Hi everyone,
this post isn't directly relatd to the assassination but I know there has been mention of Blackwater on here so thought members might be interested in this:
http://news.yahoo.com/s/ap/20070917/ap_on_re_mi_ea/iraq
The BBC's take on it:
http://news.bbc.co.uk/1/hi/world/middle_east/6998788.stm
Full Version: Blackwater latest
QUOTE (Francesca Akhtar @ Sep 17 2007, 04:13 PM) 
Hi everyone,
this post isn't directly relatd to the assassination but I know there has been mention of Blackwater on here so thought members might be interested in this:
http://news.yahoo.com/s/ap/20070917/ap_on_re_mi_ea/iraq
The BBC's take on it:
http://news.bbc.co.uk/1/hi/world/middle_east/6998788.stm
this post isn't directly relatd to the assassination but I know there has been mention of Blackwater on here so thought members might be interested in this:
http://news.yahoo.com/s/ap/20070917/ap_on_re_mi_ea/iraq
The BBC's take on it:
http://news.bbc.co.uk/1/hi/world/middle_east/6998788.stm
Bravo for the Iraqi Govt., but I bet it never happens...Blackwater is close to Bush in person, religious political and parapolitical senses - The USG will find a way to keep them or change/kill those Iraqis in government who want them out. Blackwater is a very approriate name....in my field of Environmental Science is is an academic way of talking about toilet effluents. I wish they would be outlawed, but take a look at the book on Blackwater and you'll see what I mean. They are connected at the very top of the 'gang'....the VERY top.
AMY GOODMAN: President Bush made no mention of the incident during his State of the Union, but he did address the very issue that’s brought dozens of private security companies like Blackwater to Iraq in the first place: the need for more troops.
PRESIDENT GEORGE W. BUSH: Tonight, I ask the Congress to authorize an increase in the size of our active Army and Marine Corps by 92,000 in the next five years. A second task we can take on together is to design and establish a volunteer civilian reserve corps. Such a corps would function much like our military reserve. It would ease the burden on the Armed Forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them.
AMY GOODMAN: Is the President looking to further outsource war? My next guest writes, “Blackwater is a reminder of just how privatized the Iraq war has become.” Jeremy Scahill is a Puffin Foundation Writing Fellow at the Nation Institute. He’s author of the forthcoming book Blackwater: The Rise of the World's Most Powerful Mercenary Army. He has an op-ed piece in yesterday's Los Angeles Times, entitled "Are Mercenaries in Iraq?" Joining us now in the firehouse studio, welcome to Democracy Now!, Jeremy.
JEREMY SCAHILL: It’s good to be home.
AMY GOODMAN: We invited Blackwater on; they refused. But, Jeremy, let's talk fist about Blackwater. What is it?
JEREMY SCAHILL: Blackwater is a company that began in 1996 as a private military training facility in -- it was built near the Great Dismal Swamp of North Carolina. And visionary executives, all of them former Navy Seals or other Elite Special Forces people, envisioned it as a project that would take advantage of the anticipated government outsourcing.
Well, here we are a decade later, and it’s the most powerful mercenary firm in the world. It has 20,000 soldiers on the ready, the world’s largest private military base, a fleet of twenty aircraft, including helicopter gunships. It’s become nothing short of the Praetorian Guard for the Bush administration's so-called global war on terror. And it’s headed by a very rightwing Christian activist, ex-Navy Seal named Erik Prince, whose family was one of the major bankrollers of the Republican Revolution of the 1990s. He, himself, is a significant funder of President Bush and his allies.
And what they’ve done is they have built a very frightening empire near the Great Dismal Swamp in North Carolina. They’ve got about 2,300 men actively deployed around the world. They provide the security for the US diplomats in Iraq. They’ve guarded everyone, from Paul Bremer and John Negroponte to the current US ambassador, Zalmay Khalilzad. They’re training troops in Afghanistan. They have been active in the Caspian Sea, where they set up a Special Forces base miles from the Iranian border. They really are the frontline in what the Bush administration viewed as a necessary revolution in military affairs. In fact, they represent the life's work of Dick Cheney and Donald Rumsfeld.
AMY GOODMAN: What do you mean, the “life's work”?
JEREMY SCAHILL: Well, Dick Cheney, when he was Defense Secretary under George H.W. Bush during the Gulf War, one of the last things he did before leaving office was to create an unprecedented lucrative market for the firm that he would go on to head, Halliburton. He commissioned [a] Halliburton [division] to do a study on how to privatize the military bureaucracy. That effectively created the groundwork for the absolute war profiteer bonanza that we’ve seen unfold in the aftermath of 9/11. I mean, Clinton was totally on board with all of this, but it has exploded since 9/11. And so, Cheney, after he left office, when the first Bush was the president, went on to work at the neoconservative American Enterprise Institute, which really led the push for privatization of the government, not just the military.
And then, when these guys took office, Rumsfeld's first real major address, delivered on September 10, 2001, he literally declared war on the Pentagon bureaucracy and said he had come to liberate the Pentagon. And what he meant by that -- and he wrote this in an article in Foreign Affairs -- was that governments, unlike companies, can't die. He literally said that. So you have to figure out new incentives for competition, and Rumsfeld said that it should be run more like a corporation than a bureaucracy. And so, the company that most embodies that vision -- and they call it a revolutionary in military affairs. It’s a total part of the Project for a New American Century and the neoconservative movement. The company that most embodies that is not Halliburton; it’s Blackwater.
AMY GOODMAN: Explain what you understand happened on Tuesday: President Bush giving his address, the Blackwater helicopter crashing.
JEREMY SCAHILL: Well, I think a lot of people -- even though I think there’s been a lot of reporting on it and it’s been out in the public sphere, I think a lot of people still would be surprised to know that the US ambassador in Iraq and US diplomats throughout Iraq and US diplomatic facilities and regional occupational offices are actually guarded by mercenaries. And Blackwater has a $300 million contract to provide diplomatic security. And so, they guard Zalmay Khalilzad and other US diplomats in Iraq.
While what we understand -- and, of course, as you know, reports are always very shaky in the early stages -- is that a US diplomatic convoy came under fire in a Sunni neighborhood of Baghdad, and a Blackwater helicopter apparently landed to try to respond to that attack, because Blackwater and its “Little Bird” helicopters provide the security for diplomatic convoys, and they got engaged in some kind of a firefight on the ground, and four men from one helicopter were killed. Then another helicopter responded and was brought down, either by fire or it got tangled in some wires.
Four of the five men who worked for Blackwater that were killed were shot in the back of the head, according to reports. And what’s interesting about this is that Zalmay Khalilzad said that he had traveled with the men and then said that he had gone to the morgue to view their bodies. And he said that the circumstances of their death were unclear, because of what he called the “fog of war.” But I think it’s very possible that they were guarding a very senior diplomat, if not Zalmay Khalilzad himself. I mean, we don't have evidence to suggest that, but the fact that Khalilzad really came out forward and said, These were fine men. I was with them and visited them in the morgue, indicates that it could have been a very serious attack on a senior official.
AMY GOODMAN: What do you think is the actual body count in Iraq of US soldiers? I mean, we count them very carefully, you know, when it surpassed 3,000. This was extremely significant. What really is the number of US military dead?
JEREMY SCAHILL: Military dead is -- I mean, I think it’s interesting, because the lines have totally been erased. I would say that we should be counting the deaths of Blackwater soldiers in the total troop count. I mean, I filed over the last year a lot of Freedom of Information Act requests, and one of the ways that we have found to discover the deaths of the number of contractors that have been killed is actually through the Department of Labor, because the government has a federal insurance scheme that’s been set up, which is actually very controversial -- grew out of something called the Defense Base Act -- and it’s insurance provided to contractors who service the US military abroad. And so, as of late last year, more than 600 families of contractors in Iraq had filed for those benefits.
So I think we’re talking somewhere in the realm of -- and these are just US contractors that have rights to federal benefits inside of the United States. Remember, it’s not necessarily Americans that make up the majority of these 100,000 -- 100,000 -- contractors that are operating in Iraq right now, 48,000 of whom are mercenaries, according to the GAO. So I don't think it’s possible to put a fine point on the number of troops killed, because the Bush administration has found a backdoor way to engage in an undeclared expansion of the occupation by deploying these private armies.
And at the State of the Union address the other night, Bush announces this civilian reserve corps, which is gaining momentum among Democrats and others. Wesley Clark has talked about it, the former presidential candidate and Supreme Allied NATO Commander. But what that is is another Frankenstein scheme that Cheney and these guys cooked up in their outsourcing laboratory to engage in an undeclared expansion. I mean, on the one hand, we have Bush talking about an official US troop surge. The Army said -- a few months ago, when Colin Powell said that the active-duty Army is basically broken, the Army was calling for 30,000 troops over ten years. Bush then announces in his State of the Union 92,000 active-duty troops over five years, and at the same time, they're increasing the presence of the mercenaries, increasing the presence of the other contractors, talking about some privatized or civilian reserve corps. This is all an undeclared expansion of the US occupation, totally against the will of the American people and the world.
AMY GOODMAN: Civilian reserve corps?
JEREMY SCAHILL: Right. That's what they're calling it. And, you know, I mean, a lot of what has been tossed around about this since 2002 has been envisioning a sort of disaster response, international aid. You know, it’s all very benign-sounding, but the context of it, when Bush announced it the other night, he said we need 92,000 troops and we should develop a civilian reserve corps to supplement the work of the military.
Now, what’s interesting, Amy, is that two years ago Erik Prince, the head of Blackwater USA, was speaking at a military conference. He only comes out of his headquarters to speak in front of military audiences. He does not speak in front of civilians. He's on panels with top brass and others. He’s very secretive. He gave a major address in which he called for the creation of what he called a “contractor brigade.” And I actually -- I can read you what he said. He said -- this is two years ago, before Bush called for his civilian reserve corps. Erik Prince, head of Blackwater USA: “There’s consternation in the [Pentagon] about increasing the permanent size of the Army. We want to add 30,000 people.” And they talked about costs of anywhere from $3.6 billion to $4 billion to do that. Well, by my math, that comes out to about $135,000 per soldier. And then, Prince added, “We could do it certainly cheaper.”
And so, now you have Blackwater, the Praetorian Guard for the war on terror, itching to get into Sudan. You know, something happened last year that got no attention whatsoever. In October, President Bush lifted sanctions on Christian Southern Sudan, and there have been reports now that Blackwater has been negotiating directly with the Southern Sudanese regional government to come in and start training the Christian forces of the south of Sudan. Blackwater has been itching to get into Sudan, and Erik Prince is on the board of Christian Freedom International, which is an evangelical missionary organization that has been targeting Sudan for many years. And there is a political agenda that Blackwater fits perfectly into, whether it’s Iraq and Afghanistan or Sudan.
AMY GOODMAN: And the other connections, Jeremy Scahill, between Blackwater and the Bush administration and the Republican Party?
JEREMY SCAHILL: The most recent one is that President Bush hired Blackwater's lawyer -- Blackwater’s former lawyer to be his lawyer. He replaced Harriet Miers. His name is Fred Fielding, of course, a man who goes back many decades to the Reagan administration, the Nixon administration. He is now going to be Bush's top lawyer, and he was Blackwater's lawyer.
Joseph Schmitz, who was the former Pentagon Inspector General, whose job it was to police the war contractor bonanza, then goes on to work for one of the most profitable of them, is the vice chairman of the Prince Group, Blackwater’s parent company, and the general counsel for Blackwater.
Ken Starr, who’s the former Whitewater prosecutor, the man who led the impeachment charge against President Clinton, Kenneth Starr is now Blackwater's counsel of record and has filed briefs for them at the Supreme Court, in fighting against wrongful death lawsuits filed against Blackwater for the deaths of its people and US soldiers in the war zones.
And then, perhaps the most frightening employee of Blackwater is Cofer Black. This is the man who was head of the CIA’s counterterrorism center at the time of 9/11, the man who promised President Bush that he was going to bring bin Laden's head back in a box on dry ice and talked about having his men chop bin Laden’s head off with a machete, told the Russians that he was going to bring the heads of the Mujahideen back on sticks, said there were going to be flies crawling across their eyeballs. Cofer Black is a 30-year veteran of the CIA, the man who many credit with really spearheading the extraordinary rendition program after 9/11, the man who told Congress that there was a “before 9/11” and an “after 9/11,” and that after 9/11, the gloves come off. He is now a senior executive at Blackwater and perhaps their most powerful behind-the-scenes operative.
AMY GOODMAN: And electoral politics?
JEREMY SCAHILL: Well, Erik Prince, the head of Blackwater, and other Blackwater executives are major bankrollers of the President, of Tom DeLay, of Santorum. They really were -- when those guys were running Congress, Amy, Blackwater had just a revolving door there. They were really welcomed in as heroes. Senator John Warner, the former head of the Senate Armed Services Committee, called them “our silent partner in the global war on terror.” Erik Prince’s sister, Betsy DeVos, is married to Dick Devos, who recently lost the gubernatorial race in Michigan.
But also, Amy, this is a family, the Prince family, that really was one of the primary funders. It was Amway and Dick DeVos in the 1990s, and it was Edgar Prince and his network -- Erik Prince's father -- that really created James Dobson, Focus on the Family -- they gave them the seed money to start it -- Gary Bauer, who was one of the original signers to the Project for a New American Century, a major anti-choice leader in this country, former presidential candidate, founder of the Family Research Council. He credits Edgar Prince, Erik’s father, with giving him the money to start the Family Research Council. We’re talking about people who were at the forefront of the rightwing Christian revolution in this country that really is gaining steam, despite recent electoral defeats.
And what’s really frightening is that you have a man in Erik Prince, who is a neo-crusader, a Christian supremacist, who has been given over a half a billion dollars in federal contracts, and that's not to mention his black contracts, his secret contracts, his contracts with foreign friendly governments like Jordan. This is a man who espouses Christian supremacy, and he has been given, essentially, allowed to create a private army to defend Christendom around the world against secularists and Muslims and others, and has really been brought into the fold. He refers to Blackwater as the sort of FedEx of the Pentagon. He says if you really want a package to get somewhere, do you go with the postal service or do you go with FedEx? This is how these people view themselves. And it embodies everything that President Eisenhower prophesied would happen with the rise of an unchecked military-industrial complex. You have it all in Blackwater.
AMY GOODMAN: Jeremy Scahill, thanks very much for joining us, and I look forward to seeing your book when it comes out. Jeremy Scahill's forthcoming book is Blackwater: The Rise of the World's Most Powerful Mercenary Army. Thanks for joining us.
<a href="http://www.democracynow.org/article.pl?sid=07/01/26/1559232" target="_blank">http://www.democracynow.org/article.pl?sid=07/01/26/1559232[/url]</a>
Who is playing games at or with Google?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
QUOTE (Ron Ecker @ Sep 17 2007, 09:32 PM)
Who is playing games at or with Google?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
Hackers and counter-hackers. I had something like that happen to me when I went to Microsoft's site and got a wonderful screen called Micro****....didn't last long.
Peter,
Thanks, I guess that's the only explanation that makes sense. (Except for one that I don't want to consider.)
Ron
Thanks, I guess that's the only explanation that makes sense. (Except for one that I don't want to consider.)
Ron
QUOTE (Ron Ecker @ Sep 17 2007, 08:32 PM)
Who is playing games at or with Google?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
This happens all the time. Editors critical of Blackwater, Bush, CIA, etc. edit the relevant page to say something critical. However, the editor in charge, who claims to be objective, in reality, someone on the right, removes the critical comments straight away.
The only chance you have of keeping your edit online is to fully reference the article. I did this with Operation Mockingbird and they then left it alone.
QUOTE (John Simkin @ Sep 18 2007, 08:06 AM)
QUOTE (Ron Ecker @ Sep 17 2007, 08:32 PM)
Who is playing games at or with Google?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
I went to Google and searched Blackwater. I clicked on the second item that appeared, an article in Wikipedia. The article stated right off that Blackwater employees are "the scum of the earth." It was like reading the Onion.
I posted the link on another forum because I couldn't believe it. It was like it was too good to be true. And it was. When I followed the link I had posted (the same link from Google), I got a straightforward, non-critical article on Blackwater, but looking exactly the same as the article that vilified it.
What happened?
This happens all the time. Editors critical of Blackwater, Bush, CIA, etc. edit the relevant page to say something critical. However, the editor in charge, who claims to be objective, in reality, someone on the right, removes the critical comments straight away.
The only chance you have of keeping your edit online is to fully reference the article. I did this with Operation Mockingbird and they then left it alone.
John, While what you say is absolutely correct, I believe we are talking about two different [if related] phenomenon. Ron had witnessed [I think] a complete website link hack...not just a modification.
From www.democracynow.org Sept 18, 2007
AMY GOODMAN: The Bush administration is trying to stop the Iraqi government from banning the private military firm Blackwater. Iraqi officials say they've revoked Blackwater's license over a deadly shooting that killed up to eleven civilians. Witnesses say Blackwater guards fired indiscriminately after a car bomb exploded near their convoy. Blackwater is denying wrongdoing and says its guards properly responded to an ambush from insurgents. But Iraqi Interior Minister Jawad al-Bolani called the shootings “a big crime that we can't be silent about.”
US officials have already gone into overdrive to prevent the banning of Blackwater in Iraq. On Monday, Secretary of State Condoleezza Rice telephoned Iraqi Prime Minister Nouri al-Maliki and vowed an investigation. But the Iraqi government appears to be holding ground. Earlier today, Maliki's cabinet said it supports the ban and will review the legal status of all private military companies working in Iraq.
The shootout is only Blackwater's latest controversy in Iraq. The North Carolina-based firm operates under a multi-million dollar contract to protect US officials and facilities. It's been allowed close to free reign under a murky legal environment that offers little to no oversight over its operations.
The author and independent journalist Jeremy Scahill has been closely following Blackwater. He is the author of the New York Times bestselling book, Blackwater: The Rise of the World's Most Powerful Mercenary Army. Jeremy joins us here in New York at our firehouse studio.
Joining us from Washington, D.C. is Doug Brooks. He’s president of International Peace Operations Association, a trade group for the private security industry. Blackwater is a founding member.
Let's begin with Doug Brooks. Can you tell us at this point what you know?
DOUG BROOKS: We don't know a whole lot. We've been hearing a lot of different rumors about what exactly happened. But as near as we can tell, there was some sort of ambush in the middle of Baghdad. One vehicle was disabled, but eventually extracted. But there was a firefight that lasted some twenty minutes in the middle of Baghdad.
AMY GOODMAN: Do you know who it was that the Blackwater was protecting?
DOUG BROOKS: We’re not sure. I believe it’s State Department, I think, has been what’s been reported, but I’m not sure.
AMY GOODMAN: Jeremy Scahill, can you respond to the Iraqi government saying they’re throwing Blackwater out? And the latest news is that it looks like they may be looking at the contracts of all of the security companies.
JEREMY SCAHILL: Well, clearly, Nouri al-Maliki made the mistake of believing that there is a sovereign Iraqi government for about fifteen minutes over the past twenty-four hours, and it appears now that there's a real diplomatic shuffle going on. Condoleezza Rice called Nouri al-Maliki ostensibly to apologize, but it does seem that the US is putting a tremendous amount of pressure on the Iraqi government not to expel Blackwater.
And, you know, what's important to understand about this is that Blackwater is a relatively small player, in terms of numbers in Iraq. They have about a thousand operatives on the ground inside of the country. But symbolically, this is of enormous importance, because Blackwater is the official mercenary company of the US government. They protect the senior US officials in Iraq, the US ambassador. My understanding is that it was a chief of mission operation that they were protecting yesterday, which could mean that it was a very senior US official that the principal or the noun, so to speak.
But we also have to say, there's nothing new here. Iraqis for four years have been terrorized by these mercenaries, who ride around the country, and they'll do anything to keep their ever-important US lives protected, even if it means shooting Iraqi civilians. And so, if Iraq does follow through on this and expel Blackwater, it would be an extraordinary development.
AMY GOODMAN: What is your response to Iraq announcing that they're going to throw out Blackwater, Doug Brooks?
DOUG BROOKS: Well, there has to be a process. There is -- the Ministry of Interior has sort of been set up several times. There's a licensing process that's incredibly arcane, and right now it takes, what, nine months to get a six-month license, which means you have to apply actually for renewal before your license is even approved. And the Ministry of Interior has had some real problems. And so, we're not quite sure what's behind this whole thing.
But I think these companies are providing a valuable service. I think this terminology of “mercenaries” -- I think if you're a serious researcher, you wouldn't use it. There's a clear international definition of what a mercenary is. These companies are not mercenary. They operate legally. They operate under rules and regulations. And that’s as it should be.
JEREMY SCAHILL: Well, Doug, let me just respond to that. Blackwater, which, of course, is a member company of your association, doesn't just have former Navy Seals, Delta Force, Special Forces operators. They've hired Colombian soldiers, Chilean soldiers. In fact, Chile is very interesting, Doug, because the Chilean government is actually opposed to the occupation of Iraq. They refused to join the so-called Coalition of the Willing, and Blackwater turns around and hires up these Chileans and deploys them in Iraq. It's the very essence of being a mercenary. In fact, it's Erik Prince, the founder of Blackwater, it’s his definition of “mercenary,” which is a professional soldier who serves a foreign power, and so the fact -- for money. And the fact of the matter is that Blackwater has hired up soldiers from countries around the world whose home governments are opposed to the war. They are mercenaries. Blackwater is a mercenary company.
DOUG BROOKS: May I respond? I actually met some of the Chileans while I was in Baghdad and had a good talk with them. I mean, some of them are mechanics. Some of them are drivers for the vehicles. Many of them had been there for several years, basically paying off their houses and paying for their wives’ educations, and so on. I mean, it's an individual option to do this kind of work. It’s security work. It’s stability --
JEREMY SCAHILL: And they’re not mercenaries -- because they're paying their houses off, that doesn't make them mercenaries?
DOUG BROOKS: No, because there’s an international definition of what a mercenary is. And these are clearly not. These are legitimate entities working over there, and they're valuable. Essentially, you need these sorts of --
AMY GOODMAN: Doug Brooks, let me ask --
DOUG BROOKS: Please.
AMY GOODMAN: What is your definition of a mercenary? What's the international definition?
DOUG BROOKS: It's a derogatory -- well, it’s a derogatory term. Basically, the international definition, and there's like six parts that weigh into it, but essentially you have to be -- to be a mercenary, you cannot have been sent by a government, you cannot be a party of the actual conflict, you cannot be from a country that’s a party of the actual conflict, your primary motivation has to be money. It’s --
JEREMY SCAHILL: Exactly what the Chileans working for Blackwater are, Doug.
DOUG BROOKS: Well, no, because, in fact, they are civilians. And I think one of the real distinctions we need to make is these are private security companies; they are not military companies. There are different rules for the military than there are for the civilians. The military has something called “rules of engagement.” They're secret. Essentially it says that it allows the military to be proactive in their responses or in their offensive operations. For the security companies, they have something called “rules for use of force,” RUF. It's quite different, quite a bit more restrictive, and it essentially boils -- it’s public, and it boils down to three things: they're allowed to protect themselves, they're allowed to protect whatever they've been contracted to protect, and they're allowed to protect Iraqi civilians under mortal threat. And that's it.
JEREMY SCAHILL: And so often they're also shooting Iraqi civilians. I find it amazing, Doug, that you continue to refer to these heavily armed mercenaries in Iraq as civilians. They are hardly civilians. And there’s nothing defensive about what Blackwater is doing in Iraq. Erik Prince’s men are at the vanguard of an offensive occupation. You cannot get more offensive than occupying someone else's country. And every time Blackwater engages in a firefight, it’s not because the Iraqis are just walking up and shooting at Blackwater. It's because Blackwater is occupying the country along with the US military.
AMY GOODMAN: Well, we have some rules here. We have to break for stations to identify themselves, sixty seconds, and then we'll be back with our guests: Doug Brooks, president of the International Peace Operations Association, and Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. We'll be back in a minute.
[break]
AMY GOODMAN: As we talk about the latest news, Iraqi government saying they're throwing Blackwater out of Iraq, we're joined by two people, by Doug Brooks, who heads the International Peace Operation Association, representing companies like Blackwater, which is a founding member, and also Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.
I want to talk about the history of Blackwater in Iraq. Jeremy Scahill, let's begin with you.
JEREMY SCAHILL: Well, I think that most people in the world first learned of Blackwater USA on March 31st, 2004, when four Blackwater operatives were ambushed and killed in the Iraqi city of Fallujah. Their bodies were burned, they were dragged through the streets, strung up from a bridge over the Euphrates River. And the Bush administration responded to that attack by leveling Fallujah and destroying the city. In fact, it was the first of a number of sieges against the city of Fallujah, and it really fueled the Iraqi resistance that haunts the occupation to this day. That was the first time that many people heard of any kind of a private security or private military company, a mercenary company, operating in Iraq.
And Blackwater has been at the center of a number of pivotal moments in Iraq. In fact, I don't know that there's any other private entity that's had more of an influence on events on the ground in Iraq than Blackwater. A few days after that Fallujah ambush, Blackwater operatives engaged in an all-out firefight with supporters of Muqtada al-Sadr in the Iraqi city of Najaf on April 4, 2004, once again putting Blackwater in the center of major developments in Iraq.
And then in the past year, there have been a number of incidents that not only have impacted Iraqi civilians, but have caused tensions between Baghdad and Washington. Last Christmas Eve, an off-duty Blackwater contractor allegedly shot and killed a body guard for the Shiite vice president of Iraq, Adil Abdul-Mahdi, and the Iraqis are calling that a murder. Blackwater responded to that incident by, they say, firing the contractor and then whisking him out of the country. They say that they were told to do so by the US government. To my knowledge, that individual has not been prosecuted. Blackwater says that they're cooperating with the Justice Department in an investigation over that incident, but we're talking about -- I mean, imagine if an Iraqi killed a bodyguard for Dick Cheney at a Christmas party somewhere. I mean, what kind of outrage would there be? And the Iraqis actually kept this under wraps, because they felt that if they had released this story and that it became public in Iraq, that it would so outrage the population. How is it that an American can murder a bodyguard for the vice president of the country, and apparently nothing happens to them?
Then in May, there were back-to-back firefights involving Blackwater on a street outside of the Interior Ministry that drew in US forces and Iraqi forces, as well. That also caused an enormous amount of tension between Baghdad and Washington. And then we had this incident that happened over the weekend, where we understand eight, as many as eleven, perhaps, people were killed in yet another firefight. So Blackwater clearly has been at the center of some very violent moments in Iraq and also appears to be creating some cracks between Washington and Baghdad.
AMY GOODMAN: Doug Brooks, we tried to get Blackwater on; they didn't respond to emails or calls. But who does Blackwater answer to? Under what laws do they operate?
DOUG BROOKS: Well, essentially, they're contracted by the US government, so they have both -- they can be held accountable contractually. They can be penalized contractually. Their contract can be revoked. After that, you have individual-level accountability. And at this point, they are now under UCMJ, but they’re also under MEJA, the Military Extraterritorial Jurisdiction Act, which essentially says that a person working for a contractor can be brought back to the United States and tried for a felony. Interestingly, it also applies to other nationalities, not including local nationals. So there's that clause, as well.
This is something that our industry, that IPOA, has actually been working on to improve. The better the accountability, the better it is for our industry. We have companies working around the world. We have companies working in Darfur. We have companies working in Afghanistan. We have companies in Mogadishu, where the US government doesn't even have their own people. So it's important that this accountability aspect be addressed, and we need to look towards the future on this, because we are going to be using contractors in the future. It's a critical element to not just Iraq and Afghanistan, but also to peace operations for the UN and Haiti and Congo, and so on.
AMY GOODMAN: Jeremy Scahill?
