BEIJING – Envoys to international talks on ending North Korea's nuclear weapons program struggled Friday to find a compromise as differences emerged over a Chinese proposal on how to begin disarmament.

Christopher Hill, the main U.S. envoy to the talks, said all sides agreed on the proposal's broader issues. Hill said the remaining issues focused on a single paragraph of the Chinese proposal for a set of reciprocal steps aimed at implementing a 2005 deal that calls for North Korea to disarm in exchange for security guarantees and aid.

Hill said the envoys were working to rewrite the text to address North Korea's concerns. He did not give any details.

“I think we can be cautiously optimistic,” Hill said after a two-hour lunch meeting with his North Korean counterpart, Vice Foreign Minister Kim Kye Gwan, in the first bilateral session between the two sides at this week's talks.

Japan's envoy, Kenichiro Sasae, said while there was consensus on some points, but that there was no prospect of an imminent agreement.

“There are some parts in which we had progress but on others we ran into difficulty. We will continue with the talks, but at this point in time I don't feel there is a prospect of reaching an agreement,” Sasae said.

Kim said the meeting led to agreement on some unspecified issues, although there were still issues to overcome. “We are going to make more efforts to resolve them,” Kim said.

Late Thursday after the first day of talks, China distributed a draft agreement to the nuclear envoys from China, Japan, the two Koreas, Russia and the United States.

The proposal – presented after North Korea agreed in principle to take initial steps to disarm – would grant the communist nation unspecified energy aid for shutting down its main nuclear facilities within two months, South Korea's Yonhap news agency reported.

Officials declined to confirm details of the draft.

Hill said earlier Friday he saw “differences” among the delegations over the draft deal.

A South Korean official also cautioned against being too optimistic. The official, who spoke on condition of anonymity because of the issue's sensitivity, said it is “not as easy as expected to produce a result due to differences in positions and a conflict of interests.”

Both Hill and the South Korean official declined to elaborate on what the differences were.

But a pro-Pyongyang newspaper in Japan said the North wants the U.S. first to show that it has permanently ceased its “hostile” policy toward Pyongyang.

“As conditions mature, (North Korea) can halt the operation of the Yongbyon nuclear facilities,” the Choson Sinbo said, referring to the site of the North's main nuclear complex north of Pyongyang.

“The (North)'s position is that it can take corresponding measures when the U.S. takes steps to show that it irreversibly gave up its hostile policy,” it said.

The report, carried on the paper's Web site, cited a “diplomatic source well versed in” the negotiations. The paper, with links to the government in Pyongyang, is considered one of the North's propaganda tools.

Any agreement on an initial set of reciprocal moves to implement a September 2005 accord – in which North Korea pledged to disarm in exchange for aid and security guarantees – would set the stage for the first tangible steps in the often-delayed six-nation process.

The 2005 deal, a broad statement of principles that did not outline any concrete steps for dismantling North Korea's nuclear program, was the only agreement since the negotiations began in 2003.

At the last session of the arms negotiations in December, following North Korea's Oct. 9 underground nuclear test, the North refused to even talk about its nuclear programs. Instead, it demanded the U.S. lift financial restrictions targeting alleged North Korean counterfeiting and money laundering.

WASHINGTON – A federal grand jury in Trenton, N.J. has indicted three former U.S. Army officers and two U.S. civilians for their role in a bribery, fraud and money laundering scheme involving the theft of millions of dollars from the Coalition Provisional Authority (CPA) in Iraq, Deputy Attorney General Paul J. McNulty announced today.

The 25-count indictment unsealed today charges U.S. Army Colonel Curtis G. Whiteford, U.S. Army Lt. Colonels Debra M. Harrison and Michael B. Wheeler, and civilians Michael Morris and William Driver with various crimes related to a scheme to defraud the CPA - South Central Region (CPA-SC) in al-Hillah, Iraq. Whiteford, once the second-most senior official at CPA-SC, was charged with one count of conspiracy, one count of bribery, and 11 counts of honest services wire fraud. Harrison, at one time the acting Comptroller at CPA-SC who oversaw the expenditure of CPA-SC funds for reconstruction projects, was charged with one count of conspiracy, one count of bribery, 11 counts of honest services wire fraud, four counts of interstate transport of stolen property, one count of bulk cash smuggling, four counts of money laundering, and one count of preparing a false tax form. Wheeler, an advisor for CPA projects for the reconstruction of Iraq, was charged with one count of conspiracy, one count of bribery, 11 counts of honest services wire fraud, one count of interstate transport of stolen property, and one count of bulk cash smuggling.

