WAYNE MADSEN REPORT

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December 13, 2005 -- Halliburton's connection to low wage slave trading in the Middle East and espionage inside the Vice President of the United States' White House office. Vice President Dick Cheney's old company, Halliburton, has some interesting partners in its work in occupied Iraq. On Dec. 11, WMR reported on links between Halliburton/Kellogg, Brown & Root and a Viktor Bout-owned airline based in Moldova, Aerocom/Air Mero. Bout's airlines have also reportedly been involved in flying low wage earners from East Asia to Dubai and on to Iraq where they work for paltry salaries in sub-standard living conditions. Halliburton/KBR has sub-contracted to a shadowy Dubai-based firm, Prime Projects International Trading LLC (PPI), which "trades" mainly in workers from Thailand, the Philippines, Nepal, India, Pakistan, and other poor Asian nations.

In 2004, after a Filipino PPI worker was killed in a mortar attack on Camp Anaconda in Iraq, the Philippines government of Gloria Macapagal-Arroyo ordered PPI, which is based at P.O. Box 42252, Dubai, UAE, to send overseas Filipino workers  OFWs) home from Iraq and Kuwait and banned it from further recruiting in the Philippines. Some of PPI's recruiting included running ads on the Internet. In addition to the other south Asian employees, the Philippine workers were employed by PPI under a Pentagon sweetheart umbrella contract let to KBR under the LOGCAP (Logistics Civil Augmentation Program) III program.

Although little is known about PPI, it reportedly has been linked to Halliburton/KBR for a number of years and has been associated with Halliburton contracts in the Saudi Arabia, Kuwait, and the Balkans during the time when Dick Cheney headed the firm. PPI has also been involved in operations at Guantanamo Bay, Cuba, where Filipino workers were involved in building the prison housing suspected "Al Qaeda" prisoners.

Inside sources report that PPI has some high level financial partners, including the al Nahayan royal family of the United Arab Emirates and Vice President Cheney. And there are connections to President Macapagal-Arroyo's ordering the repatriation of hundreds of Filipino workers home from Iraq and Kuwait and the discovery that U.S. Marine Corps and FBI spy Leandro Aragoncillo, a Filipino-American who worked as a Marine security aide inside Cheney's office until early 2002 and who was arrested by the FBI this past October, had stolen dossiers from Cheney's office that were considered damaging to Mrs. Macapagal-Arroyo. Macapagal-Arroyo was sworn in as President on January 20, 2001 (the same day George W. Bush and Dick Cheney were sworn in) after a popular revolution ousted Joseph Estrada. Macapagal-Arroyo, the daughter of past Philippine President Diosdado Macapagal.

 

Philippine White House spy ring linked to Cheney, Abramoff, and mysterious Dubai slave wage firm

Aragoncillo passed Cheney's reports on Macapagal-Arroyo, some of which were obtained from National Security Agency intercepts, to Estrada, a political opponent of Macapagal-Arroyo and an ally of former Philippine First Lady Imelda Marcos. Estrada was planning a coup against Macapagal-Arroyo with U.S. support. Aragoncillo was linked to another U.S.-based Filipino spy -- former Philippine National Police officer Michael Ray Aquino -- who was also involved in passing Cheney's classified documents to Estrada. Aquino, who is wanted in the Philippines for involvement in murder, kidnapping, and drug trafficking, was also arrested by the FBI.

More importantly, Aquino's close friend, Estrada, is also a business associate of indicted GOP lobbyist/reputed gangster Jack Abramoff. Another high-level Filipino-American in the White House, Karl Rove's Assistant and Assistant to the President, Susan Bonzon Ralston, also served as Abramoff's personal assistant at the law firms Preston Gates & Ellis and Greenberg Traurig. Ralston has been called to testify before the grand jury and special prosecutor Patrick Fitzgerald, who is investigating Karl Rove's involvement in leaking the name of CIA covert agent Valerie Plame Wilson to the media.

Aragoncillo allegedly passed over 100 documents from a classified FBI computer system at Fort Monmouth, New Jersey while working there as an intelligence analyst for the FBI after he left the Marine Corps. It is significant that Aragoncillo admitted to spying while only working as an aide to Cheney and not when he worked for Vice President Al Gore during 1999 and 2000.

It now seems apparent that Aragoncillo and Aquino were part of an illegal Cheney covert operation to topple Macapagal-Arroyo in retaliation for her stopping PPI's recruiting efforts in the Philippines. That decision by Manila dealt a severe financial blow to the Halliburton/KBR LOGCAP profits in Iraq. It is also of note that Aragoncillo worked with national Security Adviser Condoleezza Rice.