JEREMY SCAHILL: Well, right now in Iraq there are about 180,000 US contractors, according to the Los Angeles Times, operating alongside 165,000 to 175,000 US troops, which is an enormous force. It’s one that the Bush administration does not publicly own. The fact that the US has almost 400,000 personnel occupying Iraq is almost never mentioned by any US government officials. General David Petraeus himself --
DOUG BROOKS: If I can weigh in on that point at some point --
JEREMY SCAHILL: General David Petraeus himself said that basically contractors are essential to the survival of the US occupation. So the private sector now is dwarfing the size of the official US military presence in Iraq. And Doug talks about all of these laws under --
DOUG BROOKS: Could I clarify that?
JEREMY SCAHILL: Hold on a second, Doug. Doug talks about all of these --
DOUG BROOKS: Before you move onto another point, could I clarify the numbers issue?
AMY GOODMAN: Go ahead, Doug Brooks. The numbers.
DOUG BROOKS: There's 180,000 -- we'll accept the number of 180,000 contractors. But keep in mind, most of those are Iraqis, the kind of people you expect or would hope would be doing the security and reconstruction. Also keep in mind, of the 180,000, many of them are doing the reconstruction, where it’s not actually supporting the military operation.
JEREMY SCAHILL: This is one of the grotesque realities of the Iraq war. It’s very similar to the way multinational corporations operate, where at the top you have the executives of Nike and Disney reaping the profits, and then you hire sweatshop labor on the ground and say, “Oh, well, we're helping the local economy.” And that's exactly what these private war companies are doing in Iraq.
But I wanted to respond to what Doug is saying about the accountability issue. Yes, there's a law on the books called the Military Extraterritorial Jurisdiction Act, which, in theory, provides for the prosecution of contractors who commit a crime in a foreign war zone back inside of the United States. And then, because of a change in language last year to the Defense Authorization Act, they're “in theory” is the ability to prosecute contractors who work for the Department of Defense under the court-martial system. But the fact of the matter is that we've had tens of thousands of mercenaries go in and out of Iraq; not a single one has been prosecuted for any crimes against an Iraqi. So either we have tens of thousands of mercenaries running around Iraq who are actually Boy Scouts, or something is fundamentally rotten with the system.
And I personally, Doug, do not have faith in the Bush administration's Justice Department to go after these crony corporations of the administration. I mean, we see the politicization of the Justice Department. Do we really believe that they're going to go after Erik Prince's men in Baghdad?
DOUG BROOKS: I think we should separate out this other political aspect, because essentially these contractors have been working in support of US missions long before the Bush administration. We had 700,000 contractors in World War II. We had 80,000 contractors in Vietnam. And in Bosnia, we had more contractors than soldiers. So we've had these contractors there. It doesn't really matter who the administration is. The contractors bring amazing capacity and capability. My own academic research was in Sierra Leone. There was a handful of contractors supporting the UN peacekeeping operation there in 1999 and 2000, when I was there.
AMY GOODMAN: Doug Brooks, let me ask you a question.
DOUG BROOKS: Everything that was moved or fixed or done was being done by contractors. I think that they play a critical role.
AMY GOODMAN: Doug Brooks, can Iraq throw Blackwater out?
DOUG BROOKS: It's a good question, because of -- currently under Iraqi law, which a lot of it comes from the CPA, is Order 17, which essentially says that the companies, as long as the individuals are on duty, they're actually under US law. So there’s some question as to whether -- what the process would be and how the Iraqis would do it. So I really can't answer.
AMY GOODMAN: Jeremy Scahill?
JEREMY SCAHILL: I mean, the reality here is that every time Iraq has made any kind of noise about prosecuting contractors, the contractors are whisked out. It becomes a major discussion between Washington and Baghdad diplomats. And the fact of the matter is, this is solid proof. There is no sovereignty in Iraq of the government at all. The US gutted out the Iraqi legal system, made it virtually impossible for Iraqis to hold accountable murderers and thugs inside of the country who are foreign operatives. And so, when the Bush administration talks about how great everything is going in Baghdad, we have to remember that when US mercenaries shoot Iraqis, the Iraqis are basically powerless to stop them.
AMY GOODMAN: I wanted to play a clip from CNN. Blackwater, of course, is denying the wrongdoing. This clip from CNN yesterday was senior producer Suzanne Simons, who apparently is writing a book on Blackwater. She appeared shortly after you, Jeremy, were interviewed about the shooting.
SUZANNE SIMONS: Now, I’m told by the source that no civilians were actually killed in this incident at all, that all of the people killed were people who were firing on this convoy. And there are even some early reports that some of those people were wearing bits and pieces of Iraqi police uniforms.
AMY GOODMAN: That's Suzanne Simons, a CNN senior producer. That's what she was identified as. And she had only originally said that she had a high-level industry source. And that's who her sources were.
JEREMY SCAHILL: Right. I mean, I think this is part of also a long tradition of CNN, on behalf of the US government, engaging in spin. I mean, what does it mean, “a top industry source”? I’m not even sure what that phrase means. And, you know, they're basically saying, “Well, we believe” --
AMY GOODMAN: Well, she said -- what she did later say is that you have to take what the Iraqi government says with a grain of salt. She, instead, had high-level industry sources.
JEREMY SCAHILL: I mean, I think this also goes back to the point I was trying to make early on. I think Iraqi officials were under the mistaken impression that they have some degree of sovereignty, and now Condoleezza Rice clearly is reading the Riot Act to the Maliki government.
AMY GOODMAN: What does this mean, Doug Brooks, right now? Not just that Blackwater -- Iraq is saying, “We'll throw Blackwater out,” but now they're reviewing all of the security companies. What would it mean if Iraq did try to throw Blackwater out? How do they do it?
DOUG BROOKS: It's a good question. The reconstruction of a state is -- it can be sort of a messy affair. And we see that certainly with the Ministry of Interior and all the problems they've had. I mean, as I mentioned, the whole licensing system is a big problem. And, you know, we've had constant issues, the State Department has had constant issues with the Ministry of Interior. And I think you, on your own show -- and I listen to it on WPFW every morning -- you’ve talked about some of the problems that they've had at the Ministry of Interior. So I think there's a lot of internal issues that have to be sorted out.
In terms of their legal system, maybe Jeremy thinks that it's a lot further along in reconstruction than most people, but you wonder if there would be due process for anybody who’s put into the Iraqi legal system.
JEREMY SCAHILL: Doug, what’s the due process for the Iraqis that are gunned down by mercenary companies in Iraq? Where's the due process for the victims of Blackwater and other mercenary companies that you represent?
DOUG BROOKS: There is clear rules for use of force. And when you're in Iraq and you are with these vehicles and military convoys -- of course, there’s many more of those -- you see how the Iraqis behave around them. You allow a lot of space between the convoys and the civilians. And that has to be that way, because you have essentially the insurgency that’s using suicide vehicle born improvised explosive devices, so they can move up right next to the convoys and detonate them. So there's a clear sign on all these -- you're operating in a war zone. You're not going to have sort of a perfect society. And that's an unfortunate reality.
JEREMY SCAHILL: A perfect society, Doug? I’m asking you what’s the due process.
DOUG BROOKS: That applies to both the military and it applies to civilians, as well.
JEREMY SCAHILL: You're primarily concerned with US lives. US lives are superior to Iraqi lives, and when Iraqis commit the horrible crime of driving their vehicles and get killed, where's the due process for them?
DOUG BROOKS: No, I disagree on that point.
JEREMY SCAHILL: It doesn’t exist.
DOUG BROOKS: I think, because, keep in mind, most of the employees of the security companies, most of the employees of the contractors, are Iraqis, as well. And one of the key issues of the industry is actually being able to get their people out of Iraq when they're threatened by insurgents.
AMY GOODMAN: Let me bring in something here. Shiite cleric Muqtada al-Sadr has joined the call for all contracts of foreign security firms to be annulled. He blamed the Iraqi government for failing to protect the Iraqis, noting the shootings occurred on a busy square filled with Iraqi troops. Could this lead to more war?
JEREMY SCAHILL: Well, I mean, this is interesting, because Muqtada al-Sadr has been one of the few voices of the Iraqi resistance that has flirted with the unification of Sunni and Shiite groups. And I think what we're seeing here now is a much larger recognition on the part of not only Iraqi politicians, but of the resistance groups, that these mercenary companies are operating all around Iraq. And I do think that we could see an escalation in attacks against these private security operators, now that it's becoming a major issue, huge story right now in the Arabic-language press.
AMY GOODMAN: One question the corporate media doesn't ask --
DOUG BROOKS: There’s certainly a lot of political --
AMY GOODMAN: One second, Doug. One question the corporate media doesn’t ask is, what are these security firms like Blackwater doing protecting high-level State Department officials, etc.? Why isn't it US soldiers who are doing this?
JEREMY SCAHILL: Well, the official theory --
DOUG BROOKS: Can I answer that?
JEREMY SCAHILL: -- for it -- and Doug, I think, would agree on this. I mean, the official reason given for this is that it frees up, in theory, the official US military to fight the actual war. And so, you contract security from private companies to protect US officials. I see this, though, as a back-door surge that the Bush administration has engaged in. The deaths of these guys don't get counted. Their crimes don't get prosecuted. Iraqis clearly don't have a means by which to get justice when they're the victims of crimes.
AMY GOODMAN: Doug Brooks, you have the last word.
DOUG BROOKS: Yeah, I’m not sure I would agree with that particular perspective, but essentially they do bring a lot of expertise. Most of the Americans that do this sort of thing are experienced veterans. So, essentially, you're getting somebody who has already done their time in the military. They have the experience, they're more mature. They tend to be more professionally trained to do these specific kind of operations.
AMY GOODMAN: So you're saying that the security firms, like Blackwater, are more experienced than US soldiers or better than US soldiers?
DOUG BROOKS: Absolutely. In general, that's accurate. And, you know, they can go for long periods, for two years or three years, whereas the military has to rotate their people in and out. And they train particularly for this kind of job. It's different from the military. The military is trained to attack into ambushes, whereas the security companies are trained to get their people out of the ambushes alive [inaudible].
AMY GOODMAN: We’re going to have to leave it there, but I thank you both very much for being with us. Doug Brooks, head of the International Peace Organization Association in Washington. We’re sorry Blackwater didn't respond to our calls. Jeremy Scahill, author of the New York Times bestselling book, Blackwater: The Rise of the World's Most Powerful Mercenary Army.
AMY GOODMAN: The Bush administration is trying to stop the Iraqi government from banning the private military firm Blackwater. Iraqi officials say they've revoked Blackwater's license over a deadly shooting that killed up to eleven civilians. Witnesses say Blackwater guards fired indiscriminately after a car bomb exploded near their convoy. Blackwater is denying wrongdoing and says its guards properly responded to an ambush from insurgents. But Iraqi Interior Minister Jawad al-Bolani called the shootings “a big crime that we can't be silent about.”
US officials have already gone into overdrive to prevent the banning of Blackwater in Iraq. On Monday, Secretary of State Condoleezza Rice telephoned Iraqi Prime Minister Nouri al-Maliki and vowed an investigation. But the Iraqi government appears to be holding ground. Earlier today, Maliki's cabinet said it supports the ban and will review the legal status of all private military companies working in Iraq.
The shootout is only Blackwater's latest controversy in Iraq. The North Carolina-based firm operates under a multi-million dollar contract to protect US officials and facilities. It's been allowed close to free reign under a murky legal environment that offers little to no oversight over its operations.
The author and independent journalist Jeremy Scahill has been closely following Blackwater. He is the author of the New York Times bestselling book, Blackwater: The Rise of the World's Most Powerful Mercenary Army. Jeremy joins us here in New York at our firehouse studio.
Joining us from Washington, D.C. is Doug Brooks. He’s president of International Peace Operations Association, a trade group for the private security industry. Blackwater is a founding member.
Let's begin with Doug Brooks. Can you tell us at this point what you know?
DOUG BROOKS: We don't know a whole lot. We've been hearing a lot of different rumors about what exactly happened. But as near as we can tell, there was some sort of ambush in the middle of Baghdad. One vehicle was disabled, but eventually extracted. But there was a firefight that lasted some twenty minutes in the middle of Baghdad.
AMY GOODMAN: Do you know who it was that the Blackwater was protecting?
DOUG BROOKS: We’re not sure. I believe it’s State Department, I think, has been what’s been reported, but I’m not sure.
AMY GOODMAN: Jeremy Scahill, can you respond to the Iraqi government saying they’re throwing Blackwater out? And the latest news is that it looks like they may be looking at the contracts of all of the security companies.
JEREMY SCAHILL: Well, clearly, Nouri al-Maliki made the mistake of believing that there is a sovereign Iraqi government for about fifteen minutes over the past twenty-four hours, and it appears now that there's a real diplomatic shuffle going on. Condoleezza Rice called Nouri al-Maliki ostensibly to apologize, but it does seem that the US is putting a tremendous amount of pressure on the Iraqi government not to expel Blackwater.
And, you know, what's important to understand about this is that Blackwater is a relatively small player, in terms of numbers in Iraq. They have about a thousand operatives on the ground inside of the country. But symbolically, this is of enormous importance, because Blackwater is the official mercenary company of the US government. They protect the senior US officials in Iraq, the US ambassador. My understanding is that it was a chief of mission operation that they were protecting yesterday, which could mean that it was a very senior US official that the principal or the noun, so to speak.
But we also have to say, there's nothing new here. Iraqis for four years have been terrorized by these mercenaries, who ride around the country, and they'll do anything to keep their ever-important US lives protected, even if it means shooting Iraqi civilians. And so, if Iraq does follow through on this and expel Blackwater, it would be an extraordinary development.
AMY GOODMAN: What is your response to Iraq announcing that they're going to throw out Blackwater, Doug Brooks?
DOUG BROOKS: Well, there has to be a process. There is -- the Ministry of Interior has sort of been set up several times. There's a licensing process that's incredibly arcane, and right now it takes, what, nine months to get a six-month license, which means you have to apply actually for renewal before your license is even approved. And the Ministry of Interior has had some real problems. And so, we're not quite sure what's behind this whole thing.
But I think these companies are providing a valuable service. I think this terminology of “mercenaries” -- I think if you're a serious researcher, you wouldn't use it. There's a clear international definition of what a mercenary is. These companies are not mercenary. They operate legally. They operate under rules and regulations. And that’s as it should be.
JEREMY SCAHILL: Well, Doug, let me just respond to that. Blackwater, which, of course, is a member company of your association, doesn't just have former Navy Seals, Delta Force, Special Forces operators. They've hired Colombian soldiers, Chilean soldiers. In fact, Chile is very interesting, Doug, because the Chilean government is actually opposed to the occupation of Iraq. They refused to join the so-called Coalition of the Willing, and Blackwater turns around and hires up these Chileans and deploys them in Iraq. It's the very essence of being a mercenary. In fact, it's Erik Prince, the founder of Blackwater, it’s his definition of “mercenary,” which is a professional soldier who serves a foreign power, and so the fact -- for money. And the fact of the matter is that Blackwater has hired up soldiers from countries around the world whose home governments are opposed to the war. They are mercenaries. Blackwater is a mercenary company.
DOUG BROOKS: May I respond? I actually met some of the Chileans while I was in Baghdad and had a good talk with them. I mean, some of them are mechanics. Some of them are drivers for the vehicles. Many of them had been there for several years, basically paying off their houses and paying for their wives’ educations, and so on. I mean, it's an individual option to do this kind of work. It’s security work. It’s stability --
JEREMY SCAHILL: And they’re not mercenaries -- because they're paying their houses off, that doesn't make them mercenaries?
DOUG BROOKS: No, because there’s an international definition of what a mercenary is. And these are clearly not. These are legitimate entities working over there, and they're valuable. Essentially, you need these sorts of --
AMY GOODMAN: Doug Brooks, let me ask --
DOUG BROOKS: Please.
AMY GOODMAN: What is your definition of a mercenary? What's the international definition?
DOUG BROOKS: It's a derogatory -- well, it’s a derogatory term. Basically, the international definition, and there's like six parts that weigh into it, but essentially you have to be -- to be a mercenary, you cannot have been sent by a government, you cannot be a party of the actual conflict, you cannot be from a country that’s a party of the actual conflict, your primary motivation has to be money. It’s --
JEREMY SCAHILL: Exactly what the Chileans working for Blackwater are, Doug.
DOUG BROOKS: Well, no, because, in fact, they are civilians. And I think one of the real distinctions we need to make is these are private security companies; they are not military companies. There are different rules for the military than there are for the civilians. The military has something called “rules of engagement.” They're secret. Essentially it says that it allows the military to be proactive in their responses or in their offensive operations. For the security companies, they have something called “rules for use of force,” RUF. It's quite different, quite a bit more restrictive, and it essentially boils -- it’s public, and it boils down to three things: they're allowed to protect themselves, they're allowed to protect whatever they've been contracted to protect, and they're allowed to protect Iraqi civilians under mortal threat. And that's it.
JEREMY SCAHILL: And so often they're also shooting Iraqi civilians. I find it amazing, Doug, that you continue to refer to these heavily armed mercenaries in Iraq as civilians. They are hardly civilians. And there’s nothing defensive about what Blackwater is doing in Iraq. Erik Prince’s men are at the vanguard of an offensive occupation. You cannot get more offensive than occupying someone else's country. And every time Blackwater engages in a firefight, it’s not because the Iraqis are just walking up and shooting at Blackwater. It's because Blackwater is occupying the country along with the US military.
AMY GOODMAN: Well, we have some rules here. We have to break for stations to identify themselves, sixty seconds, and then we'll be back with our guests: Doug Brooks, president of the International Peace Operations Association, and Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. We'll be back in a minute.
[break]
AMY GOODMAN: As we talk about the latest news, Iraqi government saying they're throwing Blackwater out of Iraq, we're joined by two people, by Doug Brooks, who heads the International Peace Operation Association, representing companies like Blackwater, which is a founding member, and also Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.
I want to talk about the history of Blackwater in Iraq. Jeremy Scahill, let's begin with you.
JEREMY SCAHILL: Well, I think that most people in the world first learned of Blackwater USA on March 31st, 2004, when four Blackwater operatives were ambushed and killed in the Iraqi city of Fallujah. Their bodies were burned, they were dragged through the streets, strung up from a bridge over the Euphrates River. And the Bush administration responded to that attack by leveling Fallujah and destroying the city. In fact, it was the first of a number of sieges against the city of Fallujah, and it really fueled the Iraqi resistance that haunts the occupation to this day. That was the first time that many people heard of any kind of a private security or private military company, a mercenary company, operating in Iraq.
And Blackwater has been at the center of a number of pivotal moments in Iraq. In fact, I don't know that there's any other private entity that's had more of an influence on events on the ground in Iraq than Blackwater. A few days after that Fallujah ambush, Blackwater operatives engaged in an all-out firefight with supporters of Muqtada al-Sadr in the Iraqi city of Najaf on April 4, 2004, once again putting Blackwater in the center of major developments in Iraq.
And then in the past year, there have been a number of incidents that not only have impacted Iraqi civilians, but have caused tensions between Baghdad and Washington. Last Christmas Eve, an off-duty Blackwater contractor allegedly shot and killed a body guard for the Shiite vice president of Iraq, Adil Abdul-Mahdi, and the Iraqis are calling that a murder. Blackwater responded to that incident by, they say, firing the contractor and then whisking him out of the country. They say that they were told to do so by the US government. To my knowledge, that individual has not been prosecuted. Blackwater says that they're cooperating with the Justice Department in an investigation over that incident, but we're talking about -- I mean, imagine if an Iraqi killed a bodyguard for Dick Cheney at a Christmas party somewhere. I mean, what kind of outrage would there be? And the Iraqis actually kept this under wraps, because they felt that if they had released this story and that it became public in Iraq, that it would so outrage the population. How is it that an American can murder a bodyguard for the vice president of the country, and apparently nothing happens to them?
Then in May, there were back-to-back firefights involving Blackwater on a street outside of the Interior Ministry that drew in US forces and Iraqi forces, as well. That also caused an enormous amount of tension between Baghdad and Washington. And then we had this incident that happened over the weekend, where we understand eight, as many as eleven, perhaps, people were killed in yet another firefight. So Blackwater clearly has been at the center of some very violent moments in Iraq and also appears to be creating some cracks between Washington and Baghdad.
AMY GOODMAN: Doug Brooks, we tried to get Blackwater on; they didn't respond to emails or calls. But who does Blackwater answer to? Under what laws do they operate?
DOUG BROOKS: Well, essentially, they're contracted by the US government, so they have both -- they can be held accountable contractually. They can be penalized contractually. Their contract can be revoked. After that, you have individual-level accountability. And at this point, they are now under UCMJ, but they’re also under MEJA, the Military Extraterritorial Jurisdiction Act, which essentially says that a person working for a contractor can be brought back to the United States and tried for a felony. Interestingly, it also applies to other nationalities, not including local nationals. So there's that clause, as well.
This is something that our industry, that IPOA, has actually been working on to improve. The better the accountability, the better it is for our industry. We have companies working around the world. We have companies working in Darfur. We have companies working in Afghanistan. We have companies in Mogadishu, where the US government doesn't even have their own people. So it's important that this accountability aspect be addressed, and we need to look towards the future on this, because we are going to be using contractors in the future. It's a critical element to not just Iraq and Afghanistan, but also to peace operations for the UN and Haiti and Congo, and so on.
AMY GOODMAN: Jeremy Scahill?
JEREMY SCAHILL: Well, right now in Iraq there are about 180,000 US contractors, according to the Los Angeles Times, operating alongside 165,000 to 175,000 US troops, which is an enormous force. It’s one that the Bush administration does not publicly own. The fact that the US has almost 400,000 personnel occupying Iraq is almost never mentioned by any US government officials. General David Petraeus himself --
DOUG BROOKS: If I can weigh in on that point at some point --
JEREMY SCAHILL: General David Petraeus himself said that basically contractors are essential to the survival of the US occupation. So the private sector now is dwarfing the size of the official US military presence in Iraq. And Doug talks about all of these laws under --
DOUG BROOKS: Could I clarify that?
JEREMY SCAHILL: Hold on a second, Doug. Doug talks about all of these --
DOUG BROOKS: Before you move onto another point, could I clarify the numbers issue?
AMY GOODMAN: Go ahead, Doug Brooks. The numbers.
DOUG BROOKS: There's 180,000 -- we'll accept the number of 180,000 contractors. But keep in mind, most of those are Iraqis, the kind of people you expect or would hope would be doing the security and reconstruction. Also keep in mind, of the 180,000, many of them are doing the reconstruction, where it’s not actually supporting the military operation.
JEREMY SCAHILL: This is one of the grotesque realities of the Iraq war. It’s very similar to the way multinational corporations operate, where at the top you have the executives of Nike and Disney reaping the profits, and then you hire sweatshop labor on the ground and say, “Oh, well, we're helping the local economy.” And that's exactly what these private war companies are doing in Iraq.
But I wanted to respond to what Doug is saying about the accountability issue. Yes, there's a law on the books called the Military Extraterritorial Jurisdiction Act, which, in theory, provides for the prosecution of contractors who commit a crime in a foreign war zone back inside of the United States. And then, because of a change in language last year to the Defense Authorization Act, they're “in theory” is the ability to prosecute contractors who work for the Department of Defense under the court-martial system. But the fact of the matter is that we've had tens of thousands of mercenaries go in and out of Iraq; not a single one has been prosecuted for any crimes against an Iraqi. So either we have tens of thousands of mercenaries running around Iraq who are actually Boy Scouts, or something is fundamentally rotten with the system.
And I personally, Doug, do not have faith in the Bush administration's Justice Department to go after these crony corporations of the administration. I mean, we see the politicization of the Justice Department. Do we really believe that they're going to go after Erik Prince's men in Baghdad?
DOUG BROOKS: I think we should separate out this other political aspect, because essentially these contractors have been working in support of US missions long before the Bush administration. We had 700,000 contractors in World War II. We had 80,000 contractors in Vietnam. And in Bosnia, we had more contractors than soldiers. So we've had these contractors there. It doesn't really matter who the administration is. The contractors bring amazing capacity and capability. My own academic research was in Sierra Leone. There was a handful of contractors supporting the UN peacekeeping operation there in 1999 and 2000, when I was there.
AMY GOODMAN: Doug Brooks, let me ask you a question.
DOUG BROOKS: Everything that was moved or fixed or done was being done by contractors. I think that they play a critical role.
AMY GOODMAN: Doug Brooks, can Iraq throw Blackwater out?
DOUG BROOKS: It's a good question, because of -- currently under Iraqi law, which a lot of it comes from the CPA, is Order 17, which essentially says that the companies, as long as the individuals are on duty, they're actually under US law. So there’s some question as to whether -- what the process would be and how the Iraqis would do it. So I really can't answer.
AMY GOODMAN: Jeremy Scahill?
JEREMY SCAHILL: I mean, the reality here is that every time Iraq has made any kind of noise about prosecuting contractors, the contractors are whisked out. It becomes a major discussion between Washington and Baghdad diplomats. And the fact of the matter is, this is solid proof. There is no sovereignty in Iraq of the government at all. The US gutted out the Iraqi legal system, made it virtually impossible for Iraqis to hold accountable murderers and thugs inside of the country who are foreign operatives. And so, when the Bush administration talks about how great everything is going in Baghdad, we have to remember that when US mercenaries shoot Iraqis, the Iraqis are basically powerless to stop them.
AMY GOODMAN: I wanted to play a clip from CNN. Blackwater, of course, is denying the wrongdoing. This clip from CNN yesterday was senior producer Suzanne Simons, who apparently is writing a book on Blackwater. She appeared shortly after you, Jeremy, were interviewed about the shooting.
SUZANNE SIMONS: Now, I’m told by the source that no civilians were actually killed in this incident at all, that all of the people killed were people who were firing on this convoy. And there are even some early reports that some of those people were wearing bits and pieces of Iraqi police uniforms.
AMY GOODMAN: That's Suzanne Simons, a CNN senior producer. That's what she was identified as. And she had only originally said that she had a high-level industry source. And that's who her sources were.
JEREMY SCAHILL: Right. I mean, I think this is part of also a long tradition of CNN, on behalf of the US government, engaging in spin. I mean, what does it mean, “a top industry source”? I’m not even sure what that phrase means. And, you know, they're basically saying, “Well, we believe” --
AMY GOODMAN: Well, she said -- what she did later say is that you have to take what the Iraqi government says with a grain of salt. She, instead, had high-level industry sources.
JEREMY SCAHILL: I mean, I think this also goes back to the point I was trying to make early on. I think Iraqi officials were under the mistaken impression that they have some degree of sovereignty, and now Condoleezza Rice clearly is reading the Riot Act to the Maliki government.
AMY GOODMAN: What does this mean, Doug Brooks, right now? Not just that Blackwater -- Iraq is saying, “We'll throw Blackwater out,” but now they're reviewing all of the security companies. What would it mean if Iraq did try to throw Blackwater out? How do they do it?
DOUG BROOKS: It's a good question. The reconstruction of a state is -- it can be sort of a messy affair. And we see that certainly with the Ministry of Interior and all the problems they've had. I mean, as I mentioned, the whole licensing system is a big problem. And, you know, we've had constant issues, the State Department has had constant issues with the Ministry of Interior. And I think you, on your own show -- and I listen to it on WPFW every morning -- you’ve talked about some of the problems that they've had at the Ministry of Interior. So I think there's a lot of internal issues that have to be sorted out.
In terms of their legal system, maybe Jeremy thinks that it's a lot further along in reconstruction than most people, but you wonder if there would be due process for anybody who’s put into the Iraqi legal system.
JEREMY SCAHILL: Doug, what’s the due process for the Iraqis that are gunned down by mercenary companies in Iraq? Where's the due process for the victims of Blackwater and other mercenary companies that you represent?
