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Tue Jan 1, 2013, 09:02 AM

Army drops suspension of contractor in criminal probe

http://www.usatoday.com/story/news/nation/2012/12/30/army-lifts-suspension-propaganda-contractor/178

Army drops suspension of contractor in criminal probe
Tom Vanden Brook, USA TODAY3:26p.m. EST December 30, 2012

WASHINGTON - The Army has lifted its suspension of the owner of its top propaganda contractor in Afghanistan, despite the Pentagon's ongoing criminal investigation against him for late tax payments, treatment of his Afghan employees and an online smear campaign he launched against USA TODAY.

The Army had suspended Camille Chidiac, co-owner of Leonie Industries, in May after he admitted to setting up disparaging social media and web sites against two journalists from USA TODAY. At the time, Defense Secretary Leon Panetta ordered "appropriate action" taken against Chidiac, according to Pentagon press secretary George Little, who called Chidiac's ctions "intolerable."

The Army reversed the suspension Nov. 15, allowing Chidiac to bid for new federal contracts, including an extension of the propaganda contract in January. The Army, in a statement from spokesman Matthew Bourke, decided that Chidiac should be reinstated because the Army concluded that he conducted the smear campaign on his own time without Leonie's resources. Chidiac put his ownership stake in a trust in an agreement reached with the Army. That prompted the Army to lift its suspension of Chidiac, according to Bourke.

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The Army refused to provide copies of its investigation or the agreement. Retired Lt. Gen. Scott Black joined Leonie's board of directors as part of the deal, according to company spokesman Gar Smith.

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