Cheney: Involved in the low wage slave trade, espionage, and war profiteering.

What was not anticipated by Cheney was that the FBI would step in and arrest Aragoncillo for culling classified information from the FBI's computers at Fort Monmouth. This case, like the AIPAC espionage case involving top Pentagon officials, has been largely ignored by the media. However, along with the Plame case and AIPACgate, all roads lead back to Cheney's office at the White House.

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Dear Howard Dean: Why Bother?

Ernest Partridge, Co-Editor
The Crisis Papers
 
December 13, 2005

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Dr. Howard Dean, Chair
Democratic National Committee

Dear Dr. Dean,

Every week I get dozens of solicitations from the Democratic National Committee, from the Democratic Senate and Congressional Campaign Committees, or from various Democratic candidates and office-holders, each of them asking for contributions. “You can help us achieve victory next November,” I am told.

If by “victory” is meant a majority vote cast at the polls, then the Democrats achieved “victory” in 2000, 2002 and 2004. And yet, the Republicans remain in control of the Congress and the White House.

Small wonder! Republicans build the voting machines, Republicans write the secret software, Republicans count and compile the totals. The Republican machines allow no auditing of the vote totals they report. So Republicans have the ability to “win” elections, regardless of the will of the voters.  There is compelling evidence that they have done just that.

And so, if nothing is done to end the privatization of our elections and to introduce reliable verification, the Republicans will "win" again in November 2006 and then in 2008. Today, eleven months before the mid-term election, the outcome is fore-ordained – as certain as Soviet elections under Stalin, and Iraqi elections under Saddam. For, as Stalin said, "Those who cast the votes decide nothing, those who count the votes decide everything.”

In the United States today, the GOP counts most of the votes, and there are no means to verify up to 80% of those votes.

In view of this dreadful situation, when the Democrats ask me for a contribution I must reply: “What’s the point? It’s already been settled! What remains is an empty charade.”

The evidence of election fraud is overwhelming. You, Dr. Dean, are doubtless as aware of that evidence as I am. In fact, along with millions of fellow citizens, I watched the video clip of you sitting at a table with Bev Harris, as she simulated with a computer, in just a few seconds, a “fix” of an election. If I were to elaborate the evidence of fraud, space restraints would force me to halt after I had scarcely begun, and I would never get to other issues I wish to discuss in this letter. Suffice it to say that several independent statistical analyses have put the probability of an honest 2004 election as one in several million. The thirty-plus-point polling discrepancy in last month’s Ohio election reform initiatives are off the probability scale – in effect, impossible as random error. Attempts to explain away the 2004 exit poll errors are risibly lame. (For example, the theory that Republican voters were more reluctant to speak to exit pollsters is supported by no independent evidence, and fails to explain why this alleged phenomenon was confined to districts with paperless e-voting machines, and not found in paper-ballot districts). Reports of machine failure and error during the 2004 election were overwhelmingly to the advantage of Bush/Cheney. No one has come forth with a plausible explanation of how Bush gained an additional eleven million votes over his 2000 total. (For a “gateway” into the evidence of voting fraud, see The Crisis Papers pages on “Electoral Integrity” and “Election Fraud.”).

The evidence of voting fraud and election theft is no secret – it is out in the open for all to see who are willing to see. In 2000, millions watched as Republican thugs, recruited by Tom DeLay from Washington congressional offices, stormed and shut down the voting recount in Miami. The published text of the majority opinion in Bush v. Gore that handed the 2000 election over to George Bush is a self-refuting travesty. Books, articles and reports by Steven Freeman, John Conyers’ staff, Fitrakis and Wasserman, Mark Crispin Miller, and the Congressional Government Accountability Office, to name just a few, all testify convincingly to the vulnerability of the election process and the illegitimacy of the election results. Occasionally a virtual confession of guilt is blurted out by a careless GOP operative. For example, as the votes in the 2004 Presidential election were still being counted, Republican Congressman Peter King was caught on camera saying “It’s all over but the counting. And we’ll take care of the counting.” (You can see it here).

There is no cogent rebuttal to this evidence of voting fraud: there can’t be, for the e-voting machines and compilers have been designed to forbid rebuttal. The software is secret and there is no independent record of the votes. Accordingly, so-called “verification” is nothing more than a re-run of the suspect tallies. Lacking substantive evidence of the reliability of the voting and compiling machines and software, all that remains for the defenders of e-voting is a pathetic plea,  “just trust us!” That and ad hominem attacks on the skeptics: “get over it!,” “sore losers,” “conspiracy theorists.”

