By Aram Roston, NBC News Producer

A notorious international arms dealer was convicted in federal court in Manhattan Thursday, in what's likely to be the end of the colorful career of the so-called "Prince of Marbella," a man who sold weapons to rogue regimes around the world. The conviction of the flamboyant 63-year-old Syrian, Monzer Al Kassar, was a victory for the Justice Department and the Drug Enforcement Administration, whose agents had pursued him for more than 15 years. 

Al Kassar's lavish lifestyle and his dealings with unsavory terrorists made him seem like the villain in a James Bond movie. A federal jury convicted him of conspiring to kill U.S. nationals and conspiring to acquire and ship anti-aircraft missiles. He had been caught in a sting operation, in which DEA informants posed as representatives of the Colombia FARC insurgent group. FARC is designated a terrorist group.

I met Al Kassar at his 15-room palace overlooking the Mediterranean in 2006, well before he was indicted in the current case. In an exclusive interview, shortly after he was accused of supporting insurgent groups in Iraq in a separate case, Al Kassar showed off his palace - with its spiral staircases, glass-domed ceiling and lavish carpets. He swore loudly to me that he was simply a "legal arms dealer."

By Aram Roston, NBC News Producer

A prominent fundraiser for Sen. John McCain's presidential campaign is facing a new legal challenge over a lucrative Pentagon contract that involved shipping oil to military forces in Iraq. A competing firm filed a federal suit under the Racketeer Influenced and Corrupt Organizations (RICO) Act this week against the fundraiser, Harry Sargeant III, and his company, International Oil Trading Company. The suit accuses them of a "bribery scheme" to pay officials in the Kingdom of Jordan, in an effort to keep competing firms out. Sargeant and his company deny wrongdoing and say no bribes were paid.
 
Sargeant is the Finance Chairman of the Republican Party of Florida, a key state in the upcoming presidential election. The federal lawsuit is the latest case to bring attention to him. NBC News first reported last May that Sargeant was awarded the Pentagon contract even though he was not the lowest bidder. NBC reported he was being sued in Florida state court by a former business partner who was the brother-in-law of the King of Jordan.
 
This summer, Sargeant made headlines again. Senator McCain's campaign announced it was returning $50,000 in political donations that had been "bundled" by Sargeant, after the Washington Post brought attention to some of the "unlikely" donors. And just last week, U.S. Rep.  Henry Waxman, D-Ca, called on the Department of Defense to investigate Sargeant, and accused him of "war-profiteering" for excessive profits in four successive contracts. A letter Waxman signed said “Mr. Sargeant’s personal gain from these four contracts may have been $70 million or higher.”
 
The latest suit was filed in federal court in Miami by Supreme Fuels, a contracting firm based in Dubai. The central allegation in the lawsuit is a "conspiracy since 2004 to bribe key Jordanian government officials to ensure that defendants would be the sole recipients of more than one billion dollars worth of U.S. government contracts for the supply of fuels to the U.S. military in Iraq."
 
The suit claims that, without the approval of the government of Jordan, companies were not able to get the contract from the U.S. military.

By Aram Roston, NBC News Producer

Harry Sargeant III is a top fundraiser for Sen. John McCain's presidential bid. As NBC News first reported, Sargeant was sued by a business partner over the lucrative profits from Pentagon contracts to ship oil to Iraq. It was a dispute that involved high profile characters, because the business partner happened to be the brother-in-law of the King of Jordan. The legal documents in the case were obtained by NBC News: the initial complaint from the brother-in-law, and the answer from Sargeant and his company.
 
The Pentagon contracts involved shipping oil through Jordan, and because of the way the bids were structured, Sargeant's company was one of the only ones that could bid, because it obtained a special letter from the government of Jordan.
 
Now the Washington Post has raised questions about how Sargeant raised more than $100,000 in political funds for different candidates from "a collection of ordinary people, several of whom professed little interest in the outcome of the election."

By Aram Roston, NBC News Producer

High oil prices mean a windfall in revenue for Iraq's government, but the Iraqis have failed to spend all that money properly on the country's infrastructure, according to new report by the Government Accountability Office. Indeed, the Iraq government headed by Prime Minister Nouri al-Maliki had almost $30 billion in unspent funds in its coffers at the end of last year.

That is in spite of the billions spent on reconstruction by the U.S. The GAO report, released Tuesday, is the most up to date analysis so far of Iraq's oil wealth and spending. It is subtitled "Iraqi Revenues, Expenditures, and Surplus."

And the GAO says that 2008 will bring record revenue to Iraq, of up to $79.2 billion in oil revenue. But inspite of all the infrastructure problems, the GAO says that Iraq's government may have as much as $50 billion unspent at the end of the year.

Update: The contracting company that built the Iraqi prison detailed in this blog has issued a statement in response to the Inspector General's audit. Scroll to the bottom of the post to see the response.

By Aram Roston, NBC News Producer

Even for troubled reconstruction efforts in Iraq, this case stands out. Sprawled out in the Iraqi desert in Diyala Province is an abandoned and incomplete prison compound built of reinforced concrete, ringed by a fence and unmanned watchtowers. It cost the U.S. government $40 million to build over three years, before the entire complex was left unattended in 2007, to the wind and sand.

