Kenneth R. Timmerman
Monday, Dec. 11, 2006
WASHINGTON -- Defeated Pennsylvania Republican Curt Weldon believes that the CIA and the FBI are "out of control," and that the next Congress must do better oversight to prevent them from continued interference in domestic U.S. politics.
The charge by the outgoing Republican congressman and deputy chairman of the House Armed Services Committee, one of the top targets of the Democratic National Committee in November's congressional election, was not idle speculation.
"Just yesterday, FBI Director Mueller took the unusual step of publicly acknowledging that the FBI had launched a criminal inquiry into the activities of two of its agents for misconduct in a federal investigation," Weldon said. "Even more unusual, Mueller said that the improper leaks involved Congressman Weldon.
Weldon spoke to NewsMax on Friday just outside the House chamber in the Capitol building on his last day as a United States congressman. He planned to stay for votes scheduled to continue until 11 p.m.
Six weeks before last November's election, Weldon continued to dominate his Democratic opponent in the polls. Then, out of nowhere, "anonymous law enforcement sources" leaked to the press that the FBI was conducting a federal probe into the Pennsylvania Republican for alleged influence peddling.
Weldon has been in Congress since 1986, and was re-elected in 2004 with 59 percent of the vote. After a televised FBI raid on his daughter's townhouse on Oct. 16, Weldon dropped like a rock in the polls.
"I was exceptionally disappointed, and that is being charitable in terms of my response," Mueller told the Senate Judiciary Committee on Thursday, referring to the leaks in the "Weldon matter."
"It is unfair in advance of an election; but, as importantly to us, it adversely affected the investigation," Mueller said.
Judiciary Committee Chairman Sen. Arlen Specter, R-Pa., blasted Mueller and said he found the FBI behavior to be "highly prejudicial."
Weldon's opponent, retired Rear Adm. Joseph A. Sestak, won top drawer support from the national Democratic Party, including an endorsement and campaign appearance by Bill Clinton on Oct. 5.
The list of his campaign contributors reads like a "Who's Who" of the Clinton administration. Contributors included former Secretary of State Madeleine Albright, former National Security adviser Sandy Berger, former White House political director John Podesta, and a host of Clinton White House aides including national security experts Rand Beers and Bob Bell, and terrorism analyst Daniel Benjamin.
Also significant, Weldon believes, was a contribution from Mary McCarthy, a senior CIA official forced to resign just 10 days from retirement in April on allegations she had leaked highly-classified information to The Washington Post that helped expose the existence of CIA secret prisons for terrorists.
"The CIA is out of control," Weldon said. "They are not leaking for the good of the country, or out of national security concerns, but purely to satisfy a personal agenda."
Weldon believes he became a top target of the national Democratic Party because of his investigations into Clinton-era national security scandals, including the sell-off of military technology to communist China. He further cooled his relationship with the Democratic Party after asserting that before 9/11, the Able Danger intelligence program identified Mohamed Atta and other 9/11 hijackers as possible members in al-Qaida.
Weldon also charged the former CIA station chief in Paris, Bill Murray, of attempting to smear the incoming chairman of the House Permanent Select Intelligence Committee, Silvestre Reyes, by alleging that Reyes attended a meeting in Paris with Iran-contra figure, Manoucher Ghorbanifar.
Those allegations appeared in a left-wing Internet publication on Nov. 17 that was clearly aimed at thwarting Reyes's candidacy to take over the sensitive intelligence oversight position. "What does this say about Reyes' judgment, meeting with a guy like this?" left-wing journalist Laura Rozen wrote.
Impeached former federal judge Rep. Alcee Hastings, D-Fla., was in line to become chairman of the intelligence committee, but was facing stiff opposition from security-minded Democrats as well as Republicans, who argued he was unfit for the job. Reyes was seen as a compromise candidate for the job.
"Bill Murray's aim was to impugn the reputation of the incoming chairman of the House intelligence committee," Weldon said. "This is outrageous. And it is a blatant lie, because Reyes never met with Ghorbanifar in Paris."
Weldon also accused Murray of having leaked to the press the name of a confidential source in Paris who had provided Weldon with intelligence information on Iran.
