligence agencies. This year alone Congress authorized $ 10 billion before the attacks for counterterrorism efforts.
American law enforcement and intelligence agencies have scored several big wins against terrorists, jailing some and foiling the plots of others. Michael Cherkasky, a former New York state prosecutor who investigated terrorist activities, says federal agents have known for years that suicide bombers had changed their habits, living seemingly normal lives here, but says agents failed to understand the terrorists' deadly intentions.
Cherkasky cites the evidence introduced in a recent terrorist trial in New York--a training manual from bin Laden's al Qaeda terrorist network. "The al Qaeda manual says you have to act nonreligious," Cherkasky explains, "shave your beards, fit in as middle class."
But it wasn't just behavior; it was targets that went undetected. The government was caught flat-footed in several major terrorist attacks, current and former intelligence officials say. Among them: the bombing of the USS Cole last year, the bombings of the two East African embassies in 1998, and the September 11 attacks on the World Trade Center and the Pentagon. A review of the government's efforts against international terrorism shows that they have been hobbled by bungled investigations and poor intelligence analysis--or, in some cases, no analysis at all of critical documents accumulated by investigators.
That disturbs several former senior Justice Department and FBI officials who were actively involved in counterterrorism investigations during their careers. They believe that U.S. intelligence agencies may have had sufficient information to prevent the deadly attacks on the World Trade Center and the Pentagon--if only they had understood what they had. John Martin, the former top national security prosecutor for the Justice Department, says the government eventually will get to the bottom of why intelligence and law enforcement agencies did not prevent the attack. And, he thinks, they will conclude that government agencies "were collecting the intelligence, they were deciphering it, but they were sending it to the field late and in muddled, ambiguous terms." Jamie Gorelick, the No. 2 Justice Department official in President Clinton's first term, sounds a similar theme. "We have a very robust intelligence collection effort," she says. "But we don't have a commensurate analytical capability. I am certain that when we are able to digest what we have collected, we will find information which surely could have or might have prevented" the attacks.
Red alert. That may be, and there's growing evidence that Washington should have been better prepared. There were warning signs, say former counterterrorism officials. Court files show that operatives linked to bin Laden or other militants have been planning for some time to make the United States their primary theater of operations. Now the FBI is finding that its failure to analyze the intelligence amassed during earlier investigations is slowing its efforts to locate conspirators or associates of the hijackers.
With many leads not producing much, U.S. law enforcement agencies are looking overseas for help. One big break came late last week when an Algerian pilot named Lotfi Raissi, 27, was arrested in London for allegedly lying on his application for a pilot's license in the United States. British authorities say they have linked him to four of the hijackers. A prosecutor told a London court that Raissi's job was to ensure that the hijackers were "capable and trained."
The United States has the most sophisticated intelligence collection capability in the world, but it appears to have failed utterly in this instance. The supersecret National Security Agency intercepts phone calls and messages thousands of miles from its sprawling complex in suburban Maryland near Washington. Yet there has been no indication from U.S. officials that the NSA intercepted any information on the alleged hijackers who were operating in its shadow, just a few miles away, in the days before the attacks.
When the dust settles, Congress undoubtedly will examine what U.S. intelligence and law enforcement agencies knew before the hijackers produced their carnage. The Bush administration says it had no advance warning that the attacks would take place. But it is clear that the FBI and Justice Department had developed information on some of the hijackers before the attacks--just how much isn't known, and the government isn't saying.
Three former top intelligence officials say it is clear that some of the hijackers and possible associates were on FBI watch lists prior to the September 11 attacks. There seems to be little doubt of that. On August 23, the CIA sent the FBI the names of two suspected terrorists, Khalid Almihdhar and Nawaf Alhazmi. But the bureau was unable to apprehend them before they helped hijack the airliner that crashed into the Pentagon. FBI officials did not respond to several requests for interviews.
Officials say the CIA and FBI now are rushing to improve their intelligence capabilities. One intelligence source says the CIA is bringing back retirees to fill the massive demand for qualified help. Meanwhile, the FBI has put out the word that it badly needs people who can translate Arabic, Farsi, and Pashto. "They are scouting everywhere for translators," says a law enforcement officer involved in the government's massive manhunt. One reason: In the past, the bureau hasn't had sufficient personnel to translate and interpret critical documents, or vast amounts of intelligence, that could have shed light on terrorist plots. In some ways, the FBI must shoulder the blame. The bureau has very few Arab-American agents and translators, and funds intended for hiring translators were diverted to hiring more agents to fight street crime, several former Justice Department officials say. "The language problem is prodigious," says the intelligence source, "at both the CIA and the FBI."
That's true, too, at other intelligence agencies in the Defense Department, including the NSA. In a report issued last week, the House Intelligence Committee said American spy agencies "have all admitted they do not have the language talents . . . to fully and effectively accomplish their missions."
Surveillance. Apart from the language needs, Attorney General John Ashcroft now wants Congress--in addition to the $ 20 billion more in counterterrorism funding it has committed since the attacks--to give law enforcement even more powers to wiretap immigrants and monitor their activities in the United States. At the same time, some lawmakers are pushing the government to use the Washington-based Alien Terrorist Removal Court, composed of sitting judges, to help rid the country of suspected terrorists. Sen. Bob Smith, a Republican from New Hampshire, is spearheading that effort.
Under the current law, a suspected terrorist brought before the court must be given an unclassified summary of the deportation charges. Smith plans to introduce a provision this week that would allow the government to use classified information in the court proceeding without sharing any information with the suspect. The proposal is likely to spark a hot debate in Congress, where some members deplore the use of secret evidence and have been trying to outlaw the practice. Smith couldn't care less. "We need to bring these terrorists to court and deport them," he says. Smith persuaded Congress to approve the creation of the court in April 1996. But its powers were weakened, he adds, by amendments requiring suspected terrorists to be given a summary of the charges against them. As a result, the Justice Department never used the court, fearing that disclosure of intelligence would expose sources. Current officials would not comment for this story.
Civil libertarians say the department has found it easier to deport or imprison suspected terrorists through other administrative immigration proceedings. Secret evidence, which is anathema to Arab-Americans and civil rights activists, can be used in those proceedings when the government seeks to deport aliens on other grounds, such as "garden variety" immigration violations, says a former top immigration official. In the terrorist court, suspects would have more safeguards--the right to counsel and the option to challenge the constitutionality of the secret evidence, says Timothy Edgar, a top lawyer for the American Civil Liberties Union. No such rights are available in immigration court proceedings, he says. Given the choice, he says, the terrorist court is the least distasteful.
Immigration officials say that secret evidence is seldom used, perhaps only 10 to 12 times a year out of 300,000 cases in the immigration courts. Steven R. Valentine, a former Justice Department official who oversaw the Office of Immigration Litigation, says the government must deport or detain terrorist suspects--especially in light of the recent tragic attacks. In the past, he says, because of legal challenges, the Justice Department has been unable to deport known terrorists. "That," he adds, "is insane."