 "This was the worst project we've seen!" said Stuart Bowen, the Special Inspector General for Iraq Reconstruction, whose office released a report on the site, known as the Khan Bani Sa'ad Correctional Facility. Much of the anticipated reconstruction in Iraq following the 2003 U.S. invasion has been hampered by the violence of war, as well as by mismanagement and corruption, as Bowen's office and other investigations have documented in the past.

 The report lays out a withering critique of what happened. It was meant to be the first phase of a 3,600-bed prison - with space for 1,800 prisoners as a first step. And it was conceived during the days of the "Coalition Provisional Authority," about a year after the U.S. invasion, when Ambassador Paul Bremer presided over the U.S. occupation.

By Jim Popkin, NBC News Senior Investigative Producer

White-supremacist groups have recruited 203 people who served in the U.S. military or who claim to have U.S. military backgrounds, according to a new report by the FBI. The unclassified FBI Intelligence Assessment, issued last week and obtained by NBC News, cautions that white-power extremists are trying hard to recruit active-duty soldiers and recent veterans of the wars in Iraq and Afghanistan.

“White supremacist extremists hope to revitalize the white supremacist movement by exploiting antigovernment sentiment among opponents of the overseas conflicts in Iraq and Afghanistan,” the FBI report states. It adds, however, that the effort is not going particularly well. “Although some veterans of these conflicts have joined the extremist movement, they have not done so in numbers sufficient to stem declines among major national extremist organizations, nor has their participation resulted in a more violent extremist movement,” the FBI writes.

By NBC News

A spokesman for one of Iraq’s most prominent insurgent groups declares in a rare interview that he favors the Democrats in the upcoming presidential election. “We believe that the Democrats are more aware of the severity of the American situation in Iraq, and, therefore, they can give more attention to safeguarding American interests in this region,” the spokesman said.

The comments are part of an exclusive interview that NBC News terrorism analyst Evan Kohlmann recently conducted with Dr. Ali al-Naimi, spokesman for the Islamic Army in Iraq. Kohlmann, who also serves as Senior Investigator for the NEFA Foundation, has now conducted several interviews with the leading insurgent groups in Iraq. The on-the-record conversations have revealed the rifts that have arisen amongst the Iraqi insurgent groups and al-Qaida. In the recent interview, al-Naimi denounces al-Qaida and its foreign fighters. “The errors of al-Qaida in regards to spilling the blood of the innocent are more numerous than can possibly be covered in a single response, statement, or interview,” al-Naimi said.

By Aram Roston, NBC News Producer

An NBC News exclusive report that ran on msnbc.com about an unusual Pentagon fuel deal has sparked an inquiry by the House Committee on Oversight and Government Reform, according to the committee's Web site.

As the NBC News report said, the lucrative contract to ship fuel through Jordan to Iraq involved an influential group of people, including Florida businessman Harry Sargeant III, who is now a top fundraiser for Sen. John McCain's presidential bid. It also involved the brother-in-law of the king of Jordan, who is suing Sargeant, alleging fraud. Sargeant is the president of the International Oil Trading Company (IOTC), which won the contract. The Committee Chairman, Rep. Henry Waxman, D-Calif., sent letters requesting information about the deal. One went to Sargeant, the politically active company president. Sargeant, who has raised over $100,000 for McCain, was listed on June 3 as the co-chair of the McCain Victory Committee in Florida. The other letter was sent to U.S. Secretary of Defense Robert Gates. Both letters cite the msnbc.com report, and request contract information.

By NBC News

In rare interviews, two of the most influential Sunni insurgent groups in Iraq recently revealed a serious split with the al-Qaida terror group. Spokesmen for the Sunni insurgents took questions from NBC News terrorism analyst Evan Kohlmann. Kohlmann published the exclusive interview transcripts Wednesday on the website for the NEFA Foundation, where he serves as a Senior Investigator.

The two Iraqi terrorist groups, “Hamas al-Iraq” and the “Al-Rashideen Army”, have insisted that they are part of a unified Sunni effort to force a U.S. military withdrawal from Iraq. They told Kohlmann that their groups are umbrella organizations for all the major Iraqi insurgent factions--except al-Qaida in Iraq. Why? "Everyone has fought against them because we see this group [al-Qaida] as promoting a particular agenda that does not fit with the realities of Iraqi society,” one of the groups said.

By Aram Roston, NBC News Producer

On Thursday June 5, in his office, I watched Tim Russert lean back in his chair and carefully read over the excerpts of an interview he'd conducted with Vice President Dick Cheney more than five years earlier, just days before the Iraq war was launched. In one sense, nowhere was Russert's influence more clear than this: The very excerpts from “Meet the Press” he was reading were included in a widely awaited report released that day by the Senate Intelligence Committee. The Committee's goal: Compare the public statements of the Bush Administration before the Iraq war against the actual intelligence produced by America's spies. Had President Bush and Cheney and others, as they publicly made the case for war, ever contradicted what the CIA was saying secretly?