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We already knew that Michael Elston, chief of staff to the Deputy Attorney General and former U.S. Attorney Carol Lam, weren't best buds. Their acrimonious phone calls over her December 2006 firing as U.S. attorney for San Diego are well known, but according to the DOJ Inspector General's report issued today, the two butted heads as early as October 2006, over the "deselection" of a young attorney for the Justice Department Honor's Program.

On October 11, 2006, Lam sent an email to Elston inquiring as to why a candidate, an honors graduate from Stanford Law School who had held a Federal clerkship, was unqualified. Lam told the OIG that she suspected the candidate was deselected because of a previous article she had written on gender discrimination in the military, and because the judge she clerked for was a Clinton appointee.

From the report (pdf):

Elston replied by e-mail that most deselections were for poor grades. He acknowledged, however, that poor grades did not appear to be the issue with this candidate, and he offered to check into the application and let Lam know whether an appeal would be successful.

Elston replied later that day: "I have reviewed her application materials, Carol. I do not think an appeal will be successful. If it helps, she was not selected by the other components to which she applied."

Lam responded: "Thanks Mike. Just curious, though - I don't see anything unacceptable in her online application that was made available to us. Do the other components see something that I don't?"

Elston replied: "Not that I know of, Carol."

Elston was found by the report to be in violation of federal law for hiring candidates on "political and ideological" grounds.

Before leaping to the conclusion that Lam's firing, which has yet to be fully explained, was prompted by the honors program dispute, keep in mind that Lam's name appeared on a preliminary list of U.S. attorneys to be fired as early as January 2006. She was then fired in December of that year, one of eight U.S. attorneys asked to resign by the Justice Department, but one of the only ones (at least initially) to put up a fight. At the time she was asked to leave, Lam was in the midst of securing indictments on CIA operative Dusty Foggo and defense contractor Brent Wilkes.

While the U.S. Ambassador to Albania denied allegations of wrongdoing today from his office in Tirana, back in Washington the State Department's Inspector General has opened an investigation.

"We've opened an investigation into this matter at the request of the department and we are coordinating with other agencies," Tom Burgess, a spokesman for the State Department IG, said in a phone interview with TPMmuckraker.

State Department officials have known for months about the allegations that arms dealer AEY and its 22-year-old president may have tried to pass off cartons of illegal Chinese-made ammunition to fulfill a $300 million U.S. government contract supplying the Afghan Army.

But yesterday's disclosure that the the U.S. Ambassador in Tirana, John Withers, may have known about it and then concealed that knowledge from lawmakers on Capitol Hill apparently came as a surprise to the State Department.

According to the AP:

In Washington on Tuesday, U.S. State Department spokesman Tom Casey said the allegation would be investigated, but that he knew of no evidence to support it.

Speaking to reporters, Casey said the State Department has asked its inspector general "to go and look at these charges and conduct a thorough, fair and transparent investigation of these allegations."

He said, "These are very serious allegations."

But Casey also said, "We certainly don't have any information that would support or substantiate these allegations which are being made against a career Foreign Service officer" with 24 years of distinguished experience.

Hell must be freezing over.

David Addington, the Vice President's Chief of Staff and executive privilege aficionado is set to testify with John Yoo, former Justice Department Official and spinner of words, on interrogation practices in Guantanamo this Thursday, June 26 in front of the House Judiciary Committee.

As we've reported before, this has been a long time coming. We're taking bets to see who pulls a Feith.

When Army officials asked Ralph Merrill to provide a "performance evaluation" of arms dealer AEY, he gave the the firm a glowing review.

Well, of course did. He's the company's financial backer. And he's also one of the three other men indicted last week along with AEY's 22-year-old president, Efraim Diveroli.

"We have dealt with AEY Inc. for the last four years and have built an excellent business relationship with them. We have found them to be reliable, competent, efficient and honest," Merrill wrote in the evaluation in October 2006.

Army officials had reason to know that Merrill was tied to AEY. In March of 2006, Merrill wrote an email to a military official describing himself as AEY's vice president. In January 2007, he told Army officials that he'd set aside $1 million in case AEY needed extra capital.

A federal indictment describes Merrill as a "business associate of Efraim Diveroli, who provided financial and managerial assistance." Merill was involved in some of AEY's negotiations with subcontractors, the indictment said.

Nevertheless, Merrill's was among the three ostensibly independent performance evaluations the Army had on file for AEY when they awarded it a $300 million contract in Janury 2007. Merrill, who also runs a Utah-based weapons dealership called Vector Arms, had responded to the Army's request for information about Vector Arms' dealings with AEY.