The response of the mainstream media in the face of all this? Total silence.

The response of the Democratic Party? Total silence.

The response of the media and the Party to the GAO report report validating the concerns of the critics? More silence.

Why!?

Admittedly, with total GOP control of the executive and congressional branches in Washington, federal investigation and legislation are, for the moment, out of the question. But elections are administered on the state and municipal levels where, in many cases, the Democrats are in control. So I ask again:

* Where are the criminal investigations?
 
* Where are the civil lawsuits, e.g., by Max Cleland in Georgia, Walter Mondale in Minnesota, Al Gore in Florida, John Kerry in Ohio?
 
* Why is appropriate state-level legislation not proposed and enacted by Democratic majorities?
 
* Why is the national Democratic Party not publicizing the GAO report?

I am told that some Democratic politicians are concerned that if the Party raises a ruckus about voting fraud, the Democratic base will be discouraged and will stay at home on election day.

Well, so what?  If the fix is in on election day, what difference does it make whether or not the voters go to the polls? Why bother to close the gate after the horse has been stolen?

We also hear that the crime of stealing a national election is so enormous that the GOP wouldn’t dare to attempt it.

Why would they not?  Computer experts have shown us that the theft of a national election can be carried out by very few individuals: the programmers who write the secret software and a few centralized hackers working in “real time” as the returns start to come in.  We are also told that they can do this without leaving any trace of their crimes.

Might the perpetrators be deterred by moral qualms or loyalty to our political institutions?

Get Real!  We are speaking here of a pack of scoundrels who have lied to the public in order to  launch an illegal war costing tens of thousands of innocent lives, who have openly violated treaties and condoned war crimes, who have suspended the civil liberties guaranteed by the Bill of Rights, who have absconded with the national treasury and have put our children and their children in permanent hock, who have sullied the good name and reputation of the United States before the community of nations. In the face of such manifest evil, stolen elections are moral chump change.

And consider in addition the stakes faced by these traitors: billions of dollars from the public treasury “appropriated” into private accounts and massive tax breaks for Bush’s “haves and have-mores” while the rest of us face an increased tax burden and a slash in public services. And for many now in the Bush administration and in the Congress, defeat in the 2006 and 2008 elections would bring Congressional and Justice Department investigations and indictments followed by hard time in the federal slammer.

In the face of all this, who can doubt that, if given the opportunity, they would fix elections in order to keep their ill-gotten booty and their immunity from prosecution?  And it is abundantly clear that they have this opportunity.

When the defenders of e-voting bother to respond to these concerns, they are heard to demand: "where's the evidence of this alleged fraud?"  As noted above, we have the evidence, compelling at least, and many believe, conclusive.  But such demands radically misconceive the correct burden of proof.  Private citizens and organizations should not have to take upon themselves the obligation to prove their franchise either secure or fraudulent.  The free citizens of an authentic democracy have the right to a secure and verifiable vote, and it is the proper task of the criminal justice system to secure that right.

So there you have it, Dr. Dean. A massive and ongoing crime is being committed against our democracy – a democracy which has now, in effect, been set aside and shut down. A democracy which can only be restored if we the people rise up and take it back.

Where, in this coming struggle, is the Democratic Party? Is it an ally of the people and a defender of our Constitution? Or is it an accomplice to the crime?

The American people are entitled to an answer.

Continuing silence by the Democratic party is, in effect, an answer.  But it is not the answer to which the free citizens of a democracy are entitled.

Respectfully,

Ernest Partridge, Ph.D,
Co-Editor, The Crisis Papers.
www.crisispapers.org

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Copyright 2005, by Ernest Partridge

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From Capitol Hill Blue

What Price Freedom?

Soldiers voted, but were their votes counted?

By LISA HOFFMAN

Dec 13, 2005, 06:06

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More U.S. troops voted in the 2004 election than ever before, according to a new Pentagon study. But critics say that the report by the Federal Voting Assistance Program sheds little light on the most important question: How many of their votes were actually counted?

The study, based on questionnaires sent to those in uniform overseas and on the home front, found that nearly 8 out of 10 service members said they voted in the election, which included the closely contested presidential race.

That amounted to a 10 percent increase in military turnout over that in the 2000 election and the highest ever for those in uniform. Of the ballots cast this time, 53 percent were absentee _ a sharp increase from the 37 percent who voted long distance the last time when no U.S. troops were at war overseas.