Fanaticism's faces
The FBI's release of the photographs of the 19 hijackers caused many to ponder the causes of their hatred and rage at America, and their evident lust to kill and die.
AMERICAN AIRLINES FLIGHT 11 (CRASHED INTO NORTH TOWER)
Satam Al Suqami
Abdulaziz Alomari
Waleed Alshehri
Wail Alshehri
Mohamed Atta

UNITED AIRLINES FLIGHT 175 (CRASHED INTO SOUTH TOWER)
Marwan al-Shehhi
Ahmed Alghamdi
Hamza Alghamdi
Mohand Alshehri
Fayez Banihammad

AMERICAN AIRLINES FLIGHT 77 (CRASHED INTO THE PENTAGON)
Nawaf Alhazmi
Salem Alhazmi
Khalid Almihdhar
Hani Hanjour
Majed Moqed

UNITED AIRLINES FLIGHT 93 (CRASHED IN STONY CREEK, PA.)
Saeed Alghamdi
Ahmad Al Haznawi
Ahmed Alnami
Ziad Samir Jarrah

Following the money
To strike at Osama bin Laden's finances, President Bush issued an order to freeze the assets of 27 groups and individuals tied to al Qaeda's terror network. But it will be tough to unravel al Qaeda's financial web, which exploits Middle Eastern banks, underground brokers, front companies, and charities--many not on the White House list. To date, those under investigation have not been charged with any crime.
[Chart drawings are not available.]