"I questioned the CIA about this," Weldon told NewsMax. "They sent me a memo with the name of my source blacked out. I asked them why. They said, because it was classified. That didn't stop Murray from releasing his name."
"This is what the whole Valerie Plame case was about," he added. Murray was embarrassed because he had mishandled the informant, so was seeking to discredit him through the press, Weldon believed.
Despite protests to CIA and FBI over Murray's leaks, neither agency launched a criminal investigation. "Murray got away with it," Weldon said. "This demonstrates everything that is wrong with our intelligence community."
Weldon said he was not bitter about his defeat, but was encouraging Congress to do stricter oversight of an intelligence community he believed was "out of control."
Kenneth R. Timmerman is president of the Middle East Data Project, author of "Countdown to Crisis: The Coming Nuclear Showdown with Iran," and a contributing editor to NewsMax.com.
Showing posts with label Weldon. Show all posts
Showing posts with label Weldon. Show all posts
Tuesday, December 12, 2006
Friday, December 1, 2006
New House Intelligence Chairman Secretly Met With Iran-Contra Arms Dealer
OVERSEEING THE OVERSEERS. One thing you may not know about Rep. Silvestre Reyes (D-Tx), now being considered as a compromise candidate to chair the House Permanent Select Committee on Intelligence (HPSCI), is that he joined his friend and colleague, outgoing congressman Curt Weldon at a meeting with infamous Iran Contra arms dealer Manucher Ghorbanifar, against the advice of the Agency, and without informing the U.S. ambassador in Paris, as is proper protocol. The meeting took place at the Sofitel hotel on Rue Boissy D'Anglas around the corner from the US embassy in Paris on a Saturday morning in the spring of 2004 (see update below), according to two sources. (The US government was actually surveilling the hotel lobby that morning out of concern that Iranians might potentially try to harm the congressmen; Weldon apparently loudly asked the concierge for a room for a secret meeting). Ghorbanifar and his business partner were trying to entice the U.S. congressmen to take up the cause of trying to make Ghorbanifar a paid U.S. intelligence asset again on the Middle East, but the CIA would have nothing to do with him, given that he was deemed a fabricator and made the subject of two CIA burn notices in the 1980s, and caused much grief for U.S. policymakers who dealt with him during the Iran Contra affair (think of then-National Security Advisor Robert McFarlane sitting at a Tehran airport with a cake on his lap for Rafsanjani, who wouldn't meet with him, as Ghorbanifar had promised he would, the plane of missile parts from the U.S. sitting in the hangar behind him; Ghorbanifar blamed the mishap on the Americans). What does this say about Reyes' judgment, meeting with a guy like this? Or his knowledge of U.S. operations gone amok?
I put in a call to Reyes' office to ask about that, not for the first time, and am still waiting to hear back. Will post their response if and when it comes. (Also at the meeting, according to my sources, was Congressman Solomon Ortiz [D-TX], who also has not responded to previous inquiries on the matter). One obvious concern is that the House intel committee has, of course, as its chief responsibility oversight of the intelligence community; when the oversight committee potential chairman makes a judgment call like this, what does it mean for the soundness of the vetting that intelligence operations and analysis and personnel decisions can be expected to get?
You can judge the quality of the intelligence Ghorbanifar and his associate were trying to sell the congressmen on by picking up a copy of Weldon's book, Countdown to Terror, which is drawn from it, and read more about the whole affair here and here.
Update: The meeting date was either Friday 29 August 2003 or Saturday, August 30, 2003. Reyes, Ortiz and Weldon were returning from a Congressional delegation that included Russia, and Uzbekistan, on a "technical stopover" in Paris 28/29 August, to give the (US military) crew rest. Weldon had dinner the Friday night before at the ambassador's residence, at which he told the ambassador, when asked, that he had no meetings planned in Paris. He and his group met as planned the next morning with his source Fereidoun Mahdavi who brought his business partner Ghorbanifar to the meeting in a corner of the mostly empty Sofitel lobby in the morning 9am. The US government had spotters on the corner outside and in the lobby out of concern that Ghorbanifar might try to set Weldon up. After Mahdavi and Ghorbanifar showed up, the spotter in the lobby was instructed not to linger.
Reyes' spokeswoman Kira Maas denies Reyes has ever met with Ghorbanifar.