The study cited high interest in the election as one of the spurs for the increased participation, along with the availability of electronically transmitted absentee-ballot requests and the voting program's extensive informational Web site, which was accessed more than 8 million times between November 2003 and December 2004, the study said.

But Samuel Wright, who has been a military voting-rights advocate for more than 20 years, said the study does not reflect how many of the troops' ballots made it to local voting registrars in time to be counted, or how many GIs requested ballots but never received them.

The survey "obscures an important fact: disenfranchisement of military and overseas absentee voters remains alarmingly high," said Wright, who heads the military voting-rights project at the National Defense Committee advocacy group. "When it comes to actually voting, the current system fails miserably."

His organization did its own survey of local officials after the 2004 election and found that the ballots of at least 1 in 4 service members overseas were never counted. Of those who tried to vote, about 30 percent were unable to do so because they didn't receive ballots or got them too late.

These snafus came despite a concerted effort by the Pentagon to fix problems that marred the 2000 vote. Among other glitches, hundreds of military ballots in Florida were thrown out because of their late arrival or improper postmark.

Special measures were ordered in 2004 to try to make sure the 160,000 U.S. troops in harm's way in Iraq and Afghanistan at the time were able to vote successfully. The Pentagon report does not indicate the voting-participation rate of those in the war zones.

Wright and Susan Dzieduszycka-Suinat, director of the Overseas Vote Foundation, also criticized the fact that the same Pentagon office in charge of the voting program also did the study of its own effectiveness.

And they said troops will continue to be disenfranchised as long as Internet or other electronic voting is not allowed. The Pentagon had hoped to allow 100,000 troops and other U.S. citizens abroad to vote via the Internet in the 2004 election, but cancelled the experiment after questions were raised about the security of such a voting system.

"Despite progress made in recent years, most states still conduct absentee voting essentially as they did during World War II, by shipping pieces of paper around the world by snail mail," Wright and Dzieduszycka-Suinat said in a critique of the Pentagon report.

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(Contact Lisa Hoffman at HoffmanL(at)shns.com.)

© Copyright 2005 Capitol Hill Blue

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Blogged by Brad on 12/13/2005 @ 12:15pm PT...

EXCLUSIVE: SECURITIES FRAUD LITIGATION FILED AGAINST DIEBOLD, INC!

Eight Current and Former Executives Named as Co-Defendants, Including former CEO O'Dell and New CEO Swidarski

Class Action Suit Alleges Fraud, Insider Trading, Manipulation of Stock Prices, Concealment of Known Flaws in Voting Machines and Company Structural Problems



The BRAD BLOG can now report that a Securities Fraud Class Action suit has been filed against Diebold, Inc. (stock symbol: DBD) naming eight top executive officers in the company as co-defendants. The suit has been filed by plaintiff Janice Konkol, alleging securities fraud against the North Canton, Ohio-based manufacturer of Voting Systems and ATM machines on behalf of investors who owned shares of Diebold stock and lost money due to an alleged fraudulent scheme by the company and its executives to deceive shareholders during the "class period" of October 22, 2003 through September 21, 2005.

The suit was filed today in U.S. Federal District Court in Ohio and alleges the company "artificially inflated" stock prices through misleading public information designed to conceal the true nature of Diebold's financial and legal situation. The defendants are also alleged to have attempted to disguise well-known and ongoing problems with Diebold's Voting Machine equipment and software. Additionally, the suit alleges insider trading by defendants resulting in proceeds of $2.7 million. Remedies are sought under the Securities Exchange Act of 1934.

The suit, filed by the law firm Scott+Scott, LLC on behalf of Konkol and the plaintiff class, names former Diebold CEO and Chairman, Walden O'Dell as a co-defendant along with seven other current and former officers of the once-venerable company.

News of the pending litigation was first reported as imminent in an exclusive report by The BRAD BLOG late last week.

Yesterday, in a surprise announcement, O'Dell unexpectedly resigned from the company. A Diebold press release described O'Dell as leaving the company for "personal reasons". He was immediately replaced by the company's president and chief operating officer, Thomas W. Swidarski, who had directly overseen Diebold's Election Systems subsidiary division for some time. Swidarski is also named as a co-defendant in today's class action suit.

After news was released of weaker-than-expected third-quarter earnings on September 21, Diebold stock prices plummeted 15.5% in unusually heavy trading that resulted in a one day sell-off costing investors more than $40 million dollars. The complaint describes Diebold and the co-defendants as having "failed to disclose adverse facts known" to the company and that they "participated in a fraudulent scheme and course of business that operated as a fraud."

