The Department of Defense has banned the co-owner of PR services firm from handling military contracts after he confessed to a "misinformation campaign" targeting two reporters covering his company.
Camille Chidiac, who co-founded and controls a 49-percent stake in Leonie Industries, was added to the Excluded Parties List of individuals and companies barred from working federal contracts, effective May 30.
Leonie handles information and PR operations for the military in Afghanistan and has worked with the U.S. government since 2004.
“Mr. Chidiac’s placement on the EPL relates to him as an individual,” Leonie, which has worked with Patton Boggs amid the crisis, said in a statement June 20. “Leonie has not been placed on the EPL, and the government has not indicated that Leonie has done anything that would warrant placement on the list.”
Two USA Today reporters, Tom Vanden Brook and Ray Locker, reported in February that the company’s work on a $145M, three-year pact was ineffective, questioned its limited military experience, and that it owed at least $4M in federal taxes, which has since been paid. USA Today also reported that its writers were targeted with an online smear campaign after reporting on the company.
Members of Congress expressed concern and threatened to withhold Pentagon PR funds in the wake of the allegations, sparking a Pentagon investigation.
Chidiac, who works with Phalanx PR, confessed on May 24 to involvement in an online “misinformation” campaign, following an internal probe by.
"Some of the positive and negative comments made about these two journalists articles were written on blogs that I had registered under my name," said Chidiac. "I take full responsibility for having some of the discussion forums opened and reproducing their previously published USA Today articles on them."
Chidiac, however, denied his work was a smear campaign, noting the blogs registered under his name were all clearly marked "unofficial fan site", were not "fake websites" and were not intended to "smear, mislead or misinform anyone."
" Following USA Today's release of a new article falsely claiming a 'smear campaign' had been instituted against its journalists, I had the blogs audited and then removed so that there would be no consequences to Leonie for something I did personally," he said.
Although the company stressed he resigned as an employee in 2008 and acted on his own, he still holds a 49-percent stake in the company.
Leonie, which said it has earned high marks by the government for its previous work and has been audited on several occasions, said Chidiac is “being removed as an owner of the company,” although as of June 20 that process is not yet completed.