"I have no reason to believe there might be a problem, but in a department as large as ours, with decentralized decision-making and budget approval authorities, it seems appropriate to audit relevant contracts in a systematic manner," wrote chief Pentagon spokesman Lawrence Di Rita in a letter to Pentagon Inspector-General Joseph Schmitz. 

We obtained a copy of the letter, dated yesterday. 

"In light of recent press reports alleging that other departments of government have used public funds to pay journalists for various purposes, it seems prudent to review the use of Department of Defense funds that might possibly have led to such activity through department or non-DoD contracting activities." 

Mr. Di Rita said it would be "most helpful to review activities going back six to eight years," a span that would cover the second term of the Clinton administration. President Bush has condemned the practice of his departments paying, directly or indirectly, columnists for research projects or for what seemed to be favorable opinion pieces. 
     
Down to two 
The buzz in the Pentagon is that the competition to be the next Joint Chiefs chairman this fall is already down to just two: Marine Corps Gen. Peter Pace, the Joint Chiefs vice chairman; and Navy Adm. Edmund P. Giambastiani Jr., the head of U.S. Forces Command in Norfolk.

Both are favorites of Defense Secretary Donald H. Rumsfeld. Gen. Pace is a no-nonsense Vietnam combat veteran who has been a major influence on policy in the war on terror. 

Adm. Giambastiani is Mr. Rumsfeld's former senior military assistant. His command leads the way on the defense secretary's favorite project: transformation. 

Rumsfeld aides remind people that when it comes to personnel decisions, don't rule out surprises. 

Air Force Gen. Richard B. Myers, the current chairman, is due to retire this fall, after a four-year term. He and Mr. Rumsfeld have forged a close working relationship. The defense chief is looking for that same kind of chemistry in the next chairman. 
    
Code word compromise
The Joint Staff at the Pentagon last week ordered an investigation into the compromise of several programs that were revealed in a book by author William Arkin.

According to a Jan. 25 cable from the Joint Staff to 14 military units, most of them involved in special operations, Air Force Gen. Richard B. Myers, chairman of the Joint Chiefs of Staff, has asked for an "opsec" or operational security assessment of possible national security damage to special access programs and other "operational compromises" in the book, "Code Names."

The U.S. Special Operations Command will be the lead agency in reviewing the compromise of special access programs called Power Geyser and Footprint, along with other secret programs and activities.

Power Geyser is a special counterterrorism commando group, and Footprint is another commando counterterrorism activity.

At least one Pentagon security official was outraged that nothing was done for months to try to identify the source of the compromises.

The official said Mr. Arkin was linked to a senior Pentagon official but that the Office of the Secretary of Defense protected the official. "So just let the secrets hemorrhage," the official said. "God bless America."

Mr. Arkin, a liberal Greenpeace political activist turned columnist, was investigated by the Air Force Office of Special Investigations in 2002 after he disclosed the code-named program Polo Step, on the war planning for Iraq. Several suspects in the leak, including a three-star officer, were allowed to retire rather than face questioning over the leak.

Mr. Arkin told us he does not think he damaged U.S. national security. "I've been very careful not to reveal anything related to ongoing operations or an intelligence source and method," he said.

Pentagon spokesman Larry Di Rita said grumbling from Pentagon security officials over the book is misguided. He noted, "I wonder if they are the same ones who gave him his clearance in the first place."

Mr. Arkin was an Army intelligence analyst in the 1970s. 
    
Iraq contract fraud (II)
A report made public this week by the Special Inspector General for Iraq Reconstruction confirms what we reported last month.

The report stated that the now-disbanded Coalition Provisional Authority (CPA) in Iraq failed to oversee $8.8 billion of Iraqi money, leaving the reconstruction process open to fraud and corruption.
The money was part of the Development Fund for Iraq made up of money from Iraqi oil sales, frozen assets from foreign governments and surplus from the U.N. oil-for-food program.

Under a section on financial controls at Iraqi ministries, the report said one ministry's $435 million budget had controls that were "weak or nonexistent" and that the financial process "was open to fraud, kickbacks, and misappropriation of funds."

That's the identical language disclosed in this space Dec. 31 in a memo we obtained from an audit done by the contractor Bearing Point after auditors examined the Iraqi Communications Ministry.
Shortly after the memo was written, two Pentagon officials working in Iraq for the CPA left under a cloud of suspicion.

The Special Inspector General report bolsters the claims of former Pentagon official John A. Shaw, who first blew the whistle on what he has said was a cover-up of contracting fraud in Iraq related to the Communications Ministry's plan for a cell phone network. 
    
Chinese snubbed
The Chinese government is complaining about the "rude" treatment a group of its reporters suffered during a State Department-sponsored visit to the Pentagon.

The official Chinese Communist Party newspaper was in high dudgeon over the Jan. 11 incident in which several Chinese reporters were asked to leave the Pentagon briefing room prior to a press conference with Defense Secretary Donald H. Rumsfeld and visiting Russian Defense Minister Sergei Ivanov.

The newspaper attributed the "rudeness" to differences between the Pentagon and the State Department.

After being seated in the briefing room, "a Pentagon official came over to where the Chinese reporters were already seated and with no explanation whatsoever ordered 'Up and out,'" the newspaper reported.

The Chinese were upset and blamed the Pentagon for blocking Americans from seeing "Chinese people getting mixed up in matters between the United States and Russia" and said as a result "Chinese people have to give up their seats."

A Pentagon spokesman said the ouster of the Chinese was a matter of making space for visiting Russian reporters.

"We try to accommodate such groups when there happens to be a press availability on the day they are in the building, but I am told that ... there simply was no more room in the place." 

The spokesman noted that Mr. Rumsfeld and Mr. Ivanov met the Chinese reporters in the hallway and had a "brief but pleasant exchange."

• Bill Gertz and Rowan Scarborough are Pentagon reporters. Mr. Gertz can be reached at 202/636-3274 or by e-mail at bgertz@washingtontimes.com. Mr. Scarborough can be reached at 202/636-3208 or by e-mail at rscarborough@washingtontimes.com.