That's all according to documents disclosed today at the House oversight committees hearing on AEY.

At the hearing, Rep. John Tierney (D-MA) grilled military officials about the review process: "Mr. Merrill had a conflict of interest. ...How can you get an unbiased and objective assessment of past performance from someone who has a financial interest in the contract?"

Mitchell Howell, from the Defense Department's Defense Contract Management Agency, responded that they agency is reviewing its procedures to prevent similar problems in the future.

We reported yesterday that Douglas Feith, who played hookie from the House Judiciary Subcommittee on the Constitution, Civil Rights, and Civil Liberties last week, was about to get subpoenaed.

And now we're one step closer.

In a hearing today, the subcommittee voted to authorize chairman Jerrold Nadler (D-NY) to issue a subpoena to compel Feith's testimony. In a statement at the hearing, Nadler said:

It is simply not prudent to rely on the voluntary promise to appear of a witness who already has broken [a voluntary] agreement. I hope that it will not become necessary to issue this subpoena, but Congress has the prerogative and duty to conduct meaningful oversight to ensure a robust system of checks and balances.

Following the Inspector General's report on bias in the Justice Department hiring process, and John Conyers (D-MI)'s call to action, Attorney General Michael Mukasey has issued a statement accepting all of the recommendations from the OIG:

I appreciate the hard work and collaboration of the Department's Office of Professional Responsibility and Office of Inspector General on this report. The Department overhauled its Honors Program and Summer Law Intern Program hiring processes last year, and I am pleased that the report remarked positively on these institutional changes.

I have also made clear, and will continue to make clear, that the consideration of political affiliations in the hiring of career Department employees is impermissible and unacceptable. The joint report issued today contains additional recommendations aimed at ensuring that political and ideological affiliations are not inappropriately used to evaluate candidates for these programs; I accept, and have directed the implementation, of all of those recommendations.

In today's report on bias in hiring practices at the Department of Justice, the Office of the Inspector General found Michael Elston "violated federal law" by deselecting candidates based on their liberal affiliations:

As explained below, we concluded that Elston violated federal law and Department policy by deselecting candidates based on their liberal affiliations. First, the data analysis indicates that highly qualified candidates with liberal or Democratic Party affiliations were deselected at a much higher rate than highly qualified candidates with conservative or Republican Party affiliations. Second, Elston admitted that he may have deselected candidates in a few instances due to their affiliations with certain liberal causes.

The DOJ IG report released this morning, besides providing some memorable quotes on woodland creatures, also gave some valuable statistics on the biased hiring practices of Honor Program attorneys.

The nomination process for attorneys had two stages. First, individual offices in DOJ reviewed applications and selected certain ones for interviews. Then, a Screening Committee selected by the deputy attorney general reviewed the selections and made nominations for final interviews. This was a change made in 2002 when the "involvement of political appointees at the Department in the hiring process was greatly expanded."

The OIG broke down nominees into those that they classified as "Liberal," "Conservative" and "Neutral."* They then evaluated the deselection (removal from the hiring process) rate of those nominees between 2002 and 2007. They found a strikingly high percentage of identifiable liberals who were culled from the process compared to identifiable conservatives.

For example, in 2002, of the 100 "liberals" nominated, 80% were "deselected" by the Screening Committee. Of the 46 "conservatives" nominated, only 9% were deselected.

Chart 3 of the report (pdf) details the discrepancy:

Perhaps even more disturbing, of the 71 candidates who were deemed "Highly Qualified" (attended a top 20 ranked law school, were in the top 20% of their class and had previously held judicial clerkships and were members of the law review), 37% were deselected.

And the kicker?

15 out of the 17 highly qualified candidates who were categorized as "Liberal" were deselected. Zero of the five highly qualified "Conservative" candidates were deselected.

But it gets better and better!

Overall, of the applicants nominated, 70% of those who identified as Democrats were de-selected, 32% who identified as Neutral were deselected, and just 11% who identified as Republicans were deselected.

The Screening Committee was an amorphous group, and as the OIG describes, DOJ offices that sent their recommendations to the Screening Committee, often did not know how the Committee members were selected, who sat on it, or the Committee's criteria in selecting or deselecting candidates.

So who was on the elusive committee?

In 2002, the OIG determined that "Andrew Hruska, then Senior Counsel to the Deputy Attorney General, and David Higbee, then Deputy Associate Attorney General, participated in the screening process, and that Howard Nielson, then Counselor to the Attorney General, and Adam Ciongoli, then Counselor to the Attorney General, may also have participated in the screening process."

