Young Firm Finds a Bonanza in Middle East

Lincoln officials, in recent interviews, defended their role, saying the practice of paying to have stories published is common in many Middle Eastern countries and was needed to counter false stories that insurgents have intimidated some Iraqi papers into publishing.

Bailey, 30, would not directly address his company's work for U.S. commanders in Iraq. But he said, "We're proud of all the work we do on the ground, and this is precisely the sort of engagement in the war of ideas the U.S. must pursue if we are ever to overcome terrorism.

"We have had new commercial and government clients approach us since this story broke, which only validates the need for more of this work," Bailey said.

Laurie Adler, a Lincoln spokeswoman, said: "We have scrupulously and successfully executed our U.S. military contracts with on-scene supervision of our work, receiving high praise for our contributions. Our own research, feedback from our clients and a succession of new contracts all indicate that we have made important contributions to the U.S. and Coalition efforts in Iraq."

Lincoln's founders are listed as executive vice presidents, and the company is recruiting a president, one official said. While Bailey was attending Oxford in the mid-1990s, Craig was at West Point. Impressed by a Marine teacher, he left after three years and joined the Marine Corps, a company spokesman said. Craig served in several Middle Eastern and Asian countries as an intelligence specialist and was discharged as a sergeant in 2000, he said.

Bailey came to the United States in 1999 and worked in Silicon Valley before moving to a hedge fund in New York that set up a fund to make intelligence and defense acquisitions in 2003.

Craig and Bailey met that spring. They soon decided there was more of an opportunity running a company than doing buyouts, a company official said. Using the name Lincoln Alliance Corp., they established an office in Iraq in December 2003. Iraqex was set up early last year for government contracts, and Lincoln Group became the operating name this spring.

Bailey, 30, said in a recent interview that he had attended the Republican convention in 2004 and was co-chairman in New York of a young Republican group called Lead21, which he described as a social group focused on current events that does not hold fundraisers or contribute to political campaigns. Neither Bailey nor Craig is listed as making any donations to federal political candidates.

Lincoln hired two Washington lobbying firms, Van Scoyoc Associates Inc. and BKSH & Associates, this summer. The Van Scoyoc registration said it was hired to lobby for "appropriations regarding information operations." Military information operations cover a wide range of activities designed to fool, confuse or refute an enemy.

The company says it used the lobbying groups to tell its story in Congress after it won the large special operations contract, not to lobby for new contracts.