February 15, 2006
Quick Rise for Purveyors of Propaganda in Iraq
By DAVID S. CLOUD
WASHINGTON, Feb. 14 — Two years ago, Christian Bailey and Paige Craig were
living in a half-renovated Washington group house, with a string of failed
startup companies behind them.
Mr. Bailey, a boyish-looking Briton, and Mr. Craig, a chain-smoking former
Marine sergeant, then began winning multimillion-dollar contracts with the
United States military to produce propaganda in Iraq.
Now their company,
works out of elegant offices along Pennsylvania Avenue and sponsors polo
matches in Virginia horse country. Mr. Bailey recently bought a
million-dollar Georgetown row house. Mr. Craig drives a Jaguar and shows up
for interviews accompanied by his "director of security," a beefy bodyguard.
The company's rise, though, has been built in part by exaggerated claims
about its abilities and connections, according to interviews with more than
a dozen current and former Lincoln Group employees and associates, and a
review of company documents.
In collecting government money, Lincoln has followed a blueprint taught to
Mr. Bailey by Daniel S. Peña Sr., a retired American businessman who
described Mr. Bailey as a protégé.
Federal contracts in Washington can supply easy seed capital for a
struggling entrepreneur, Mr. Peña says he advised a youthful Mr. Bailey in
the mid-1990's when the two men started a short-lived technology company. "I
told him, 'When in trouble, go to D.C.,' and the kid listened," Mr. Peña
Mr. Bailey defends his company's record, saying,
"Lincoln Group successfully executes challenging assignments." He added
that "teams are created from the best available resources."
Lincoln won its contracts after claiming to have partnerships with major
media and advertising companies, former government officials with extensive
Middle East experience, and ex-military officers with background in
intelligence and psychological warfare, the documents show. But some of
those companies and individuals say their associations were fleeting.
Lincoln has also run into problems delivering on work for the military after
its partnerships with more experienced firms fell apart, company documents
and interviews indicate. The firm has continued to bid for new business from
the Pentagon and has hired two Washington lobbying firms to promote itself
on Capitol Hill and with the Bush administration.
"They appear very professional on the surface, then you dig a little deeper
and you find that they are pretty amateurish," said Jason Santamaria, a
former Marine officer whom the company once described as a "strategic
The company's work in Iraq, where Mr. Bailey and Mr. Craig visit from time
to time to direct operations, is facing growing scrutiny.
The Pentagon's inspector general last month opened an audit of Lincoln
Group's contracts there, according to two Defense Department officials. A
separate inquiry ordered by Gen. George W. Casey Jr., the top American
commander in Iraq, after disclosures late last year that Lincoln Group paid
Iraqi publications to run one-sided stories by American soldiers, has been
completed but not made public, military officials said.
A spokesman for General Casey, Lt. Col. Barry Johnson, declined to comment
on Lincoln Group, citing the ongoing investigation.
In interviews, Mr. Bailey, 30, and Mr. Craig, 31, said they had succeeded by
anticipating the military's need for help communicating with and influencing
the Iraqi public, just as the insurgency was building. "We saw that it was
very hard for the U.S. to do that work," Mr. Bailey said. "They didn't do
media and outreach very well. We had local offices in a tough environment
where traditional U.S. contractors would not operate."
He disputed suggestions that Lincoln had experienced difficulty delivering
on work for the military, saying the firm had "successfully executed" more
than 20 contracts from the Defense Department.
Lincoln's roster of advisers and other businesses assisting it has
continually changed, Mr. Craig said, because "our work in often hostile
environments has occasionally proved to be too risky or challenging for some
of our partners."
Little in Mr. Bailey's background indicated he would end up doing propaganda
work in Iraq. Born in Britain as Christian Jozefowicz, he changed his name
when he graduated from Oxford University and moved to San Francisco during
the late-1990's dot-com boom.