DOUG BROOKS: There is clear rules for use of force. And when you're in Iraq and you are with these vehicles and military convoys -- of course, there’s many more of those -- you see how the Iraqis behave around them. You allow a lot of space between the convoys and the civilians. And that has to be that way, because you have essentially the insurgency that’s using suicide vehicle born improvised explosive devices, so they can move up right next to the convoys and detonate them. So there's a clear sign on all these -- you're operating in a war zone. You're not going to have sort of a perfect society. And that's an unfortunate reality.
JEREMY SCAHILL: A perfect society, Doug? I’m asking you what’s the due process.
DOUG BROOKS: That applies to both the military and it applies to civilians, as well.
JEREMY SCAHILL: You're primarily concerned with US lives. US lives are superior to Iraqi lives, and when Iraqis commit the horrible crime of driving their vehicles and get killed, where's the due process for them?
DOUG BROOKS: No, I disagree on that point.
JEREMY SCAHILL: It doesn’t exist.
DOUG BROOKS: I think, because, keep in mind, most of the employees of the security companies, most of the employees of the contractors, are Iraqis, as well. And one of the key issues of the industry is actually being able to get their people out of Iraq when they're threatened by insurgents.
AMY GOODMAN: Let me bring in something here. Shiite cleric Muqtada al-Sadr has joined the call for all contracts of foreign security firms to be annulled. He blamed the Iraqi government for failing to protect the Iraqis, noting the shootings occurred on a busy square filled with Iraqi troops. Could this lead to more war?
JEREMY SCAHILL: Well, I mean, this is interesting, because Muqtada al-Sadr has been one of the few voices of the Iraqi resistance that has flirted with the unification of Sunni and Shiite groups. And I think what we're seeing here now is a much larger recognition on the part of not only Iraqi politicians, but of the resistance groups, that these mercenary companies are operating all around Iraq. And I do think that we could see an escalation in attacks against these private security operators, now that it's becoming a major issue, huge story right now in the Arabic-language press.
AMY GOODMAN: One question the corporate media doesn't ask --
DOUG BROOKS: There’s certainly a lot of political --
AMY GOODMAN: One second, Doug. One question the corporate media doesn’t ask is, what are these security firms like Blackwater doing protecting high-level State Department officials, etc.? Why isn't it US soldiers who are doing this?
JEREMY SCAHILL: Well, the official theory --
DOUG BROOKS: Can I answer that?
JEREMY SCAHILL: -- for it -- and Doug, I think, would agree on this. I mean, the official reason given for this is that it frees up, in theory, the official US military to fight the actual war. And so, you contract security from private companies to protect US officials. I see this, though, as a back-door surge that the Bush administration has engaged in. The deaths of these guys don't get counted. Their crimes don't get prosecuted. Iraqis clearly don't have a means by which to get justice when they're the victims of crimes.
AMY GOODMAN: Doug Brooks, you have the last word.
DOUG BROOKS: Yeah, I’m not sure I would agree with that particular perspective, but essentially they do bring a lot of expertise. Most of the Americans that do this sort of thing are experienced veterans. So, essentially, you're getting somebody who has already done their time in the military. They have the experience, they're more mature. They tend to be more professionally trained to do these specific kind of operations.
AMY GOODMAN: So you're saying that the security firms, like Blackwater, are more experienced than US soldiers or better than US soldiers?
DOUG BROOKS: Absolutely. In general, that's accurate. And, you know, they can go for long periods, for two years or three years, whereas the military has to rotate their people in and out. And they train particularly for this kind of job. It's different from the military. The military is trained to attack into ambushes, whereas the security companies are trained to get their people out of the ambushes alive [inaudible].
AMY GOODMAN: We’re going to have to leave it there, but I thank you both very much for being with us. Doug Brooks, head of the International Peace Organization Association in Washington. We’re sorry Blackwater didn't respond to our calls. Jeremy Scahill, author of the New York Times bestselling book, Blackwater: The Rise of the World's Most Powerful Mercenary Army.
bump
Thanks for the added info Peter - very interesting. Can't say I'm surprised at the reaction in the White House. It will be interesting to see what happens next.
Re: pages mysteriously disappearing / being editied on the internet, someone I know told me that they were doing some research on someone involved in the assassination and had found some links via google with a lot of information. She said the next day she went back and typed exactly what she had the day before but this time her results came up blank. Not one link. She said after a few days she tried again and this time some of the links reappeared but with some of the 'more interesting' ones omitted.
Re: pages mysteriously disappearing / being editied on the internet, someone I know told me that they were doing some research on someone involved in the assassination and had found some links via google with a lot of information. She said the next day she went back and typed exactly what she had the day before but this time her results came up blank. Not one link. She said after a few days she tried again and this time some of the links reappeared but with some of the 'more interesting' ones omitted.
From the FWST, 2004:
Here’s a pretty good article from ’04 ...
Less-equipped contractors paid to do military's work 'Today is absolutely tragic. It's
chilling'
By Scott Dodd;peter Smolowitz
Source: THE FORT WORTH STAR-TELEGRAM
Credit: Knight Ridder News Service
Thursday,April 1, 2004
Edition: FINAL, Section: News, Page 1A
Printer friendly Email this story
CHARLOTTE, N.C.--The former police officers and special operations soldiers who work for Blackwater USA in northeastern North
Carolina find themselves playing an unprecedented, controversial and little-known role in the occupation of Iraq.
With the U.S. military stretched thin, they have lucrative jobs -- civilian security forces can earn more than $15,000 a month -- defusing roadside bombs, escorting food convoys,
protecting visiting dignitaries and even guarding U.S. administrator L. Paul Bremer.
They often work in the most dangerous parts of the country, including the town of Fallujah, where four Blackwater employees were ambushed and killed in their
sport utility vehicles Wednesday. Dancing Iraqis dragged their charred corpses through the streets and hung two of them from a bridge.
Hearing the early reports, Susie Randolph of Horry County, S.C., immediately feared for her husband, David. A former police officer, David Randolph heads a Blackwater
security team based nine miles from Fallujah, which he calls Iraq's "baddest town."
On Wednesday afternoon, Randolph called his wife by satellite phone to tell her that his group was safe. She could hear helicopters firing in the background.
After 15 minutes, he hung up, saying some co-workers were pinned down and needed help.
"I just try to think the Lord is going to take care of him and he's going to be all right," Susie Randolph said Wednesday. "That's the only thing I can think with four kids."
National security analysts say that as the war on terrorism continues, more and more jobs once done by soldiers are being handled by for-profit contractors who often have less
equipment and less training.
"We weren't being realistic with ourselves about the role the contractors played and the potential risks," said Peter Singer, a Charlotte native with the Brookings Institution in
Washington, D.C., who wrote Corporate Warriors, a book about private defense contractors. "There's a lot more dangers and a lot more costs."
Blackwater's success is a result of the military's increased reliance on civilian partners. Founded in 1996 by a former Navy Seal, it recruits
in part from police departments and military bases in the Carolinas and has extensive dealings with the Defense Department.
The company has been awarded more than $57 million in contracts since 2002, according to government records and an inspector general's report. Its responsibilities include
training more than 10,000 Navy sailors in security each year and providing guards and two helicopters for Bremer's security detail.
The company's 6,000-acre compound in Moyock, N.C., is a half-hour drive from Norfolk, Va., and the world's largest Navy base. It uses elaborate facilities to train the military and
law enforcement officers -- such as a mock R.U. Ready High School that simulates Columbine-like attacks.
"They are one of the largest employers in the region," said Wayne Leary, Currituck County economic development director. He estimates that it employs more than 200 people in
the area.
Providing security appears to be Blackwater's newest operation. Blackwater Security Consulting LLC -- the division that employed the four
men killed Wednesday in Iraq -- was formed last year, North Carolina records show.
The company wouldn't say much. Its founder was out of town Wednesday, and a company spokesman declined to say whether the employees killed in Fallujah were from North
Carolina.
Besides security, the Pentagon is relying more on contractors to fill other traditional military roles, such as training Iraqi police and providing troops with food and housing.
National security analysts say the military is stretched thin and doesn't have enough troops to do all the jobs.
Part of the motivation is political as well, said Mark Burgess of the Washington-based Center for Defense Information. Using contractors keeps down the casualty counts of U.S.
troops, and there's usually less outcry after violence.
"It almost puts a layer between political bosses and events on the ground," Burgess said. "Appearances are everything."
But Burgess said giving contractors a more prominent role is likely to inflame Iraqis angry about the high-paying jobs going to foreigners -- much the same as U.S. workers are
upset when jobs are outsourced.
More than 15,000 contractors work in Iraq -- about one for every 10 U.S. soldiers, said Singer, of the Brookings Institution.
More than $20 billion -- one-third of the U.S. Army's operating budget in Iraq and Afghanistan -- goes toward contractors, he said.
"They are playing a whole range of mission-critical roles," Singer said. "That's in spite of our doctrine which says you don't turn over mission-critical roles to private contractors."
The Pentagon does not track the exact number of contractors or their casualties. Singer estimates that at least 30 have been killed in Iraq and about 180 have been wounded. That
total does not include missionaries or contractors handling reconstruction projects.
"They are very clearly going after civilian contractors, and today is absolutely tragic," Singer said. "It's chilling."
To our readers
We realize that the photograph to the right is disturbing, but the editors felt it was necessary to publish at least a small image to accurately convey the horror of the incident. You can
let us know your opinion by contacting our reader advocate at (817) 390-7692 or dhouse@star-telegram.com.
1. Photo: THE VIRGINIAN-PILOT/STEVE EARLEY VIA AP Two guards stand at the gate to the Blackwater training facility in Moyock, N.C. Blackwater
Security Consulting, which employed the four men killed in Iraq, was formed last year.
Here’s a pretty good article from ’04 ...
Less-equipped contractors paid to do military's work 'Today is absolutely tragic. It's
chilling'
By Scott Dodd;peter Smolowitz
Source: THE FORT WORTH STAR-TELEGRAM
Credit: Knight Ridder News Service
Thursday,April 1, 2004
Edition: FINAL, Section: News, Page 1A
Printer friendly Email this story
CHARLOTTE, N.C.--The former police officers and special operations soldiers who work for Blackwater USA in northeastern North
Carolina find themselves playing an unprecedented, controversial and little-known role in the occupation of Iraq.
With the U.S. military stretched thin, they have lucrative jobs -- civilian security forces can earn more than $15,000 a month -- defusing roadside bombs, escorting food convoys,
protecting visiting dignitaries and even guarding U.S. administrator L. Paul Bremer.
They often work in the most dangerous parts of the country, including the town of Fallujah, where four Blackwater employees were ambushed and killed in their
sport utility vehicles Wednesday. Dancing Iraqis dragged their charred corpses through the streets and hung two of them from a bridge.
Hearing the early reports, Susie Randolph of Horry County, S.C., immediately feared for her husband, David. A former police officer, David Randolph heads a Blackwater
security team based nine miles from Fallujah, which he calls Iraq's "baddest town."
On Wednesday afternoon, Randolph called his wife by satellite phone to tell her that his group was safe. She could hear helicopters firing in the background.
After 15 minutes, he hung up, saying some co-workers were pinned down and needed help.
"I just try to think the Lord is going to take care of him and he's going to be all right," Susie Randolph said Wednesday. "That's the only thing I can think with four kids."
National security analysts say that as the war on terrorism continues, more and more jobs once done by soldiers are being handled by for-profit contractors who often have less
equipment and less training.
"We weren't being realistic with ourselves about the role the contractors played and the potential risks," said Peter Singer, a Charlotte native with the Brookings Institution in
Washington, D.C., who wrote Corporate Warriors, a book about private defense contractors. "There's a lot more dangers and a lot more costs."
Blackwater's success is a result of the military's increased reliance on civilian partners. Founded in 1996 by a former Navy Seal, it recruits
in part from police departments and military bases in the Carolinas and has extensive dealings with the Defense Department.
The company has been awarded more than $57 million in contracts since 2002, according to government records and an inspector general's report. Its responsibilities include
training more than 10,000 Navy sailors in security each year and providing guards and two helicopters for Bremer's security detail.
The company's 6,000-acre compound in Moyock, N.C., is a half-hour drive from Norfolk, Va., and the world's largest Navy base. It uses elaborate facilities to train the military and
law enforcement officers -- such as a mock R.U. Ready High School that simulates Columbine-like attacks.
"They are one of the largest employers in the region," said Wayne Leary, Currituck County economic development director. He estimates that it employs more than 200 people in
the area.
Providing security appears to be Blackwater's newest operation. Blackwater Security Consulting LLC -- the division that employed the four
men killed Wednesday in Iraq -- was formed last year, North Carolina records show.
The company wouldn't say much. Its founder was out of town Wednesday, and a company spokesman declined to say whether the employees killed in Fallujah were from North
Carolina.
Besides security, the Pentagon is relying more on contractors to fill other traditional military roles, such as training Iraqi police and providing troops with food and housing.
National security analysts say the military is stretched thin and doesn't have enough troops to do all the jobs.
Part of the motivation is political as well, said Mark Burgess of the Washington-based Center for Defense Information. Using contractors keeps down the casualty counts of U.S.
troops, and there's usually less outcry after violence.
"It almost puts a layer between political bosses and events on the ground," Burgess said. "Appearances are everything."
But Burgess said giving contractors a more prominent role is likely to inflame Iraqis angry about the high-paying jobs going to foreigners -- much the same as U.S. workers are
upset when jobs are outsourced.
More than 15,000 contractors work in Iraq -- about one for every 10 U.S. soldiers, said Singer, of the Brookings Institution.
More than $20 billion -- one-third of the U.S. Army's operating budget in Iraq and Afghanistan -- goes toward contractors, he said.
"They are playing a whole range of mission-critical roles," Singer said. "That's in spite of our doctrine which says you don't turn over mission-critical roles to private contractors."
The Pentagon does not track the exact number of contractors or their casualties. Singer estimates that at least 30 have been killed in Iraq and about 180 have been wounded. That
total does not include missionaries or contractors handling reconstruction projects.
"They are very clearly going after civilian contractors, and today is absolutely tragic," Singer said. "It's chilling."
To our readers
We realize that the photograph to the right is disturbing, but the editors felt it was necessary to publish at least a small image to accurately convey the horror of the incident. You can
let us know your opinion by contacting our reader advocate at (817) 390-7692 or dhouse@star-telegram.com.
1. Photo: THE VIRGINIAN-PILOT/STEVE EARLEY VIA AP Two guards stand at the gate to the Blackwater training facility in Moyock, N.C. Blackwater
Security Consulting, which employed the four men killed in Iraq, was formed last year.
Keep in mind that Blackwater is only one of many mercenary groups. Don't forget
Wackenhut, Kroll and Halliburton:
..........
History
of private military companies
The mercenaries and auxiliaries are useless and dangerous, and if anyone supports his state by the arms of mercenaries, he will never stand firm or sure, as they are disunited, ambitious, without
discipline, faithless, bold amongst friends, cowardly amongst enemies, they have no fear of God, and keep no faith with men...wrote Machiavelli in The Prince.
As Peter W. Singer says in his book, Corporate Warriors: The Rise of the Privatized Military Industry (ISBN 0801441145), "[T]he monopoly of the state over violence is the exception in world
history, rather than the rule. The state itself is a rather new unit of governance, appearing only in the last four hundred years. Moreover, it drew from the private violence market to build its public power."
And as Lt. Col. Tim Spicer says in his book, An Unorthodox Soldier: Peace and War in the Sandline Affair (ISBN 1840183497), "Mercenary soldiering has a long and honorable history...When
something is both widespread and long lasting, there must be some fundamental reason for it. In the case of mercenaries, the reasons why they have continued to survive and prosper down the centuries
can be reduced to just two: efficiency and technology."
The War on Terror and the 21st Century
The modern private military company has evolved from a hybrid of the wild activities of rogue white officers, and their African recruits, often linked with intelligence agencies running around Africa, and
their more legitimate counterparts working under contract from Cold War hero countries. This coupled with the risk advisory services offered to corporations by companies like Kroll, Inc. and CRG and
the introduction of more legitimate players from the high ranks of big militaries have come together to offer security to companies doing business in hostile regions and to countries seeking to upgrade
their militaries.
The war in Iraq and Afghanistan along with the promised long global war against terror has created a boom in the security and risk advisory market. Trained and experienced military personnel from
Special Forces units in the US, UK, Israel and South Africa are retiring to take part. The same is true for the intelligence agencies as companies aiding business ventures in Iraq like GlobalOptions and
Diligence see executives on the boards from the CIA, DIA, FBI, the Secret Service, FEMA and MI6.
Many companies are subsidiaries of larger firms. MPRI and Titan were bought by L-3 Communications which is traded on the NYSE. Defence Systems Limited was bought by Armor Holdings, Inc.,
renamed ArmorGroup than bought out by its board. Group 4 Securicor is a merger between Group 4 Falck and the Wackenhut Corporation providing services from armed prison guards to guarding
embassies to supplying electronic surveillance. Computer Sciences Corporation acquired DynCorp.
Many of these companies, while paid with taxpayer money when working under government contracts, are often registered offshore somewhere, escaping tax on many profits from re-entering the
representative, public Treasury.
Other companies provide specialized advice and training for maritime concerns such as Executive Solutions International, LLC (ESI). The threat to port cities where liquefied natural gas comes in on
container ships could be severe. Pirating and other attacks on the high seas are a threat in many areas of the world. Companies are developing to meet the security needs of cities and companies subject to
terrorist or other attacks on shipments.
The laws surrounding hired soldiers and civilian contractors is not clear and not well defined under international agreements. This is a reason why increasingly the focus is regulation at the national level;
e.g. as the licensing mechanisms used by the United States and South Africa demonstrate. Yet many of the hired soldiers are not American; they could be from the country of conflict, or flown in from
Chile, El Salvador, or South Africa. Exactly what jurisdiction, aside from their employer, they are under is, according to some commentators, uncertain. [1]
This is true for American contractors as well. Civilian contractors working for Dyncorp in the Balkan wars were implicated by a fellow employee for indulging in a child prostitution and sale ring in the
war torn country. [2] Those who turned in the employees were fired, and later the offending employees were fired , however not charged with anything. [3]
Some of the interrorgators in the Abu Ghraib crimes were civilian contractors provided by Titan and CACI. They have yet to be charged for any crimes, however they are being sued as are the two
companies. [4][5][6] All three companies have continued to receive large wartime contracts from the US government.
Points of Interest
The Center for Public Integrity: Making A Killing: The Business of War
"At least 90 companies that provide services normally performed by national military forces but without the same degree of public oversight have operated in 110 countries worldwide." [7]
"Arms dealers have profited from a massive unregulated sell off of low price surplus armaments into the most fragile, conflict-ridden states and failed states. The weapons, mostly from
state-owned Eastern European factories, have found their way to Angola, Sudan, Ethiopia, Colombia, Congo-Brazzaville, Sri Lanka, Burundi and Afghanistan where conflicts have led to the deaths
of up to 10 million people during the past decade." [8]
"Since 1994, the U.S. Defense Department has entered into 3,061 contracts with 12 of the 24 U.S.-based PMCs identified by ICIJ, a review of government documents showed. Pentagon records
valued those contracts was more than $300 billion. More than 2,700 of those contracts were held by just two companies: Kellogg Brown & Root and Booz Allen Hamilton. Because of the
limited information the Pentagon provides and the breadth of services offered by some of the larger companies, it was impossible to determine what percentage of these contracts was for training,
security or logistical services." [9]
"The International Traffic in Arms Regulations Law (ITAR) requires PMCs to obtain approval from the State Department before selling their services to a foreign government. State's Office of
Defense Trade Controls reviews contract proposals to ensure they do not violate sanctions or other U.S. policy. However, PMCs can also sell their services abroad through the Defense
Department's Foreign Military Sales (FMS) program, which does not require any licensing by State. Under FMS, the Pentagon pays the contractor for services offered to a foreign government,
which in turn reimburses the Pentagon." [10]
Outsourcing the Pentagon
The following is according to the Center for Public Integrity's Outsourcing the Pentagon:
"In April [2002], the Army told Congress that its best guess was that the Army had between 124,000 and 605,000 service contract workers. In October, the Army announced that it would permit
contractors to compete for "non-core" positions held by 154,910 civilian workers (more than half of the Army's civilian workforce) and 58,727 military personnel." [11]
"In 2003, the IG [Inspector General] reported that out of 113 service contract actions reviewed (with an estimated value of $17.8 billion), at least 98 had one or more problems, including
inadequate competition, lack of surveillance, or inadequate price reasonableness determinations." [12]
"The Freedom of Information Act applies to "agency" records. Contractors, in this context, are not "agencies," even where they perform decisional roles. Similarly, government officials are
subject to a body of conflict of interest provisions, pay caps, limits on political activity, and labor rules that do not similarly constrain contractors who perform similar, even the same, work." [13]
"Between 1998 and 2003, the Pentagon awarded more than $47 billion in contracts designated for small businesses to companies that have each earned more than $100 million from Defense
Department contracts alone during that six year period." [14]
"The homeland security industry is currently the fastest growing sector of the U.S. economy, predicted to grow from a $5 billion industry in 2000 to $130 billion in 2010, according to the
Homeland Security Research Corporation, a private California think tank." [15]
Corporate warriors
In 2002, Peter W. Singer wrote the following in "Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry" by Peter W. Singer. (Links to 91K/46 page .pdf file.)
"With the rise of the privatized military industry, actors in the global system can access capabilities that extend across the entire spectrum of military activity-from a team of commandos to a wing
of fighter jets-simply by becoming a business partner."? (pg. 1-2)
"Many PMFs operate as "virtual companies." Similar to Internet firms that limit their expenditure on fixed (brick and mortar) assets, most PMFs do not maintain standing forces but draw from
databases of qualified personnel and specialized subcontractors on a contract-by-contract basis." (pg. 15)
"The unrestricted access to military services ushered in by the rise of the privatized military industry has clearly enhanced the role of nonstate groups which at one time had been at a disadvantage
in a system dominated by states. PMFs provide these groups with new options and new paths to power not imagined until very recently." (pg. 31)
"The ultimate problem with PMFs is that they diffuse responsibility. Questions about who monitors, regulates, and punishes employees or companies that go astray are still to be fully answered.
That many of these firms are chartered in offshore accounts complicates the matter further." (pg. 34)
Recruiting candidates
In "Transfering Costs of War to Latin America is Morally, Politically Wrong" in The Miami Herald, January 29, 2005, Geoff Thale observes:
"In El Salvador, the security firms are said to be pleased with the candidates they have found. Many of them served in the Salvadoran armed forces; they are highly motivated, because they are
being paid several times what they could earn in the Salvadoran economy; and they are cheap, because even paying five times what an average Salvadoran earns means that the security firms are
paying far less than they would have to pay to recruit U.S. civilians to do this work."
"The U.S. military contracts out elements of security operations to U.S. companies, who recruit relatively low-cost Latin Americans to fill the jobs. The contractors keep labor costs down, thus
helping their bottom line. The Latin Americans are poor, need the work and benefit from what are -- by their standards -- high salaries."
"Latin America and other less-developed regions shouldn't serve as a cheap labor pool to recruit people for dangerous jobs that are part of the U.S. military mission in Iraq. It may be tempting to
pay others to take risks for us. It may be particularly tempting to pay people from foreign countries such as El Salvador, Colombia or Chile, so that we don't experience the human cost of
casualties or deaths ourselves. But it's not morally acceptable."
"U.S. military and government officials are attempting to avoid paying the political cost in the United States of the war in Iraq by hiring poor Latin Americans to do part of the fighting and the
dying in place of U.S. citizens. Whether one supports or opposes the U.S. war in Iraq, one can agree that it is the U.S. military that ought to bear the burden of fighting a war that the United
States initiated. Allies may join in and send their own troops in support if they so choose. But U.S. contractors working for the Pentagon shouldn't be recruiting civilians in Latin America to bear
the burden of carrying out a U.S. military mission."
"When a U.S. soldier is wounded or killed in combat, his or her family, neighbors and community feel the weight of the war and ask themselves, Is it worth it? In a democracy such as the
United States, it is important for citizens to share the burden related to military action abroad, feel the impact and make the judgment about whether it's worthwhile."
Creating distance
The July 3, 2003 cover feature, Soldiers of Good Fortune by Barry Yeoman for The Independent Weekly makes the following assertions:
"Private military corporations become a way to distance themselves and create what we used to call 'plausible deniability,'" says Daniel Nelson, a former professor of civil-military relations at the
Defense Department's Marshall European Center for Security Studies. "It's disastrous for democracy."
"The lack of oversight alarms some members of Congress. "Under a shroud of secrecy, the United States is carrying out military missions with people who don't have the same level of
accountability," says Rep. Jan Schakowsky (D-Ill.), a leading congressional critic of privatized war. "We have individuals who are not obligated to follow orders or follow the Military Code of
Conduct. Their main obligation is to their employer, not to their country."
"An analysis shows that 17 of the nation's leading private military firms have invested more than $12.4 million in congressional and presidential campaigns since 1999."
"In 2001, according to the most recent federal disclosure forms, 10 private military companies spent more than $32 million on lobbying."
"Federal law bans U.S. soldiers from participating in Colombia's war against left-wing rebels and from training army units with ties to right-wing paramilitaries infamous for torture and political
killings. There are no such restrictions on for-profit companies, though, and since the late 1990s, the United States has paid private military companies an estimated $1.2 billion, both to eradicate
coca crops and to help the Colombian army put down rebels who use the drug trade to finance their insurgency."
"The Pentagon has become so dependent on private military companies that it literally cannot wage war without them. Troops already rely on for-profit contractors to maintain 28 percent of all
weapons systems."
"There are some weapons systems that the U.S. military forces do not have the capability to do their own maintenance on," concedes David Young, a deputy commander at the Defense Contract
Management Agency."
Accountability
Lt. Col. Tim Spicer makes the following remarks in his book, An Unorthodox Soldier: Peace and War and the Sandline Affair:
"Another frequent allegation about PMCs is that they are "not accountable." Not accountable to whom? World opinion? Outside politicians? I can only speak for Sandline, but we are always
accountable, to our own policies and ethos and to our client government, with whom we always have a binding contract."? (pg. 24)
"[T]he majority of legitimate PMCs are quite capable of continuing to operate and grow without the introduction of a regulatory regime. PMCs will accept external regulation if it is manageable
and adds to their commercial aspirations and operational effectiveness. [ ] I would suggest that since PMCs operate in an international setting and in high-risk, volatile situations, the sort of
heavy-handed regulation employed in other areas of public concern might not be entirely appropriate." (pg. 27)
"Any PMC must adhere to the law of armed conflict, as defined by the Geneva Convention, and show a respect for human dignity and human rights. Although our operatives are always enlisted
in the forces of the governments who employ us, not least to ensure a clear chain of command, if one of our people were told, for example, to attack a village, an action which would unnecessarily
endanger innocent lives, he would not do it." (pg. 53)
Trade association view
Doug Brooks, president of the International Peace Operations Association, a representative group for PMCs makes the following statements:
Contrary to various media reports, private security company (PSC) employees in Iraq are not becoming overnight millionaires. Sensational reports of $1500 or even $3500 per day salaries tax
free float around in the media, but the reality is far different. Private security professionals with the highest qualifications and suffering the greatest risk may earn as much as $700 per day, far
below the sensational salaries many experts have been claiming. [16]
Skilled private contractors in Iraq are doing everything from rebuilding the education system and electrical grids to protecting fledgling democracy efforts. It is critical that the industry spearhead
efforts challenging rogue companies and contractors who violate the public trust. [17]
The reality is that every UN or regional peace operation in existence today requires and utilizes the services of the private sector. IPOA members have proven their effectiveness and value in these
operations. [18]
In a globalized economy, all transnational companies, whether their focus is manufacturing, mining, transportation or even security, look for employees with the required skill sets from local,
regional, and international sources. [19]
Wackenhut, Kroll and Halliburton:
..........
