US: Bad Reception

As the House International Relations Committee prepares to open hearings into the operations of the Bush administration's new Arabic-language broadcasting program, accusations of mismanagement, cronyism, and gross waste are roiling Radio Sawa, Alhurra television, and Middle East Broadcasting Networks (MBN), their nonprofit, government-funded parent corporation. Both the Government Accountability Office (GAO) and the State Department inspector general have launched probes of the Arabic services, which are overseen by the Broadcasting Board of Governors (BBG), which is still chaired by Kenneth Tomlinson, the handpicked friend of Karl Rove who resigned from the Corporation for Public Broadcasting (CPB) last week after he came under fire for partisan meddling.

Now both Tomlinson and Mouafac Harb, the director of Radio Sawa and Alhurra, are expected to appear on Capitol Hill this week to testify about the alleged abuses. They are likely to face hard questions about the relationships between Harb, the Lebanese-born journalist who runs both the radio and TV networks, and companies that have won lucrative sole-source contracts from them.

One of the biggest beneficiaries of Alhurra's largesse has been a network of Lebanon-based companies revolving around a Harb friend named Eli Khoury. He is the top executive at the Saatchi & Saatchi advertising agency franchise in Beirut and a partner or shareholder in two affiliated companies, Quantum Communications and Brand Central. Khoury's firms have obtained sole-source contracts worth at least "a few million dollars," according to MBN officials and other knowledgeable sources. Both MBN and Tomlinson's oversight board have refused to disclose the exact amounts paid to Khoury's companies. They insist that MBN -- as a taxpayer-funded "private" corporation -- is not required to disclose such "proprietary" information.

At this week's congressional hearings, however, House staffers expect more complete disclosure. They will find that Harb's friend -- and his friend's firms -- have done well. Saatchi & Saatchi's Beirut franchise produced promotional and "branding" commercials for Alhurra at a cost of $125,000 or more per spot, according to a network source. Brand Central got nearly $250,000 for developing a Web site that still lacks streaming audio or video clips of Alhurra news shows. Quantum Communications got a contract worth $500,000 last year alone for providing the vaguely defined job of "production coordination" for six programs based in Lebanon and other countries. Alhurra sources say that the shows produced outside Lebanon are ready to air, and wonder why they would need to be routed through Quantum. "They do nothing," says one Alhurra source about Quantum's work on a program produced in Morocco.

BBG member Norman Pattiz, a Westwood One executive who has emerged as one of the strongest advocates of the Arabic networks, believes that producing programming in Beirut makes sense. "Lebanon is a hub in the Middle East for non-state-sponsored and commercially successful television production. It is only natural that when you are searching for professional broadcasters, you would go to where they are most likely to be found," he says. But according to former Alhurra talk-show regular Salameh Nematt, "No one sets up a new production company in Beirut" due to political instability and interference from Syrian intelligence agents.

Several broadcasting companies have moved from Beirut to Dubai, where an elaborate "Media City" has been established. Among the facilities there is Radio Sawa's own Dubai Media Center, with TV and radio studios that mostly sit unused, according to Samir Douaihy, the former Sawa manager in Dubai. Although eight hours of daily radio programming now originates there, "Dubai pretends to do huge work, but it is a screen for doing business in Beirut," says Douhaiy.

Harb has doled out generous contracts closer to home as well. One of the more unusual deals, at a cost of about $1.5 million, is for live interpreting services by Capital Communications Group, a Washington firm managed by a Lebanese American named Akram Elias. By contrast, Radio Free Europe/Radio Liberty broadcasts in 28 languages without any such costly services. As its former president, Thomas Dine, notes, "Our simultaneous translation costs are zero." Their translations are provided in-house by staff recruited through a competitive process and publicly advertised jobs -- neither of which Alhurra or Radio Sawa have bothered to use, according to sources.

As both disgruntled Alhurra sources and MBN officials explain, the interpreting work for the Arabic services requires at least two interpreters to show up daily for eight-hour shifts, in case they are needed for live translation chores. "It's nice work if you can get it," says a skeptical broadcasting source. While Capital Communications is a respected cultural-exchange firm that won the contract through bidding, its interpreting deal with the Arabic services is widely regarded as excessive.