Then CIA station chief in Paris Bill Murray says in response to that: "Weldon, Ortiz and Reyes were part of a Congressional delegation which was in France in late August 2003 for a planned meeting that Weldon planned with his source. I was supposed to go to that meeting but had been given instructions not to after I had learned from my own sources that Ghorbanifar was going to attend the meeting. Therefore I called Weldon, I told him I wouldn't go to the meeting. I also told him his source's information was not very good. He told me that my superiors in Washington would not agree with that and had told him it was first class information. The meeting was held. Ghorbanifar attended."
Update II: For his part, Mahdavi remembers meeting Congressman Solomon Ortiz at that 2003 Sofitel meeting to which he brought Ghorbanifar. About Reyes: "It's possible. At the time, the whole effort of Weldon was to get me in contact with the CIA. I assume no one from the intelligence committee was there." He also tells me outgoing House intelligence committee chairman Peter Hoekstra brought a delegation of eight congressmen -- four Democrats and four Republicans - to meet with him last year. Mahdavi says he had dinner with the Congressional delegation led by Hoekstra at the Hotel Opera in Paris in the summer of 2005. He also says he has met with Weldon "several" times.
In sum, the CIA station chief at the time understood that Weldon, Reyes and Ortiz, staying at the Hotel Sofitel in Paris, were scheduled to meet with Weldon's Iranian intelligence source, Fereidoun Mahdavi, on the morning of the 29th or 30th August 2003 at the hotel. When he learned from his sources that Mahdavi planned to bring Ghorbanifar to the meeting, he alerted Weldon that he would not attend, and that meeting with Ghorbanifar was not a good idea. The Congressional Record of November 10, 2003 documents that Weldon, Reyes and Ortiz of the Armed Services committee indeed traveled together on a congressional delegation and were in Paris at that time, and charged the taxpayers the same amount for their Paris stays ($397.00 each for two nights hotel on the 28th and 29th Aug 2003). Indeed, Congressional Travel records indicate that while Reyes joined Ortiz and Weldon on their trip two days late (Ortiz and Weldon went first to Serbia and Ukraine, Reyes joined up with them on the 24 August in Russia), flying commercially, that he departed on the same day with them from France, and they all reported identical charges for their time in France. The embassy sent spotters to scout the hotel lobby and street out of concern that Ghorbanifar, considered a foreign agent for Iran, might try to set the congressmen up. The spotter in the lobby saw a group of congressmen in the lobby of the Sofitel waiting for the 9am meeting, and heard Weldon ask the concierge for a room for a secret meeting, and complain that the CIA was quote chickening out of the meeting again. The spotter saw Mahdavi and Ghorbanifar come in to the lobby, and the group including the congressmen and the Iranians take a seat at a table in a corner of the mostly empty lobby restaurant area. He was instructed not to linger after Ghorbanifar arrived and had made sure no one was around who would harm or set up the congressmen and left. Mahdavi, a participant in the meeting, remembers specifically Weldon, Ortiz and Ghorbanifar there at the table, but isn't sure about Reyes, saying it's possible. I have called Reyes' office previously (as well as Ortiz and Weldon for that matter) to ask about allegations he attended the meeting, and indeed, had his spokeswoman's direct line penned into my US Congress handbook because of the earlier few times I called, but she has never gotten back to me until yesterday, when I included her statement. Perhaps it's time for Congressman Reyes' office to offer an explanation for what he was doing that morning that his colleagues Weldon and Ortiz met with Ghorbanifar and Mahdavi? If he wasn't at the meeting, it would be useful to know what he was doing, since the two colleagues he traveled with were at the meeting with Ghorbanifar and Madhavi. I welcome a fuller explanation, since I had understood from a reliable source that he was there.
--Laura Rozen
Monday, November 27, 2006
Subject of FBI probe tells of Weldon ties
Posted on Mon, Nov. 27, 2006
Lawyer John J. Gallagher says their dealings go back 30 years, with a mutual interest in Russia.
By John Shiffman and Mark Fazlollah
Inquirer Staff Writers
When Center City lawyer and Russian trade expert John J. Gallagher lost a $2.5 million investment in a cognac distillery in a former Soviet republic, a family friend stepped up to help - in a big way.