History
of private military companies
The mercenaries and auxiliaries are useless and dangerous, and if anyone supports his state by the arms of mercenaries, he will never stand firm or sure, as they are disunited, ambitious, without
discipline, faithless, bold amongst friends, cowardly amongst enemies, they have no fear of God, and keep no faith with men...wrote Machiavelli in The Prince.
As Peter W. Singer says in his book, Corporate Warriors: The Rise of the Privatized Military Industry (ISBN 0801441145), "[T]he monopoly of the state over violence is the exception in world
history, rather than the rule. The state itself is a rather new unit of governance, appearing only in the last four hundred years. Moreover, it drew from the private violence market to build its public power."
And as Lt. Col. Tim Spicer says in his book, An Unorthodox Soldier: Peace and War in the Sandline Affair (ISBN 1840183497), "Mercenary soldiering has a long and honorable history...When
something is both widespread and long lasting, there must be some fundamental reason for it. In the case of mercenaries, the reasons why they have continued to survive and prosper down the centuries
can be reduced to just two: efficiency and technology."
The War on Terror and the 21st Century
The modern private military company has evolved from a hybrid of the wild activities of rogue white officers, and their African recruits, often linked with intelligence agencies running around Africa, and
their more legitimate counterparts working under contract from Cold War hero countries. This coupled with the risk advisory services offered to corporations by companies like Kroll, Inc. and CRG and
the introduction of more legitimate players from the high ranks of big militaries have come together to offer security to companies doing business in hostile regions and to countries seeking to upgrade
their militaries.
The war in Iraq and Afghanistan along with the promised long global war against terror has created a boom in the security and risk advisory market. Trained and experienced military personnel from
Special Forces units in the US, UK, Israel and South Africa are retiring to take part. The same is true for the intelligence agencies as companies aiding business ventures in Iraq like GlobalOptions and
Diligence see executives on the boards from the CIA, DIA, FBI, the Secret Service, FEMA and MI6.
Many companies are subsidiaries of larger firms. MPRI and Titan were bought by L-3 Communications which is traded on the NYSE. Defence Systems Limited was bought by Armor Holdings, Inc.,
renamed ArmorGroup than bought out by its board. Group 4 Securicor is a merger between Group 4 Falck and the Wackenhut Corporation providing services from armed prison guards to guarding
embassies to supplying electronic surveillance. Computer Sciences Corporation acquired DynCorp.
Many of these companies, while paid with taxpayer money when working under government contracts, are often registered offshore somewhere, escaping tax on many profits from re-entering the
representative, public Treasury.
Other companies provide specialized advice and training for maritime concerns such as Executive Solutions International, LLC (ESI). The threat to port cities where liquefied natural gas comes in on
container ships could be severe. Pirating and other attacks on the high seas are a threat in many areas of the world. Companies are developing to meet the security needs of cities and companies subject to
terrorist or other attacks on shipments.
The laws surrounding hired soldiers and civilian contractors is not clear and not well defined under international agreements. This is a reason why increasingly the focus is regulation at the national level;
e.g. as the licensing mechanisms used by the United States and South Africa demonstrate. Yet many of the hired soldiers are not American; they could be from the country of conflict, or flown in from
Chile, El Salvador, or South Africa. Exactly what jurisdiction, aside from their employer, they are under is, according to some commentators, uncertain. [1]
This is true for American contractors as well. Civilian contractors working for Dyncorp in the Balkan wars were implicated by a fellow employee for indulging in a child prostitution and sale ring in the
war torn country. [2] Those who turned in the employees were fired, and later the offending employees were fired , however not charged with anything. [3]
Some of the interrorgators in the Abu Ghraib crimes were civilian contractors provided by Titan and CACI. They have yet to be charged for any crimes, however they are being sued as are the two
companies. [4][5][6] All three companies have continued to receive large wartime contracts from the US government.
Points of Interest
The Center for Public Integrity: Making A Killing: The Business of War
"At least 90 companies that provide services normally performed by national military forces but without the same degree of public oversight have operated in 110 countries worldwide." [7]
"Arms dealers have profited from a massive unregulated sell off of low price surplus armaments into the most fragile, conflict-ridden states and failed states. The weapons, mostly from
state-owned Eastern European factories, have found their way to Angola, Sudan, Ethiopia, Colombia, Congo-Brazzaville, Sri Lanka, Burundi and Afghanistan where conflicts have led to the deaths
of up to 10 million people during the past decade." [8]
"Since 1994, the U.S. Defense Department has entered into 3,061 contracts with 12 of the 24 U.S.-based PMCs identified by ICIJ, a review of government documents showed. Pentagon records
valued those contracts was more than $300 billion. More than 2,700 of those contracts were held by just two companies: Kellogg Brown & Root and Booz Allen Hamilton. Because of the
limited information the Pentagon provides and the breadth of services offered by some of the larger companies, it was impossible to determine what percentage of these contracts was for training,
security or logistical services." [9]
"The International Traffic in Arms Regulations Law (ITAR) requires PMCs to obtain approval from the State Department before selling their services to a foreign government. State's Office of
Defense Trade Controls reviews contract proposals to ensure they do not violate sanctions or other U.S. policy. However, PMCs can also sell their services abroad through the Defense
Department's Foreign Military Sales (FMS) program, which does not require any licensing by State. Under FMS, the Pentagon pays the contractor for services offered to a foreign government,
which in turn reimburses the Pentagon." [10]
Outsourcing the Pentagon
The following is according to the Center for Public Integrity's Outsourcing the Pentagon:
"In April [2002], the Army told Congress that its best guess was that the Army had between 124,000 and 605,000 service contract workers. In October, the Army announced that it would permit
contractors to compete for "non-core" positions held by 154,910 civilian workers (more than half of the Army's civilian workforce) and 58,727 military personnel." [11]
"In 2003, the IG [Inspector General] reported that out of 113 service contract actions reviewed (with an estimated value of $17.8 billion), at least 98 had one or more problems, including
inadequate competition, lack of surveillance, or inadequate price reasonableness determinations." [12]
"The Freedom of Information Act applies to "agency" records. Contractors, in this context, are not "agencies," even where they perform decisional roles. Similarly, government officials are
subject to a body of conflict of interest provisions, pay caps, limits on political activity, and labor rules that do not similarly constrain contractors who perform similar, even the same, work." [13]
"Between 1998 and 2003, the Pentagon awarded more than $47 billion in contracts designated for small businesses to companies that have each earned more than $100 million from Defense
Department contracts alone during that six year period." [14]
"The homeland security industry is currently the fastest growing sector of the U.S. economy, predicted to grow from a $5 billion industry in 2000 to $130 billion in 2010, according to the
Homeland Security Research Corporation, a private California think tank." [15]
Corporate warriors
In 2002, Peter W. Singer wrote the following in "Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry" by Peter W. Singer. (Links to 91K/46 page .pdf file.)
"With the rise of the privatized military industry, actors in the global system can access capabilities that extend across the entire spectrum of military activity-from a team of commandos to a wing
of fighter jets-simply by becoming a business partner."? (pg. 1-2)
"Many PMFs operate as "virtual companies." Similar to Internet firms that limit their expenditure on fixed (brick and mortar) assets, most PMFs do not maintain standing forces but draw from
databases of qualified personnel and specialized subcontractors on a contract-by-contract basis." (pg. 15)
"The unrestricted access to military services ushered in by the rise of the privatized military industry has clearly enhanced the role of nonstate groups which at one time had been at a disadvantage
in a system dominated by states. PMFs provide these groups with new options and new paths to power not imagined until very recently." (pg. 31)
"The ultimate problem with PMFs is that they diffuse responsibility. Questions about who monitors, regulates, and punishes employees or companies that go astray are still to be fully answered.
That many of these firms are chartered in offshore accounts complicates the matter further." (pg. 34)
Recruiting candidates
In "Transfering Costs of War to Latin America is Morally, Politically Wrong" in The Miami Herald, January 29, 2005, Geoff Thale observes:
"In El Salvador, the security firms are said to be pleased with the candidates they have found. Many of them served in the Salvadoran armed forces; they are highly motivated, because they are
being paid several times what they could earn in the Salvadoran economy; and they are cheap, because even paying five times what an average Salvadoran earns means that the security firms are
paying far less than they would have to pay to recruit U.S. civilians to do this work."
"The U.S. military contracts out elements of security operations to U.S. companies, who recruit relatively low-cost Latin Americans to fill the jobs. The contractors keep labor costs down, thus
helping their bottom line. The Latin Americans are poor, need the work and benefit from what are -- by their standards -- high salaries."
"Latin America and other less-developed regions shouldn't serve as a cheap labor pool to recruit people for dangerous jobs that are part of the U.S. military mission in Iraq. It may be tempting to
pay others to take risks for us. It may be particularly tempting to pay people from foreign countries such as El Salvador, Colombia or Chile, so that we don't experience the human cost of
casualties or deaths ourselves. But it's not morally acceptable."
"U.S. military and government officials are attempting to avoid paying the political cost in the United States of the war in Iraq by hiring poor Latin Americans to do part of the fighting and the
dying in place of U.S. citizens. Whether one supports or opposes the U.S. war in Iraq, one can agree that it is the U.S. military that ought to bear the burden of fighting a war that the United
States initiated. Allies may join in and send their own troops in support if they so choose. But U.S. contractors working for the Pentagon shouldn't be recruiting civilians in Latin America to bear
the burden of carrying out a U.S. military mission."
"When a U.S. soldier is wounded or killed in combat, his or her family, neighbors and community feel the weight of the war and ask themselves, Is it worth it? In a democracy such as the
United States, it is important for citizens to share the burden related to military action abroad, feel the impact and make the judgment about whether it's worthwhile."
Creating distance
The July 3, 2003 cover feature, Soldiers of Good Fortune by Barry Yeoman for The Independent Weekly makes the following assertions:
"Private military corporations become a way to distance themselves and create what we used to call 'plausible deniability,'" says Daniel Nelson, a former professor of civil-military relations at the
Defense Department's Marshall European Center for Security Studies. "It's disastrous for democracy."
"The lack of oversight alarms some members of Congress. "Under a shroud of secrecy, the United States is carrying out military missions with people who don't have the same level of
accountability," says Rep. Jan Schakowsky (D-Ill.), a leading congressional critic of privatized war. "We have individuals who are not obligated to follow orders or follow the Military Code of
Conduct. Their main obligation is to their employer, not to their country."
"An analysis shows that 17 of the nation's leading private military firms have invested more than $12.4 million in congressional and presidential campaigns since 1999."
"In 2001, according to the most recent federal disclosure forms, 10 private military companies spent more than $32 million on lobbying."
"Federal law bans U.S. soldiers from participating in Colombia's war against left-wing rebels and from training army units with ties to right-wing paramilitaries infamous for torture and political
killings. There are no such restrictions on for-profit companies, though, and since the late 1990s, the United States has paid private military companies an estimated $1.2 billion, both to eradicate
coca crops and to help the Colombian army put down rebels who use the drug trade to finance their insurgency."
"The Pentagon has become so dependent on private military companies that it literally cannot wage war without them. Troops already rely on for-profit contractors to maintain 28 percent of all
weapons systems."
"There are some weapons systems that the U.S. military forces do not have the capability to do their own maintenance on," concedes David Young, a deputy commander at the Defense Contract
Management Agency."
Accountability
Lt. Col. Tim Spicer makes the following remarks in his book, An Unorthodox Soldier: Peace and War and the Sandline Affair:
"Another frequent allegation about PMCs is that they are "not accountable." Not accountable to whom? World opinion? Outside politicians? I can only speak for Sandline, but we are always
accountable, to our own policies and ethos and to our client government, with whom we always have a binding contract."? (pg. 24)
"[T]he majority of legitimate PMCs are quite capable of continuing to operate and grow without the introduction of a regulatory regime. PMCs will accept external regulation if it is manageable
and adds to their commercial aspirations and operational effectiveness. [ ] I would suggest that since PMCs operate in an international setting and in high-risk, volatile situations, the sort of
heavy-handed regulation employed in other areas of public concern might not be entirely appropriate." (pg. 27)
"Any PMC must adhere to the law of armed conflict, as defined by the Geneva Convention, and show a respect for human dignity and human rights. Although our operatives are always enlisted
in the forces of the governments who employ us, not least to ensure a clear chain of command, if one of our people were told, for example, to attack a village, an action which would unnecessarily
endanger innocent lives, he would not do it." (pg. 53)
Trade association view
Doug Brooks, president of the International Peace Operations Association, a representative group for PMCs makes the following statements:
Contrary to various media reports, private security company (PSC) employees in Iraq are not becoming overnight millionaires. Sensational reports of $1500 or even $3500 per day salaries tax
free float around in the media, but the reality is far different. Private security professionals with the highest qualifications and suffering the greatest risk may earn as much as $700 per day, far
below the sensational salaries many experts have been claiming. [16]
Skilled private contractors in Iraq are doing everything from rebuilding the education system and electrical grids to protecting fledgling democracy efforts. It is critical that the industry spearhead
efforts challenging rogue companies and contractors who violate the public trust. [17]
The reality is that every UN or regional peace operation in existence today requires and utilizes the services of the private sector. IPOA members have proven their effectiveness and value in these
operations. [18]
In a globalized economy, all transnational companies, whether their focus is manufacturing, mining, transportation or even security, look for employees with the required skill sets from local,
regional, and international sources. [19]
Keep in mind that Blackwater is only one of many mercenary groups. Don't forget
Wackenhut, Kroll and Halliburton:
..........
History
of private military companies
The mercenaries and auxiliaries are useless and dangerous, and if anyone supports his state by the arms of mercenaries, he will never stand firm or sure, as they are disunited, ambitious, without
discipline, faithless, bold amongst friends, cowardly amongst enemies, they have no fear of God, and keep no faith with men...wrote Machiavelli in The Prince.
As Peter W. Singer says in his book, Corporate Warriors: The Rise of the Privatized Military Industry (ISBN 0801441145), "[T]he monopoly of the state over violence is the exception in world
history, rather than the rule. The state itself is a rather new unit of governance, appearing only in the last four hundred years. Moreover, it drew from the private violence market to build its public power."
And as Lt. Col. Tim Spicer says in his book, An Unorthodox Soldier: Peace and War in the Sandline Affair (ISBN 1840183497), "Mercenary soldiering has a long and honorable history...When
something is both widespread and long lasting, there must be some fundamental reason for it. In the case of mercenaries, the reasons why they have continued to survive and prosper down the centuries
can be reduced to just two: efficiency and technology."
The War on Terror and the 21st Century
The modern private military company has evolved from a hybrid of the wild activities of rogue white officers, and their African recruits, often linked with intelligence agencies running around Africa, and
their more legitimate counterparts working under contract from Cold War hero countries. This coupled with the risk advisory services offered to corporations by companies like Kroll, Inc. and CRG and
the introduction of more legitimate players from the high ranks of big militaries have come together to offer security to companies doing business in hostile regions and to countries seeking to upgrade
their militaries.
The war in Iraq and Afghanistan along with the promised long global war against terror has created a boom in the security and risk advisory market. Trained and experienced military personnel from
Special Forces units in the US, UK, Israel and South Africa are retiring to take part. The same is true for the intelligence agencies as companies aiding business ventures in Iraq like GlobalOptions and
Diligence see executives on the boards from the CIA, DIA, FBI, the Secret Service, FEMA and MI6.
Many companies are subsidiaries of larger firms. MPRI and Titan were bought by L-3 Communications which is traded on the NYSE. Defence Systems Limited was bought by Armor Holdings, Inc.,
renamed ArmorGroup than bought out by its board. Group 4 Securicor is a merger between Group 4 Falck and the Wackenhut Corporation providing services from armed prison guards to guarding
embassies to supplying electronic surveillance. Computer Sciences Corporation acquired DynCorp.
Many of these companies, while paid with taxpayer money when working under government contracts, are often registered offshore somewhere, escaping tax on many profits from re-entering the
representative, public Treasury.
Other companies provide specialized advice and training for maritime concerns such as Executive Solutions International, LLC (ESI). The threat to port cities where liquefied natural gas comes in on
container ships could be severe. Pirating and other attacks on the high seas are a threat in many areas of the world. Companies are developing to meet the security needs of cities and companies subject to
terrorist or other attacks on shipments.
The laws surrounding hired soldiers and civilian contractors is not clear and not well defined under international agreements. This is a reason why increasingly the focus is regulation at the national level;
e.g. as the licensing mechanisms used by the United States and South Africa demonstrate. Yet many of the hired soldiers are not American; they could be from the country of conflict, or flown in from
Chile, El Salvador, or South Africa. Exactly what jurisdiction, aside from their employer, they are under is, according to some commentators, uncertain. [1]
This is true for American contractors as well. Civilian contractors working for Dyncorp in the Balkan wars were implicated by a fellow employee for indulging in a child prostitution and sale ring in the
war torn country. [2] Those who turned in the employees were fired, and later the offending employees were fired , however not charged with anything. [3]
Some of the interrorgators in the Abu Ghraib crimes were civilian contractors provided by Titan and CACI. They have yet to be charged for any crimes, however they are being sued as are the two
companies. [4][5][6] All three companies have continued to receive large wartime contracts from the US government.
Points of Interest
The Center for Public Integrity: Making A Killing: The Business of War
"At least 90 companies that provide services normally performed by national military forces but without the same degree of public oversight have operated in 110 countries worldwide." [7]
"Arms dealers have profited from a massive unregulated sell off of low price surplus armaments into the most fragile, conflict-ridden states and failed states. The weapons, mostly from
state-owned Eastern European factories, have found their way to Angola, Sudan, Ethiopia, Colombia, Congo-Brazzaville, Sri Lanka, Burundi and Afghanistan where conflicts have led to the deaths
of up to 10 million people during the past decade." [8]
"Since 1994, the U.S. Defense Department has entered into 3,061 contracts with 12 of the 24 U.S.-based PMCs identified by ICIJ, a review of government documents showed. Pentagon records
valued those contracts was more than $300 billion. More than 2,700 of those contracts were held by just two companies: Kellogg Brown & Root and Booz Allen Hamilton. Because of the
limited information the Pentagon provides and the breadth of services offered by some of the larger companies, it was impossible to determine what percentage of these contracts was for training,
security or logistical services." [9]
"The International Traffic in Arms Regulations Law (ITAR) requires PMCs to obtain approval from the State Department before selling their services to a foreign government. State's Office of
Defense Trade Controls reviews contract proposals to ensure they do not violate sanctions or other U.S. policy. However, PMCs can also sell their services abroad through the Defense
Department's Foreign Military Sales (FMS) program, which does not require any licensing by State. Under FMS, the Pentagon pays the contractor for services offered to a foreign government,
which in turn reimburses the Pentagon." [10]
Outsourcing the Pentagon
The following is according to the Center for Public Integrity's Outsourcing the Pentagon:
"In April [2002], the Army told Congress that its best guess was that the Army had between 124,000 and 605,000 service contract workers. In October, the Army announced that it would permit
contractors to compete for "non-core" positions held by 154,910 civilian workers (more than half of the Army's civilian workforce) and 58,727 military personnel." [11]
"In 2003, the IG [Inspector General] reported that out of 113 service contract actions reviewed (with an estimated value of $17.8 billion), at least 98 had one or more problems, including
inadequate competition, lack of surveillance, or inadequate price reasonableness determinations." [12]
"The Freedom of Information Act applies to "agency" records. Contractors, in this context, are not "agencies," even where they perform decisional roles. Similarly, government officials are
subject to a body of conflict of interest provisions, pay caps, limits on political activity, and labor rules that do not similarly constrain contractors who perform similar, even the same, work." [13]
"Between 1998 and 2003, the Pentagon awarded more than $47 billion in contracts designated for small businesses to companies that have each earned more than $100 million from Defense
Department contracts alone during that six year period." [14]
"The homeland security industry is currently the fastest growing sector of the U.S. economy, predicted to grow from a $5 billion industry in 2000 to $130 billion in 2010, according to the
Homeland Security Research Corporation, a private California think tank." [15]
Corporate warriors
In 2002, Peter W. Singer wrote the following in "Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry" by Peter W. Singer. (Links to 91K/46 page .pdf file.)
"With the rise of the privatized military industry, actors in the global system can access capabilities that extend across the entire spectrum of military activity-from a team of commandos to a wing
of fighter jets-simply by becoming a business partner."? (pg. 1-2)
"Many PMFs operate as "virtual companies." Similar to Internet firms that limit their expenditure on fixed (brick and mortar) assets, most PMFs do not maintain standing forces but draw from
databases of qualified personnel and specialized subcontractors on a contract-by-contract basis." (pg. 15)
"The unrestricted access to military services ushered in by the rise of the privatized military industry has clearly enhanced the role of nonstate groups which at one time had been at a disadvantage
in a system dominated by states. PMFs provide these groups with new options and new paths to power not imagined until very recently." (pg. 31)
"The ultimate problem with PMFs is that they diffuse responsibility. Questions about who monitors, regulates, and punishes employees or companies that go astray are still to be fully answered.
That many of these firms are chartered in offshore accounts complicates the matter further." (pg. 34)
Recruiting candidates
In "Transfering Costs of War to Latin America is Morally, Politically Wrong" in The Miami Herald, January 29, 2005, Geoff Thale observes:
"In El Salvador, the security firms are said to be pleased with the candidates they have found. Many of them served in the Salvadoran armed forces; they are highly motivated, because they are
being paid several times what they could earn in the Salvadoran economy; and they are cheap, because even paying five times what an average Salvadoran earns means that the security firms are
paying far less than they would have to pay to recruit U.S. civilians to do this work."
"The U.S. military contracts out elements of security operations to U.S. companies, who recruit relatively low-cost Latin Americans to fill the jobs. The contractors keep labor costs down, thus
helping their bottom line. The Latin Americans are poor, need the work and benefit from what are -- by their standards -- high salaries."
"Latin America and other less-developed regions shouldn't serve as a cheap labor pool to recruit people for dangerous jobs that are part of the U.S. military mission in Iraq. It may be tempting to
pay others to take risks for us. It may be particularly tempting to pay people from foreign countries such as El Salvador, Colombia or Chile, so that we don't experience the human cost of
casualties or deaths ourselves. But it's not morally acceptable."
"U.S. military and government officials are attempting to avoid paying the political cost in the United States of the war in Iraq by hiring poor Latin Americans to do part of the fighting and the
dying in place of U.S. citizens. Whether one supports or opposes the U.S. war in Iraq, one can agree that it is the U.S. military that ought to bear the burden of fighting a war that the United
States initiated. Allies may join in and send their own troops in support if they so choose. But U.S. contractors working for the Pentagon shouldn't be recruiting civilians in Latin America to bear
the burden of carrying out a U.S. military mission."
"When a U.S. soldier is wounded or killed in combat, his or her family, neighbors and community feel the weight of the war and ask themselves, Is it worth it? In a democracy such as the
United States, it is important for citizens to share the burden related to military action abroad, feel the impact and make the judgment about whether it's worthwhile."
Creating distance
The July 3, 2003 cover feature, Soldiers of Good Fortune by Barry Yeoman for The Independent Weekly makes the following assertions:
"Private military corporations become a way to distance themselves and create what we used to call 'plausible deniability,'" says Daniel Nelson, a former professor of civil-military relations at the
Defense Department's Marshall European Center for Security Studies. "It's disastrous for democracy."
"The lack of oversight alarms some members of Congress. "Under a shroud of secrecy, the United States is carrying out military missions with people who don't have the same level of
accountability," says Rep. Jan Schakowsky (D-Ill.), a leading congressional critic of privatized war. "We have individuals who are not obligated to follow orders or follow the Military Code of
Conduct. Their main obligation is to their employer, not to their country."
"An analysis shows that 17 of the nation's leading private military firms have invested more than $12.4 million in congressional and presidential campaigns since 1999."
"In 2001, according to the most recent federal disclosure forms, 10 private military companies spent more than $32 million on lobbying."
"Federal law bans U.S. soldiers from participating in Colombia's war against left-wing rebels and from training army units with ties to right-wing paramilitaries infamous for torture and political
killings. There are no such restrictions on for-profit companies, though, and since the late 1990s, the United States has paid private military companies an estimated $1.2 billion, both to eradicate
coca crops and to help the Colombian army put down rebels who use the drug trade to finance their insurgency."
"The Pentagon has become so dependent on private military companies that it literally cannot wage war without them. Troops already rely on for-profit contractors to maintain 28 percent of all
weapons systems."
"There are some weapons systems that the U.S. military forces do not have the capability to do their own maintenance on," concedes David Young, a deputy commander at the Defense Contract
Management Agency."
Accountability
Lt. Col. Tim Spicer makes the following remarks in his book, An Unorthodox Soldier: Peace and War and the Sandline Affair:
"Another frequent allegation about PMCs is that they are "not accountable." Not accountable to whom? World opinion? Outside politicians? I can only speak for Sandline, but we are always
accountable, to our own policies and ethos and to our client government, with whom we always have a binding contract."? (pg. 24)
"[T]he majority of legitimate PMCs are quite capable of continuing to operate and grow without the introduction of a regulatory regime. PMCs will accept external regulation if it is manageable
and adds to their commercial aspirations and operational effectiveness. [ ] I would suggest that since PMCs operate in an international setting and in high-risk, volatile situations, the sort of
heavy-handed regulation employed in other areas of public concern might not be entirely appropriate." (pg. 27)
"Any PMC must adhere to the law of armed conflict, as defined by the Geneva Convention, and show a respect for human dignity and human rights. Although our operatives are always enlisted
in the forces of the governments who employ us, not least to ensure a clear chain of command, if one of our people were told, for example, to attack a village, an action which would unnecessarily
endanger innocent lives, he would not do it." (pg. 53)
Trade association view
Doug Brooks, president of the International Peace Operations Association, a representative group for PMCs makes the following statements:
Contrary to various media reports, private security company (PSC) employees in Iraq are not becoming overnight millionaires. Sensational reports of $1500 or even $3500 per day salaries tax
free float around in the media, but the reality is far different. Private security professionals with the highest qualifications and suffering the greatest risk may earn as much as $700 per day, far
below the sensational salaries many experts have been claiming. [16]
Skilled private contractors in Iraq are doing everything from rebuilding the education system and electrical grids to protecting fledgling democracy efforts. It is critical that the industry spearhead
efforts challenging rogue companies and contractors who violate the public trust. [17]
The reality is that every UN or regional peace operation in existence today requires and utilizes the services of the private sector. IPOA members have proven their effectiveness and value in these
operations. [18]
In a globalized economy, all transnational companies, whether their focus is manufacturing, mining, transportation or even security, look for employees with the required skill sets from local,
regional, and international sources. [19]
Wackenhut, Kroll and Halliburton:
..........
History
of private military companies
The mercenaries and auxiliaries are useless and dangerous, and if anyone supports his state by the arms of mercenaries, he will never stand firm or sure, as they are disunited, ambitious, without
discipline, faithless, bold amongst friends, cowardly amongst enemies, they have no fear of God, and keep no faith with men...wrote Machiavelli in The Prince.
As Peter W. Singer says in his book, Corporate Warriors: The Rise of the Privatized Military Industry (ISBN 0801441145), "[T]he monopoly of the state over violence is the exception in world
history, rather than the rule. The state itself is a rather new unit of governance, appearing only in the last four hundred years. Moreover, it drew from the private violence market to build its public power."
And as Lt. Col. Tim Spicer says in his book, An Unorthodox Soldier: Peace and War in the Sandline Affair (ISBN 1840183497), "Mercenary soldiering has a long and honorable history...When
something is both widespread and long lasting, there must be some fundamental reason for it. In the case of mercenaries, the reasons why they have continued to survive and prosper down the centuries
can be reduced to just two: efficiency and technology."
The War on Terror and the 21st Century
The modern private military company has evolved from a hybrid of the wild activities of rogue white officers, and their African recruits, often linked with intelligence agencies running around Africa, and
their more legitimate counterparts working under contract from Cold War hero countries. This coupled with the risk advisory services offered to corporations by companies like Kroll, Inc. and CRG and
the introduction of more legitimate players from the high ranks of big militaries have come together to offer security to companies doing business in hostile regions and to countries seeking to upgrade
their militaries.