There he founded or advised several companies and plunged into the Silicon
Valley social scene, according to Mr. Bailey and several friends and former
business associates. Among the companies were Express Action, a company that
planned to develop an Internet service to calculate duties on overseas
purchases, and Motion Power, which intended to invent a shoe that would
generate its own electrical power to run portable consumer devices.
"You would have been proud had you seen this 23-year-old kid pitching, with
no product, no customers, no business plan," Mr. Bailey wrote in a letter to
Mr. Peña, describing how he raised $15 million from investors for Express
Mr. Bailey later moved to New York and sought investors for an investment
fund, according to documents filed with the National Futures Association. In
2003, he moved to Washington.
Mr. Craig's path to the capital began when he dropped out of West Point to
pursue, he says, his interests in business and national security.
Enlisting in the Marines in 1995, he began working in military intelligence.
He earned an undergraduate degree in information technology while stationed
in Okinawa and Australia through the University of Maryland and a masters in
business administration from National University, which runs academic
programs on military bases. He left the Marines in 2000.
By 2004, Mr. Bailey had moved into Mr. Craig's house near downtown
Washington, and the two had formed the company that eventually became
Their original goal was to make money exploiting Iraq's most obvious surplus
— its shattered infrastructure. But those efforts faltered.
A project to export scrap metal fell apart after the Iraqi government banned
scrap exports in 2004, Mr. Bailey said. A pile of scrap metal, purchased
with a loan from an Indonesian bank, has been sitting in Basra ever since,
according to two ex-employees. Like several other former Lincoln workers,
they asked to remain anonymous because they had signed confidentiality
agreements with the company or still dealt with the firm.
Lincoln also spent about $50,000 for two portable brick-making machines from
Texas. The company had hoped to set up a brick plant near Mosul, where the
demand for construction materials was vast, according to a presentation Mr.
Bailey made to potential investors in Dubai. The machines, though, were
principally designed for homeowners or small contractors. Lincoln would not
comment on the project.
Eventually, Lincoln began working with the American military, which was
spending millions on contractors for a broad range of services. The firm
rented a one-story house inside the Green Zone, the heavily fortified
government compound in central Baghdad. Furnished with two sofas and a sheet
of plywood that served as a desk, the house had a single telephone and an
overloaded electrical outlet.
Lincoln formed a partnership with The Rendon Group, a Washington company
with close ties to the Bush administration, and won a $5 million Pentagon
contract to help inform Iraqis about the American-led effort to defeat the
insurgency and form a new government. One contract requirement was to get
Iraqi publications to run articles written by the military, according to
several ex-Lincoln employees.
Rendon soon dropped out and Lincoln handled the contract alone. But the
company had fewer than two dozen workers and little experience with public
relations, according to several ex-employees.
Problems arose from the start. In a 2004 briefing to the military, Lincoln
conceded that it was "not yet fully staffed" and that "media monitoring
software" required by the contract was "not ready."
And the government did not provide that much work at first. The military's
public affairs office produced only a few articles a day during that period,
one Lincoln ex-employee said. A small State Department contract to assist
small businesses had just been cancelled, he said, and the firm was having
difficulty making its payroll.
Lincoln lacked the armored vehicles or security guards employed by more
established contractors. When venturing outside the Green Zone, employees
would grab weapons and climb into one of two beat-up Proton sedans, which
employees were told were chosen to blend in with dilapidated Iraqi vehicles
on the streets.
After winning a small contract from the Marines to do polling, the company
hired Iraqis to go door-to-door in Anbar Province with questionnaires. To
protect themselves from possible insurgent reprisals, they were told to say
they were working for an Iraqi university, according to a former Lincoln
Last August, gunmen came to the home of one of the Iraqi workers, killing
him and three others, according to an ex- employee. Mr. Bailey said it was
not clear whether the killing was related to the polling, but the company
decided to move a Lincoln office staffed by Iraqis in downtown Baghdad to a
less noticeable location.