The friend, U.S. Rep. Curt Weldon, first called the president of Moldova. When that didn't work, Weldon went to the House and proposed cutting all U.S. aid to Moldova until Gallagher got his money back.
That deal, now part of an FBI corruption investigation, wasn't the only time that Weldon used his office to help Gallagher, a lawyer who specializes in putting together business deals - from Philadelphia City Hall to the U.S. Capitol to the Kremlin.
Weldon also backed an effort that funneled federal money to former Soviet scientists working for a partnership between Gallagher and a Russian firm.
Gallagher's software firm apparently had no workers and did little in the partnership, The Inquirer found.
Weldon lost his congressional seat to Democrat Joe Sestak three weeks ago. But there was no letup in the FBI corruption investigation involving Weldon, his daughter Karen's consulting firm, and Gallagher.
In the first interview given by one of the subjects of the FBI probe, Gallagher said his relationship with Weldon went back 30 years. Their careers, he said, dovetailed in Russia.
"I was very lucky to have my representative also have an interest in Russia," Gallagher, a resident of Weldon's district, said in his spacious office at 18th and Market Streets in Center City.
Gallagher said Weldon, in trying to help him in Moldova, was simply providing good constituent service. "It's my congressman's job," Gallagher said. "He represents me, and a foreign country wronged me."
Agents who searched his law office were investigating possible violations of a federal bribery law, Gallagher said. "Of course I didn't pay Curt Weldon," he said.
Gallagher declined to give details of the FBI raid last month, other than to acknowledge that agents took his Moldova file, among others. He said he was cooperating with the investigation.
For years, Gallagher and the Weldon family have constantly crossed paths in the network of U.S.-Russian trade groups.
Gallagher, who says he has made more than 100 business trips to Russia, helped Karen Weldon's firm there. He said he introduced her firm, Solutions Worldwide, to officials from a Russian company that makes drone spy planes.
The aviation firm gave Solutions a $12,000-a-month contract. Curt Weldon pushed the Navy to buy the drone, and officials got as far signing a contract with the Russian company.
But Gallagher said the deal ended because of news coverage of Karen Weldon's contract.
The first client of Solutions Worldwide was the Russian natural-gas giant Itera International Energy. The FBI also raided its Florida office last month.
Weldon set up a Library of Congress dinner for Itera in 2002 and, on the floor of Congress, pushed for a federal grant to the firm. A month later, Itera hired Solutions for $500,000 a year.
Weldon and his daughter, as well as Itera officials, have denied wrongdoing.
Gallagher said he met Itera officials but declined to elaborate, saying only that he did no business with them. "If it's part of the grand jury investigation, unfortunately I can't speak."
Until recently, Gallagher may have been better known in Russian trade circles than in his own hometown. A graduate of La Salle University and the University of Pennsylvania law school, Gallagher, 54, started his own law firm in 1980.
Gallagher also knew his way around City Hall.
During the City Hall corruption investigation, the FBI recorded him talking to the late power broker Ronald A. White about raising money for Mayor Street and trying to win city deals, sources said.
On one such 2003 call, Gallagher phoned White from Russia to complain that he wasn't getting his share of city legal work. White said he'd take care of it. "Relax," White told him. "Everyone knows who you are."
Gallagher said in the interview that he and White had been friends since they attended law school together three decades ago.
He said he never paid White to help him with the Street administration. For "all good friends," he said, White "would lend a hand."
Gallagher said in the interview that he held two Street fund-raisers with White - one raised about $25,000 - because he was "a lifelong Democrat."
Gallagher also is close to top Republicans in Delaware County, where he lives.
He has given $48,000 to the Springfield Republican Party over the last six years - three times more than any other donor, campaign records show. The Springfield party is run by Charles Sexton, Karen Weldon's partner in Solutions Worldwide.
Gallagher said he contributed because he had known Sexton for 25 years. He said he never got work from Delaware County.
In 2003, Gallagher and Delaware County Republican chief Thomas J. Judge Sr. traveled to Serbia to see Sexton get an honorary doctorate. Gallagher said the degree was arranged by the wealthy Karics, who were banned from the United States because of their ties to the late dictator Slobodan Milosevic.
The Karics also hired Karen Weldon to try to improve their image. Gallagher said he did no business with the Karics.
