Hagel, the WH point man on Egypt; A drone makes history, but the program continues; Jason Forrester to be sworn in at the Pentagon today; Doug Wilson to Truman/CNP; Burn pit at Leatherneck “in violation” of DOD rules; and a bit more.

By Gordon Lubold 

Libya is smuggling arms to Syria.  Harald Doornbos and Jenan Moussa have the scoop in FP: "Libyan rebels have long seen their Syrian counterparts as comrades in arms, fighting a similar struggle to rid themselves of a bloody dictator. It helps, of course, that President Bashar al-Assad maintained a close alliance with Muammar al-Qaddafi — the deposed Libyan leader even broadcast his final messages from a Syrian-based station after he was ousted from Tripoli, the capital. Following Qaddafi’s demise, some Libyan fighters traveled to Syria to support the armed uprising, but it may be through supplying weapons once used to topple their own dictator that Libyans make their greatest impact on the struggle against the Syrian regime."

Says a 43-year-old former rebel commander in Benghazi, in charge of smuggling weapons from Libya to opposition forces in Syria: "Our Libyan revolution was very much supported by the international community… But the revolution in Syria seems to have been abandoned by the world. So over a year ago we decided to help and send weapons." Read the rest, here.

At the Pentagon, "far reaching consequences" versus "it’s imperative that your organization meets its projected spending goal." Defense Secretary Chuck Hagel warned key lawmakers yesterday that slashing $52 billion from the Pentagon’s budget next year if the across-the-board cuts remain in effect could have "severe and unacceptable effects." In a letter to Sens. Carl Levin, chairman of the Senate Armed Services Committee and Ranking Member James Inhofe, Hagel wrote: "If the cuts continue, the Department will have to make sharp cuts with far reaching consequences, including limiting combat power, reducing readiness and undermining the national security interests of the United States." The letter comes as it looks less likely that Congress will give the Pentagon more flexibility in where and by how much the reductions to the defense budget will take place. The letter came in response to an invitation from Levin and Inhofe for Hagel to spell out the impacts of the cuts on the Department.

But on the same page the Washington Post printed that story (A15) appeared Al Kamen’s "In the Loop" column, in a piece titled "Where are those $600 toilet seats when you really need them?" Kamen ran with a copy of a memo from the Defense Information Systems Agency in which contracting and budget officers tell colleagues to spend it up. "Our available funding balances remain large in all appropriations – too large to spend" just on small supplemental funds often required by existing contracts, the June 27 e-mail said. DISA’s budget, Kamen pointed out, is about $2 billion. "It is critical in our efforts to [spend] 100 percent of our available resources this fiscal year," said the e-mail, from budget officer Sannadean Sims and procurement officer Kathleen Miller. Context always matters in this kind of thing, but we’ve certainly heard about "burn rates" before – they are way important to bean counters.

But as Kamen points out, the DISA memo appears to contradict another memo, written by the Pentagon’s undersecretary for acquisition, Frank Kendall, and Pentagon comptroller Robert Hale. That September 2012 memo said, in part, that spending cash for the sake of it is not the right approach. "The threat that funding will be taken away or that future budgets can be reduced unless funds are obligated on schedule… is a strong and perverse motivator." The memo also said: "we risk creating incentives to enter into quick but poor business deals or to expend funds primarily to avoid reductions in future budget years." Londono’s story, here.

Kamen’s "In the Loop" column, here. 

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Layoffs at Gannett’s Government Media Company – the publisher of Army, Navy, Air Force and Marine Corps Times – and Defense News and other publications. We’re told that Gannett Government Media Company in Springfield, Va., notified about 15 employees yesterday that they were being laid off. The independent newspapers, a reading staple across the services since 1940 (and where Situation Report cut its teeth on military reporting) has had to furlough employees in recent years. The employees came from both editorial and the business side, but we don’t believe any reporters lost their jobs. We’re told that declining ad and circulation revenue are the culprits.