Morris, a U.S. citizen in Romania who owns and operates a Cyprus-based financial services business, was charged with one count of conspiracy and 11 counts of honest services wire fraud. Morris was arrested by Romanian authorities on Feb. 6, 2007. The United States is seeking to have him extradited to New Jersey on these charges. Driver, Harrison’s husband, was charged with four counts of money laundering. Harrison and Wheeler, who were previously charged in criminal complaints, remain released on bond.

“This indictment alleges that the defendants flagrantly enriched themselves at the expense of the Iraqi people – the very people they were there to help,” said Deputy Attorney General McNulty. “U.S. government officials working in Iraq are not for sale. We will prosecute anyone who attempts to exploit the reconstruction efforts in Iraq for their personal gain.”

According to the indictment, from December 2003 through December 2005, Whiteford, Harrison, Wheeler and Morris conspired with at least three others—Robert Stein, at the time the Comptroller and Funding Officer for the CPA-SC; Philip H. Bloom, a U.S. citizen who owned and operated several companies in Iraq and Romania; and U.S. Army Lt. Colonel Bruce D. Hopfengardner—to rig the bids on contracts being awarded by the CPA-SC so that all of the contracts were awarded to Bloom. In total, Bloom received more than $8.6 million in rigged contracts. The indictment alleges that Bloom, in return, provided Whiteford, Harrison, Wheeler, Stein, Hopfengardner and others with over $1 million in cash, SUVs, sports cars, a motorcycle, jewelry, computers, business class airline tickets, liquor, promise of future employment with Bloom, and other items of value.

The indictment alleges that Bloom laundered over $2 million in currency that Whiteford, Harrison, Wheeler, Hopfengardner, Stein and others stole from the CPA-SC that had been designated for the reconstruction of Iraq. Bloom then used his foreign bank accounts in Iraq, Romania and Switzerland to send some of the stolen money to Harrison, Stein, Hopfengardner, and other Army officials in return for them awarding contracts to Bloom and his companies. Morris allegedly assisted Bloom in making these wire transfers of stolen CPA funds and in funneling those monies to the co-conspirators. Harrison and her husband, William Driver, for example, allegedly received a Cadillac Escalade as a bribe and used tens of thousands of dollars for improvements to their home in Trenton. Whiteford allegedly received at least $10,000 in cash, a $3,200 watch, a job offer from Bloom, and other valuables.

The indictment further alleges that during the course of the conspiracy, Whiteford, Harrison, Wheeler, Stein and Hopfengardner used U.S. currency stolen from the CPA-SC to funnel funds to Bloom for the purchase of weapons which they converted to their own personal use in the United States, including machine guns, assault rifles, silencers and grenade launchers.

Stein was sentenced on Jan. 29, 2007, to nine years in prison. He previously pleaded guilty to conspiracy, bribery, money laundering, possession of machine guns, and being a felon in possession of a firearm for his role in the scheme to defraud the CPA-SC.

On March 10, 2006, Bloom pleaded guilty to related charges of conspiracy, bribery, and money laundering in connection with the same scheme as Stein. Bloom is scheduled to be sentenced on Feb.16, 2007.

On Aug. 25, 2006, Hopfengardner, pleaded guilty to charges of conspiracy to commit wire fraud and money laundering in connection with the same scheme as Bloom and Stein. Hopfengardner is scheduled for a status conference on March 23, 2007.