In his forays to Russia and Eastern Europe, Gallagher wears many hats: sometimes private lawyer, other times an agent of U.S. antinuclear policy. Sometimes, the roles blur.
One example: Gallagher now serves as chairman of the United States Industry Coalition, a Weldon-backed, government-financed group that lines up private business ventures in Russia.
Shortly before Gallagher became a board member, the agency in 2001 helped set up a deal for him with one of Russia's leading software companies.
Gallagher's firm, CTG Software Inc., had no address, other than his law office, and apparently no employees. It was founded two days before the Energy Department announced it would fund the venture, which aimed to find software jobs for former weapons scientists.
About 12 months later, Gallagher dropped out without getting any of the federal money. The endeavor fell short of expectations, hiring far fewer scientists than planned.
Gallagher gets strong support from the industry coalition's former CEO, Victor Alessi.
"I am convinced that his involvement in this project was altruistic," Alessi said.
Some coalition board members said Gallagher had helped the organization as chairman.
"One of the very strongest suits was his relationship with Curt Weldon," said former coalition chairman David C. Bell, president of Phygen Inc., a high-tech Minneapolis firm doing business in Russia. "Curt has been a friend of [the coalition]. It's nice to have friends in positions of power."
The former director of the Energy Department's nonproliferation programs said he "would not have chosen someone with a known close relationship with Weldon to be chairman of the board with [the coalition]."
"My goodness, it raises the appearance of a conflict of interest," said John Hnatio, who called Weldon a "major funder" of the program.
Weldon also was at Gallagher's side in a fight to help a young Russian crippled in an accident with a U.S. diplomat.
In 1998, U.S. Consul General Douglas Kent was uninsured when his SUV hit a Toyota in the Russian city of Vladivostok. Passenger Alexander Kashin, then 23, was left paralyzed.
Gallagher filed a federal suit in Philadelphia and gained wide attention in Russia. Protesters picketed the U.S. consulate in Vladivostok. "I thought... if we initiated suit, it could be settled very quickly," Gallagher said.
But the case lingered.
In May 2004, Weldon pushed Congress for a settlement, describing the case as a human-rights issue. He said the suit was filed by a "very prominent Russian lawyer in Philadelphia by the name of John Gallagher."
Congress took no action, and a federal court dismissed the case against Kent last month.
Kashin will never walk again, Gallagher said, but he hasn't given up trying for help from the U.S. or Russian governments.
Kent said he was confused by Weldon's role. "I could never tell whether Gallagher was working for Weldon or Weldon was working for Gallagher," Kent said.
The FBI is clearly interested in Weldon's actions in the Moldova affair, Gallagher said.
In that venture, Gallagher said he put up $500,000 of his own money and gathered the rest from a group of investors, several from Delaware County.
At first, he said, he received assurances from top Moldovan officials that the sale had the government's blessing.
He met with Moldova's prime minister and the man who later allegedly scammed him. The prime minister said, "deal with him," Gallagher said. He cited that incident in a 2004 deposition in a suit investors filed against him.
After Gallagher deposited the money in an Eastern European bank, he said, it disappeared. When Gallagher returned to Moldova, he said officials acted as though they didn't know him.
In 2003, Gallagher went to Weldon, who offered the amendment to cut off foreign aid.
"A longtime constituent of mine invested $2.5 million in Moldova," Weldon told Congress. "I have taken this matter to the president of Moldova on several occasions."
Weldon demanded that Moldovan officials recover the lost money. But he later withdrew the amendment to cut off aid.
Gallagher vowed to continue fighting to get the money back from Moldova because some investors are "dear friends."
"This isn't something I'm forgetting about because the FBI took the file," he said.
To view the U.S. Industry Coalition Web site for John J. Gallagher's firm, go to http://go.philly.com/usic
--------------------------------------------------------------------------------
Contact staff writer John Shiffman at 215-854-2658 or at jshiffman@phillynews.com. Special correspondent Bagila Bukharbayeva contributed to this article.
http://www.philly.com/mld/philly/16104541.htm?template=contentModules/printstory.jsp
Lawyer John J. Gallagher says their dealings go back 30 years, with a mutual interest in Russia.
