Classified Information-Former CIA Director Indicted

The CIA's former executive director and a defense contractor were indicted Tuesday by a San Diego, California, grand jury for allegedly corrupting the intelligence agency's contracts. ^[1]
Kyle "Dusty" Foggo, the CIA's top administrator from November 2004 until last May, was accused of using his seniority and influence at a prior CIA job in Europe to steer business deals to his friend Brent R. Wilkes, a California businessman and top Republican fundraiser. ^[2]

The 11-count indictment states that Wilkes subsidized meals and vacations for Foggo and his family in Washington, Hawaii and Scotland and promised to employ Foggo after his retirement from the CIA. ^[3] It also accuses Foggo of improperly providing classified information to Wilkes about the CIA, his contracting competitors and "other matters".

The indictment says that Foggo deliberately "concealed material facts" from his colleagues at the CIA and used "shell companies and straw men" to hide their role in the contracts and it formally charges the two men with conspiracy to commit honest services fraud and money laundering. ^[4]

The indictment is the latest development in a federal criminal probe into the budget process known as "earmarking," in which lawmakers have directed federal contracts to favored designees who were either friends or campaign contributors. ^[5]

The case involving Foggo is unusual because all of the contracts at issue are classified, but the indictment makes it clear that the agency was allegedly cheated when it wound up paying 60 percent more than it should have for water supplied by a company affiliated with Wilkes to CIA outposts in Afghanistan and northern Iraq. ^[6] This will be one of the first criminal cases to reach into the CIA's clandestine operations in Europe and the Middle East. ^[7]

The evidence against Foggo included e-mails in which he helped arrange advance payments on a $1.69 million contract. ^[8] Afterarriving at CIA headquarters, he continued to ask for more rapid payments to a Wilkes-affiliated firm identified in the indictment as "Shell Company No. 1," the document states. [9]

CIA Director Michael V. Hayden, told employees in a memo Tuesday that they should not talk about the matter "out of respect for the legal proceedings that are underway, and to ensure the protection of classified information and agency equities." ^[10]Hayden said that the allegations against Foggo first surfaced inside the CIA, which he said cooperated closely with the Justice Department on the probe. ^[11]

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[1] R. Jeffrey Smith, Former Top CIA Official Indicted: Foggo Accused of Steering Contracts to GOP Fundraiser, Washington Post, February 14, 2007.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.