The war in Iraq and Afghanistan along with the promised long global war against terror has created a boom in the security and risk advisory market. Trained and experienced military personnel from
Special Forces units in the US, UK, Israel and South Africa are retiring to take part. The same is true for the intelligence agencies as companies aiding business ventures in Iraq like GlobalOptions and
Diligence see executives on the boards from the CIA, DIA, FBI, the Secret Service, FEMA and MI6.
Many companies are subsidiaries of larger firms. MPRI and Titan were bought by L-3 Communications which is traded on the NYSE. Defence Systems Limited was bought by Armor Holdings, Inc.,
renamed ArmorGroup than bought out by its board. Group 4 Securicor is a merger between Group 4 Falck and the Wackenhut Corporation providing services from armed prison guards to guarding
embassies to supplying electronic surveillance. Computer Sciences Corporation acquired DynCorp.
Many of these companies, while paid with taxpayer money when working under government contracts, are often registered offshore somewhere, escaping tax on many profits from re-entering the
representative, public Treasury.
Other companies provide specialized advice and training for maritime concerns such as Executive Solutions International, LLC (ESI). The threat to port cities where liquefied natural gas comes in on
container ships could be severe. Pirating and other attacks on the high seas are a threat in many areas of the world. Companies are developing to meet the security needs of cities and companies subject to
terrorist or other attacks on shipments.
The laws surrounding hired soldiers and civilian contractors is not clear and not well defined under international agreements. This is a reason why increasingly the focus is regulation at the national level;
e.g. as the licensing mechanisms used by the United States and South Africa demonstrate. Yet many of the hired soldiers are not American; they could be from the country of conflict, or flown in from
Chile, El Salvador, or South Africa. Exactly what jurisdiction, aside from their employer, they are under is, according to some commentators, uncertain. [1]
This is true for American contractors as well. Civilian contractors working for Dyncorp in the Balkan wars were implicated by a fellow employee for indulging in a child prostitution and sale ring in the
war torn country. [2] Those who turned in the employees were fired, and later the offending employees were fired , however not charged with anything. [3]
Some of the interrorgators in the Abu Ghraib crimes were civilian contractors provided by Titan and CACI. They have yet to be charged for any crimes, however they are being sued as are the two
companies. [4][5][6] All three companies have continued to receive large wartime contracts from the US government.
Points of Interest
The Center for Public Integrity: Making A Killing: The Business of War
"At least 90 companies that provide services normally performed by national military forces but without the same degree of public oversight have operated in 110 countries worldwide." [7]
"Arms dealers have profited from a massive unregulated sell off of low price surplus armaments into the most fragile, conflict-ridden states and failed states. The weapons, mostly from
state-owned Eastern European factories, have found their way to Angola, Sudan, Ethiopia, Colombia, Congo-Brazzaville, Sri Lanka, Burundi and Afghanistan where conflicts have led to the deaths
of up to 10 million people during the past decade." [8]
"Since 1994, the U.S. Defense Department has entered into 3,061 contracts with 12 of the 24 U.S.-based PMCs identified by ICIJ, a review of government documents showed. Pentagon records
valued those contracts was more than $300 billion. More than 2,700 of those contracts were held by just two companies: Kellogg Brown & Root and Booz Allen Hamilton. Because of the
limited information the Pentagon provides and the breadth of services offered by some of the larger companies, it was impossible to determine what percentage of these contracts was for training,
security or logistical services." [9]
"The International Traffic in Arms Regulations Law (ITAR) requires PMCs to obtain approval from the State Department before selling their services to a foreign government. State's Office of
Defense Trade Controls reviews contract proposals to ensure they do not violate sanctions or other U.S. policy. However, PMCs can also sell their services abroad through the Defense
Department's Foreign Military Sales (FMS) program, which does not require any licensing by State. Under FMS, the Pentagon pays the contractor for services offered to a foreign government,
which in turn reimburses the Pentagon." [10]
Outsourcing the Pentagon
The following is according to the Center for Public Integrity's Outsourcing the Pentagon:
"In April [2002], the Army told Congress that its best guess was that the Army had between 124,000 and 605,000 service contract workers. In October, the Army announced that it would permit
contractors to compete for "non-core" positions held by 154,910 civilian workers (more than half of the Army's civilian workforce) and 58,727 military personnel." [11]
"In 2003, the IG [Inspector General] reported that out of 113 service contract actions reviewed (with an estimated value of $17.8 billion), at least 98 had one or more problems, including
inadequate competition, lack of surveillance, or inadequate price reasonableness determinations." [12]
"The Freedom of Information Act applies to "agency" records. Contractors, in this context, are not "agencies," even where they perform decisional roles. Similarly, government officials are
subject to a body of conflict of interest provisions, pay caps, limits on political activity, and labor rules that do not similarly constrain contractors who perform similar, even the same, work." [13]
"Between 1998 and 2003, the Pentagon awarded more than $47 billion in contracts designated for small businesses to companies that have each earned more than $100 million from Defense
Department contracts alone during that six year period." [14]
"The homeland security industry is currently the fastest growing sector of the U.S. economy, predicted to grow from a $5 billion industry in 2000 to $130 billion in 2010, according to the
Homeland Security Research Corporation, a private California think tank." [15]
Corporate warriors
In 2002, Peter W. Singer wrote the following in "Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry" by Peter W. Singer. (Links to 91K/46 page .pdf file.)
"With the rise of the privatized military industry, actors in the global system can access capabilities that extend across the entire spectrum of military activity-from a team of commandos to a wing
of fighter jets-simply by becoming a business partner."? (pg. 1-2)
"Many PMFs operate as "virtual companies." Similar to Internet firms that limit their expenditure on fixed (brick and mortar) assets, most PMFs do not maintain standing forces but draw from
databases of qualified personnel and specialized subcontractors on a contract-by-contract basis." (pg. 15)
"The unrestricted access to military services ushered in by the rise of the privatized military industry has clearly enhanced the role of nonstate groups which at one time had been at a disadvantage
in a system dominated by states. PMFs provide these groups with new options and new paths to power not imagined until very recently." (pg. 31)
"The ultimate problem with PMFs is that they diffuse responsibility. Questions about who monitors, regulates, and punishes employees or companies that go astray are still to be fully answered.
That many of these firms are chartered in offshore accounts complicates the matter further." (pg. 34)
Recruiting candidates
In "Transfering Costs of War to Latin America is Morally, Politically Wrong" in The Miami Herald, January 29, 2005, Geoff Thale observes:
"In El Salvador, the security firms are said to be pleased with the candidates they have found. Many of them served in the Salvadoran armed forces; they are highly motivated, because they are
being paid several times what they could earn in the Salvadoran economy; and they are cheap, because even paying five times what an average Salvadoran earns means that the security firms are
paying far less than they would have to pay to recruit U.S. civilians to do this work."
"The U.S. military contracts out elements of security operations to U.S. companies, who recruit relatively low-cost Latin Americans to fill the jobs. The contractors keep labor costs down, thus
helping their bottom line. The Latin Americans are poor, need the work and benefit from what are -- by their standards -- high salaries."
"Latin America and other less-developed regions shouldn't serve as a cheap labor pool to recruit people for dangerous jobs that are part of the U.S. military mission in Iraq. It may be tempting to
pay others to take risks for us. It may be particularly tempting to pay people from foreign countries such as El Salvador, Colombia or Chile, so that we don't experience the human cost of
casualties or deaths ourselves. But it's not morally acceptable."
"U.S. military and government officials are attempting to avoid paying the political cost in the United States of the war in Iraq by hiring poor Latin Americans to do part of the fighting and the
dying in place of U.S. citizens. Whether one supports or opposes the U.S. war in Iraq, one can agree that it is the U.S. military that ought to bear the burden of fighting a war that the United
States initiated. Allies may join in and send their own troops in support if they so choose. But U.S. contractors working for the Pentagon shouldn't be recruiting civilians in Latin America to bear
the burden of carrying out a U.S. military mission."
"When a U.S. soldier is wounded or killed in combat, his or her family, neighbors and community feel the weight of the war and ask themselves, Is it worth it? In a democracy such as the
United States, it is important for citizens to share the burden related to military action abroad, feel the impact and make the judgment about whether it's worthwhile."
Creating distance
The July 3, 2003 cover feature, Soldiers of Good Fortune by Barry Yeoman for The Independent Weekly makes the following assertions:
"Private military corporations become a way to distance themselves and create what we used to call 'plausible deniability,'" says Daniel Nelson, a former professor of civil-military relations at the
Defense Department's Marshall European Center for Security Studies. "It's disastrous for democracy."
"The lack of oversight alarms some members of Congress. "Under a shroud of secrecy, the United States is carrying out military missions with people who don't have the same level of
accountability," says Rep. Jan Schakowsky (D-Ill.), a leading congressional critic of privatized war. "We have individuals who are not obligated to follow orders or follow the Military Code of
Conduct. Their main obligation is to their employer, not to their country."
"An analysis shows that 17 of the nation's leading private military firms have invested more than $12.4 million in congressional and presidential campaigns since 1999."
"In 2001, according to the most recent federal disclosure forms, 10 private military companies spent more than $32 million on lobbying."
"Federal law bans U.S. soldiers from participating in Colombia's war against left-wing rebels and from training army units with ties to right-wing paramilitaries infamous for torture and political
killings. There are no such restrictions on for-profit companies, though, and since the late 1990s, the United States has paid private military companies an estimated $1.2 billion, both to eradicate
coca crops and to help the Colombian army put down rebels who use the drug trade to finance their insurgency."
"The Pentagon has become so dependent on private military companies that it literally cannot wage war without them. Troops already rely on for-profit contractors to maintain 28 percent of all
weapons systems."
"There are some weapons systems that the U.S. military forces do not have the capability to do their own maintenance on," concedes David Young, a deputy commander at the Defense Contract
Management Agency."
Accountability
Lt. Col. Tim Spicer makes the following remarks in his book, An Unorthodox Soldier: Peace and War and the Sandline Affair:
"Another frequent allegation about PMCs is that they are "not accountable." Not accountable to whom? World opinion? Outside politicians? I can only speak for Sandline, but we are always
accountable, to our own policies and ethos and to our client government, with whom we always have a binding contract."? (pg. 24)
"[T]he majority of legitimate PMCs are quite capable of continuing to operate and grow without the introduction of a regulatory regime. PMCs will accept external regulation if it is manageable
and adds to their commercial aspirations and operational effectiveness. [ ] I would suggest that since PMCs operate in an international setting and in high-risk, volatile situations, the sort of
heavy-handed regulation employed in other areas of public concern might not be entirely appropriate." (pg. 27)
"Any PMC must adhere to the law of armed conflict, as defined by the Geneva Convention, and show a respect for human dignity and human rights. Although our operatives are always enlisted
in the forces of the governments who employ us, not least to ensure a clear chain of command, if one of our people were told, for example, to attack a village, an action which would unnecessarily
endanger innocent lives, he would not do it." (pg. 53)
Trade association view
Doug Brooks, president of the International Peace Operations Association, a representative group for PMCs makes the following statements:
Contrary to various media reports, private security company (PSC) employees in Iraq are not becoming overnight millionaires. Sensational reports of $1500 or even $3500 per day salaries tax
free float around in the media, but the reality is far different. Private security professionals with the highest qualifications and suffering the greatest risk may earn as much as $700 per day, far
below the sensational salaries many experts have been claiming. [16]
Skilled private contractors in Iraq are doing everything from rebuilding the education system and electrical grids to protecting fledgling democracy efforts. It is critical that the industry spearhead
efforts challenging rogue companies and contractors who violate the public trust. [17]
The reality is that every UN or regional peace operation in existence today requires and utilizes the services of the private sector. IPOA members have proven their effectiveness and value in these
operations. [18]
In a globalized economy, all transnational companies, whether their focus is manufacturing, mining, transportation or even security, look for employees with the required skill sets from local,
regional, and international sources. [19]
The current number of innocent persons they killed the other day is now listed as 20. Not one Blackwater employee/mercenary has yet to be punished for anything....one who killed someone else [and was caught] was just moved silently out of Iraq. They have killed thousands...no one knows the number. [and the US Military doesn't count Iraqi dead, remember...they just don't count to the Empire].
Thanks Jack for posting that info. Much in there of interest on those other firms. Peter - I just read this on the BBC site:
http://news.bbc.co.uk/1/hi/world/middle_east/7003760.stm
http://news.bbc.co.uk/1/hi/world/middle_east/7003760.stm
QUOTE (Francesca Akhtar @ Sep 20 2007, 01:05 AM)
Thanks Jack for posting that info. Much in there of interest on those other firms. Peter - I just read this on the BBC site:
http://news.bbc.co.uk/1/hi/world/middle_east/7003760.stm
http://news.bbc.co.uk/1/hi/world/middle_east/7003760.stm
Good update Francesca; thanks for the link.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
QUOTE (Myra Bronstein @ Sep 20 2007, 02:22 AM)
QUOTE (Francesca Akhtar @ Sep 20 2007, 01:05 AM)
Thanks Jack for posting that info. Much in there of interest on those other firms. Peter - I just read this on the BBC site:
http://news.bbc.co.uk/1/hi/world/middle_east/7003760.stm
http://news.bbc.co.uk/1/hi/world/middle_east/7003760.stm
Good update Francesca; thanks for the link.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Is it only me who finds it very strange that when the President, Ambassador or Ms. Rice et al. go to Bagdad to hide in the Green Zone, they are NOT driven and protected by the US Military, but by mercenaries. How much like the SS protecting Hilter and his gang is that?! A lot. Scahill's book Blackwater is a frightening read. This is no normal security service and has very powerful connections!
Political. Military. Religious! Other....a very scary new phenomenon not about to go away soon.
Its all part of privitazation gone mad....even the military? well,....the government already has been.
http://www.blackwaterbook.com/
http://www.truthout.org/docs_2005/091005A.shtml
http://www.thenation.com/doc/20070402/scahill
http://www.npr.org/templates/story/story.php?storyId=8992128
QUOTE (Myra Bronstein @ Sep 20 2007, 01:22 AM)
Good update Francesca; thanks for the link.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Hi Myra, you're welcome. I'd say that description of Blackwater seems very accurate. Out of interest, is this being covered a lot over there? Here it has got quite a lot of coverage on the main news programmes.
QUOTE (Francesca Akhtar @ Sep 20 2007, 08:43 PM)
QUOTE (Myra Bronstein @ Sep 20 2007, 01:22 AM)
Good update Francesca; thanks for the link.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Hi Myra, you're welcome. I'd say that description of Blackwater seems very accurate. Out of interest, is this being covered a lot over there? Here it has got quite a lot of coverage on the main news programmes.
It's being covered moderately I'd say Francesca. It's not being reported at length in depth, but it's not being ignored either.
Then again if they reported on it extensively it'd become more apparent that Iraq is a largely privatized occupation.
It's not something the corporate owned media is eager to spotlight.
You say it's getting a lot of coverage there.
Are they focusing on the aspect of privatization? And on the fact that by using mercenaries the US bypasses all sorts of pesky laws and regulations and rules of engagement?
QUOTE (Myra Bronstein @ Sep 21 2007, 03:07 AM)
QUOTE (Francesca Akhtar @ Sep 20 2007, 08:43 PM)
QUOTE (Myra Bronstein @ Sep 20 2007, 01:22 AM)
Good update Francesca; thanks for the link.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Somewhere in a posted interview the book author said Blackwater was (I paraphrase) the military industrial complex incarnate.
Very true.
Hi Myra, you're welcome. I'd say that description of Blackwater seems very accurate. Out of interest, is this being covered a lot over there? Here it has got quite a lot of coverage on the main news programmes.
It's being covered moderately I'd say Francesca. It's not being reported at length in depth, but it's not being ignored either.
Then again if they reported on it extensively it'd become more apparent that Iraq is a largely privatized occupation.
It's not something the corporate owned media is eager to spotlight.
You say it's getting a lot of coverage there.
Are they focusing on the aspect of privatization? And on the fact that by using mercenaries the US bypasses all sorts of pesky laws and regulations and rules of engagement?
The BBC had as their lead story two days ago and even had an extended interview with Scahill about who/what Blackwater was all about....I doubt anything like that is going on in the USA major media. The problems with Blackwater start with the privatization, but go way beyond that. In Iraq the are part and parcel of the lies the media and government are complicit in.....when Blackwater men are killed they are NOT listed as US dead and when they kill Iraqis [before this] there was simply no mention, any more than snakes killed crossing the highway. There was a heartrending talk on the BBC by a man who survived an attack by Blackwater, but watched the rest of his family killed. It was the kililng of 4 Blackwater men in Falludja that started the genocide in that city by the US - including use of banned weapons such as white phosphorus, and just the murder of anything that moved...men, women and children. I think the Blackwater rules of engagement are along the lines of kill anything Iraqi that moves. In fact Iraqis flee in terror when they see the vehicles with the dark windows speeding by. We're such nice occupy buddies. Our oil - your problem.
Blackwater USA is trying to build a large "training facility" in southeast San Diego county quite near the Mexican border:
http://www.sdreader.com/php/cityshow.php?id=1566
For more information on this, Google potrero blackwater.
______________________________________________
http://www.sdreader.com/php/cityshow.php?id=1566
For more information on this, Google potrero blackwater.
______________________________________________
Privatizing Murder
Email Print Share
Posted on Sep 20, 2007
By Marie Cocco
WASHINGTON—There is no set piece more emblematic of the tragic farce that is the American involvement in Iraq than the grotesque episode of Blackwater USA and the killing of civilians in Baghdad—at least nine and as many as 28—on Sunday.
Everyone has reacted on cue with the usual expressions of outrage or, at minimum, grave diplomatic concern over the fusillade of gunfire that was unleashed against Iraqis who apparently were bystanders to the passing of an American convoy that was being escorted by heavily armed Blackwater security guards.
The Iraqi government said it was pulling the private security firm’s license to operate in the country, and has asked that its contract be severed. But it seems there may not be a license, or if there was, it would have been granted by that wonderment of bureaucratic dysfunction and sectarian passion, the Iraqi Interior Ministry. The U.S. State Department, meanwhile, says it hasn’t been informed that Iraq has “lifted, suspended or terminated” any permit.
No matter. American diplomats now are sequestered in their Green Zone fortress, unable to motor around Iraq without their mercenary guards who have, in the interest of cooling tempers, been temporarily sidelined as investigations proceed. Yet it’s almost without question that, soon enough, some private security contractors will be back in action. They are as crucial to sustaining the American military occupation of Iraq as is the president’s unrepentant refusal to end it.
All the essential elements of governance in the Bush era come together in the Blackwater episode.
The heavy use of private armies—“corporate warriors” is the term used by Brookings Institution expert Peter Singer—helps to hide the initial and catastrophic decision to limit the number of American troops deployed far below what many military experts said was necessary to pacify post-invasion Iraq. Secrecy, another administration hallmark, prevented even the Congressional Research Service from getting a definitive count of the number of private contractors taxpayers support. “The executive branch either has not kept sufficient records to produce or has been unwilling to present basic, accurate information on the companies employed under U.S. government contracts and subcontracts in Iraq,” the researchers reported in July.
Add the odor of political cronyism: Blackwater’s founder, Erik Prince, has deep ties to the Republican Party and conservative religious organizations. He was a Republican congressional aide and briefly an intern in the White House of President George H.W. Bush, according to The News & Observer in Raleigh, N.C. When four Blackwater employees were murdered in Fallujah in 2004, the company turned for public relations and lobbying advice to the Alexander Strategy Group, a now-defunct Republican lobbying firm that was closely linked to former House Majority Leader Tom DeLay.
Meanwhile, the zone of lawlessness the Bush administration created for detainees at Guantanamo Bay, Cuba, for its global network of secret prisons and in its domestic surveillance program extended, as well, to private contractors. Under an order issued by the Coalition Provisional Authority, the American occupation bureaucracy that governed Iraq in the initial months after the invasion, private security contractors are immune from any legal action, including prosecution, that arises from their work. Nor are they subject to U.S. military law as are regular American forces. A law enacted in 2000 that conceivably could cover them hasn’t been tested. Nor, Singer says, has a 2006 effort to bring the private forces under the military justice system been implemented.
And no one—not the White House nor the Pentagon nor, apparently, the State Department—heeded repeated reports of abuse and flagrant violence against Iraqis that have dogged the private security guards for years. “Everybody has known about these problems,” Singer told me in an interview. “They’ve been widely reported.”
The Army’s investigation of the Abu Ghraib prison scandal identified private contractors as responsible for more than a third of abuses and identified six employees as culpable, Singer says. Yet, unlike soldiers who were court-martialed for their crimes at Abu Ghraib, no private contractor has been prosecuted. There even was a “trophy video”—of contractors for one security company shooting at Iraqi civilians—that the guards themselves posted on the Internet.
We have reached the inevitable moment of anger and recrimination. In keeping with the administration’s overarching philosophy that private business is always better—at everything—than government, we have privatized the most elemental government function of waging war. Now we will pay dearly for this folly.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
© 2007, Washington Post Writers Group
Email Print Share
Posted on Sep 20, 2007
By Marie Cocco
WASHINGTON—There is no set piece more emblematic of the tragic farce that is the American involvement in Iraq than the grotesque episode of Blackwater USA and the killing of civilians in Baghdad—at least nine and as many as 28—on Sunday.
Everyone has reacted on cue with the usual expressions of outrage or, at minimum, grave diplomatic concern over the fusillade of gunfire that was unleashed against Iraqis who apparently were bystanders to the passing of an American convoy that was being escorted by heavily armed Blackwater security guards.
The Iraqi government said it was pulling the private security firm’s license to operate in the country, and has asked that its contract be severed. But it seems there may not be a license, or if there was, it would have been granted by that wonderment of bureaucratic dysfunction and sectarian passion, the Iraqi Interior Ministry. The U.S. State Department, meanwhile, says it hasn’t been informed that Iraq has “lifted, suspended or terminated” any permit.
No matter. American diplomats now are sequestered in their Green Zone fortress, unable to motor around Iraq without their mercenary guards who have, in the interest of cooling tempers, been temporarily sidelined as investigations proceed. Yet it’s almost without question that, soon enough, some private security contractors will be back in action. They are as crucial to sustaining the American military occupation of Iraq as is the president’s unrepentant refusal to end it.
All the essential elements of governance in the Bush era come together in the Blackwater episode.
The heavy use of private armies—“corporate warriors” is the term used by Brookings Institution expert Peter Singer—helps to hide the initial and catastrophic decision to limit the number of American troops deployed far below what many military experts said was necessary to pacify post-invasion Iraq. Secrecy, another administration hallmark, prevented even the Congressional Research Service from getting a definitive count of the number of private contractors taxpayers support. “The executive branch either has not kept sufficient records to produce or has been unwilling to present basic, accurate information on the companies employed under U.S. government contracts and subcontracts in Iraq,” the researchers reported in July.
Add the odor of political cronyism: Blackwater’s founder, Erik Prince, has deep ties to the Republican Party and conservative religious organizations. He was a Republican congressional aide and briefly an intern in the White House of President George H.W. Bush, according to The News & Observer in Raleigh, N.C. When four Blackwater employees were murdered in Fallujah in 2004, the company turned for public relations and lobbying advice to the Alexander Strategy Group, a now-defunct Republican lobbying firm that was closely linked to former House Majority Leader Tom DeLay.
Meanwhile, the zone of lawlessness the Bush administration created for detainees at Guantanamo Bay, Cuba, for its global network of secret prisons and in its domestic surveillance program extended, as well, to private contractors. Under an order issued by the Coalition Provisional Authority, the American occupation bureaucracy that governed Iraq in the initial months after the invasion, private security contractors are immune from any legal action, including prosecution, that arises from their work. Nor are they subject to U.S. military law as are regular American forces. A law enacted in 2000 that conceivably could cover them hasn’t been tested. Nor, Singer says, has a 2006 effort to bring the private forces under the military justice system been implemented.
And no one—not the White House nor the Pentagon nor, apparently, the State Department—heeded repeated reports of abuse and flagrant violence against Iraqis that have dogged the private security guards for years. “Everybody has known about these problems,” Singer told me in an interview. “They’ve been widely reported.”
The Army’s investigation of the Abu Ghraib prison scandal identified private contractors as responsible for more than a third of abuses and identified six employees as culpable, Singer says. Yet, unlike soldiers who were court-martialed for their crimes at Abu Ghraib, no private contractor has been prosecuted. There even was a “trophy video”—of contractors for one security company shooting at Iraqi civilians—that the guards themselves posted on the Internet.
We have reached the inevitable moment of anger and recrimination. In keeping with the administration’s overarching philosophy that private business is always better—at everything—than government, we have privatized the most elemental government function of waging war. Now we will pay dearly for this folly.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
© 2007, Washington Post Writers Group
QUOTE (Thomas Graves @ Sep 21 2007, 05:27 PM)
Blackwater USA is trying to build a large "training facility" in southeast San Diego county quite near the Mexican border:
http://www.sdreader.com/php/cityshow.php?id=1566
For more information on this, Google potrero blackwater.
______________________________________________
http://www.sdreader.com/php/cityshow.php?id=1566
For more information on this, Google potrero blackwater.
______________________________________________
partially deleted, bumped
QUOTE (Peter Lemkin @ Sep 21 2007, 07:25 AM)
.....when Blackwater men are killed they are NOT listed as US dead and when they kill Iraqis [before this] their was simply no mention, any more than snakes killed crossing the highway. ...
Very good point Peter.
They're just disappeared.
Helps the Big Bad cook the books.
http://www.cnn.com/2007/WORLD/meast/09/23/...robe/index.html
"The Iraqi government will file criminal charges against employees of U.S. security firm Blackwater who are blamed for a gun battle in Baghdad in which civilians were killed, an Iraqi Interior Ministry official said Sunday.
It is unclear how Iraqi courts will attempt to bring the contractors to trial. A July report from the Congressional Research Service said the Iraqi government has no authority over private security firms contracted by the U.S. government.
The Iraqi government claims that as many as 20 civilians were killed by the private contractors, who were guarding a U.S. diplomatic convoy.
Iraqi officials, who claim the shootings were unprovoked, dispute the U.S. claim that the guards were responding to an attack and said on Saturday they had a videotape that showed the Blackwater guards opened fire without provocation.
The incident prompted the Iraqi government to call for Blackwater's expulsion from the country and sparked anger among ordinary Iraqis.
...
Blackwater USA security resumed its normal operations in Iraq on Friday after a hiatus sparked by concerns among Iraqi and U.S. government officials over last weekend's shooting.
Sheikhly said the Iraqi government has allowed Blackwater to again operate in the streets of Iraq, because otherwise U.S. troops would have to be pulled from the field to provide security, creating a security imbalance."
Wow, they're going so far as to stage a kangaroo court.
I wonder which PR company will get the big contract from Blackwater.
"The Iraqi government will file criminal charges against employees of U.S. security firm Blackwater who are blamed for a gun battle in Baghdad in which civilians were killed, an Iraqi Interior Ministry official said Sunday.
It is unclear how Iraqi courts will attempt to bring the contractors to trial. A July report from the Congressional Research Service said the Iraqi government has no authority over private security firms contracted by the U.S. government.
The Iraqi government claims that as many as 20 civilians were killed by the private contractors, who were guarding a U.S. diplomatic convoy.
Iraqi officials, who claim the shootings were unprovoked, dispute the U.S. claim that the guards were responding to an attack and said on Saturday they had a videotape that showed the Blackwater guards opened fire without provocation.
The incident prompted the Iraqi government to call for Blackwater's expulsion from the country and sparked anger among ordinary Iraqis.
...