By John Shiffman and Mark Fazlollah
Inquirer Staff Writers
When Center City lawyer and Russian trade expert John J. Gallagher lost a $2.5 million investment in a cognac distillery in a former Soviet republic, a family friend stepped up to help - in a big way.
The friend, U.S. Rep. Curt Weldon, first called the president of Moldova. When that didn't work, Weldon went to the House and proposed cutting all U.S. aid to Moldova until Gallagher got his money back.
That deal, now part of an FBI corruption investigation, wasn't the only time that Weldon used his office to help Gallagher, a lawyer who specializes in putting together business deals - from Philadelphia City Hall to the U.S. Capitol to the Kremlin.
Weldon also backed an effort that funneled federal money to former Soviet scientists working for a partnership between Gallagher and a Russian firm.
Gallagher's software firm apparently had no workers and did little in the partnership, The Inquirer found.
Weldon lost his congressional seat to Democrat Joe Sestak three weeks ago. But there was no letup in the FBI corruption investigation involving Weldon, his daughter Karen's consulting firm, and Gallagher.
In the first interview given by one of the subjects of the FBI probe, Gallagher said his relationship with Weldon went back 30 years. Their careers, he said, dovetailed in Russia.
"I was very lucky to have my representative also have an interest in Russia," Gallagher, a resident of Weldon's district, said in his spacious office at 18th and Market Streets in Center City.
Gallagher said Weldon, in trying to help him in Moldova, was simply providing good constituent service. "It's my congressman's job," Gallagher said. "He represents me, and a foreign country wronged me."
Agents who searched his law office were investigating possible violations of a federal bribery law, Gallagher said. "Of course I didn't pay Curt Weldon," he said.
Gallagher declined to give details of the FBI raid last month, other than to acknowledge that agents took his Moldova file, among others. He said he was cooperating with the investigation.
For years, Gallagher and the Weldon family have constantly crossed paths in the network of U.S.-Russian trade groups.
Gallagher, who says he has made more than 100 business trips to Russia, helped Karen Weldon's firm there. He said he introduced her firm, Solutions Worldwide, to officials from a Russian company that makes drone spy planes.
The aviation firm gave Solutions a $12,000-a-month contract. Curt Weldon pushed the Navy to buy the drone, and officials got as far signing a contract with the Russian company.
But Gallagher said the deal ended because of news coverage of Karen Weldon's contract.
The first client of Solutions Worldwide was the Russian natural-gas giant Itera International Energy. The FBI also raided its Florida office last month.
Weldon set up a Library of Congress dinner for Itera in 2002 and, on the floor of Congress, pushed for a federal grant to the firm. A month later, Itera hired Solutions for $500,000 a year.
Weldon and his daughter, as well as Itera officials, have denied wrongdoing.
Gallagher said he met Itera officials but declined to elaborate, saying only that he did no business with them. "If it's part of the grand jury investigation, unfortunately I can't speak."
Until recently, Gallagher may have been better known in Russian trade circles than in his own hometown. A graduate of La Salle University and the University of Pennsylvania law school, Gallagher, 54, started his own law firm in 1980.
Gallagher also knew his way around City Hall.
During the City Hall corruption investigation, the FBI recorded him talking to the late power broker Ronald A. White about raising money for Mayor Street and trying to win city deals, sources said.
On one such 2003 call, Gallagher phoned White from Russia to complain that he wasn't getting his share of city legal work. White said he'd take care of it. "Relax," White told him. "Everyone knows who you are."
Gallagher said in the interview that he and White had been friends since they attended law school together three decades ago.
He said he never paid White to help him with the Street administration. For "all good friends," he said, White "would lend a hand."
Gallagher said in the interview that he held two Street fund-raisers with White - one raised about $25,000 - because he was "a lifelong Democrat."
Gallagher also is close to top Republicans in Delaware County, where he lives.
He has given $48,000 to the Springfield Republican Party over the last six years - three times more than any other donor, campaign records show. The Springfield party is run by Charles Sexton, Karen Weldon's partner in Solutions Worldwide.
Gallagher said he contributed because he had known Sexton for 25 years. He said he never got work from Delaware County.
In 2003, Gallagher and Delaware County Republican chief Thomas J. Judge Sr. traveled to Serbia to see Sexton get an honorary doctorate. Gallagher said the degree was arranged by the wealthy Karics, who were banned from the United States because of their ties to the late dictator Slobodan Milosevic.
