Justice Dept. Conducting Criminal Probe of Baghdad Embassy Contracts

State Department Inspector General Howard Krongard
State Department Inspector General Howard Krongard (Linda Davidson - The Washington Post)
By Glenn Kessler
Washington Post Staff Writer
Friday, November 16, 2007

The Justice Department is conducting a criminal probe into the awarding of the contract and related subcontracts in the troubled construction of the massive $736 million U.S. Embassy in Baghdad, according to sources and congressional testimony this week.

The probe came to light Wednesday during a House Oversight and Government Reform Committee hearing into the actions of State Department Inspector General Howard J. Krongard. Though lawmakers appeared careful not to mention names of people under investigation, Krongard mentioned two people during his testimony, both of whom are key figures in the building of the embassy, as he defended his practice of meeting with people under investigation.

"I would like to tell you exactly what I was doing, both with Mr. Golden and Ms. French," Krongard told lawmakers.

James L. Golden is a Washington-based contract employee of the State Department who oversees the project, though earlier this year the U.S. ambassador to Iraq barred him from returning to that country after he was suspected of altering evidence after a mortar attack. Mary French is the embassy project coordinator based in Baghdad.

Krongard also said Justice has "three investigations" involving Iraq, apparently referring to previously reported probes into alleged labor trafficking by First Kuwaiti General Trading & Contracting Co. -- the construction company awarded the embassy contract -- and alleged weapons smuggling by Blackwater Worldwide, which supplies security for the State Department.

A Justice Department spokesman declined to comment.

The embassy, which will be the largest U.S. diplomatic mission in the world, was originally budgeted at $592 million. But, amid accusations of poor planning and workmanship, the State Department recently announced that additions and changes to the original design will add $144 million to the cost.

A report by the committee's majority staff referred to the Justice Department probe and also said that Krongard, against his staff's advice, met in August with someone implicated in "potential criminal activity" uncovered during a State Department audit of the embassy contract.

Then, the report said, Krongard met in September with someone else under investigation by the Justice Department. A source, speaking on the condition of anonymity, identified that person as French. When Krongard arrived in Baghdad, he was warned by his deputy that French had become a "subject of investigation" and that he should not meet with her, for fear of tainting the investigation. But, the report said, "Krongard went through with the meeting and spent several hours with this individual."

It isn't clear why the Justice Department is focusing on French. The source said that the investigation of Golden is examining his awarding of subcontracts in the project. French declined to comment, and Golden did not return phone calls or e-mails.

The report said Justice was so concerned about Krongard's meetings that it requested he recuse himself from the embassy investigation. During the hearing Wednesday, Krongard announced that he will recuse himself from any investigations involving the embassy, as well as from probes involving Blackwater because his brother serves on a Blackwater advisory board.

Krongard continues on the job as inspector general, State Department spokesman Sean McCormack said yesterday. But McCormack pointedly declined several times to say whether Secretary of State Condoleezza Rice still has confidence in Krongard. "You can play the Washington games with people," he said. "Howard is still working as inspector general here at the State Department."

Staff writer Dan Eggen contributed to this report.

© 2007 The Washington Post Company