These cases are being prosecuted by Trial Attorneys James A. Crowell IV and Ann C. Brickley of the Public Integrity Section, headed by Acting Section Chief Edward C. Nucci, and Trial Attorney Patrick Murphy of the Asset Forfeiture and Money Laundering Section, headed by Chief Richard Weber, of the Criminal Division. These cases are being investigated by the Special Inspector General for Iraq Reconstruction (SIGIR), Internal Revenue Service Criminal Investigations (IRS), the U.S. Immigration and Customs Enforcement at the Department of Homeland Security (ICE), Army Criminal Investigations Division, the U.S. Department of State Office of Inspector General, and the FBI’s Washington Field Office in support of the Justice Department’s National Procurement Fraud Task Force and the International Contract Corruption Initiative. The investigation has received substantial assistance from the ICE Cybercrimes Division. “These indictments not only serve as a deterrent to future crimes of this nature, but also demonstrate the direct benefits of independent oversight and interagency cooperation in guarding American tax dollars invested in Iraq,” said Special Inspector General for Iraq Stuart Bowen. “SIGIR’s investigative team, now in Baghdad for more than three years, should be proud of their significant contribution in bringing these individuals to justice.”

“No matter how complex the fraud scheme, the individuals indicted today illustrate that even military officers are not above the law and will be brought to justice if they engage in procurement fraud in the Iraqi reconstruction.  The FBI, in support of the National Procurement Fraud Task Force and the International Corruption Initiative, stands ready to work with our partners to investigate, as appropriate, and to eliminate contract bid rigging, bribery, fraud, and money laundering schemes that hinder the rebuilding efforts in Iraq,” said Assistant Director Michael A. Mason, Criminal, Cyber, Response and Services Branch of the FBI. “Criminals motivated by profit and greed don’t deserve to work alongside the brave men and women of our military serving in Iraq,” said Julie Myers, Assistant Secretary of Homeland Security for ICE. “These charges highlight the federal government’s commitment in targeting suspected bribery, fraud and money laundering involving Iraq reconstruction funds and the war in Iraq. ICE is proud to have contributed its financial investigative expertise to this important joint operation.”

“The IRS will use the tax code and money laundering authorities to go after corrupt officials and contractors,” said IRS Commissioner Mark W. Everson. “Sometimes this is the fastest and most direct way to hold accountable those who abuse the public trust, as is clearly the case in this instance.” “We are committed to investigating and rooting out these types of crimes to the fullest, wherever the truth may lead us,” said Brig. Gen. Rodney Johnson, commanding general, U.S. Army Criminal Investigation Command and Provost General of the Army. “This goes against the very fabric of our values as an Army and we will continue to aggressively pursue individuals, in or out of uniform, and companies who commit crimes against the Army, the American taxpayer, and the people we serve.”

An indictment is merely an allegation. Defendants are presumed to be innocent until proven guilty. Deputy Attorney General McNulty announced the creation of the National Procurement Fraud Initiative in October 2006, designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs. As part of this initiative, the Deputy Attorney General has created the National Procurement Fraud Task Force (www.usdoj.gov/criminal/npftf), includes federal prosecutors, the FBI, SIGIR, and the Offices of Inspectors General for key federal agencies, and is chaired by Assistant Attorney General Alice S. Fisher of the Criminal Division. The Task Force has formed regional working groups around the country and is addressing many important topics relating to procurement fraud, including international procurement fraud issues, training, potential legislation, and information sharing between agencies.

Since the formation of the Task Force, federal prosecutors have brought or resolved 15 different criminal cases involving procurement fraud and have recovered more than $100 million through vigorous enforcement of civil remedies available in procurement fraud cases. Other examples of fraud and abuse cases prosecuted by the Department of Justice in recent months include the following:

*On Feb. 2, 2007, former U.S. Army civilian translator Faheem Salam of Michigan was sentenced to three years in prison for offering bribes to a senior Iraqi police official, in violation of the Foreign Corrupt Practices Act;

*On Jan. 30, 2007, Gheevarghese Pappen, a U.S. Army Corps of Engineers employee at Camp Arifjan in Kuwait, was sentenced to two years in prison for accepting $50,000 in illegal gratuities from a Kuwaiti contractor;

*On Jan. 25, 2007, Peleti “Pete” Peleti Jr., a U.S. Army Chief Warrant Officer, was charged in the Central District of Illinois with receiving a $50,000 bribe in exchange for influencing a food supplies services contract. Peleti served as Army’s Theater Food Service Advisor and was stationed at Camp Arifjan in Kuwait;

*On Nov. 13, 2006, four members of the California Army National Guard pleaded guilty to conspiracy charges related to their embezzlement from the U.S. Army while deployed in Iraq.

