Petraeus scandal: Kelley sought $80M fee

Updated Nov. 16, 2012 at 11:14 AM
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WASHINGTON, Nov. 15 (UPI) -- A CIA probe into ex-chief David Petraeus may offer "lessons," a spokesman said, as a report suggested the scandal's women tried to profit from the relationship.

The investigation by CIA Inspector General David B. Buckley will be an in-house inquiry, agency spokesman Preston Golson told reporters.

"If there are lessons to be learned from this case, we'll use them to improve," he said. "But we're not getting ahead of ourselves. An investigation is exploratory and doesn't presuppose any particular outcome."

A key focus on the inquiry will be whether Petraeus misused his position -- and the security details, private jets and special accommodations that came with it -- to facilitate his extramarital affair with his biographer, Paula Broadwell, a person familiar with the investigation told The New York Times.

Petraeus resigned as CIA director a week ago after acknowledging he had the affair. Petraeus, 60, and Broadwell, 40, are both married with children.

Another married woman, 37-year-old Jill Kelley, a Tampa, Fla., socialite mother of three active in local military circles and a close personal friend of Petraeus, triggered an FBI probe that led to Petraeus' downfall by alerting an aggressive FBI agent to anonymous emails that accused her of inappropriately flirtatious behavior toward Petraeus.

The sender of those emails turned out to be Broadwell.

The FBI probe also ensnared U.S. Marine Corps. Gen. John R. Allen, leader of U.S. forces in Afghanistan. The Defense Department says it is investigating thousands of emails between Kelley and Allen.

The announcement of the internal CIA investigation came as Petraeus was to testify before the House and Senate intelligence committees in closed-door sessions Friday about the Sept. 11 U.S. Consulate attack in Benghazi, Libya, that killed Ambassador Christopher Stevens and three other Americans, including two CIA contractors.

It also came as ABC News reported Broadwell starred as a submachine gun subject-matter expert in a promotional video for a company trying to win U.S. military contracts and Kelley allegedly positioned herself as someone who could broker a multibillion-dollar energy deal with South Korea and asked for an $80 million commission.

Broadwell, who ABC News said had developed celebrity status in military circles, appeared in the 6-minute video for KRISS USA Inc. of Virginia Beach, Va., touting the arms maker's unconventional line of lightweight Vector submachine guns.

Broadwell had no official affiliation with KRISS USA, company's Chief Executive Officer John Spurrier told the network.

But the company, formerly Transformational Defense Industries and now the U.S. branch of Switzerland's KRISS Arms Group, would not say why it chose her as a spokeswoman or if she was paid to be in the video, ABC News said.

The non-profit Project on Government Oversight, which investigates and seeks to expose corruption and other government misconduct, told the network using Broadwell was a brilliant move by a company seeking an edge in Washington.

"People did not have to know she was [Petraeus'] mistress," Executive Director Danielle Brian told the network. "They knew that he was friends with her, so anyone in the agency would know that this is someone Petraeus was going to be favorable toward."

Broadwell and her attorney had no immediate comment.

Retired Army Col. Steve Boylan, a friend and former Petraeus spokesman, told ABC News Petraeus knew nothing about Broadwell's video appearance.

Kelley allegedly used Petraeus' name in late summer to position herself to a New York energy executive as a close Petraeus friend who could broker a contract with top South Korean government officials for a $4 billion coal-gasification energy facility, the network said.

Kelley became an honorary South Korean consul, a ceremonial designation, in August with State Department approval, The Christian Science Monitor reported.

She had been recommended for the ceremonial position earlier this year by South Korean Ambassador to the United States Han Duk-soo, a former prime minister who is now chairman of the powerful Korea International Trade Association.

Han saw her as an influential go-between as South Korea and the United States expanded economic ties after approval of the U.S.-South Korea free-trade agreement late last year.

Kelley met energy executive Adam Victor, chief executive officer of TransGas Development Systems LLC, at August's Republican National Convention in Tampa.

"Miss Kelley made it clear to me that General Petraeus put her in this position [as honorary consul], and that's why she was able to have access to such senior levels [of the Seoul government], that they were essentially doing a favor for General Petraeus," Victor told ABC News.

Victor told the network he later broke off dealing with Kelley after she asked for a commission of about $80 million. He concluded she was inexperienced and unqualified for the job.

A spokesperson for Kelley had no immediate comment.

Boylan told ABC News Petraeus knew "nothing" about Kelley's dealings with Victor. A second source said the retired four-star general had asked Kelly to "stop throwing his name around," ABC News said.

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