The suit, to be released in full by The BRAD BLOG shortly, alleges Diebold and the eight co-defendants failed to alert investors to adverse facts known to the company, choosing instead to participate in a "fraudulent scheme and course of business" that operated as a fraud or deceit on the company's shareholders.

The suit describes the liabilities of the company and co-defendants as follows...

Each defendant is liable for (a) making false statements, or (b) failing to disclose adverse facts known to him about Diebold. Defendants’ fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of Diebold publicly traded securities was a success, as it (a) deceived the investing public regarding Diebold’s prospects and business; (b) artificially inflated the prices of Diebold’s publicly traded securities; (c) allowed insiders to sell over 51,000 shares of Diebold stock, for proceeds of $2.7 million; and (d) caused plaintiff and other members of the Class to purchase Diebold’s publicly traded securities at inflated prices.

...THE DEFENDANTS...

Named as co-defendants in the suit along with former CEO O'Dell and new CEO Swidarski are President of International Operations, Michael J. Hillock; Senior Vice President of Customer Solutions, David Bucci; Interim Chief Financial Officer, Principal Accounting Officer and Controller, Kevin J. Krakora; Vice President and Chief Information Officer, John M. Crowther; Senior Vice President and CFO, Gregory T. Geswein; and President and COO, Eric C. Evans. (Titles applied to the named co-defendants during the class period. Evans, for example resigned from the company on the same day as the Sep. 21, 2005 announcement.) "Each individual defendant," the suit points out, "owed a duty to the Company and its shareholders not to trade on inside information."

The claim cites a number of allegedly misleading news releases pertaining to the fitness and security of election systems as contracted by Diebold in San Diego County in 2003; their settlement for $2.6 million with the state of California in 2004, wherein Diebold is alleged to have concealed "the dimensions and scope of internal problems at the Company" from investors; and an "astonishingly low and incredibly inaccurate" statement about "restructuring charges" in the Sep. 21 announcement.

Once again, quoting from the lawsuit:

During the Class Period, defendants knew and concealed that:

(a) the Company remained unable to assure the quality and working order of their voting machine products;

(b) the Company lacked a credible state of internal controls and corporate compliance;

(c) the 2004 settlement with the State of California served to conceal from investors the dimensions and scope of internal problems at the Company, impacting product quality, strategic planning, forecasting, guidance, internal controls and corporate compliance; and

(d) the Company’s "prediction" of astonishingly low and incredibly inaccurate restructuring charges for the entire 2005 fiscal year grossly understated the true costs defendants faced to restructure the Company.

The complaint alleges that the company lied to investors about the true costs of its restructuring activities, concealing the fact that Diebold was facing far worse restructuring issues than publicly represented -- indicative of far greater problems than the company was willing to reveal.

For example, the complaint indicates that the problems Diebold faced in California in 2004 were merely the tip of an internal structural iceberg which the company had sought to conceal from investors when they decided to make a settlement in the case. Investors could not know then that the problems revealed by the California litigation in 2004 were a sign of more and deeper internal problems to come. The settlement agreed to by Diebold in that case, the suit alleges, was meant to keep a lid on the larger dimensions of the problems, rather than indicating that the issues at stake had been fully resolved. Press materials released by the company announcing the settlement -- and included in the version of the complaint filed today -- seem to indicate otherwise to investors.

...THE INSIDER...

Additional facets of the company's internal structural problems were revealed in a series of previous BRAD BLOG articles reporting on an anonymous company insider we dubbed "DIEB-THROAT" who alerted us to the "Cyber Alert Warning" issued by a branch of the Dept. of Homeland Security in August of 2004. That warning concerned the vulnerability to hackers of Diebold's central vote tabulating software prior to last year's Presidential Election. The election watchdog organization BlackBoxVoting.org, who had first discovered the vulnerability, had also recently arranged for a computer security expert to successfully hack into actual Diebold voting machines used in Leon County, Florida without leaving any trace of the manipulation.

It was just several days after our first report on DIEB-THROAT that stock prices plunged at the company in September. Diebold attempted to blame their troubles, at the time, on bad weather in the gulf which lead our insider source to aver: "Using Hurricane Katrina is a poor excuse for bad products - the last time this kind of deception occurred it was called Enron."

Internet news site, The RAW STORY recently ran their own interview with DIEB-THROAT revealing still more structural problems within the company and its voting division. The report explained that the company was "plagued by technical woes," even as a Diebold spokesperson claimed the 144-year old company "has a sterling reputation in the industry."

