A U.S. House of Representatives committee says the U.S. embassy in Albania approved action to conceal the illegal Chinese origins of ammunition being shipped by a U.S. contractor from Albania to Afghanistan.

In a letter to U.S. Secretary of State Condoleezza Rice, the Committee on Oversight and Government Reform said it has information that the U.S. ambassador to Albania, John Withers, agreed last year to the removal of all evidence of Chinese packaging from an ammunition storage site, ahead of a visit by a New York Times reporter. The letter says the decision was made during a late-night meeting with Albania's Defense Minister Fatmir Mediu.

The committee is holding a hearing Tuesday on allegations surrounding the arms dealer in question, AEY, Incorporated, including questions about its $300 million contract with U.S. forces in Afghanistan.

At the time of the alleged cover-up, AEY was under investigation for illegal arms trafficking in Chinese ammunition.

Last week, the U.S. Justice Department indicted AEY and its top officials on 71 counts of fraud and related charges.

Last March, the U.S. defense department suspended AEY from future government defense work.

U.S. law prohibits the acquisition of ammunition that was made in China.

During Tuesday's hearing, the oversight committee's chairman Henry Waxman said the AEY contract shows the Defense Department's procurement process is dysfunctional, citing the failure of officials to check the dealer's poor track record.