Equally dubious is the firm's housing relocation work for scores of Arab immigrants, perhaps 100 or more, who have been hired by Harb. Most have been routed to two apartment complexes in Crystal City, Virginia, which is about an hour by public transportation from the networks' headquarters in Springfield. Elias, who didn't return telephone calls from The American Prospect, was paid hundreds of dollars by MBN for each new employee for whom he found housing. He also got an additional referral fee from the apartment-management firm that may have been as high as $2,000 per person, according to an Alhurra employee who learned about the fees when he was mistaken for an Elias representative.

The Arabic networks also entered into a costly deal with Profile Travel, another sole-source contractor favored by Harb. As former Alhurra staffer Magdi Khalil points out, round-trip tickets obtained through that agency for flights to the Middle East cost $3,000 to $4,000 for economy class, while the same tickets were available elsewhere for $1,000 or less. MBN officials insist that Profile "has provided superior service at extremely low prices" -- and that the fees paid to the agency have only been $20,000, not counting the ticket prices.

Certain individual contractors and firms appear to be rewarded with lavish payments, particularly those who have personal connections with Harb. Douaihy says that advertising contractor Khoury is a major player in Beirut nightlife and "organizes everything for [Harb] ... buying music, renting an office, meeting the five or 10 hot new girls on TV." After Harb broke a dinner engagement with him one evening in Lebanon, Douaihy later ran into his boss and the Saatchi executive at a swank restaurant with a pair of attractive women. "This is my best friend in Beirut, Eli Khoury," he recalls Harb telling him.

The Alhurra budget allocated $104,000 for a stylist and makeup artist known as Haneen (who actually gets about $80,000 a year). MBN sources claim that her salary is a bargain, lower than the median pay for a makeup artist and stylist in the television industry. But Tomlinson said he was stunned by it. "We may have here the proverbial welfare queen," he joked in a recent interview. Network documents show that the Alhurra budget also included a more reasonable $50,000 annual salary for another makeup artist. What makes Haneen so special? She may be talented, but sources at the network also say she is a close friend of Harb's wife.

But Haneen's salary is a pittance compared with the consulting fees paid to two top executives at MBN. One is Bert Kleinman, a longtime associate of Pattiz in the radio business with limited television experience who now gets $250,000 a year. Kleinman, who recently announced his plans to resign and return to Los Angeles, was given a sole-source contract because he had worked as a consultant in international broadcasting in the Middle East -- even though he never learned Arabic or managed a TV network. His colleague Farrell Meisel, a Pattiz selection, also has been paid a fee of $250,000 a year for helping to launch Alhurra, for which he now obtains syndicated programming. Network insiders complain that Meisel's second in command does most of the groundwork. "He flies around the world and stays at first-class hotels," grouses a former Alhurra employee. "The girl makes the programming decision, and he's the face of it at the signing." Meisel declined to return phone calls, but MBN officials praise his extensive television experience.

All of the lavish spending on salaries and sole-source deals still doesn't approach the $10 million squandered on the troubled computer system and unproven software that still plague Alhurra. "It didn't go through the proper procurement as befits an agency," says a staff member familiar with the quick "build-out" that launched the TV network in less than six months. "They were rolling stuff through the door, and there was no one there to account for what was inside the box." Much of the equipment that arrived was duplicative or simply useless at that time. "There were three closets full of gear, like a fiber switch that cost $75,000," he recalls.

The Cinegy software installation was so ineffective -- and so few people could operate the system -- that the original contractor, TGS, had to spend $400,000 of its own funds to fly in the German company's software gurus to tutor the staff and rewrite the program. TGS spent so much to fix the original errors that the company ultimately went bankrupt, even though it had essentially purchased the software from itself, as the exclusive Cinegy reseller in the United States. "The system crashes all the time," according to Alhurra staffers, in part because the software was never used before for both archiving and editing.

Yet in true Bush administration style, Willy Halla, the information-technology designer responsible for the failed system, was awarded a $25,000-a-month contract with Alhurra after he left TGS. He then oversaw the build-out of Radio Sawa's computer system, which was delayed by about eight months. He retorts that "there were no problems" (before abruptly hanging up the phone).

Why did the launch of the Arabic networks cause so much waste? An Alhurra source recalls being told by Bert Kleinman, "Don't worry about the money; Harb wants it, so get it done." MBN denies that Kleinman or other network executives squandered federal funds or encouraged others to do so. In fact, the spokeswoman says, "MBN management consistently reminded all persons involved that everything had to be done properly and in concert with the law." Now Harb will have a chance to make that argument to the GAO, the State Department inspector general, and Congress.

• 176 War Profiteers Site