Back in the United States, Mr. Bailey and Mr. Craig worked to drum up more
In late 2004, Mr. Craig traveled to Fort Bragg, N.C., to meet with officers
of the 18th Airborne Corps, which was preparing take over management of
Lincoln's public affairs contract in Iraq, according to a former employee
and company documents. Despite the problems with the existing work, Lincoln
said it could assist the military in the more secretive realm of
"information operations," according to a transcript of the briefing. Unlike
public affairs work, information operations are meant to influence and help
defeat foreign adversaries, using deception, if necessary.
The briefing also touted the firm's "strategic advisers," including Mr.
Santamaria, the former Marine officer, who received a master's degree from
the Wharton business school and was co-author of a business book called "The
Marine Corps Way."
Mr. Santamaria said he reviewed several investment proposals for Lincoln
during a two-week association in late 2004. But after becoming "concerned
about their methods," he said, "I severed ties with them as quickly as I
A Lincoln spokesman, William Dixon, said "it was a mistake" to include Mr.
Santamaria's name in the December briefing because he was no longer
affiliated with the company.
Lincoln may simply have been following another principle taught by Mr. Peña.
"How do you create an instant track record?" Mr. Peña says he told Mr.
Bailey. "You joint-venture with someone who has a track record."
Early last summer, military commanders made Lincoln Group the main civilian
contractor for carrying out an aggressive propaganda campaign in Anbar
Province, known as the Western Mission project. Over the next several
months, the military transferred tens of millions of dollars to Lincoln for
the project, records show.
The company hired dozens of employees, including academics and former
military personnel, as well as hundreds of contract workers in Iraq and
elsewhere, a number that fluctuates by contract requirements, according to
Mr. Dixon, the Lincoln spokesman.
With the new duties came substantial new requirements, including producing
television and radio ads, buying newspaper ads and placing many more
articles in the Iraqi press. The military also approved paying Iraqi editors
to run stories, according to ex-Lincoln employees.
Lincoln also enlisted the New York advertising executive Jerry Della Femina,
chairman of Della Femina Rothschild Jeary & Partners. Mr. Della Femina said
he was introduced to Mr. Craig last spring by a Washington lobbyist.
Mr. Della Femina said his firm "did a great deal of work" on advertising
ideas for Lincoln to present to the military's Special Operations Command,
which last summer was soliciting bids for contracts, potentially worth
millions, for psychological operations.
Lincoln listed Mr. Della Femina as a "creative director" in materials
presented last spring at a meeting with Special Operations officers in
Tampa. But Mr. Della Femina said his firm pulled out before executing any of
the ideas. Three months after ending the collaboration, Mr. Della Femina
said, he discovered that Lincoln's Web site listed him as one of its
"I was surprised that they had our name on their Web site in the first
place," he said.
After he asked that his name be removed, Mr. Craig said, "we honored his
request within the week."
By that time, Lincoln had already been notified by Special Operations
Command that it and two other companies had been chosen to compete for work
under the contract.
Lincoln later told Special Operations Command that one of its principal
subcontractors was Omnicom Group Inc. of New York, an advertising and
marketing conglomerate. A proposal signed by Mr. Bailey in October said
Lincoln "has exploited the extensive experience and expertise of the Omnicom
But Pat Sloan, an Omnicom spokeswoman, said she could find no evidence it
has ever worked with Lincoln Group. "We're not aware of any relationship
with Lincoln Group," she said. She noted that Omnicom had once owned 49
percent of Mr. Della Femina's agency but had sold the stake in early 2005.
Michael J. Jeary, president of Mr. Della Femina's agency, said Lincoln's
claim of Omnicom as a subcontractor was an "honest mistake" because he had
never told the firm Omnicom had sold its minority stake.
Although Lincoln Group's work in Iraq is now under scrutiny in two
Pentagon investigations, the firm is hunting for more government work. Last
month, Mr. Bailey attended a going-away reception at the Virginia
condominium of a mid-level government employee on her way to a new job at
the American Embassy in Baghdad. Her job: overseeing contracts.