...THE PLAINTIFF...

Plaintiff Konkol, a just-retired 29-year public school employee from Central Wisconsin first invested in Diebold in 1999. She told The BRAD BLOG that she purchased the stock thinking, "ATM's that'd be the way to go." She originally invested $500 which eventually grew to $1400 before falling. She is also invested in Diebold via mutual funds held by the Wisconsin Education Union in which she is a member. Konkol, a 56-year old grandmother of three, recently returned from two weeks of volunteering on the Gulf Coast with several members of her Lutheran church. "We got a big group together and we went down to the Gulf to help out in Katrina."

"I believe in churches...I believe we should practice what we're preached to about," she told us. "I don't like it when big companies take advantage of us little people," she said. "I can't say that I'm anti-big business...I just want things to be fair."

It appears that Scott+Scott, the attorneys associated with the case, are just beginning to learn about the full scope of the fraud allegedly perpetrated by Diebold on investors. Amended complaints with additional details are expected to be filed in the weeks and months to come. Other law firms are also expected to file similar suits which will eventually be consolidated by the Federal District Court hearing the case. Indeed The BRAD BLOG has been contacted since filing our original report on this last week, by other firms who are said to be pursuing similar litigation against Diebold.

...THE REFORMERS...

As one of America's largest Voting Machine Companies (along with ES&S, they account for the tabulation of more than 80% of America's votes every election) Diebold has been the target of Election Reform advocates for their strong partisan support of Republican causes and candidates, a statement made prior to last year's Presidential Election to Republican fundraisers by O'Dell that he was committed to "delivering the state of Ohio" to George W. Bush, along with their reluctance to include verifiable paper ballots with their voting products and to make the source-code for their software open and available for public inspection.

A recent 100+ page GAO report, shamefully unreported by the mainstream media, confirmed many of the Election Reform advocates concerns about the security and vulnerability of Voting Equipment made by Diebold and other such companies. In California, a recent mock election test revealed that some 20% of Diebold touch-screen voting machines failed to operate as expected after being previous decertified for similar failures and vulnerabilities. Despite that, California's Republican Sec. of State Bruce McPherson remarkably is considering re-certifying those same machines in the state which Diebold has described as America's "largest voting market."

Diebold was one of seven major American Voting Machine companies named in Velvet Revolution's "Divestiture for Democracy" campaign launched on Presidents' Day last February. The campaign demanded accountability and openness by the Voting Machine Companies in what Velvet Revolution deemed a "patriotic duty" to "ensure free, fair and transparent elections" by the private companies entrusted with running our sacred public democracy. The BRAD BLOG is a co-founder of VelvetRevolution.us.

Konkol's complaint as filed today demands "a trial by jury."

The BRAD BLOG will of course, compile an extensive, accurate and verifiable paper trail in regards to this story as it continues to unfold...

UPDATE: Scott+Scott, LLC releases news of the case filing in a press release here...

FURTHER UPDATE: Reuters picks up the story. Unable to get comment from Diebold.

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Fitzgerald to brief grand jury Wednesday

12/13/2005 @ 11:13 pm

Filed by Jason Leopold

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Special Prosecutor Patrick Fitzgerald will present additional evidence to a grand jury Wednesday morning in the CIA leak case that could result in an indictment being handed up against White House Deputy Chief of Staff Karl Rove, sources close to the investigation told RAW STORY.

Although the grand jury’s term expires in 18 months, Fitzgerald is expected to wrap up the case as it relates to Rove before the end of the year, the sources said.

Fitzgerald intends to present the grand jury with the sworn testimony from Rove’s attorney Robert Luskin, and Time magazine reporter Viveca Novak. The sources close to the case said Fitzgerald is still intent on seeking an indictment against Rove on at least one count of making false statements to FBI and Justice Department investigators when he was first interviewed in early October 2003 about his role in the leak.

Rove failed to tell investigators at the time that he had spoken about covert CIA agent Valerie Plame Wilson with Time magazine reporter Matthew Cooper and conservative columnist Robert Novak, who first published her name and CIA status in a July 14, 2003 column. Rove had been a source for both journalists. Cooper and Novak later cooperated in the case. Luskin said Rove had forgotten about the conversation.

Eleventh-hour testimony from reporter Viveca Novak—who Rove’s attorney Robert Luskin fingered as a crucial witness in keeping his client out of court—does not appear to have been helpful to Rove in dodging an indictment, the sources said.