Look Ma, no joysticks: Situation Report watched a bit of history yesterday, from Vulture’s Row on the USS Bush aircraft carrier. The Navy demonstrated that it could use a computer to not only launch but also land the X-47B autonomous drone. On a sunny day off the coast of Virginia, Navy officials landed "Salty Dog 502" on the deck of the carrier, launched it, and landed it again. It was an almost completely successful experiment – save for the third approach in which the drone had to be diverted because of a data link problem. For the most part, though, the test – the first time a drone being operated entirely by an onboard computer had been landed on the top of a carrier at sea – was a bit of history that as Navy Secretary Ray Mabus pointed out after rivaled Eugene Ely’s flight off a ship in 1910.

One question remains – what will become of the two drone prototypes? They are likely to become prominent museum pieces, but Chief of Naval Operations Adm. Jon Greenert, also on hand for the test yesterday, said they may have more work to do. Greenert, to reporters in the hangar afterward: "These demonstrators will be retired eventually, but they have so much more work to do as we continue this demonstration and move on and understand the concept of operations."

But despite the high-fives yesterday, the program ain’t over anyway. After two successful landings (and after the first group of reporters left the Bush on the Osprey to return to Washington), the third and final approach by Salty Dog 502 failed. The plane’s on-board computer is designed to detect a problem and divert itself if need be. In that case, the aircraft "self-detected a navigation computer anomaly" and Salty Dog landed itself on Wallops Island Air Field. "X-47B navigated to and landed without incident," according to a statement from the Navy. Situation Report is told this morning that that means that technically, the X-47B program isn’t over anyway – and must complete the third landing. Then Navy officials will determine what more to do with the twin prototypes before ultimately retiring them. Our story from yesterday, here.

Hagel is the administration’s point-man on Egypt. Defense Secretary Chuck Hagel is the man on whose shoulders the situation with Egypt largely falls, as the administration attempts to convince the Egyptian military to work to restore order and democracy. The WSJ’s Adam Entous: "A senior Obama administration official called the relationship between Mr. Hagel and Egyptian military leader Gen. Abdel Fattah Al Sisi-forged over lunch just two months ago-‘basically the only viable channel of communication during the crisis.’

Washington has long viewed its military ties with Cairo, backed by more than $40 billion in military aid since 1948 along with annual military exercises and extensive officer exchanges, as an anchor of one of its most important relationships in the Arab world. The U.S. reliance on the military relationship explains in large part why the White House isn’t rushing to decide whether the ouster of Mr. Morsi was a "coup," a determination that could force the U.S. to freeze more than $1.3 billion in annual U.S. military aid and sacrifice what limited leverage Washington has with Gen. Sisi."

And: "The messages that Mr. Hagel has privately relayed to Gen. Sisi, in a series of long, detailed phone calls in recent days, have been drawn up by top policy makers from across the administration, including the White House and the State Department." Read the rest, here.

The Pentagon says that Hagel and Egyptian Defense Minister Al-Sisi have spoken by phone eight times since July 2. Situation Report is also told that Assistant Secretary of Defense for International Security Affairs and policy go-to person in the building Derek Chollet and his team have been actively working to support Hagel on Egypt, coordinating and supporting all the outreach to the Egyptians.

Reuters’ Phil Stewart at the Pentagon reports that despite the ouster of Morsi, the U.S. still plans to sell four F-16s to Egypt. Stewart: "The disclosure came as Washington treads a careful line, neither welcoming Mursi’s removal nor denouncing it as a "coup," saying it needs time to weigh the situation. A U.S. decision to brand his overthrow a coup would, by U.S. law, require Washington to halt aid to the Egyptian military, which receives the lion’s share of the $1.5 billion in annual U.S. assistance to that country. The jets, which will likely be delivered in August and are built by Lockheed Martin Corp, are part of the annual aid package, a U.S. defense official said."