OSAMA BIN LADEN

CHARITIES
Authorities have known for years that al Qaeda uses charities for fundraising and providing cover for its activities.
Makhtab al-Khidamat/al Kifah, Afghanistan - Assets frozen by White House executive order
Wafa Humanitarian Organization, Afghanistan: A Kandahar, Afghanistan-based charity bankrolled by wealthy Arabs, Wafa allegedly provides weapons and equipment to bin Laden's network. Investigators believe it may have played an operational role in the hijacking attacks. - Assets frozen by White House executive order
al Rashid Trust, Pakistan - Assets frozen by White House executive order
Blessed Relief, Sudan - Entities or accounts being investigated by U.S. or overseas authorities
International Islamic Relief Organization, Philippines - Entities or accounts being investigated by U.S. or overseas authorities
Association of Islamic Development, Philippines - Entities or accounts being investigated by U.S. or overseas authorities
World Alliance of Muslim Youth, Philippines - Entities or accounts being investigated by U.S. or overseas authorities
Islamic Wisdom Worldwide, Philippines - Entities or accounts being investigated by U.S. or overseas authorities

BANKING
Financial institutions, some of which had refused to share information, have now identified accounts that may have been used by bin Laden's organization to move money.
Habib Bank, Pakistan: It was no secret that Habib Bank, a state-owned bank in Pakistan, held accounts of a suspect charity: The al Rashid Trust even listed three Habib accounts on its Web site. Finally, last week, Habib Bank froze the al Rashid accounts. - Entities or accounts being investigated by U.S. or overseas authorities
al Shamal Islamic Bank, Sudan - Entities or accounts being investigated by U.S. or overseas authorities
Deutsche Bank, Germany - Entities or accounts being investigated by U.S. or overseas authorities
French banks - Entities or accounts being investigated by U.S. or overseas authorities

CRIMINAL ACTIVITIES
Investigators are checking if Russian mob money is tied to al Qaeda's movement of Southwest Asian opium and are looking into allegations that the group extorts from wealthy Arab businesses and profits from stock manipulation.
Narcotics trafficking, Afghanistan - Entities or accounts being investigated by U.S. or overseas authorities
Extortion, Persian Gulf nations - Entities or accounts being investigated by U.S. or overseas authorities
Securities fraud, Europe and United States: Securities regulators want to know whether bin Laden associates made money by purchasing short options on the stock of insurance, financial, and airline companies, knowing that their values would fall after the attacks. - Entities or accounts being investigated by U.S. or overseas authorities

BUSINESSES
Bin Laden has used a range of businesses to raise extra cash and provide cover for his operatives. Many of his investments date from his years in Sudan in the early 1990s, and he is still thought to hold interests in some companies there.
Nada Management Organization, Switzerland: Swiss authorities have reopened an investigation into this finance company. Western intelligence agencies are said to believe that al Qaeda funneled donations through al Taqwa Management Organization (as Nada was called then) to accounts in the Bahamas. - Entities or accounts being investigated by U.S. or overseas authorities
Mamoun Darkazanli Import-Export Co., Germany - Assets frozen by White House executive order
Taba Investments, Sudan, and Taba Ltd., Uganda - Entities or accounts being investigated by U.S. or overseas authorities
al-Hijrah for Construction and Development, Sudan - Entities or accounts being investigated by U.S. or overseas authorities
Wadi al-Aqiq, Sudan - Entities or accounts being investigated by U.S. or overseas authorities
al-Themar al Mubaraka, Sudan - Entities or accounts being investigated by U.S. or overseas authorities

Sources: White House, Ridgway Center for International Security Studies, press and staff reports
Rod Little--USN&WR

The plotlines for death and dying
HAUNTING WORDS
The FBI found chilling four-page documents belonging to hijackers in the September 11 attacks. Handwritten in Arabic, the letters include Islamic prayers and extol the benefits of martyrdom. According to a U.S. News translation, the letters advised the hijackers to keep God in their hearts and to pray, fast, and read the Koran. The letters also contain passages from the Koran. Agents found the writings in Mohamed Atta's luggage, which did not make it onto his flight. They also found a copy in Nawaf Alhazmi's vehicle at Dulles International Airport and one at the Pennsylvania crash site of United Flight 93. Attorney General John Ashcroft called them a "disturbing and shocking view into the mindset of these terrorists." According to a U.S. News translator, the letters talk about the importance of being a martyr and fighting for Islam. The documents also stress fighting infidels and refer to a seventh-century battle the Prophet fought, defeating 10,000 infidels. The letters also advised the hijackers that when they face death, they must recite to themselves, "There is no God but God."