The Karics also hired Karen Weldon to try to improve their image. Gallagher said he did no business with the Karics.
In his forays to Russia and Eastern Europe, Gallagher wears many hats: sometimes private lawyer, other times an agent of U.S. antinuclear policy. Sometimes, the roles blur.
One example: Gallagher now serves as chairman of the United States Industry Coalition, a Weldon-backed, government-financed group that lines up private business ventures in Russia.
Shortly before Gallagher became a board member, the agency in 2001 helped set up a deal for him with one of Russia's leading software companies.
Gallagher's firm, CTG Software Inc., had no address, other than his law office, and apparently no employees. It was founded two days before the Energy Department announced it would fund the venture, which aimed to find software jobs for former weapons scientists.
About 12 months later, Gallagher dropped out without getting any of the federal money. The endeavor fell short of expectations, hiring far fewer scientists than planned.
Gallagher gets strong support from the industry coalition's former CEO, Victor Alessi.
"I am convinced that his involvement in this project was altruistic," Alessi said.
Some coalition board members said Gallagher had helped the organization as chairman.
"One of the very strongest suits was his relationship with Curt Weldon," said former coalition chairman David C. Bell, president of Phygen Inc., a high-tech Minneapolis firm doing business in Russia. "Curt has been a friend of [the coalition]. It's nice to have friends in positions of power."
The former director of the Energy Department's nonproliferation programs said he "would not have chosen someone with a known close relationship with Weldon to be chairman of the board with [the coalition]."
"My goodness, it raises the appearance of a conflict of interest," said John Hnatio, who called Weldon a "major funder" of the program.
Weldon also was at Gallagher's side in a fight to help a young Russian crippled in an accident with a U.S. diplomat.
In 1998, U.S. Consul General Douglas Kent was uninsured when his SUV hit a Toyota in the Russian city of Vladivostok. Passenger Alexander Kashin, then 23, was left paralyzed.
Gallagher filed a federal suit in Philadelphia and gained wide attention in Russia. Protesters picketed the U.S. consulate in Vladivostok. "I thought... if we initiated suit, it could be settled very quickly," Gallagher said.
But the case lingered.
In May 2004, Weldon pushed Congress for a settlement, describing the case as a human-rights issue. He said the suit was filed by a "very prominent Russian lawyer in Philadelphia by the name of John Gallagher."
Congress took no action, and a federal court dismissed the case against Kent last month.
Kashin will never walk again, Gallagher said, but he hasn't given up trying for help from the U.S. or Russian governments.
Kent said he was confused by Weldon's role. "I could never tell whether Gallagher was working for Weldon or Weldon was working for Gallagher," Kent said.
The FBI is clearly interested in Weldon's actions in the Moldova affair, Gallagher said.
In that venture, Gallagher said he put up $500,000 of his own money and gathered the rest from a group of investors, several from Delaware County.
At first, he said, he received assurances from top Moldovan officials that the sale had the government's blessing.
He met with Moldova's prime minister and the man who later allegedly scammed him. The prime minister said, "deal with him," Gallagher said. He cited that incident in a 2004 deposition in a suit investors filed against him.
After Gallagher deposited the money in an Eastern European bank, he said, it disappeared. When Gallagher returned to Moldova, he said officials acted as though they didn't know him.
In 2003, Gallagher went to Weldon, who offered the amendment to cut off foreign aid.
"A longtime constituent of mine invested $2.5 million in Moldova," Weldon told Congress. "I have taken this matter to the president of Moldova on several occasions."
Weldon demanded that Moldovan officials recover the lost money. But he later withdrew the amendment to cut off aid.
Gallagher vowed to continue fighting to get the money back from Moldova because some investors are "dear friends."
"This isn't something I'm forgetting about because the FBI took the file," he said.
To view the U.S. Industry Coalition Web site for John J. Gallagher's firm, go to http://go.philly.com/usic
--------------------------------------------------------------------------------
Contact staff writer John Shiffman at 215-854-2658 or at jshiffman@phillynews.com. Special correspondent Bagila Bukharbayeva contributed to this article.
http://www.philly.com/mld/philly/16104541.htm?template=contentModules/printstory.jsp
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