[Late Update: Chief of Staff for the Deputy Attorney General, Michael Elston was named in the report as being in violation of federal laws for weighing "political and ideological" leanings in the hiring process. Elston and Esther McDonald, a former DOJ lawyer, were both found in violation of DOJ policy.] ____ * From a footnote in the OIG's report on political designations assigned to candidates:
"We recognize that these determinations are not precise and that categorizing organizations as liberal or conservative can be somewhat subjective. The appendix contains a listing of those organizations we categorized as liberal or conservative in our analysis of the candidates' affiliations. For example, we categorized as "liberal" organizations promoting causes such as choice in abortion issues, gay rights, defense of immigrants, separation of church and state, and privacy rights. Examples of organizations we considered liberal include Earthjustice, the American Civil Liberties Union, Planned Parenthood, Lambda Law Association, and Ayuda. We categorized as "conservative" groups promoting causes such as defense of religious liberty, traditional family values, free enterprise, limited government, and right to life issues. Examples of groups we considered conservative include the Federalist Society, the Alliance Defense Fund, the Christian Legal Society, and the Family Research Council. In reviewing candidates' applications, we considered a candidate's affiliations to be "neutral" if the organizations listed did not have an apparent liberal or conservative viewpoint, or if the candidate listed affiliations with both liberal and conservative organizations."

Does arms dealer AEY, Inc., still have some U.S. defense contracts?

Even though it's been on a U.S. State Department Arms Trafficking Watchlist for three years?

Even though it's been under federal investigation for several months?

Even though its president was arrested last week on federal charges related to arms exports?

Even though military officials were testifying about the company this morning on Capital Hill?

Maybe so.

At the House oversight committee hearing this morning, Rep. Stephen Lynch (D-MA) asked military contracting officials:

"I hear and I read that the contracts have been canceled, terminated. Now I was in Iraq at the Taji weapons depot a few weeks ago and I asked a commanding general there about the AEY contract. He said 'yeah, they're shipping into us.' So myself and Mr. Platts from Pennsylvania actually asked the general to give us some detail and went around and started opening up some crates. They were all AEY contracts, it looks like they're still performing in this contract, and that doesn't jive with the testimony and documents I have before me. So can you tell me, is AEY still performing on some contracts in Iraq?"

Jeffrey Parsons, Executive Director of the Army Contracting Command responded: "Sir, I am not aware, and I will have to get back to you on whether they are still performing..."

"That's not good enough," Lynch said.

Late Update: Here's the video of Lynch's query.

Arms dealer AEY Inc. and its 22-year-old president have been on the U.S. State Department's Arms Trafficking Watchlist for years.

But that didn't keep them from landing a nearly $300 million Pentagon contract providing ammo to the Afghan Army.

AEY is getting a lot of scrutiny since its 22-year-old president and three others from the firm were indicted last week and accused of providing useless and illegal Chinese-made ammunition under a U.S. government contract.

At a hearing on Capitol Hill today, Stephen D. Mull, Acting Assistant Secretary of State at the bureau of Political Military Affairs, said AEY Inc. was placed on the watchlist in January 2005. AEY's president, Efraim Diveroli, was individually placed on the list in 2006, Mull said. They were placed on the list for reasons that remain classified, officials said.

AEY was awarded the $300 million Afghanistan contract in January 2007.

Military officials stammered to explain how the massive deal sailed through the Army's contracting system without any red flags.

"The contracting officers that execute the contracts are not required to go and look at the watchlist," said Brigadier General William N. Phillips, U.S. Army, Commanding General at Picatinny Arsenal and head of the Joint Munitions and Lethality Life Cycle Management Command, told the committee

Jeffrey Parsons, Executive Director of the Army Contracting Command said: "I'm not sure whether that watch list is accessible to people outside the State Department."

Lawmakers also asked questions about the Albanian arms dealer who AEY who sold the ammo to AEY.

His name was Ylli Pinari. He was president of the Military Export Import Company of Albania (MEICO) in Albania. And he was placed on a U.S. State Department Arms Trafficking Watchlist back in 2005. The reasons for putting him on the watchlist are also classified.

The purpose of the watchlist is to identify people and companies who "might be unreliable recipients of defense articles and services licensed by the State Department." Rep. Stephen F. Lynch, (D-MA) described the situation as "a disgrace"

"This kid was 19 years old and he got a $300 million contract," Lynch said. "Has anybody been fired for this? Can I ask the panel: Has anybody gotten their walking papers for this?

No, Parsons replied, nobody's been fired over the AEY investigation.