SAN SALVADOR, EL SALVADOR – Today, Attorney General Alberto R. Gonzales and Salvadoran President Elias Antonio Saca announced tough new collaborative efforts to combat transnational gangs such as MS-13 and 18th Street that operate in El Salvador, elsewhere in Central America, Mexico, and the United States. The comprehensive, four-part initiative is designed to help identify and prosecute the most dangerous Salvadoran gang members through programs to enhance gang enforcement, fugitive apprehension, international coordination, information sharing, and training and prevention.

“This initiative will enable the United States and our colleagues in Central America to share information and coordinate law enforcement efforts as we work in partnership to target and dismantle violent gangs,” said Attorney General Alberto R. Gonzales. “I look forward to working with President Saca and other Central American leaders to fight crime and keep our citizens safe.”

First, through assistance from the U.S. Federal Bureau of Investigation (FBI) and the U.S. Department of State, El Salvador’s civilian police force (Policia Nacional Civil or PNC) will establish a new Transnational Anti-Gang (TAG) Unit to better pursue and prosecute gang members. FBI agents will provide front-line training, information-sharing, and other support aimed at increasing the capacity of PNC detectives to identify and arrest the worst offenders, who can then be prosecuted, when possible, by a Salvadoran anti-gang prosecutor embedded as a member of the new TAG unit.

Second, to better identify, track and apprehend gang members, the FBI will accelerate the implementation of the Central American Fingerprinting Exploitation (CAFE) initiative. The State Department and the FBI will collaborate to provide equipment and training to help law enforcement agencies in El Salvador and other Central American nations acquire digital fingerprints of violent gang members and other criminals who travel and commit crimes under different identities in El Salvador, the U.S. and other countries. The prints will then be integrated into a computerized system that allows law enforcement officials from participating countries to exchange information. Additionally, the Justice Department is working with the Department of Homeland Security (DHS), El Salvador and others in the region to implement DHS’s new Electronic Travel Document system (eTD), which will provide law enforcement officials in El Salvador with electronic information on Salvadoran gang members and other criminals who have been deported from the United States to El Salvador after serving their sentences in the United States.

Third, because international cooperation and coordination is critical to combat gangs that know no borders, tomorrow in Los Angeles, for the first time, the Chiefs of Police for El Salvador, Guatemala, Honduras, and Belize are meeting in an international summit of chiefs of police focused on the single issue of transnational gangs. The outcome of that summit will be proposals that will be presented at the 3rd Annual International Gang Conference in San Salvador in April. In addition, at the request of the government of El Salvador, the U.S. Marshals Service (USMS), FBI, Drug Enforcement Administration (DEA), Bureau of Alcohol Tobacco, Firearms and Explosives (ATF), and other law enforcement agencies will conduct a series of joint assessments of anti-gang capabilities in El Salvador, and help identify the best strategic options for El Salvador for undertaking additional steps to enhance domestic and regional anti-gang efforts in such areas as gang intelligence, fugitive apprehension, witness protection, firearms violence, prisons and drug trafficking.

Fourth, the United States has increased its anti-gang training in Central America, including efforts through the International Law Enforcement Academy (ILEA) in San Salvador. Last week the Academy completed its third anti-gang program in recent months, training police and prosecutors from El Salvador and nearby countries in the best practices of targeting and fighting gang activity and other crimes. The Attorney General announced today that the State Department is funding a new regional anti-gang program aimed at gang prevention, police training, and the development of effective law enforcement and criminal justice institutions in El Salvador and neighboring countries. The U.S. Agency for International Development is also funding a new regional program to support public-private partnerships in gang prevention and to further regional cooperation on this issue.

These joint initiatives with El Salvador are part of a greater effort by the U.S. government to combat gangs and gang-related violence in North and Central America. The Department of Justice, under the leadership of Attorney General Gonzales, has made the fight against gangs one of its highest priorities. Just last year, Attorney General Gonzales created a new, national anti-gang task force, the National Gang Targeting, Enforcement and Coordination Center (GangTECC) – led by the Department’s Criminal Division and made up of agents from ATF, DEA, FBI, USMS, the Bureau of Prisons, and Department of Homeland Security’s Immigration and Customs Enforcement (ICE). GangTECC works in close collaboration with the new National Gang Intelligence Center, the Gang Squad prosecution unit in the Criminal Division, and the FBI’s MS-13 National Gang Task Force, as well as with other federal, state, local and overseas law enforcement agencies.