In a bid to keep Rove out of Fitzgerald’s crosshairs, Luskin recently told Fitzgerald that he had a conversation with Time magazine reporter Viveca Novak in February 2004 where she inadvertently revealed that Rove had been a source for her colleague Matt Cooper. Luskin said this prompted an exhaustive search for evidence that Cooper and Rove spoke. The search turned up an email Rove had sent to then Deputy National Security Adviser Stephen Hadley just minutes after his conversation with Cooper in which he told Hadley what they had spoken about. Luskin said he promptly turned over the email to Fitzgerald and that led Rove to change his testimony.

A week ago, Fitzgerald briefed the second grand jury hearing evidence in the leak case for more than three hours. During that time, he brought them up to speed on the latest developments involving Rove and at least one other White House official, the sources said. The attorneys refused to identify the second person.

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ALSO:

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Fitzgerald was long suspicious Rove had hidden evidence; Not swayed by last minute testimony, lawyers say

12/13/2005 @ 12:35 pm

Filed by Jason Leopold and Larisa Alexandrovna

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A few weeks after he took over the investigation into the leak of covert CIA agent Valerie Plame Wilson in early 2004, Special Prosecutor Patrick Fitzgerald had already become suspicious that Karl Rove and Vice President Cheney’s then-chief of staff I. Lewis “Scooter” Libby were hindering his investigation.

In late January 2004, Fitzgerald sent a letter to his boss, then acting Attorney General James Comey, seeking confirmation that he had the authority to investigate and prosecute individuals for additional crimes, including obstruction of justice, perjury, and destroying evidence. The leak investigation had been centered up to that point on an obscure law making it a felony for any government official to knowingly disclose the identity of an undercover CIA officer.

Comey responded to Fitzgerald in writing Feb. 6, 2004, confirming that Fitzgerald had the authority to prosecute those crimes, including “perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.”

Fitzgerald was concerned that Rove had hidden or destroyed evidence, lawyers close to the case tell RAW STORY. His suspicions may have been right: an email he sent to then Deputy National Security Adviser Stephen Hadley in early July 2003 later proved Rove had spoken to Time magazine reporter Matthew Cooper about Plame—a fact that Rove omitted when he was first interviewed by the FBI.

Whether or not Fitzgerald knew in late January or early February 2004 about the existence of the email Rove sent to Hadley remains unknown. The email did not show up during a search ordered by then-White House counsel Alberto Gonzales in 2003. Gonzales enjoined all White House staff to turn over any communication about Valerie Plame Wilson and her husband, former Ambassador Joseph Wilson, a vocal critic of the Iraq war who accused the Bush administration of twisting prewar Iraq intelligence. Gonzales’ request came 12 hours after senior White House officials had been told of the pending investigation.

Hadley did not respond to repeated requests for comment. Calls placed to the National Security Council were dropped by press office aides.

According to those familiar with the case and earlier reporting by RAW STORY, Fitzgerald had already obtained the cooperation of a key witness, former Deputy National Security Adviser for Vice President Dick Cheney, John Hannah. In February 2004, Hannah agreed to cooperate with Fitzgerald when the special prosecutor uncovered evidence tying Hannah to the leak and threatened to indict him, the sources said.

Hannah gave Fitzgerald the names of some White House officials who knew about Plame Wilson and disseminated her CIA status to reporters and other White House officials, the laywers said. One of the officials Hannah appears to have implicated was Rove, they added. Cheney promoted Hannah to be his assistant national security adviser following Libby’s indictment.

Fitzgerald still looking to indict Rove

Short of a last minute intervention by Rove’s attorney, Special Prosecutor Patrick Fitzgerald is expected to ask a grand jury investigating the outing of CIA agent Valerie Plame Wilson to indict Deputy White House Chief of Staff Karl Rove for making false statements to the FBI and Justice Department investigators in October 2003, lawyers close to the case say.

Rove failed to tell investigators at the time that he had spoken about Plame to Time Magazine reporter Matthew Cooper and conservative columnist Robert Novak, both of whom later cooperated in the case. Novak outed Plame in a July 14, 2003 column.

The Chicago prosecutor briefed the second grand jury investigating the outing last week for more than three hours. During that time, he brought them up to speed on the latest developments involving Rove and at least one other White House official, the sources said. The attorneys refused to identify the second person.

As of Monday, neither Rove nor his attorney Robert Luskin has explained Rove’s misstatements to Fitzgerald’s satisfaction, those familiar with the case said. Eleventh-hour testimony from Time Magazine reporter Viveca Novak—who Rove’s attorney Robert Luskin fingered as a crucial witness in keeping his client out of court—does not appear to have been helpful in dodging an indictment, they added.

