WASHINGTON, June 20 (UPI) -- The Pentagon banned a co-owner of its top propaganda firm in Afghanistan from further contracts after learning of his efforts to smear reporters, officials say.
Camille Chidiac, who owns 49 percent of Leonie Industries, allegedly had started an online effort against two USA Today journalists who reported on the company's finances.
Leonie Industries, which has its headquarters in Pacific Palisades, Calif., also allegedly misrepresented its finances while bidding for federal contracts and had owed back taxes, officials said.
USA Today reported U.S. Rep. Hank Johnson, D-Ga., asked Defense Secretary Leon Panetta to expand investigations of Leonie, saying the firm's actions "suggest a pattern of malice, dishonesty and incompetence that renders Leonie Industries unsuitable for continued service as a federal contractor."
"The notion that taxpayers' dollars would go [to] such a company is abhorrent," he added.
Chidiac confessed May 24 to creating defamatory Web sites under the names of the two reporters, the newspaper said.
Chidiac was placed on a list of people ineligible for federal contracts, effective May 30. He said he would divest from the company, but had yet to do so, the newspaper said.
Leonie has said the campaign was not done on behalf of the firm and that the firm does not condone it. Chidiac's suspension is not expected to interfere with the firm's contracts, as he had not been involved with the firm's affairs since 2008.
Records show Leonie's tax debt of more than $4 million had been paid as of March.