Blackwater USA security resumed its normal operations in Iraq on Friday after a hiatus sparked by concerns among Iraqi and U.S. government officials over last weekend's shooting.
Sheikhly said the Iraqi government has allowed Blackwater to again operate in the streets of Iraq, because otherwise U.S. troops would have to be pulled from the field to provide security, creating a security imbalance."
Wow, they're going so far as to stage a kangaroo court.
I wonder which PR company will get the big contract from Blackwater.
Blackwater was set up 11 years ago by Erik Prince, a reclusive right-wing Christian billionaire. After 9/11 Blackwater moved swiftly into corporate and other forms of security, and in 2003 won a State Department contract to provide bodyguards for Paul Bremer. As further contracts followed, Blackwater assumed effective charge of large areas of Baghdad.
Blackwater is among the most prominent of dozens of American security firms earning millions of dollars by conducting war zone operations previously the preserve of national armies. Like US and British troops, they are not subject to the jurisdiction of Iraqi courts. Nor are they subject to courts martial either. In other words, they are effectively immune from prosecution.
Blackwater is among the most prominent of dozens of American security firms earning millions of dollars by conducting war zone operations previously the preserve of national armies. Like US and British troops, they are not subject to the jurisdiction of Iraqi courts. Nor are they subject to courts martial either. In other words, they are effectively immune from prosecution.
QUOTE (John Simkin @ Sep 24 2007, 07:46 PM)
Blackwater was set up 11 years ago by Erik Prince, a reclusive right-wing Christian billionaire. After 9/11 Blackwater moved swiftly into corporate and other forms of security, and in 2003 won a State Department contract to provide bodyguards for Paul Bremer. As further contracts followed, Blackwater assumed effective charge of large areas of Baghdad.
Blackwater is among the most prominent of dozens of American security firms earning millions of dollars by conducting war zone operations previously the preserve of national armies. Like US and British troops, they are not subject to the jurisdiction of Iraqi courts. Nor are they subject to courts martial either. In other words, they are effectively immune from prosecution.
Blackwater is among the most prominent of dozens of American security firms earning millions of dollars by conducting war zone operations previously the preserve of national armies. Like US and British troops, they are not subject to the jurisdiction of Iraqi courts. Nor are they subject to courts martial either. In other words, they are effectively immune from prosecution.
Great way to run a world gone mad! No accountability for armed murder and mayham. Not in the country you occupy and shoot-up the people in, and not your native land. I wonder if the World Court would take a stab at them...pun intended.
These murderous creeps make up to $1000/day....and a license to kill with impunity and immunity. They hate us for our freedoms, and setting such a nice example. The American Government is well on its way toward becoming the most hated and feared country since the German Reich. We still have some residual goodwill, but it is dissolving FAST! Thank goodness, many still understand the Government is not the same as the American People.
Probe: Blackwater USA Negligent in Fallujah Deaths
A Congressional investigation has issued a scathing criticism of the private military firm Blackwater USA around the March 2004 mission that saw four of its guards killed and led to a major escalation of the Iraq war. The House Oversight committee says Blackwater sent the guards into the insurgent stronghold of Fallujah unprepared and lacking proper security. The guards were killed, two of their bodies strung over a bridge. The U.S. military responded with devastating attacks on Fallujah that virtually destroyed much of the city, killed thousands and displaced many more. The House oversight committee also says Blackwater officials then impeded Congrssional efforts to investigate. The families of the four slain guards have launched a civil suit against Blackwater for alleged negligence in their deaths. Donna Zovko lost her son “Jerry” Zovko in the Fallujah incident. She said: “Congress can’t change anything for my son… But let’s see what they can do for the others out there because someone needs to care for these contractors. Blackwater cares about nothing but the mighty dollar.”
Blackwater Victims Include 4 Media Workers
Meanwhile more details have emerged on other killings linked to Blackwater forces aside from last week’s mass shooting in Baghdad. McClatchy Newspapers reports the victims include four media workers killed over the past year. In February, Blackwater guards shot and killed Al Atyaf television reporter Suhad Shakir as she was driving to work. Five days later, three Iraqi security guards were killed at the offices of the state-funded Iraqi Media Network, also known as Iraqiya.The three were picked off by Blackwater snipers on the opposite street. An Interior Ministry official says the guards were killed as if they were “target practice.”
From: www.democracynow.org for today Sept, 28, 2007
A Congressional investigation has issued a scathing criticism of the private military firm Blackwater USA around the March 2004 mission that saw four of its guards killed and led to a major escalation of the Iraq war. The House Oversight committee says Blackwater sent the guards into the insurgent stronghold of Fallujah unprepared and lacking proper security. The guards were killed, two of their bodies strung over a bridge. The U.S. military responded with devastating attacks on Fallujah that virtually destroyed much of the city, killed thousands and displaced many more. The House oversight committee also says Blackwater officials then impeded Congrssional efforts to investigate. The families of the four slain guards have launched a civil suit against Blackwater for alleged negligence in their deaths. Donna Zovko lost her son “Jerry” Zovko in the Fallujah incident. She said: “Congress can’t change anything for my son… But let’s see what they can do for the others out there because someone needs to care for these contractors. Blackwater cares about nothing but the mighty dollar.”
Blackwater Victims Include 4 Media Workers
Meanwhile more details have emerged on other killings linked to Blackwater forces aside from last week’s mass shooting in Baghdad. McClatchy Newspapers reports the victims include four media workers killed over the past year. In February, Blackwater guards shot and killed Al Atyaf television reporter Suhad Shakir as she was driving to work. Five days later, three Iraqi security guards were killed at the offices of the state-funded Iraqi Media Network, also known as Iraqiya.The three were picked off by Blackwater snipers on the opposite street. An Interior Ministry official says the guards were killed as if they were “target practice.”
From: www.democracynow.org for today Sept, 28, 2007
Blackwater Receives New $92 Million Pentagon Contract
Blackwater has received a new $92 million contract from the Pentagon to fly passengers and cargo between locations around central Asia. The contract was announced at a time when Blackwater is the target of several investigations over its role in Iraq following a deadly shooting in Baghdad two weeks ago that left at least 11 Iraqis dead. Newsweek has obtained an extensive evidence file assembled by the Iraqi National Police after the Sept. 16 shooting. Iraqi officials concluded Blackwater forces opened fire unprovoked from the ground and the sky.
Blackwater has received a new $92 million contract from the Pentagon to fly passengers and cargo between locations around central Asia. The contract was announced at a time when Blackwater is the target of several investigations over its role in Iraq following a deadly shooting in Baghdad two weeks ago that left at least 11 Iraqis dead. Newsweek has obtained an extensive evidence file assembled by the Iraqi National Police after the Sept. 16 shooting. Iraqi officials concluded Blackwater forces opened fire unprovoked from the ground and the sky.
QUOTE (John Simkin @ Sep 24 2007, 06:46 PM)
Blackwater was set up 11 years ago by Erik Prince, a reclusive right-wing Christian billionaire. After 9/11 Blackwater moved swiftly into corporate and other forms of security, and in 2003 won a State Department contract to provide bodyguards for Paul Bremer. As further contracts followed, Blackwater assumed effective charge of large areas of Baghdad.
Blackwater is among the most prominent of dozens of American security firms earning millions of dollars by conducting war zone operations previously the preserve of national armies. Like US and British troops, they are not subject to the jurisdiction of Iraqi courts. Nor are they subject to courts martial either. In other words, they are effectively immune from prosecution.
Blackwater is among the most prominent of dozens of American security firms earning millions of dollars by conducting war zone operations previously the preserve of national armies. Like US and British troops, they are not subject to the jurisdiction of Iraqi courts. Nor are they subject to courts martial either. In other words, they are effectively immune from prosecution.
When U.S. CENTCOM Commander Adml. William Fallon was questioned by the Senate committee that approved his nomination, he was asked about private defense contractors in the war zone, but replied that he was not familiar enough with the issue to comment. I would think that now, six months on the job, he knows there's a problem.
Today (Tuesday), the Waxman House Oversight Committee is holding hearings on the issue and the head of Blackwater is testifying before the same committee that is neglegent, err responsible for oversight of the JFK Act.
Those who can watch the hearings live or taped on CSPAN or on the Committee's web site, can get an idea of who is on this committee and a sense of their character, and possibly be stimulated to contact them, especially if they are constituents of a committee member, and ask them about oversight hearings on the JFK Act.
These hearings, not previously scheduled or announced, show how quickly this committee can decide to hold hearings on important and newsworthy topics, and that we may have to drum up media support for JFK oversight hearings before they are held.
It appears they only act on intense public and media pressure.
http://us.f605.mail.yahoo.com/ym/ShowLette...=&box=Inbox
BK
This Morning: Hearing on Blackwater USA’s Mission and Performance in Iraq and Afghanistan
This morning at 10:00 a.m., the Oversight Committee is holding a hearing to examine the mission and performance of private military contractor Blackwater USA in Iraq and Afghanistan. Erik Prince, the owner of Blackwater, will testify as well as three State Department officials.
The hearing will provide members the opportunity to address three key questions: (1) Is Blackwater’s presence advancing or undermining U.S. efforts? (2) Has State Department responded appropriately to the shooting incidents involving Blackwater forces? (3) What are the costs to U.S. taxpayers for the reliance on Blackwater and other private military contractors?
A live video of the hearing will be available at www.oversight.house.gov beginning at 9:45 a.m. Archived video will become available this afternoon.
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QUOTE (Peter Lemkin @ Oct 1 2007, 09:41 AM)
Blackwater Receives New $92 Million Pentagon Contract
Blackwater has received a new $92 million contract from the Pentagon to fly passengers and cargo between locations around central Asia.
Blackwater has received a new $92 million contract from the Pentagon to fly passengers and cargo between locations around central Asia.
Peter, the "Area of Responsibility" for Blackwater in this contract is Kyrgyzstan,
Uzbekistan, Afghanistan, and Pakistan.
Let's put this in the context of the following:
http://www.villagevoice.com/blogs/bushbeat...kwaters_dru.php
Blackwater USA, under investigation for murder and arms smuggling in Iraq, lands
contracts for "drug interdiction," and for transportation of cargo and personnel
around the area where 90% of the world's heroin is produced.
Most heroin used in the United States comes from Latin America.
The ever-growing bumper crop of Afghani heroin may well be targeted for
"interdiction" by the very company most capable of smuggling it into the
United States.
I guess Erik Prince is like Richard Helms -- we just have to take their word
that they're honorable men.
QUOTE (Cliff Varnell @ Oct 3 2007, 04:03 AM)
QUOTE (Peter Lemkin @ Oct 1 2007, 09:41 AM)
Blackwater Receives New $92 Million Pentagon Contract
Blackwater has received a new $92 million contract from the Pentagon to fly passengers and cargo between locations around central Asia.
Blackwater has received a new $92 million contract from the Pentagon to fly passengers and cargo between locations around central Asia.
Peter, the "Area of Responsibility" for Blackwater in this contract is Kyrgyzstan,
Uzbekistan, Afghanistan, and Pakistan.
Let's put this in the context of the following:
http://www.villagevoice.com/blogs/bushbeat...kwaters_dru.php
Blackwater USA, under investigation for murder and arms smuggling in Iraq, lands
contracts for "drug interdiction," and for transportation of cargo and personnel
around the area where 90% of the world's heroin is produced.
Most heroin used in the United States comes from Latin America.
The ever-growing bumper crop of Afghani heroin may well be targeted for
"interdiction" by the very company most capable of smuggling it into the
United States.
I guess Erik Prince is like Richard Helms -- we just have to take their word
that they're honorable men.
Flying drugs and illegal arms, maybe, interdiction - unlikely, but I know you said it tongue in cheek. I'm trying to get Prince's testimony. I heard only a small snippet so far. At least they put him under oath....The part I heard he was defending every killing Blackwater members had done as in 'defense', yeah right!....our whole presence in Iraq is offensive and Blackwater the most offensive of the lot. They were even responsible for a few deaths in New Orleans. There have always been mercenaries, but other than the French Foreign Legion, I can't remember any government hiring them officially - it is usually under the table as cut-outs as during Iran-Contra or the anti-Cuba operations.
The 'Prince' speaks power to truth on www.democracynow.org Oct 3,2007
AMY GOODMAN: Mr. Prince goes to Washington. That's right, Erik Prince, founder and chair of Blackwater USA, testified before Congress Tuesday in his first extended public appearance. Prince was called before the House Committee on Oversight and Government Reform amidst a public firestorm over the role of private military firms operating in Iraq and a string of probes into Blackwater’s conduct.
Blackwater has come under heavy scrutiny since an attack last month in Baghdad in which between eleven and twenty-eight Iraqis were killed. Although the incident triggered Tuesday's hearing, the committee agreed not to discuss specifics of the attack, following a Justice Department request that it wait until an FBI investigation is concluded.
California Democrat Henry Waxman chaired the committee. His staff produced a scathing report Monday detailing Blackwater's activities in Iraq. In his opening comments, Waxman summarized some of the report's findings.
REP. HENRY WAXMAN: New documents indicate that there have been a total of 195 shooting incidents involving Blackwater forces since 2005. Blackwater’s contract says the company is hired to provide defensive services. But in most of these incidents, it was Blackwater forces who fired first. We have also learned that 122 Blackwater employees, one-seventh of the company’s current workforce in Iraq, have been terminated for improper conduct.
We have the best troops in the world. The men and women in our armed forces are extraordinarily able and dedicated. Their pay does not reflect their value, but they don’t complain. So I have a high bar when I ask whether Blackwater and other private military contractors can meet the performance standards of our soldiers.
In recent days, military leaders have said that Blackwater's missteps in Iraq are going to hurt us badly. One senior US military official said Blackwater’s actions are creating resentment among Iraqis that "may be worse than Abu Ghraib." If these observations are true, they mean that our reliance on a private military contractor is backfiring.
AMY GOODMAN: Henry Waxman, Chair of the House Oversight Committee. During Tuesday’s hearing, Blackwater chief executive, Erik Prince, was questioned repeatedly about the killing of civilians in Iraq. This is Illinois Democrat, Danny Davis.
REP. DANNY DAVIS: You do admit that Blackwater personnel have shot and killed innocent civilians, don't you?
ERIK PRINCE: No, sir. I disagree with that. I think there has been times when guys are using defensive force to protect themselves, to protect the packages, trying to get away from danger. There could be ricochets. There are traffic accidents. Yes, this is war.
You know, since 2005, we’ve conducted in excess of 16,000 missions in Iraq and 195 incidents with weapons discharge. In that time, did a ricochet hurt or kill an innocent person? That’s entirely possibly. Again, we do not have the luxury of staying behind to do that terrorist crime scene investigation to figure out what happened.
AMY GOODMAN: House committee Republicans defended Blackwater during the hearing, arguing private security firms are a necessary part of wars in Iraq and Afghanistan. This is North Carolina Republican Patrick McHenry.
REP. PATRICK McHENRY: Mr. Prince, can you describe to the committee the nature of your contract, who your client is in Iraq?
ERIK PRINCE: In Iraq, we work for the Department of State.
REP. PATRICK McHENRY: And what is the service you provide for the Department of State?
ERIK PRINCE: We operate under the Worldwide Personal Protective Services contract, and we are charged with protecting diplomats, reconstruction officials, and visiting “codels,” members of Congress and their staffs.
REP. PATRICK McHENRY: And in the last -- since -- in this calendar year, how many missions have you had in Iraq?
ERIK PRINCE: 1,873.
REP. PATRICK McHENRY: How many incidents occurred during those 1,873 movements?
ERIK PRINCE: Only fifty-six incidents.
REP. PATRICK McHENRY: Alright. And a movement is a -- for instance, you take -- a member of Congress lands at the air strip; they’re transported to the embassy. That’s one movement, is that?
ERIK PRINCE: Yes, sir.
REP. PATRICK McHENRY: Alright. And fifty-six incidents out of 1,873 moments in a war zone, is that correct?
ERIK PRINCE: Resulted in the discharge of one of our guys’ weapons.
REP. PATRICK McHENRY: Which -- those fifty-six incidents, does that mean that they shot at someone? Describe what an incident is.
ERIK PRINCE: Yes. We don’t even record all the times that our guys receive fire. The vehicles get shot at on a daily basis, multiple times a day. So that’s not something we even record. In this case, an incident is a defensive measure. You’re responding to an IED attack, followed by small arms fire. Most of the attacks we get in Iraq are complex, meaning it’s not just one bad thing, it’s a host of bad things: a car bomb followed by a small arms attack, RPGs followed by sniper fire. An incident occurs typically when our men fear for their life, they’re not able to extract themselves from the situation. They have to use sufficient defensive fire to get off the axe, to get off that place where the bad guys have tried to kill Americans that day.
AMY GOODMAN: Erik Prince, Blackwater founder and chair, questioned by North Carolina Republican Patrick McHenry. The issue of the privatization of war was raised by several committee Democrats. This is California Congressmember Diane Watson.
REP. DIANE WATSON: I am really concerned when it comes to privatizing the various struggles that we are having in a war zone. And I’m looking at a book here that says Blackwater: The Rise of the World's Most Powerful Mercenary Army. That is really disturbing to me.
AMY GOODMAN: Jeremy Scahill is the author of that book, the New York Times bestseller, Blackwater: The Rise of the World's Most Powerful Mercenary Army. He attended yesterday’s hearing, joins us from Washington, D.C. Welcome to Democracy Now!, Jeremy.
JEREMY SCAHILL: Thanks, Amy.
AMY GOODMAN: Can you set the scene for us?
JEREMY SCAHILL: Well, Erik Prince is a man who has never held a press conference. He’s only known to have given one television interview, and that was on Fox News shortly after 9/11. He’s a guy whose company has gone after people, reporters, journalists, who have taken his photo. This is a man who’s incredibly secretive and has tried to avoid having his face in the public spotlight. In fact, the last time he was invited to testify in front of the Congress, it was in February, and instead of showing up himself, he dispatched his lawyer Andrew Howell. So this was a major day, where you see the mercenary king of the United States appearing not just before Congress, but before the cameras of the world. He certainly was uneasy having to do that, but he probably faced a choice himself, and that was to either show up on his own volition or to face a subpoena, where he would have been required to show up.
When Erik Prince stepped into the room, he was mobbed by photographers, and he came in, not with an army of armed mercenaries, but with an army of lawyers and advisers. And one of the people with him was Barbara Comstock, who’s a well-known Republican operative and a crisis management consultant. Blackwater had the first and second rows basically empty behind Mr. Prince, with the exception of his team of advisers and his consiglieri, and an unidentified man on several occasions during the course of the hearing himself interrupted the hearings and asked Henry Waxman to be able to consult with Prince. And then, what would result from that is that Erik Prince would turn around, and his advisers and lawyers would pile around him like a sports team plotting out their next play. It was very dramatic.
And I think that the issue here is that the Democrats really, I feel, dropped the ball on many of the most important issues surrounding Blackwater. Yes, there were some important questions raised. But for the most part, they steered away from some of the most devastating and violent incidents involving the company. The ambush at Fallujah in March of 2004, for instance, wasn’t addressed at all, except in passing. And there were a number of family members of the four Blackwater operatives who were killed in that incident. That’s a crucial one for the Congress to investigate, not only because of the allegations that Blackwater sent those four men into Fallujah in unarmored vehicles, short two men, and without heavy weapons, but because of the enormous price that Iraqi civilians paid for the deaths of those four corporate employees, the Bush administration ordering the leveling of Fallujah and, of course, the inflammation of the Iraqi resistance. There are a number of other incidents that never came up in the hearing.
I think that what needs to happen is that Erik Prince needs to become a more frequent visitor to Capitol Hill than his industry lobbyists have been over the past several years, and his visits should always begin with his right hand raised and cameras in front of him.
AMY GOODMAN: Jeremy, the Fallujah attack that killed the four Blackwater employees, we have rarely heard in the corporate media that, in fact, Blackwater is being sued by the families of those Blackwater employees.
JEREMY SCAHILL: That’s right. And Henry Waxman's committee last week released a devastating study that essentially said that Blackwater was responsible for what happened that day, by sending the men out ill-prepared into what was arguably the most dangerous city in the world.
And the lawsuit of those four families basically boils down to this: they say that they tried, after that incident, to get information from Blackwater as to how their loved ones ended up in that city undermanned, under-armed and in these softskin vehicles, as is the term in the industry. And they say that only after months of stonewalling by Blackwater and being told that if they wanted to see the company's report on the incident that they would have to sue, that they did just that. And so, in January of 2005, they filed this lawsuit against Blackwater, charging that the company was responsible for the deaths.
I, myself, went to a mercenary conference last summer and ran into Erik Prince, and I tried to question him on some of the decisions that were made surrounding that mission. I tried to ask him why those men were there, not in armored vehicles, in a city where the US military wouldn’t even go in, not to mention without armored vehicles, and why he has refused to answer the questions of those families. He wouldn’t answer my questions at the American Enterprise Institute. And I found it quite disturbing that not a single member of Congress, when they had Erik Prince under oath, asked him about that, as well.
AMY GOODMAN: Jeremy, we’re going to come back to this discussion. I want to ask you about the first government report on the September 16th attack, now, it turns out, written by a Blackwater contractor. Jeremy Scahill is our guest, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. We'll be back with him in a minute.
AMY GOODMAN: Mr. Prince goes to Washington. That's right, Erik Prince, founder and chair of Blackwater USA, testified before Congress Tuesday in his first extended public appearance. Prince was called before the House Committee on Oversight and Government Reform amidst a public firestorm over the role of private military firms operating in Iraq and a string of probes into Blackwater’s conduct.
Blackwater has come under heavy scrutiny since an attack last month in Baghdad in which between eleven and twenty-eight Iraqis were killed. Although the incident triggered Tuesday's hearing, the committee agreed not to discuss specifics of the attack, following a Justice Department request that it wait until an FBI investigation is concluded.
California Democrat Henry Waxman chaired the committee. His staff produced a scathing report Monday detailing Blackwater's activities in Iraq. In his opening comments, Waxman summarized some of the report's findings.
REP. HENRY WAXMAN: New documents indicate that there have been a total of 195 shooting incidents involving Blackwater forces since 2005. Blackwater’s contract says the company is hired to provide defensive services. But in most of these incidents, it was Blackwater forces who fired first. We have also learned that 122 Blackwater employees, one-seventh of the company’s current workforce in Iraq, have been terminated for improper conduct.
We have the best troops in the world. The men and women in our armed forces are extraordinarily able and dedicated. Their pay does not reflect their value, but they don’t complain. So I have a high bar when I ask whether Blackwater and other private military contractors can meet the performance standards of our soldiers.
In recent days, military leaders have said that Blackwater's missteps in Iraq are going to hurt us badly. One senior US military official said Blackwater’s actions are creating resentment among Iraqis that "may be worse than Abu Ghraib." If these observations are true, they mean that our reliance on a private military contractor is backfiring.
AMY GOODMAN: Henry Waxman, Chair of the House Oversight Committee. During Tuesday’s hearing, Blackwater chief executive, Erik Prince, was questioned repeatedly about the killing of civilians in Iraq. This is Illinois Democrat, Danny Davis.
REP. DANNY DAVIS: You do admit that Blackwater personnel have shot and killed innocent civilians, don't you?
ERIK PRINCE: No, sir. I disagree with that. I think there has been times when guys are using defensive force to protect themselves, to protect the packages, trying to get away from danger. There could be ricochets. There are traffic accidents. Yes, this is war.
You know, since 2005, we’ve conducted in excess of 16,000 missions in Iraq and 195 incidents with weapons discharge. In that time, did a ricochet hurt or kill an innocent person? That’s entirely possibly. Again, we do not have the luxury of staying behind to do that terrorist crime scene investigation to figure out what happened.
AMY GOODMAN: House committee Republicans defended Blackwater during the hearing, arguing private security firms are a necessary part of wars in Iraq and Afghanistan. This is North Carolina Republican Patrick McHenry.
REP. PATRICK McHENRY: Mr. Prince, can you describe to the committee the nature of your contract, who your client is in Iraq?
ERIK PRINCE: In Iraq, we work for the Department of State.
REP. PATRICK McHENRY: And what is the service you provide for the Department of State?
ERIK PRINCE: We operate under the Worldwide Personal Protective Services contract, and we are charged with protecting diplomats, reconstruction officials, and visiting “codels,” members of Congress and their staffs.
REP. PATRICK McHENRY: And in the last -- since -- in this calendar year, how many missions have you had in Iraq?
ERIK PRINCE: 1,873.
REP. PATRICK McHENRY: How many incidents occurred during those 1,873 movements?
ERIK PRINCE: Only fifty-six incidents.
REP. PATRICK McHENRY: Alright. And a movement is a -- for instance, you take -- a member of Congress lands at the air strip; they’re transported to the embassy. That’s one movement, is that?
ERIK PRINCE: Yes, sir.
REP. PATRICK McHENRY: Alright. And fifty-six incidents out of 1,873 moments in a war zone, is that correct?
ERIK PRINCE: Resulted in the discharge of one of our guys’ weapons.
REP. PATRICK McHENRY: Which -- those fifty-six incidents, does that mean that they shot at someone? Describe what an incident is.
ERIK PRINCE: Yes. We don’t even record all the times that our guys receive fire. The vehicles get shot at on a daily basis, multiple times a day. So that’s not something we even record. In this case, an incident is a defensive measure. You’re responding to an IED attack, followed by small arms fire. Most of the attacks we get in Iraq are complex, meaning it’s not just one bad thing, it’s a host of bad things: a car bomb followed by a small arms attack, RPGs followed by sniper fire. An incident occurs typically when our men fear for their life, they’re not able to extract themselves from the situation. They have to use sufficient defensive fire to get off the axe, to get off that place where the bad guys have tried to kill Americans that day.
AMY GOODMAN: Erik Prince, Blackwater founder and chair, questioned by North Carolina Republican Patrick McHenry. The issue of the privatization of war was raised by several committee Democrats. This is California Congressmember Diane Watson.
REP. DIANE WATSON: I am really concerned when it comes to privatizing the various struggles that we are having in a war zone. And I’m looking at a book here that says Blackwater: The Rise of the World's Most Powerful Mercenary Army. That is really disturbing to me.
AMY GOODMAN: Jeremy Scahill is the author of that book, the New York Times bestseller, Blackwater: The Rise of the World's Most Powerful Mercenary Army. He attended yesterday’s hearing, joins us from Washington, D.C. Welcome to Democracy Now!, Jeremy.
JEREMY SCAHILL: Thanks, Amy.
AMY GOODMAN: Can you set the scene for us?
JEREMY SCAHILL: Well, Erik Prince is a man who has never held a press conference. He’s only known to have given one television interview, and that was on Fox News shortly after 9/11. He’s a guy whose company has gone after people, reporters, journalists, who have taken his photo. This is a man who’s incredibly secretive and has tried to avoid having his face in the public spotlight. In fact, the last time he was invited to testify in front of the Congress, it was in February, and instead of showing up himself, he dispatched his lawyer Andrew Howell. So this was a major day, where you see the mercenary king of the United States appearing not just before Congress, but before the cameras of the world. He certainly was uneasy having to do that, but he probably faced a choice himself, and that was to either show up on his own volition or to face a subpoena, where he would have been required to show up.
When Erik Prince stepped into the room, he was mobbed by photographers, and he came in, not with an army of armed mercenaries, but with an army of lawyers and advisers. And one of the people with him was Barbara Comstock, who’s a well-known Republican operative and a crisis management consultant. Blackwater had the first and second rows basically empty behind Mr. Prince, with the exception of his team of advisers and his consiglieri, and an unidentified man on several occasions during the course of the hearing himself interrupted the hearings and asked Henry Waxman to be able to consult with Prince. And then, what would result from that is that Erik Prince would turn around, and his advisers and lawyers would pile around him like a sports team plotting out their next play. It was very dramatic.
