By Kelley B. Vlahos
January 7, 2013

So who’s the fool? The outfit that turned its business of peddling useless propaganda to U.S. occupied countries onto America itself – by smearing journalists that dared criticize it – or the government that hired them for hundreds of millions in the first place?

Let’s say the government. At least Leonie Industries gets to keep the $60 million contract it extended last June. A potentially crippling suspension put on the company after it was reported that its co-founder and principle owner had covertly set up phony websites to besmirch two USA Today reporters, is suddenly off, and Leonie Industries is free to bid on more Pentagon contracts. It doesn’t appear to matter that the firm had to be shamed into paying $4 million in back taxes, and was under investigation for mistreating its Afghan employees just last year.

Employees of security contractor ArmorGroup North America, which in 2011 settled a federal lawsuit charging it submitted false claims for payment, and that it knew employees were visiting brothels in Afghanistan. The company continued to work in Afghanistan until July 2012.

But to the Department of Defense such transgressions must seem small, considering its other wayward relationships with war contractors over the last 10 years. For example, the big daddies like Blackwater-turned-Xe-now-Academi have been accused of killing people and stealing guns, and Uncle Sam is still throwing tens of millions of taxpayer money at them. So what’s the big deal about some crummy little hatchet job and a bunch of thin-skinned Afghan workers anyway?

In the great, grand scheme of things, probably not much. The story of Leonie’s lifted suspension last week hardly registered a blip on the radar. Just another case of a highly paid private “information operations” enterprise getting a pass from the Pentagon, despite its screwball antics and questionable performance outcomes (doesn’t anybody notice that we clearly lost that war for Afghan hearts and minds years ago?).

But what is worth looking at is why the government continues to outsource millions to operations so opaque that they won’t even name their CEOs or key staff on their websites. In fact, for the page entitled “our people” Leonie clearly presents a stock photo of a bunch of office jockeys fronted by Mr. Boss-in-the-Box. The page “about us” starts with “Leonie is a customer-focused company. We listen,” and ends with “Expertise Where You Need It” – and absolute marshmallow fluff in between. Each page is embellished with photos of a perfectly orchestrated multicultural staff that clearly does not exist in their real offices, situated in Arlington just inside the Beltway.

Propaganda indeed. What we do know from last year’s reporting by USA Today’s Tom Vanden Brook and Ray Locker, Leonie Industries, or The Leonie Group, was started in 2004 by a Lebanese-American brother-sister team, Camille Chidiac, then 29, and Rema Dupont, then 38. They began working as subcontracted propagandists in Iraq, despite the fact neither had any experience in military information operations nor with obtaining government contracts at this level.

Two years later, according to USA Today, they were both living in Los Angeles homes worth $2 million, and the Iraq War, well, it was going so badly the U.S. had to eventually pull a Holy Mary – “The Surge” – to get out of there. Chidiac and Dupont starting getting Afghanistan contracts in 2008, raking in millions for essentially developing public relations exercises – like dropping leaflets, putting up billboards, staging concerts and arranging radio broadcasts – to win support of the people away from the Taliban. Meanwhile, Leonie reportedly owed $4 million in back taxes and was admonished by its Pentagon bosses because it did not “pay for heat for its Afghan employees or provide medical care in the cold and increasingly dangerous war zone,” according to USA Today. After being threatened with the loss of the contract, Leonie has since rectified the situation and was deemed “highly valued by the customer” in later documents reviewed by the reporters. We guess so – according to the search engine, Leonie has received a total of $220 million in defense department contracts since 2008.

Yet we may never know if Leonie’s work was worth the trouble because most of these military propaganda operations, which at their peak in 2009 had a $580 million budget, are largely hidden from view. Not only that, even when the military has studied the effectiveness of these media efforts, many run by contractors with little to speak for them save a few influential Beltway names on their boards of advisers,they’ve kept the results secret. The Government Accountability Office (GAO), at the urging of members of congress following the February 2012 USA Today article, is finally conducting an open review of information operations or “IO” in the military, the results of which are expected in April, according to a spokesman.

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