The Pentagon gets a new DASD for Manpower and Reserve Affairs this morning. Jason Forrester will be sworn in to be the Deputy Assistant Secretary of Defense for Manpower and Personnel (Reserve Affairs) this morning in Defense Secretary Chuck Hagel’s conference room at 10:30, with Jeremy Bash, the former chief of staff for Panetta and then Hagel, making it official. We’re told that "dozens" of family members, mentors, friends and colleagues will be on hand. That job is a critical one in DOD – it’s the billet responsible for forming policy – and conducting oversight – that affects recruiting, retention, pay, other compensation as well as "health and dental readiness" for 1.1 million service members in the seven elements of DOD’s Reserve components and their families. Forrester is expected to work on sexual assault and harassment as well as suicide issues within the National Guard and Reserves. Forrester most recently served as a special assistant to the Assistant Secretary of the Army for Manpower and Reserve Affairs.

Is there really a sexual assault epidemic in the military? Read Rosa Brooks’ answer here. So much talk of sexual assault as a scandal, an epidemic, a scourge and, as Obama put it, as being "dangerous to our national security," is of course a serious issue. But is all this talk too much? Brooks: "Sexual assault in the military is a genuine and serious problem, but the frantic rhetoric may be doing more harm than good. It conceals the progress the military has made in developing effective sexual assault prevention and response programs, and it distracts us from the even higher rates of sexual violence in comparable civilian populations."

Also new this morning: Doug Wilson joins the Truman Project and the Center for National Policy as the senior fellow in residence. Wilson, the former Assistant Secretary of Defense for Public Affairs, who had been active in last year’s re-election campaign for President Barack Obama, will today be named officially the senior fellow at Truman/CNP, where he’ll also chair the Truman National Security Project’s Board of Advisors. Wilson, the first openly gay official to serve in the Pentagon (and the highest-ranking during his time there). Wilson told Situation Report he was excited about joining Truman/CNP: "I really think they have proven themselves over the last eight years to be a breeding ground and a training ground for new leaders." Truman and CNP, which merged last year, has produced folks as diverse as Matt Spence, now Deputy Assistant Secretary of Defense for Middle East Policy at the Pentagon, and Pete Buttigieg, a Rhodes scholar and Navy Reserve officer and now the mayor of South Bend, Indiana.

Wilson said he’ll keep his hand in other projects in which he has an enduring interest, like military families and veterans issues. Thusly, Wilson speaks today at the announcement of a new bakery in Washington’s Georgetown neighborhood called Dog Tag Bakery, which will sell "dog biscuits and other human foods" and is also announcing its plans to create a new educational curriculum with Georgetown to support American service members and their spouses in their transition to civilian life. Wilson will speak at a press briefing and luncheon today at Café Milano. Dog Tag’s mission? "To create a bold, new model for transition assistance and job training for veterans (and their care givers) with a service-connected disability who served in the U.S. Armed Forces," according to their Web site.

SIGAR released an "alert letter" this morning that raises serious issues with the use of an open air burn pit at Camp Leatherneck in Afghanistan. Burn pits have long been seen to be a health problem among troops and others in the field. "The use of an open air burn pit is in violation of CENTCOM and DOD guidance and regulation," a spokesman for the Special Inspector General for Afghanistan Reconstruction said in an e-mail this morning. "Camp Leatherneck spent $11.5 million to purchase and install four incinerators, which are not being used to full capacity." Read the alert letter, here. Photos, here.

Why talking with the Taliban might not be a good idea: Writing on FP’s Af-Pak channel, Ioannis Koskinas writes: "Good intentions and clear political willingness to commit significant resources has meant that, waste and inefficiencies aside, the U.S. has been able to muster military and financial support for the war in Afghanistan from nearly 50 nations.  Recently, however, Afghan and Coalition allies, along with other influential regional power brokers such as India, are starting to publicly question U.S. policy in Afghanistan, particularly the decision to engage with and support the Taliban in opening a political office in Qatar. For reasons discussed below, the dialogue between the Taliban and the U.S. should continue, quietly and with limited objectives.  But public, ill-choreographed, overly ambitious, and unrealistic attempts at reconciliation will continue to make the Doha peace process a dangerous and distracting sideshow that will take hurt rather than support U.S. foreign policy objectives in Afghanistan." Read the rest, here.