Comments on: eBay Auction Supplied Military Parts to Iranian Air Force

By: Carol A. Kalinoski

Carol A. Kalinoski — Mon, 08 Jun 2009 22:45:51 +0000

Yes, although the GAO investigation excluded Craigslist from its covert investigation, during the question and answer period of the hearing, Mr.Kutz (GAO) noted that an offering on Craigslist advertising body armor stated that it is “a must for any ganster”.

By: Chris W.

Chris W. — Mon, 08 Jun 2009 16:10:38 +0000

Ah — and the GAO IRB sting excluded a lot of major players with whom they were familiar. It seems the IRB sting was intended to look at how the small guys are doing business. (i.e. flying under the radar?)

By: Chris W.

Chris W. — Mon, 08 Jun 2009 16:09:45 +0000

The GAO also recently created a fake company with a fake website, a fake investigational drug product, and a fake research project — all to be approved by commercial IRBs. An IRB (Institutional Review Board) is an ethics committee designed to determine which products are safe to test in humans. If testing goes well, the FDA is asked to review/approve the drug and that’s how drugs get to market. I’m oversimplifying here, but the gist is that these GAO stings are currently happening in multiple fields.

After the GAO sting, 1 commercial IRB was required to testify before Congress. It went badly, and rather than take FDA sanctions head-on, they closed the business. The rest of the industry listened & are making sure that the work they do is as compliant with federal regulations as possible. In this way, the GAO is almost acting as an unofficial regulatory body.

chris w (certified IRB professional)

By: Clif Burns

Clif Burns — Fri, 05 Jun 2009 21:09:44 +0000

I just finished reading the GAO report and plan to post on it over the weekend. Interestingly, the report excluded eBay and Craigslist from its investigation.

By: Carol A. Kalinoski

Carol A. Kalinoski — Fri, 05 Jun 2009 21:04:02 +0000

The issue of U.S. military surplus sales and U.S. domestic sales to both legitimate U.S. distributors/resellers and foreign front companies was the topic of a hearing yesterday, June 4, in the House Energy and Commerce Subcommittee on Oversight and Investigation. Representatives of GAO reported the results of an investigation into the vulnerability of domestic sale for illegal exports of dual-use and military items. To do this study,GAO created a dummy corporation, established fictitious corporate identities, established a website, and completed a number of commercial transactions to acquire items such as gyrochips, night vision equipment, and triggered spark gaps by using e-mail or the sellers’ websites. No face-to-face meetings were held before the transactions were completed.

The GAO testimony, as well as the testimony of three corporations that sold the items to GAO, is available on the House Energy and Commerce website. The GAO reports were issued June 4 and are available from the GAO website.

Expect to hear more on this issue from the Congress, given enforcement actions involving “domestic
sales” that are not subject to U.S. export controls.