And I think that the issue here is that the Democrats really, I feel, dropped the ball on many of the most important issues surrounding Blackwater. Yes, there were some important questions raised. But for the most part, they steered away from some of the most devastating and violent incidents involving the company. The ambush at Fallujah in March of 2004, for instance, wasn’t addressed at all, except in passing. And there were a number of family members of the four Blackwater operatives who were killed in that incident. That’s a crucial one for the Congress to investigate, not only because of the allegations that Blackwater sent those four men into Fallujah in unarmored vehicles, short two men, and without heavy weapons, but because of the enormous price that Iraqi civilians paid for the deaths of those four corporate employees, the Bush administration ordering the leveling of Fallujah and, of course, the inflammation of the Iraqi resistance. There are a number of other incidents that never came up in the hearing.
I think that what needs to happen is that Erik Prince needs to become a more frequent visitor to Capitol Hill than his industry lobbyists have been over the past several years, and his visits should always begin with his right hand raised and cameras in front of him.
AMY GOODMAN: Jeremy, the Fallujah attack that killed the four Blackwater employees, we have rarely heard in the corporate media that, in fact, Blackwater is being sued by the families of those Blackwater employees.
JEREMY SCAHILL: That’s right. And Henry Waxman's committee last week released a devastating study that essentially said that Blackwater was responsible for what happened that day, by sending the men out ill-prepared into what was arguably the most dangerous city in the world.
And the lawsuit of those four families basically boils down to this: they say that they tried, after that incident, to get information from Blackwater as to how their loved ones ended up in that city undermanned, under-armed and in these softskin vehicles, as is the term in the industry. And they say that only after months of stonewalling by Blackwater and being told that if they wanted to see the company's report on the incident that they would have to sue, that they did just that. And so, in January of 2005, they filed this lawsuit against Blackwater, charging that the company was responsible for the deaths.
I, myself, went to a mercenary conference last summer and ran into Erik Prince, and I tried to question him on some of the decisions that were made surrounding that mission. I tried to ask him why those men were there, not in armored vehicles, in a city where the US military wouldn’t even go in, not to mention without armored vehicles, and why he has refused to answer the questions of those families. He wouldn’t answer my questions at the American Enterprise Institute. And I found it quite disturbing that not a single member of Congress, when they had Erik Prince under oath, asked him about that, as well.
AMY GOODMAN: Jeremy, we’re going to come back to this discussion. I want to ask you about the first government report on the September 16th attack, now, it turns out, written by a Blackwater contractor. Jeremy Scahill is our guest, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. We'll be back with him in a minute.
The 'Prince' speaks power to truth on www.democracynow.org Oct 3,2007
AMY GOODMAN: Mr. Prince goes to Washington. That's right, Erik Prince, founder and chair of Blackwater USA, testified before Congress Tuesday in his first extended public appearance. Prince was called before the House Committee on Oversight and Government Reform amidst a public firestorm over the role of private military firms operating in Iraq and a string of probes into Blackwater’s conduct.
Blackwater has come under heavy scrutiny since an attack last month in Baghdad in which between eleven and twenty-eight Iraqis were killed. Although the incident triggered Tuesday's hearing, the committee agreed not to discuss specifics of the attack, following a Justice Department request that it wait until an FBI investigation is concluded.
California Democrat Henry Waxman chaired the committee. His staff produced a scathing report Monday detailing Blackwater's activities in Iraq. In his opening comments, Waxman summarized some of the report's findings.
REP. HENRY WAXMAN: New documents indicate that there have been a total of 195 shooting incidents involving Blackwater forces since 2005. Blackwater’s contract says the company is hired to provide defensive services. But in most of these incidents, it was Blackwater forces who fired first. We have also learned that 122 Blackwater employees, one-seventh of the company’s current workforce in Iraq, have been terminated for improper conduct.
We have the best troops in the world. The men and women in our armed forces are extraordinarily able and dedicated. Their pay does not reflect their value, but they don’t complain. So I have a high bar when I ask whether Blackwater and other private military contractors can meet the performance standards of our soldiers.
In recent days, military leaders have said that Blackwater's missteps in Iraq are going to hurt us badly. One senior US military official said Blackwater’s actions are creating resentment among Iraqis that "may be worse than Abu Ghraib." If these observations are true, they mean that our reliance on a private military contractor is backfiring.
AMY GOODMAN: Henry Waxman, Chair of the House Oversight Committee. During Tuesday’s hearing, Blackwater chief executive, Erik Prince, was questioned repeatedly about the killing of civilians in Iraq. This is Illinois Democrat, Danny Davis.
REP. DANNY DAVIS: You do admit that Blackwater personnel have shot and killed innocent civilians, don't you?
ERIK PRINCE: No, sir. I disagree with that. I think there has been times when guys are using defensive force to protect themselves, to protect the packages, trying to get away from danger. There could be ricochets. There are traffic accidents. Yes, this is war.
You know, since 2005, we’ve conducted in excess of 16,000 missions in Iraq and 195 incidents with weapons discharge. In that time, did a ricochet hurt or kill an innocent person? That’s entirely possibly. Again, we do not have the luxury of staying behind to do that terrorist crime scene investigation to figure out what happened.
AMY GOODMAN: House committee Republicans defended Blackwater during the hearing, arguing private security firms are a necessary part of wars in Iraq and Afghanistan. This is North Carolina Republican Patrick McHenry.
REP. PATRICK McHENRY: Mr. Prince, can you describe to the committee the nature of your contract, who your client is in Iraq?
ERIK PRINCE: In Iraq, we work for the Department of State.
REP. PATRICK McHENRY: And what is the service you provide for the Department of State?
ERIK PRINCE: We operate under the Worldwide Personal Protective Services contract, and we are charged with protecting diplomats, reconstruction officials, and visiting “codels,” members of Congress and their staffs.
REP. PATRICK McHENRY: And in the last -- since -- in this calendar year, how many missions have you had in Iraq?
ERIK PRINCE: 1,873.
REP. PATRICK McHENRY: How many incidents occurred during those 1,873 movements?
ERIK PRINCE: Only fifty-six incidents.
REP. PATRICK McHENRY: Alright. And a movement is a -- for instance, you take -- a member of Congress lands at the air strip; they’re transported to the embassy. That’s one movement, is that?
ERIK PRINCE: Yes, sir.
REP. PATRICK McHENRY: Alright. And fifty-six incidents out of 1,873 moments in a war zone, is that correct?
ERIK PRINCE: Resulted in the discharge of one of our guys’ weapons.
REP. PATRICK McHENRY: Which -- those fifty-six incidents, does that mean that they shot at someone? Describe what an incident is.
ERIK PRINCE: Yes. We don’t even record all the times that our guys receive fire. The vehicles get shot at on a daily basis, multiple times a day. So that’s not something we even record. In this case, an incident is a defensive measure. You’re responding to an IED attack, followed by small arms fire. Most of the attacks we get in Iraq are complex, meaning it’s not just one bad thing, it’s a host of bad things: a car bomb followed by a small arms attack, RPGs followed by sniper fire. An incident occurs typically when our men fear for their life, they’re not able to extract themselves from the situation. They have to use sufficient defensive fire to get off the axe, to get off that place where the bad guys have tried to kill Americans that day.
AMY GOODMAN: Erik Prince, Blackwater founder and chair, questioned by North Carolina Republican Patrick McHenry. The issue of the privatization of war was raised by several committee Democrats. This is California Congressmember Diane Watson.
REP. DIANE WATSON: I am really concerned when it comes to privatizing the various struggles that we are having in a war zone. And I’m looking at a book here that says Blackwater: The Rise of the World's Most Powerful Mercenary Army. That is really disturbing to me.
AMY GOODMAN: Jeremy Scahill is the author of that book, the New York Times bestseller, Blackwater: The Rise of the World's Most Powerful Mercenary Army. He attended yesterday’s hearing, joins us from Washington, D.C. Welcome to Democracy Now!, Jeremy.
JEREMY SCAHILL: Thanks, Amy.
AMY GOODMAN: Can you set the scene for us?
JEREMY SCAHILL: Well, Erik Prince is a man who has never held a press conference. He’s only known to have given one television interview, and that was on Fox News shortly after 9/11. He’s a guy whose company has gone after people, reporters, journalists, who have taken his photo. This is a man who’s incredibly secretive and has tried to avoid having his face in the public spotlight. In fact, the last time he was invited to testify in front of the Congress, it was in February, and instead of showing up himself, he dispatched his lawyer Andrew Howell. So this was a major day, where you see the mercenary king of the United States appearing not just before Congress, but before the cameras of the world. He certainly was uneasy having to do that, but he probably faced a choice himself, and that was to either show up on his own volition or to face a subpoena, where he would have been required to show up.
When Erik Prince stepped into the room, he was mobbed by photographers, and he came in, not with an army of armed mercenaries, but with an army of lawyers and advisers. And one of the people with him was Barbara Comstock, who’s a well-known Republican operative and a crisis management consultant. Blackwater had the first and second rows basically empty behind Mr. Prince, with the exception of his team of advisers and his consiglieri, and an unidentified man on several occasions during the course of the hearing himself interrupted the hearings and asked Henry Waxman to be able to consult with Prince. And then, what would result from that is that Erik Prince would turn around, and his advisers and lawyers would pile around him like a sports team plotting out their next play. It was very dramatic.
And I think that the issue here is that the Democrats really, I feel, dropped the ball on many of the most important issues surrounding Blackwater. Yes, there were some important questions raised. But for the most part, they steered away from some of the most devastating and violent incidents involving the company. The ambush at Fallujah in March of 2004, for instance, wasn’t addressed at all, except in passing. And there were a number of family members of the four Blackwater operatives who were killed in that incident. That’s a crucial one for the Congress to investigate, not only because of the allegations that Blackwater sent those four men into Fallujah in unarmored vehicles, short two men, and without heavy weapons, but because of the enormous price that Iraqi civilians paid for the deaths of those four corporate employees, the Bush administration ordering the leveling of Fallujah and, of course, the inflammation of the Iraqi resistance. There are a number of other incidents that never came up in the hearing.
I think that what needs to happen is that Erik Prince needs to become a more frequent visitor to Capitol Hill than his industry lobbyists have been over the past several years, and his visits should always begin with his right hand raised and cameras in front of him.
AMY GOODMAN: Jeremy, the Fallujah attack that killed the four Blackwater employees, we have rarely heard in the corporate media that, in fact, Blackwater is being sued by the families of those Blackwater employees.
JEREMY SCAHILL: That’s right. And Henry Waxman's committee last week released a devastating study that essentially said that Blackwater was responsible for what happened that day, by sending the men out ill-prepared into what was arguably the most dangerous city in the world.
And the lawsuit of those four families basically boils down to this: they say that they tried, after that incident, to get information from Blackwater as to how their loved ones ended up in that city undermanned, under-armed and in these softskin vehicles, as is the term in the industry. And they say that only after months of stonewalling by Blackwater and being told that if they wanted to see the company's report on the incident that they would have to sue, that they did just that. And so, in January of 2005, they filed this lawsuit against Blackwater, charging that the company was responsible for the deaths.
I, myself, went to a mercenary conference last summer and ran into Erik Prince, and I tried to question him on some of the decisions that were made surrounding that mission. I tried to ask him why those men were there, not in armored vehicles, in a city where the US military wouldn’t even go in, not to mention without armored vehicles, and why he has refused to answer the questions of those families. He wouldn’t answer my questions at the American Enterprise Institute. And I found it quite disturbing that not a single member of Congress, when they had Erik Prince under oath, asked him about that, as well.
AMY GOODMAN: Jeremy, we’re going to come back to this discussion. I want to ask you about the first government report on the September 16th attack, now, it turns out, written by a Blackwater contractor. Jeremy Scahill is our guest, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. We'll be back with him in a minute.
AMY GOODMAN: Mr. Prince goes to Washington. That's right, Erik Prince, founder and chair of Blackwater USA, testified before Congress Tuesday in his first extended public appearance. Prince was called before the House Committee on Oversight and Government Reform amidst a public firestorm over the role of private military firms operating in Iraq and a string of probes into Blackwater’s conduct.
Blackwater has come under heavy scrutiny since an attack last month in Baghdad in which between eleven and twenty-eight Iraqis were killed. Although the incident triggered Tuesday's hearing, the committee agreed not to discuss specifics of the attack, following a Justice Department request that it wait until an FBI investigation is concluded.
California Democrat Henry Waxman chaired the committee. His staff produced a scathing report Monday detailing Blackwater's activities in Iraq. In his opening comments, Waxman summarized some of the report's findings.
REP. HENRY WAXMAN: New documents indicate that there have been a total of 195 shooting incidents involving Blackwater forces since 2005. Blackwater’s contract says the company is hired to provide defensive services. But in most of these incidents, it was Blackwater forces who fired first. We have also learned that 122 Blackwater employees, one-seventh of the company’s current workforce in Iraq, have been terminated for improper conduct.
We have the best troops in the world. The men and women in our armed forces are extraordinarily able and dedicated. Their pay does not reflect their value, but they don’t complain. So I have a high bar when I ask whether Blackwater and other private military contractors can meet the performance standards of our soldiers.
In recent days, military leaders have said that Blackwater's missteps in Iraq are going to hurt us badly. One senior US military official said Blackwater’s actions are creating resentment among Iraqis that "may be worse than Abu Ghraib." If these observations are true, they mean that our reliance on a private military contractor is backfiring.
AMY GOODMAN: Henry Waxman, Chair of the House Oversight Committee. During Tuesday’s hearing, Blackwater chief executive, Erik Prince, was questioned repeatedly about the killing of civilians in Iraq. This is Illinois Democrat, Danny Davis.
REP. DANNY DAVIS: You do admit that Blackwater personnel have shot and killed innocent civilians, don't you?
ERIK PRINCE: No, sir. I disagree with that. I think there has been times when guys are using defensive force to protect themselves, to protect the packages, trying to get away from danger. There could be ricochets. There are traffic accidents. Yes, this is war.
You know, since 2005, we’ve conducted in excess of 16,000 missions in Iraq and 195 incidents with weapons discharge. In that time, did a ricochet hurt or kill an innocent person? That’s entirely possibly. Again, we do not have the luxury of staying behind to do that terrorist crime scene investigation to figure out what happened.
AMY GOODMAN: House committee Republicans defended Blackwater during the hearing, arguing private security firms are a necessary part of wars in Iraq and Afghanistan. This is North Carolina Republican Patrick McHenry.
REP. PATRICK McHENRY: Mr. Prince, can you describe to the committee the nature of your contract, who your client is in Iraq?
ERIK PRINCE: In Iraq, we work for the Department of State.
REP. PATRICK McHENRY: And what is the service you provide for the Department of State?
ERIK PRINCE: We operate under the Worldwide Personal Protective Services contract, and we are charged with protecting diplomats, reconstruction officials, and visiting “codels,” members of Congress and their staffs.
REP. PATRICK McHENRY: And in the last -- since -- in this calendar year, how many missions have you had in Iraq?
ERIK PRINCE: 1,873.
REP. PATRICK McHENRY: How many incidents occurred during those 1,873 movements?
ERIK PRINCE: Only fifty-six incidents.
REP. PATRICK McHENRY: Alright. And a movement is a -- for instance, you take -- a member of Congress lands at the air strip; they’re transported to the embassy. That’s one movement, is that?
ERIK PRINCE: Yes, sir.
REP. PATRICK McHENRY: Alright. And fifty-six incidents out of 1,873 moments in a war zone, is that correct?
ERIK PRINCE: Resulted in the discharge of one of our guys’ weapons.
REP. PATRICK McHENRY: Which -- those fifty-six incidents, does that mean that they shot at someone? Describe what an incident is.
ERIK PRINCE: Yes. We don’t even record all the times that our guys receive fire. The vehicles get shot at on a daily basis, multiple times a day. So that’s not something we even record. In this case, an incident is a defensive measure. You’re responding to an IED attack, followed by small arms fire. Most of the attacks we get in Iraq are complex, meaning it’s not just one bad thing, it’s a host of bad things: a car bomb followed by a small arms attack, RPGs followed by sniper fire. An incident occurs typically when our men fear for their life, they’re not able to extract themselves from the situation. They have to use sufficient defensive fire to get off the axe, to get off that place where the bad guys have tried to kill Americans that day.
AMY GOODMAN: Erik Prince, Blackwater founder and chair, questioned by North Carolina Republican Patrick McHenry. The issue of the privatization of war was raised by several committee Democrats. This is California Congressmember Diane Watson.
REP. DIANE WATSON: I am really concerned when it comes to privatizing the various struggles that we are having in a war zone. And I’m looking at a book here that says Blackwater: The Rise of the World's Most Powerful Mercenary Army. That is really disturbing to me.
AMY GOODMAN: Jeremy Scahill is the author of that book, the New York Times bestseller, Blackwater: The Rise of the World's Most Powerful Mercenary Army. He attended yesterday’s hearing, joins us from Washington, D.C. Welcome to Democracy Now!, Jeremy.
JEREMY SCAHILL: Thanks, Amy.
AMY GOODMAN: Can you set the scene for us?
JEREMY SCAHILL: Well, Erik Prince is a man who has never held a press conference. He’s only known to have given one television interview, and that was on Fox News shortly after 9/11. He’s a guy whose company has gone after people, reporters, journalists, who have taken his photo. This is a man who’s incredibly secretive and has tried to avoid having his face in the public spotlight. In fact, the last time he was invited to testify in front of the Congress, it was in February, and instead of showing up himself, he dispatched his lawyer Andrew Howell. So this was a major day, where you see the mercenary king of the United States appearing not just before Congress, but before the cameras of the world. He certainly was uneasy having to do that, but he probably faced a choice himself, and that was to either show up on his own volition or to face a subpoena, where he would have been required to show up.
When Erik Prince stepped into the room, he was mobbed by photographers, and he came in, not with an army of armed mercenaries, but with an army of lawyers and advisers. And one of the people with him was Barbara Comstock, who’s a well-known Republican operative and a crisis management consultant. Blackwater had the first and second rows basically empty behind Mr. Prince, with the exception of his team of advisers and his consiglieri, and an unidentified man on several occasions during the course of the hearing himself interrupted the hearings and asked Henry Waxman to be able to consult with Prince. And then, what would result from that is that Erik Prince would turn around, and his advisers and lawyers would pile around him like a sports team plotting out their next play. It was very dramatic.
And I think that the issue here is that the Democrats really, I feel, dropped the ball on many of the most important issues surrounding Blackwater. Yes, there were some important questions raised. But for the most part, they steered away from some of the most devastating and violent incidents involving the company. The ambush at Fallujah in March of 2004, for instance, wasn’t addressed at all, except in passing. And there were a number of family members of the four Blackwater operatives who were killed in that incident. That’s a crucial one for the Congress to investigate, not only because of the allegations that Blackwater sent those four men into Fallujah in unarmored vehicles, short two men, and without heavy weapons, but because of the enormous price that Iraqi civilians paid for the deaths of those four corporate employees, the Bush administration ordering the leveling of Fallujah and, of course, the inflammation of the Iraqi resistance. There are a number of other incidents that never came up in the hearing.
I think that what needs to happen is that Erik Prince needs to become a more frequent visitor to Capitol Hill than his industry lobbyists have been over the past several years, and his visits should always begin with his right hand raised and cameras in front of him.
AMY GOODMAN: Jeremy, the Fallujah attack that killed the four Blackwater employees, we have rarely heard in the corporate media that, in fact, Blackwater is being sued by the families of those Blackwater employees.
JEREMY SCAHILL: That’s right. And Henry Waxman's committee last week released a devastating study that essentially said that Blackwater was responsible for what happened that day, by sending the men out ill-prepared into what was arguably the most dangerous city in the world.
And the lawsuit of those four families basically boils down to this: they say that they tried, after that incident, to get information from Blackwater as to how their loved ones ended up in that city undermanned, under-armed and in these softskin vehicles, as is the term in the industry. And they say that only after months of stonewalling by Blackwater and being told that if they wanted to see the company's report on the incident that they would have to sue, that they did just that. And so, in January of 2005, they filed this lawsuit against Blackwater, charging that the company was responsible for the deaths.
I, myself, went to a mercenary conference last summer and ran into Erik Prince, and I tried to question him on some of the decisions that were made surrounding that mission. I tried to ask him why those men were there, not in armored vehicles, in a city where the US military wouldn’t even go in, not to mention without armored vehicles, and why he has refused to answer the questions of those families. He wouldn’t answer my questions at the American Enterprise Institute. And I found it quite disturbing that not a single member of Congress, when they had Erik Prince under oath, asked him about that, as well.
AMY GOODMAN: Jeremy, we’re going to come back to this discussion. I want to ask you about the first government report on the September 16th attack, now, it turns out, written by a Blackwater contractor. Jeremy Scahill is our guest, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. We'll be back with him in a minute.
http://www.democracynow.org/article.pl?sid=07/10/03/1349239
hear the voice of America's Gestapo-to-be. Blackwater now getting about a billion a year! That's up from 200,000$ in 2000. This makes the CIA-Mafia connection look like a boyscout stunt. Blackwater...coming to a neighborhood near you....all too soon. The privitazation of murder and mayham.....mercenaries for the Corporate Borg. If you are American, your tax dollars fund this brownshirt and his men! One Blackwater mercenary killed a person in cold blood - no claim of defense even given. They were spirited out of Iraq and fined a few thousand dollars. They roam the streets of the USA today...free and in the clear....nice! Justice?
AMY GOODMAN: We’re talking to Jeremy Scahill, independent journalist, Democracy Now! correspondent, Nation writer, author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army. He appeared at this unprecedented congressional hearing yesterday, first time Erik Prince himself, founder and chief executive officer of Blackwater USA, has appeared before Congress.
Jeremy, can you talk about the revelation that the State Department's initial report on the September 16th attack in Baghdad that led to this hearing was written up by a Blackwater contractor named Darren Hanner?
JEREMY SCAHILL: Right. Well, first of all, as you said in the opening, Representative Waxman began this hearing by saying that the FBI had launched a criminal investigation of the September 16th Nasoor Square shootings, and that Waxman said that the Congress does have an independent right to information about this and to take testimony about it, but that he and the ranking member, Representative Davis, had agreed that they wouldn’t take any testimony on it. And so, Waxman issued a sort of guideline that it wouldn’t be discussed at all. And I think that’s troubling in and of itself.
What’s interesting is that in Erik Prince's prepared testimony, before Waxman sort of issued this order that it wouldn’t be discussed, Erik Prince was saying that the world should hold off judgment on what happened on September 16th in Baghdad until the State Department completed its review. And he said that that would give us a more complete picture of what happened. Well, what does it say now that Darren Hanner, allegedly a Blackwater contractor, wrote the initial State Department report on this issue? It says that Blackwater essentially is involved with writing what is supposed to be the independent investigation of the State Department's review of Blackwater’s own action.
This is part of a pattern of the State Department covering up for the misconduct of Blackwater in Iraq. There’s also allegations that the Inspector General of the State Department intervened in a federal investigation of alleged arms smuggling charges against Blackwater and impeded that investigation. So this isn’t surprising, but it’s incredibly disturbing and raises very serious questions about a potential whitewashing of what Iraqis say was an outright cold-blooded massacre of several Iraqi civilians.
AMY GOODMAN: Jeremy, can you explain Erik Prince's ties to the Republican Party?
JEREMY SCAHILL: Well, it’s interesting, because the Republicans on the committee, not just during this hearing, but also in the February hearing when Blackwater’s lawyer testified, tried to sort of say that this was a smear campaign against Blackwater, because some of the company's executives are close to the Republican Party. And they’ve attempted to say that Blackwater is a nonpartisan operation. Nothing could be further from the truth.
Erik Prince, the founder of Blackwater, comes from a powerhouse conservative Republican family in Michigan. His father was a major bankroller, not only of the Republican Revolution of 1994, but also a major funder of several of the key groups that make up the core of the radical religious right. His dad gave the seed money to Gary Bauer to start the Family Research Council. Erik Prince was an early intern in the first team of interns that Gary Bauer took on. Gary Bauer, also a signer of the Project for a New American Century, the neoconservative agenda adopted by the White House. Also, they were very close to James Dobson and his Focus on the Family prayer warrior network.
Erik Prince himself has given several hundred thousand dollars to Republican campaign causes, including nearly $200,000 to the Republican National Committee. He also has continued his family tradition of bankrolling radical rightwing religious groups. Erik Prince also has a long history of being involved with the Republican Party. He was an early intern at George H.W. Bush’s White House. And that’s just talking about Erik Prince.
You can go down the line of other Blackwater executives that are not only connected to the Republican Party and the conservative establishment in this country, but also to the current Bush administration, people like J. Cofer Black, the former head of Counterterrorism at the CIA; Joseph Schmitz, the former Inspector General at the Pentagon. The original lawyer for the company dealing with that Fallujah lawsuit we talked about was none other than Fred Fielding, who’s now Bush’s White House counsel. More recently, their lawyer has been Ken Starr.
In fact, Erik Prince has actually given money to Green Party candidates in an attempt to defeat Democratic candidates in elections against Republicans. So, very clearly, Erik Prince is an ideological foot soldier, not only for the administration, but for the Republican Party in general.
AMY GOODMAN: Well, let's go to this issue of Erik Prince’s ties to the Republican Party, which came up only once in Tuesday’s hearing during questioning by California Republican Darrell Issa.
REP. DARRELL ISSA: Let's just go to one area that I think hasn’t been discussed, and others might not discuss it. Is your sister's name Betsy DeVos?
ERIK PRINCE: DeVos.
REP. DARRELL ISSA: Yes. Is that your sister?
ERIK PRINCE: Yes, it is.
REP. DARRELL ISSA: And is she -- was she a former Michigan Republican Party chairwoman?
ERIK PRINCE: Yes, she was.
REP. DARRELL ISSA: And was she a Pioneer for Bush?
ERIK PRINCE: I don’t know. Could be.
REP. DARRELL ISSA: Was she a large contributor to President Bush?
ERIK PRINCE: They probably were.
REP. DARRELL ISSA: And raised a lot of money for President Bush?
ERIK PRINCE: Could easily be.
REP. DARRELL ISSA: Went to the Republican conventions in 2000 and 2004?
ERIK PRINCE: I would imagine they did, yes.
REP. DARRELL ISSA: Isn’t it true that your family, at least that part of the family, are very well-known Republicans?
ERIK PRINCE: Yes.
REP. DARRELL ISSA: Wouldn’t it be fair to say that your company is easily identified as a Republican-leaning company and, in fact, the Amway Company somewhat so because of family members there? You don’t have to speculate overly, but isn't that generally something you understand?
ERIK PRINCE: Blackwater is not a partisan company. We haven’t done any -- you know, we execute the mission given us, whether it’s training Navy sailors or protecting State Department personnel. Yes, I have given individual political contributions. I’ve done that since college, and I did it when I was an active-duty member of the Armed Services, and I’ll probably continue doing that forward. I don’t give that -- I didn’t give up that right when I became a defense contractor.
REP. DARRELL ISSA: Right. OK, Mr. Chairman --
REP. HENRY WAXMAN: Gentleman’s time is expired.
REP. DARRELL ISSA: Just to finish the thought, like we did on the other side of the aisle, I think you're exactly right, that in fact, well, being identified as partisan Republican, in fact, your company appears to have done what all companies do, which is, in fact, operate to do the job they're doing in a nonpartisan way. And I would hope that this committee and the public takes note that labeling some company as Republican-oriented because of family members is inappropriate, and I would hope that we not do it again. And I yield back.
REP. HENRY WAXMAN: Well, the only one who’s done it is you.
AMY GOODMAN: Republican Congressmember Darrell Issa of California questioning the founder of Blackwater USA, Erik Prince. Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army, comment.
JEREMY SCAHILL: I’m sure Erik Prince and his advisers had an incredible moment of “What the h--- is going on here?” You know, this was actually one of the funniest moments of this hearing, because I think Erik Prince was stunned. Darrell Issa, during the February hearing, was the pitbull for the Republicans when they were questioning the four family members of the men killed at Fallujah, and he’s the one that introduced what I think is an incredible part of this story.
