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Feds file charges, seek yacht in State contract fraud probe

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Kathleen McGrade was a contract specialist inside the State Department, but prosecutors say she didn’t live like one.

Steering tens of millions of dollars in work to a company controlled by her husband, McGrade bought a yacht, penthouse condo and lots of jewelry, according to charges unsealed Thursday in U.S. District Court in Virginia.

McGrade, 64, and her husband, Brian C. Collinsworth, 46, both of Fredericksburg, Va., face up to 20 years in prison on charges stemming from what authorities called a “secret scheme” by the couple to steer more than $60 million to a company they controlled.

Authorities said McGrade was a private contract employee assigned to work as a contract specialist inside the State Department. Though she kept the relationship with her husband a secret from colleagues, she signed off on payments to her husband’s company, authorities said.

In forfeiture papers filed in U.S. District Court in Alexandria on April 2, prosecutors also said McGrade was “involved in nearly every stage” of the contracting process. They say the scheme lasted from December to 2007 until August 2011.

Prosecutors are seeking three properties tied to the scheme along with a Steinway piano, a yacht, artwork and jewelry that includes a matching sapphire and diamond necklace and bracelet set that cost $136,500.

A phone number listed for McGrade in Virginia was disconnected, and attempts to reach her were unsuccessful.

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Rick Perry blasts diplomats, AFSA returns fire

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(Tom Pennington / Getty Images)

Republican presidential candidate Rick Perry on Monday accused the State Department’s Foreign Service officers of not acting “in America’s best interest.” CNN reported that Perry said:

“I’m not sure our State Department serves us well,” the Texas governor said on a radio program with Fox News host Bill O’Reilly. “I’m not talking about the Secretary of State here. I’m talking about the career diplomats and the Secretary of State who, all too often, may not be making decisions, or giving advice to the administration that’s in this country’s best interest.”

Perry said Congressional action might be required to ensure the nation’s diplomatic corps is taking actions that benefit America.

“We need to have a discussion with Congress to make sure that the decisions that are being made are in America’s best interest,” Perry said.

Perry’s problem with the Foreign Service seems to be that they’re not making it clear to Pakistan that they need to get their intelligence service — which is widely suspected to be aiding terrorists and militants in Afghanistan — under control.

The American Foreign Service Association today basically said (in appropriately diplomatic terms) that Perry doesn’t know what he’s talking about. AFSA, which represents Foreign Service officers around the world, issued a statement that said Perry’s comments “reflect a serious misunderstanding of [diplomats'] role in promoting American interests overseas.” AFSA cited the hundreds of diplomats that have been killed in the line of duty in places like Iraq, Pakistan, Afghanistan and Beirut, before delivering this line:

[Diplomats] serve at the pleasure of the president, are confirmed by Congress and need the informed support of both branches of government to be effective.

[...] To keep America strong and secure, we need more diplomacy, not less. And we need more, not less, support from our political leaders and citizens for their work to defend and advance our interests abroad.

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State Dept.: Get out of Libya

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All hell is breaking loose in Libya, and the State Department this afternoon ordered non-essential employees and employees’ family members to evacuate the country.

In a travel warning posted online, State also advised any U.S. citizens staying in the country to avoid demonstrations and leave an area immediately if a demonstration begins.

State issued a similar warning for Egypt Feb. 1, as the protests that culminated in Hosni Mubarak’s resignation started to grow and some were concerned about the potential for violence. But the situation in Libya already is much uglier than Cairo ever was.

Hundreds of protesters may have already been killed, and there are reports that helicopters are firing into crowds and the Libyan navy is shelling Tripoli. Al Jazeera reports that two pilots — reportedly “senior colonels” — defected to Malta after refusing orders to bomb protesters. And Moammar Gaddafi may already have fled.

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State orders Egypt evacuation

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Cairo protesters pray in the street in front of riot police Friday. By Peter Macdiarmid, Getty Images

Protests in Egypt demanding the ouster of President Hosni Mubarak are growing by the day, and many are becoming concerned about the potential for violence and lack of security. The State Department today ordered all non-emergency U.S. government employees, and all employees’ families, to leave Egypt. State spokesman Philip Crowley’s statement is below:

On February 1, the Department of State ordered the departure of all non-emergency U.S. Government personnel and their families from Egypt in light of recent events. The Department of State will continue to facilitate the evacuation of U.S. citizens who require assistance. Cairo airport is open and operating, but flights may be disrupted and transport to the airport may be disrupted due to the protests. U.S. citizens in Egypt who require assistance, or those who are concerned that their U.S. citizen loved one in Egypt may require assistance, should contact the U.S. Department of State and the U.S. Embassy in Cairo at: EgyptEmergencyUSC@state.gov, or at 1-202-501-4444. Please follow the directions on the Embassy website for all other consular inquiries.

State’s Twitter feed is being updated regularly with advisories and information for Americans in Egypt.

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Union: passport failure not our fault

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The National Federation of Federal Employees says federal passport specialists are overworked and often don’t have time to thoroughly review passport applications.

This burden may be responsible for the State Department’s failure to identify five of seven fraudulent passport applications the Government Accountability Office submitted in a covert operation, the union argued in a press release today.

Passport agency workers have to meet productivity quotas and “failing to meet these numbers in the interest of carefully reviewing citizenship documents could lead to termination,” according to the NFFE.

Passport specialists were unable to provide input when higher-ups were formulating the quotas, the union says.

Also, reforms instituted after a 2009 GAO report that revealed a similar failure to detect passport fraud may have ironically hindered passport workers’ ability to recognize fake documents. NFFE said passport specialists “are now distracted by additional and stricter requirements for how they notate applications” and “that extra attention comes at the expense of reviewing the overall case and its citizenship evidence.”

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