A woman who answered the phone at Patton Boggs, the law firm where Luskin is a partner, said Luskin would not answer specific questions about the probe.

Rove is also under scrutiny for allegedly telling his assistant not to log a phone call from Cooper, the sources said. Rove’s assistant, Susan Ralston, provided Fitzgerald with information last month in which she alleged that Rove told her not to log a call from Cooper that was transferred to Rove’s office from the White House switchboard, sources close to the case said. The lawyers added that Luskin and Rove have an explanation for that as well, but declined to elaborate.

Rove’s case hangs on February 2004

Over the past few weeks, the time frame when Fitzgerald became increasingly suspicious—specifically February 2004—has become crucial for Rove. He testified before Fitzgerald’s grand jury that month without revealing he had been a source for Cooper and Novak, saying only that he had shared information about Plame Wilson with other journalists—including Chris Matthews, the host of MSNBC’s Hardball—after her name had appeared in Novak’s column.

In a bid to keep Rove out of Fitzgerald’s crosshairs, Luskin recently told Fitzgerald that he had a conversation with Time Magazine reporter Viveca Novak in February 2004 where she inadvertently revealed that Rove had been a source for her colleague Matt Cooper. Luskin said this prompted an exhaustive search for the Hadley email which was promptly turned over to Fitzgerald and led Rove to change his testimony.

Luskin testified Dec. 2 that the Novak meeting took place in late January or early February 2004, the very month in which Fitzgerald had sought the authority to prosecute officials if they were found to have hindered his investigation into the leak.

Novak, however, testified that she met Luskin in either March or May 2004, those close to the case said. This discrepancy is at the crux of what Fitzgerald is investigating. Rove didn't reveal to the grand jury that he had spoken with Cooper until Oct. 15, 2004.

Luskin has said that Rove did not intentionally withhold information from Fitzgerald or the grand jury about his conversation with Cooper. Rather, he says Rove had simply forgotten about it, and Luskin’s meeting with Novak had jogged his memory.

Before Novak testified in a sworn deposition last week, Rove faced the prospect of being indicted on numerous counts, including obstruction of justice, perjury and making false statements for failing to disclose conversations he had with reporters about Plame Wilson, sources close to the case said. Several reporters close to Novak said they believe Luskin’s decision to draw her into the case was made to keep Rove’s indictment from being handed up on the day Libby was charged.

Rove could be indicted on those counts if Fitzgerald determines that Novak’s testimony did not go far enough in clearing up questions about why Rove did not tell investigators about his conversations with other reporters. Her testimony may, however, shield Rove from more serious charges, attorneys close to the case said.

Novak (who is not related to the conservative columnist Robert Novak, the journalist who first published Plame Wilson’s name and CIA status,) is the latest in a lengthy list of longtime Washington, D.C. reporters who have become embroiled in the leak investigation, and the third to have withheld crucial information from editors about her involvement while still reporting on the story.

In a first-person account Novak posted on Time magazine’s website Sunday about her role in the case, she said she had met with Luskin, Rove’s attorney, for drinks in October 2003. Luskin asked Novak what she was working on for Time and Novak said the Plame Wilson leak.

“Well you’re sitting next to Karl Rove’s attorney,” Luskin said to her, according to Novak’s account.

The two began spending more time together and during the course of several meetings during the first half of 2004, either in March or May, Novak wrote, Luskin had told her that Rove had not been a source for Matt Cooper, Novak’s Time colleague, who had been the second reporter to write about Plame Wilson on July 17, 2003.

Novak said she inadvertently tipped Luskin off to the fact that Cooper's source was Rove. She said she sensed she was being spun by Luskin and her knee-jerk response led to her divulging information that could be used to help Rove escape serious charges.

Following his meeting with Novak, Luskin told Rove that Novak said he was Cooper’s source. Luskin and Rove then did an exhaustive search through White House phone logs and emails to find any evidence that Rove spoke with Cooper.

An email Rove sent to then-Deputy National Security Adviser Stephen Hadley just minutes after his conversation with Cooper in July 2003 turned up, and Luskin said he immediately turned it over to Fitzgerald.

Still, it’s unclear why that email wasn't found when White House counsel Alberto Gonzales ordered all White House staff in October 2003 to turn over emails and other documentary evidence that showed officials spoke with journalists. Moreover, it’s not known why Rove did not change his grand jury testimony to reflect that he had been Cooper’s source until October 2004, some six or eight months after Novak’s meeting with Luskin.