In order to coordinate the Department’s efforts to fight gangs, Attorney General Gonzales has established an Anti-Gang Coordination Committee which organizes the Department’s wide-ranging efforts to combat gangs. Additionally, every U.S. Attorney has appointed an anti-gang coordinator to provide leadership and focus to the Department’s anti-gang efforts at the district level. In coordination with local law enforcement and community partners, the anti-gang coordinators have developed comprehensive, district-wide strategies to address the gang problems in their districts.

The Netherlands Justice Ministry has extradited Dutch citizen Wasem al Delaema to the US for his role in attempted killings of US soldiers in Iraq during October 2003, according to the Ministry on Saturday. The extradition follows a ruling by the Appeals Court in The Hague that al Delaema could be extradited for the terror attacks, saying the Court expected the US to observe the prisoner's rights. The US Dept. of Justice (DOJ) asserts that al Delaema will face trial in federal district court rather than a military commission and that he potentially may serve any sentence in the Netherlands, which could be a maximum of life imprisonment. Al Delaema's trial will be the first for a person accused of terrorist activities in Iraq during the war in that country.

Dutch authorities captured al Delaema in the Netherlands in May 2005. The DOJ charged al Delaema in July 2005 after he was seen on a videotape obtained by Dutch prosecutors showing the insurgency group Fighters of Fallujah how to set landmines near US military routes; however, al Delaema claims he was forced to appear on the videotape after being beaten. Al Delaema was indicted in September 2005 on four conspiracy charges in addition to several charges related to possession and training in the use of explosives.

Spain Foreign Minister Miguel Angel Moratinos argued for an expanded European constitution in his opening statement at the “Friends of the EU Constitution” summit that got under way in Madrid Friday. The summit is only open to delegates from the 18 countries that already have ratified the constitution, as well as delegates from Ireland and Portugal, where ratification is strongly supported and seems likely, and seeks to find ways to convince countries that have not ratified the constitution to do so. Moratinos advocated a more comprehensive constitution that could address topics such as immigration, climate change, and defense.

While most summit delegates argued against modifying the constitution, others agreed with Moratinos, and said that the current text is at the threshold for being so minimalist that any further reductions would destroy the worth of the document entirely. Of the countries that have not ratified the current text, several have advocated significant reductions.

Italy is set to become the latest country in Europe to criminalize Holocaust denial after the cabinet of Italian Prime Minister Romano Prodi unanimously approved a draft bill Thursday. The draft, written by Justice Minister Clemente Mastella, will now be given to parliament for debate. It makes it a crime punishable by up to four years in prison to defend, justify, or otherwise instigate crimes against humanity.

Earlier this month, Germany announced that as part of its 2007 EU presidency, it would propose EU-wide laws criminalizing Holocaust denial. A prior German attempt at such a law was blocked by Italy, which has since softened its opposition. It is currently illegal to deny the Holocaust in Austria, Belgium, France, Germany and Spain. DPA has more.

A Seoul court ruled Thursday that cancer patients suing South Korean tobacco firm Korea Tobacco and Ginseng Co. (KTG) do not have enough evidence to link their diseases to negligence on the part of the companies. The court conceded the link between smoking and the plaintiffs' illnesses, but said that there was insufficient evidence to show that their diseases were explicitly caused by smoking the defendant's cigarettes. In addition, the court said that there was no evidence to support assertions that the companies provided inadequate warnings about their products.

South Korea has an extremely high smoking population, at 12 million out of 47 million people, according to a 2005 report by Euromonitor International. Widespread anti-smoking campaigns have been largely ineffective. The suit dismissed Thursday was the first brought by cancer patients against tobacco companies in South Korea and was a consolidation of two separate lawsuits filed in 1999 against KTG, which was then a government-run company. Lawyers for the plaintiffs have said they will appeal the decision.