Betsy DeVos, who is Erik Prince's sister, is married to Dick DeVos, the heir to the Amway Corporation fortune, the owners of the Orlando Magic basketball team and the single greatest bankrollers of the Republican Revolution. And let’s remember here, Blackwater was a company that basically didn’t exist a decade ago. Its federal revenue, federal contract revenue, in 2001 was about $240,000. Now it’s about $1 billion. So, clearly, this company owes its meteoric rise to the policies of the Bush administration. And the fact is that Blackwater’s work in Iraq began with a $27 million no-bid contract to provide the elite body guards for Paul Bremer. It’s very relevant, Mr. Prince’s political connections and his campaign contributions and certainly that of his broader family, which is a powerhouse family in Republican politics.
AMY GOODMAN: Jeremy, can you talk about some other of the attacks that have occurred under Blackwater's watch? Particularly, briefly tell us about last December, the Christmas shooting of the Vice President's bodyguard.
JEREMY SCAHILL: Right. This is an issue that has sort of been off the pages of the major newspapers in this country since it happened. Until very recently, this hasn’t been reported on. But the story basically boils down to this. On December 24th, inside of the heavily fortified Green Zone in the Little Venice area of the Green Zone -- the Iraqis call it the Green Zoo -- an off-duty Blackwater contractor was at a Christmas Eve party and had allegedly had a lot to drink. He stumbled out of that party and ran into a bodyguard for the Iraqi Vice President Adil Abdul-Mahdi and got into some kind of an altercation with him. And the allegation is that he fired somewhere in the ballpark of seven shots at him, allegedly hitting him about three times, and then he fled that scene and was eventually pursued by armed Iraqi police inside of the Green Zone.
And what happened after this incident is that within thirty-six hours, this individual was flown out of Iraq to avoid prosecution under the Iraqi legal system. The Iraqi Vice President Abdul-Mahdi was incredibly outraged and labeled this killing a murder. And he, himself, had actually agreed to keep it under wraps, in fear that it would spark massive outrage among the Iraqi population, who wouldn’t understand how someone who killed a bodyguard for the Vice President could then be whisked out of Iraq and face no charges -- not only not in Iraq, but not in the United States, as well. I mean, imagine if an Iraqi diplomatic security officer shot and killed a bodyguard for Vice President Dick Cheney and then the Iraqis snuck him out of the country. I mean, there wouldn’t be an Iraq tomorrow if that happened.
And so, this is a situation that was boiling for a number of months, and what happened after it was incredible, because what appears to have happened is that the State Department essentially was attempting to direct Blackwater to pay hush money to the family of this individual.
And I just want to read from the report here that Representative Waxman's office released earlier this week. This is, a State Department Charge d’Affaires wrote the following to the regional security officer the very next day, on December 25th. He said, “If we are to avoid this whole thing becoming even worse, I think a prompt pledge and an apology, even if they want to claim it was accidental, would be the best way to assure the Iraqis don’t take steps, such as telling Blackwater that they are no longer able to work in Iraq.”
And according to the documents obtained by Waxman’s committee, the Charge d’Affaires initially proposed a $250,000 payment, then dropped it down to $100,000. And the diplomatic security service said that these figures were too high, and one DSS official called the Charge d’Affaires’s proposals “crazy sums” and stated that such a figure could cause Iraqis to "try to get killed, so as to set up their family financially." Eventually, Blackwater and the State Department supposedly agreed on a $15,000 payment, although Erik Prince said it was actually $20,000. And that payment was given to that individual's family, we understand, through the US State Department itself.
So, clearly, this man has not been charged with any crime. He is walking around, and we understand from reports today that he is not in custody in the United States. And so, this is part of a pattern of the State Department asking Blackwater to pay off the families of victims of Blackwater activities.
AMY GOODMAN: Let's return to Tuesday's hearing, when New York Democrat Carolyn Maloney grilled Erik Prince about that December attack.
REP. CAROLYN MALONEY: Have any charges been brought against him in the Iraqi justice system?
ERIK PRINCE: I don’t believe in the Iraqi justice system. I do believe -- I know we’ve referred it over to the --
REP. CAROLYN MALONEY: Justice Department. They told us they're still looking at it nine months later. Have any charges been brought against him in the US military justice system?
ERIK PRINCE: I don’t know.
REP. CAROLYN MALONEY: Have any charges been brought against him in the US civilian justice system?
ERIK PRINCE: Well, that would be handled by the Justice Department, ma'am. That’s for them to answer, not me.
REP. CAROLYN MALONEY: Other than firing him, has there been any sanction against him by any government authority? You mentioned you fined people for bad behavior. Was he fined for killing the Iraqi guard?
ERIK PRINCE: Yes, he was.
REP. CAROLYN MALONEY: How much was he fined?
ERIK PRINCE: Multiple thousands of dollars. I don’t know the exact number. I’ll have to get you that answer.
REP. CAROLYN MALONEY: OK.
ERIK PRINCE: Look, I’m not going to make any apologies for what he did.
REP. CAROLYN MALONEY: OK, but --
ERIK PRINCE: He clearly violated our policies.
REP. CAROLYN MALONEY: Alright. We -- every American believes he violated policies. If he lived in America, he would have been arrested, and he would be facing criminal charges. If he was a member of our military, he would be under a court-martial. But it appears to me that Blackwater has special rules. That’s one of the reasons of this hearing.
Now, within thirty-six hours of the shooting, he was flown out of Iraq. And did Blackwater arrange for this contractor leave Iraq less than two hours after the shooting?
ERIK PRINCE: I do not believe we arranged for him to leave after two hours after the shooting. He was arrested.
REP. CAROLYN MALONEY: OK, what about two days? It was two after the shooting. Did Blackwater arrange for him to leave the country?
ERIK PRINCE: That could easily be.
REP. CAROLYN MALONEY: OK.
ERIK PRINCE: IZ police arrested him. There was evidence gathered. There was information turned over to the Justice Department office in Baghdad. We fired him. He certainly didn’t have a job with us.
REP. CAROLYN MALONEY: Well, in America, if you committed a crime, you don’t pack them up and ship them out of the country in two days. If you're really concerned about accountability, which you testified in your testimony, you would have gone in and done a thorough investigation. And because this shooting took place within the Green Zone, this was a controllable situation. You could have gone in and done forensic and all the things that they do, but the response was to pack him up and have him leave the country within two days. And I’d like to ask you, how do you justify sending him away from Iraq, when any investigation would have only just begun?
ERIK PRINCE: Again, he was fired. The Justice Department was investigating in Baghdad. There is a Justice Department office there. He didn’t have a job with us anymore. We, as a private company, cannot detain him. We can fire, we can fine, but we can’t do anything else. The State Department --
REP. CAROLYN MALONEY: What evidence you have that the Justice Department was investigating him at that time?
ERIK PRINCE: From talking to my program management people in the country. They said it’s in the hands of the IZ police, which is Air Force, arrested him. They took him in for questioning. It was handled by the Justice Department. He was fired by us. The State Department ordered --
REP. CAROLYN MALONEY: Well, it’s been ten months, and the Justice Department has not done anything to him. Again, I repeat, if he was a US citizen or in America, he would have been arrested immediately, he would have faced criminal charges. We know about the chain of command in the military. They are court-martialed immediately. But if you work for Blackwater, you get packed up and you leave within two days and you face a $1,000 fine. So I am concerned about accountability and the fairness of this. -- I am concerned about accountability and really the unfairness of this. And I am concerned about how Blackwater may -- if I could just say, Mr. Chairman, that your actions may be undermining our mission in Iraq and really hurting the relationship and trust between the Iraqi people and the American military.
AMY GOODMAN: New York Congressmember Carolyn Maloney questioning the founder of Blackwater USA, Erik Prince. Jeremy Scahill, your response?
JEREMY SCAHILL: Well, you know, Blackwater’s founder, Erik Prince, said on numerous occasions during the hearing that contractors who violate Blackwater policy in Iraq face a choice -- window or aisle -- and said that they fire the contractors and take them out of the country. And, in fact, Blackwater says that it has fired 122 contractors. That’s about a seventh of its current Iraq deployment has been fired for various violations. Where is the Justice Department investigation? I mean, if this is one example of the kind of individual who’s fired and then taken out of the country, and he hasn’t been charged with a crime, despite what seems to be clear evidence that there was a killing of an Iraqi bodyguard to the Vice President, what about these other 122 firings that Erik Prince says have occurred in Iraq from Blackwater?
AMY GOODMAN: Who was the man who killed the bodyguard? What was his name?
JEREMY SCAHILL: Well, we don’t know. His name has not been released publicly. I understand today that there’s a report in the Seattle newspapers that he’s from that area of the country. But the government has been holding this very close to the chest.
AMY GOODMAN: Well, on the issue of profits, Erik Prince refused to respond when asked how much money Blackwater had made in Iraq. He was questioned by Connecticut Democrat Christopher Murphy.
REP. CHRISTOPHER MURPHY: As the CEO of the company, you can tell us what your profit has been in the past several years as a company?
ERIK PRINCE: I can give approximate numbers, but we’re a private company. And I’m sure it’s the Congress’s main interest in maintaining healthy competition amongst government vendors. So we’re a private company, and there’s a key word there: “private.”
REP. CHRISTOPHER MURPHY: And so, you will not disclose to us what the profit, what the annual profit over the last --
ERIK PRINCE: No, that’s not what I just said. We gave you an example of the profitability of a WPPS contract looks like, but we’re not going to -- I’m not going to go into our full financials.
REP. CHRISTOPHER MURPHY: And I guess, you know, I’m a new member of Congress, but as a representative of my constituents that pay 90% of your salary, pay 90% of the salaries of your employees, I think it’s a little difficult for us to fathom how that information isn’t relevant to this committee or this Congress. So let me ask again, after your consultation with your colleague. It’s your position that you don’t believe that it’s in the best interest of your company or this committee to have discussions with the United States Congress about the profit that you make off of US government contracts.
ERIK PRINCE: We can have that discussion, but I’m not fully prepared here, sitting today, to answer each and every one of your questions down to that level of detail.
REP. CHRISTOPHER MURPHY: I’m not asking for a level of detail. I’m asking for an approximation of your annual profit, based on the fact that you make 90% of your money from US taxpayers.
ERIK PRINCE: Again, we’ll come back to you. If you have written questions, we’ll give you written answers after the hearing is done.
REP. CHRISTOPHER MURPHY: Because you testified today that you are not sure of that number, you don’t know that number.
ERIK PRINCE: I’m not sure of that number. How can I calculate in depreciation on assets, when our helicopter parked around near the embassy in Baghdad get hit by rockets all the time, that they get fragged, that three of them have been shot down? There is a whole host of variability to our profitability, depending on when an asset is expended or destroyed.
REP. CHRISTOPHER MURPHY: You know, Mr. Prince, I’m not a businessman, but I find it pretty hard to believe that the CEO of a major company in this country, whether it be privately financed or publicly financed, can’t give an approximation of your annual profit on a year-to-year basis.
ERIK PRINCE: I think when the committee meets with any of my finance folks, they will tell you I’m not a financially driven guy.
AMY GOODMAN: The founder of Blackwater, Erik Prince, being questioned by Connecticut freshman Congressmember Christopher Murphy. Jeremy Scahill, do you have any idea how much Blackwater makes?
JEREMY SCAHILL: Well, I mean, when Erik Prince did give an estimate of the profitability of one of his contracts, he said it was about 10%. And so, if you look at Blackwater having about $1 billion just in State Department contracts for its Iraq work alone, it could be in the ballpark of $100 million in profit on that contract. It’s interesting, when they also -- one Congress member pointed out that General David Petraeus, who is overseeing the surge in Iraq, makes about $180,000 a year. And then they asked Erik Prince, whose entire company is funded 90% through federal contracts, how much money he makes. He at first tried to say he doesn’t know what his salary is, and then, when pressed on it, he said that it was over $1 million. I think one of the -- a statement that Prince made there is very telling and, I think, partially true. He said, “I’m not a financially driven man.” Well, I’m sure he is a financially driven man, but he’s also an ideological foot soldier, not just for the occupation of Iraq, but for the broader privatization agenda, and with this agenda, Blackwater’s guns are going to be kept loaded and, it seems, all too often fired at will.
AMY GOODMAN: Erik Prince also criticized the use of the term “mercenaries” when referring to Blackwater employees during the questioning by Georgia Republican Lynn Westmoreland.
REP. LYNN WESTMORELAND: …employees, it was doing a bad job and not meeting your criteria then, those are some of the people that you got rid of, right?
ERIK PRINCE: If they don’t hold to the standard, they have one decision to make: window or aisle?
REP. LYNN WESTMORELAND: And, Mr. Prince, what kinds of professional backgrounds do most of your security personnel have?
ERIK PRINCE: All of our personnel working on the WPPS-type contract come from the US military or law enforcement community. They have a number of years of experience doing that kind of work, ranging from five, eight years, up to twenty or thirty years of experience. They're discharged honorably. Most of them are decorated. They’ve gotten out of the military to choose -- to take another career path, and so we give them the ability to use those skills back again working for the US government.
And let me just say, we are not a partisan organization. That’s not on the interview form when you come to work for Blackwater, what party you affiliate with at all. We affiliate with America.
REP. LYNN WESTMORELAND: I understand that.
ERIK PRINCE: And the idea that people call us “mercenaries,” we have Americans working for America.
AMY GOODMAN: That is Erik Prince testifying before the House Oversight Committee headed by Henry Waxman. Jeremy Scahill, can you summarize what happened yesterday and what you think needs to be answered now?
JEREMY SCAHILL: Well, I think that the Congress needs to investigate every single incident of Blackwater opening fire in Iraq, because ultimately we have to remember, at the end of the day, this is a demand-based industry. Blackwater would not exist if there was not an occupation of Iraq doing what it does over there. It wouldn’t exist if the Congress discontinued the funding of these mercenary forces. And so, while some in the Congress, I think, want to portray Blackwater as a rogue company, it’s not. It’s part of a system, where the major goal of Blackwater in Iraq is to keep the principal alive, protect the noun at any cost. And so often that seems to come at a very high price to Iraqis. And so, as the Congress now embarks on a Wartime Contracting Commission headed by Jim Webb and Claire McCaskill, who are freshman senators -- and I think it’s telling that it took four years of occupation and two freshman senators to start this -- what we really need to examine in this country is this system that intimately links corporate profits to an escalation of war and violent conflict, because these companies are making a killing, and it’s the Iraqi people who are paying the price for it. And unfortunately, that has not been on the congressional table, and it should be.
AMY GOODMAN: Jeremy Scahill, thanks very much for being with us, independent journalist, Democracy Now! correspondent, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.
hear the voice of America's Gestapo-to-be. Blackwater now getting about a billion a year! That's up from 200,000$ in 2000. This makes the CIA-Mafia connection look like a boyscout stunt. Blackwater...coming to a neighborhood near you....all too soon. The privitazation of murder and mayham.....mercenaries for the Corporate Borg. If you are American, your tax dollars fund this brownshirt and his men! One Blackwater mercenary killed a person in cold blood - no claim of defense even given. They were spirited out of Iraq and fined a few thousand dollars. They roam the streets of the USA today...free and in the clear....nice! Justice?
AMY GOODMAN: We’re talking to Jeremy Scahill, independent journalist, Democracy Now! correspondent, Nation writer, author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army. He appeared at this unprecedented congressional hearing yesterday, first time Erik Prince himself, founder and chief executive officer of Blackwater USA, has appeared before Congress.
Jeremy, can you talk about the revelation that the State Department's initial report on the September 16th attack in Baghdad that led to this hearing was written up by a Blackwater contractor named Darren Hanner?
JEREMY SCAHILL: Right. Well, first of all, as you said in the opening, Representative Waxman began this hearing by saying that the FBI had launched a criminal investigation of the September 16th Nasoor Square shootings, and that Waxman said that the Congress does have an independent right to information about this and to take testimony about it, but that he and the ranking member, Representative Davis, had agreed that they wouldn’t take any testimony on it. And so, Waxman issued a sort of guideline that it wouldn’t be discussed at all. And I think that’s troubling in and of itself.
What’s interesting is that in Erik Prince's prepared testimony, before Waxman sort of issued this order that it wouldn’t be discussed, Erik Prince was saying that the world should hold off judgment on what happened on September 16th in Baghdad until the State Department completed its review. And he said that that would give us a more complete picture of what happened. Well, what does it say now that Darren Hanner, allegedly a Blackwater contractor, wrote the initial State Department report on this issue? It says that Blackwater essentially is involved with writing what is supposed to be the independent investigation of the State Department's review of Blackwater’s own action.
This is part of a pattern of the State Department covering up for the misconduct of Blackwater in Iraq. There’s also allegations that the Inspector General of the State Department intervened in a federal investigation of alleged arms smuggling charges against Blackwater and impeded that investigation. So this isn’t surprising, but it’s incredibly disturbing and raises very serious questions about a potential whitewashing of what Iraqis say was an outright cold-blooded massacre of several Iraqi civilians.
AMY GOODMAN: Jeremy, can you explain Erik Prince's ties to the Republican Party?
JEREMY SCAHILL: Well, it’s interesting, because the Republicans on the committee, not just during this hearing, but also in the February hearing when Blackwater’s lawyer testified, tried to sort of say that this was a smear campaign against Blackwater, because some of the company's executives are close to the Republican Party. And they’ve attempted to say that Blackwater is a nonpartisan operation. Nothing could be further from the truth.
Erik Prince, the founder of Blackwater, comes from a powerhouse conservative Republican family in Michigan. His father was a major bankroller, not only of the Republican Revolution of 1994, but also a major funder of several of the key groups that make up the core of the radical religious right. His dad gave the seed money to Gary Bauer to start the Family Research Council. Erik Prince was an early intern in the first team of interns that Gary Bauer took on. Gary Bauer, also a signer of the Project for a New American Century, the neoconservative agenda adopted by the White House. Also, they were very close to James Dobson and his Focus on the Family prayer warrior network.
Erik Prince himself has given several hundred thousand dollars to Republican campaign causes, including nearly $200,000 to the Republican National Committee. He also has continued his family tradition of bankrolling radical rightwing religious groups. Erik Prince also has a long history of being involved with the Republican Party. He was an early intern at George H.W. Bush’s White House. And that’s just talking about Erik Prince.
You can go down the line of other Blackwater executives that are not only connected to the Republican Party and the conservative establishment in this country, but also to the current Bush administration, people like J. Cofer Black, the former head of Counterterrorism at the CIA; Joseph Schmitz, the former Inspector General at the Pentagon. The original lawyer for the company dealing with that Fallujah lawsuit we talked about was none other than Fred Fielding, who’s now Bush’s White House counsel. More recently, their lawyer has been Ken Starr.
In fact, Erik Prince has actually given money to Green Party candidates in an attempt to defeat Democratic candidates in elections against Republicans. So, very clearly, Erik Prince is an ideological foot soldier, not only for the administration, but for the Republican Party in general.
AMY GOODMAN: Well, let's go to this issue of Erik Prince’s ties to the Republican Party, which came up only once in Tuesday’s hearing during questioning by California Republican Darrell Issa.
REP. DARRELL ISSA: Let's just go to one area that I think hasn’t been discussed, and others might not discuss it. Is your sister's name Betsy DeVos?
ERIK PRINCE: DeVos.
REP. DARRELL ISSA: Yes. Is that your sister?
ERIK PRINCE: Yes, it is.
REP. DARRELL ISSA: And is she -- was she a former Michigan Republican Party chairwoman?
ERIK PRINCE: Yes, she was.
REP. DARRELL ISSA: And was she a Pioneer for Bush?
ERIK PRINCE: I don’t know. Could be.
REP. DARRELL ISSA: Was she a large contributor to President Bush?
ERIK PRINCE: They probably were.
REP. DARRELL ISSA: And raised a lot of money for President Bush?
ERIK PRINCE: Could easily be.
REP. DARRELL ISSA: Went to the Republican conventions in 2000 and 2004?
ERIK PRINCE: I would imagine they did, yes.
REP. DARRELL ISSA: Isn’t it true that your family, at least that part of the family, are very well-known Republicans?
ERIK PRINCE: Yes.
REP. DARRELL ISSA: Wouldn’t it be fair to say that your company is easily identified as a Republican-leaning company and, in fact, the Amway Company somewhat so because of family members there? You don’t have to speculate overly, but isn't that generally something you understand?
ERIK PRINCE: Blackwater is not a partisan company. We haven’t done any -- you know, we execute the mission given us, whether it’s training Navy sailors or protecting State Department personnel. Yes, I have given individual political contributions. I’ve done that since college, and I did it when I was an active-duty member of the Armed Services, and I’ll probably continue doing that forward. I don’t give that -- I didn’t give up that right when I became a defense contractor.
REP. DARRELL ISSA: Right. OK, Mr. Chairman --
REP. HENRY WAXMAN: Gentleman’s time is expired.
REP. DARRELL ISSA: Just to finish the thought, like we did on the other side of the aisle, I think you're exactly right, that in fact, well, being identified as partisan Republican, in fact, your company appears to have done what all companies do, which is, in fact, operate to do the job they're doing in a nonpartisan way. And I would hope that this committee and the public takes note that labeling some company as Republican-oriented because of family members is inappropriate, and I would hope that we not do it again. And I yield back.
REP. HENRY WAXMAN: Well, the only one who’s done it is you.
AMY GOODMAN: Republican Congressmember Darrell Issa of California questioning the founder of Blackwater USA, Erik Prince. Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army, comment.
JEREMY SCAHILL: I’m sure Erik Prince and his advisers had an incredible moment of “What the h--- is going on here?” You know, this was actually one of the funniest moments of this hearing, because I think Erik Prince was stunned. Darrell Issa, during the February hearing, was the pitbull for the Republicans when they were questioning the four family members of the men killed at Fallujah, and he’s the one that introduced what I think is an incredible part of this story.
Betsy DeVos, who is Erik Prince's sister, is married to Dick DeVos, the heir to the Amway Corporation fortune, the owners of the Orlando Magic basketball team and the single greatest bankrollers of the Republican Revolution. And let’s remember here, Blackwater was a company that basically didn’t exist a decade ago. Its federal revenue, federal contract revenue, in 2001 was about $240,000. Now it’s about $1 billion. So, clearly, this company owes its meteoric rise to the policies of the Bush administration. And the fact is that Blackwater’s work in Iraq began with a $27 million no-bid contract to provide the elite body guards for Paul Bremer. It’s very relevant, Mr. Prince’s political connections and his campaign contributions and certainly that of his broader family, which is a powerhouse family in Republican politics.
AMY GOODMAN: Jeremy, can you talk about some other of the attacks that have occurred under Blackwater's watch? Particularly, briefly tell us about last December, the Christmas shooting of the Vice President's bodyguard.
JEREMY SCAHILL: Right. This is an issue that has sort of been off the pages of the major newspapers in this country since it happened. Until very recently, this hasn’t been reported on. But the story basically boils down to this. On December 24th, inside of the heavily fortified Green Zone in the Little Venice area of the Green Zone -- the Iraqis call it the Green Zoo -- an off-duty Blackwater contractor was at a Christmas Eve party and had allegedly had a lot to drink. He stumbled out of that party and ran into a bodyguard for the Iraqi Vice President Adil Abdul-Mahdi and got into some kind of an altercation with him. And the allegation is that he fired somewhere in the ballpark of seven shots at him, allegedly hitting him about three times, and then he fled that scene and was eventually pursued by armed Iraqi police inside of the Green Zone.
And what happened after this incident is that within thirty-six hours, this individual was flown out of Iraq to avoid prosecution under the Iraqi legal system. The Iraqi Vice President Abdul-Mahdi was incredibly outraged and labeled this killing a murder. And he, himself, had actually agreed to keep it under wraps, in fear that it would spark massive outrage among the Iraqi population, who wouldn’t understand how someone who killed a bodyguard for the Vice President could then be whisked out of Iraq and face no charges -- not only not in Iraq, but not in the United States, as well. I mean, imagine if an Iraqi diplomatic security officer shot and killed a bodyguard for Vice President Dick Cheney and then the Iraqis snuck him out of the country. I mean, there wouldn’t be an Iraq tomorrow if that happened.
And so, this is a situation that was boiling for a number of months, and what happened after it was incredible, because what appears to have happened is that the State Department essentially was attempting to direct Blackwater to pay hush money to the family of this individual.
And I just want to read from the report here that Representative Waxman's office released earlier this week. This is, a State Department Charge d’Affaires wrote the following to the regional security officer the very next day, on December 25th. He said, “If we are to avoid this whole thing becoming even worse, I think a prompt pledge and an apology, even if they want to claim it was accidental, would be the best way to assure the Iraqis don’t take steps, such as telling Blackwater that they are no longer able to work in Iraq.”
And according to the documents obtained by Waxman’s committee, the Charge d’Affaires initially proposed a $250,000 payment, then dropped it down to $100,000. And the diplomatic security service said that these figures were too high, and one DSS official called the Charge d’Affaires’s proposals “crazy sums” and stated that such a figure could cause Iraqis to "try to get killed, so as to set up their family financially." Eventually, Blackwater and the State Department supposedly agreed on a $15,000 payment, although Erik Prince said it was actually $20,000. And that payment was given to that individual's family, we understand, through the US State Department itself.
So, clearly, this man has not been charged with any crime. He is walking around, and we understand from reports today that he is not in custody in the United States. And so, this is part of a pattern of the State Department asking Blackwater to pay off the families of victims of Blackwater activities.
AMY GOODMAN: Let's return to Tuesday's hearing, when New York Democrat Carolyn Maloney grilled Erik Prince about that December attack.
REP. CAROLYN MALONEY: Have any charges been brought against him in the Iraqi justice system?
ERIK PRINCE: I don’t believe in the Iraqi justice system. I do believe -- I know we’ve referred it over to the --
REP. CAROLYN MALONEY: Justice Department. They told us they're still looking at it nine months later. Have any charges been brought against him in the US military justice system?
ERIK PRINCE: I don’t know.
REP. CAROLYN MALONEY: Have any charges been brought against him in the US civilian justice system?
ERIK PRINCE: Well, that would be handled by the Justice Department, ma'am. That’s for them to answer, not me.
REP. CAROLYN MALONEY: Other than firing him, has there been any sanction against him by any government authority? You mentioned you fined people for bad behavior. Was he fined for killing the Iraqi guard?
ERIK PRINCE: Yes, he was.
REP. CAROLYN MALONEY: How much was he fined?
ERIK PRINCE: Multiple thousands of dollars. I don’t know the exact number. I’ll have to get you that answer.
REP. CAROLYN MALONEY: OK.
ERIK PRINCE: Look, I’m not going to make any apologies for what he did.
REP. CAROLYN MALONEY: OK, but --
ERIK PRINCE: He clearly violated our policies.
REP. CAROLYN MALONEY: Alright. We -- every American believes he violated policies. If he lived in America, he would have been arrested, and he would be facing criminal charges. If he was a member of our military, he would be under a court-martial. But it appears to me that Blackwater has special rules. That’s one of the reasons of this hearing.
Now, within thirty-six hours of the shooting, he was flown out of Iraq. And did Blackwater arrange for this contractor leave Iraq less than two hours after the shooting?
ERIK PRINCE: I do not believe we arranged for him to leave after two hours after the shooting. He was arrested.
REP. CAROLYN MALONEY: OK, what about two days? It was two after the shooting. Did Blackwater arrange for him to leave the country?
ERIK PRINCE: That could easily be.
REP. CAROLYN MALONEY: OK.
ERIK PRINCE: IZ police arrested him. There was evidence gathered. There was information turned over to the Justice Department office in Baghdad. We fired him. He certainly didn’t have a job with us.
REP. CAROLYN MALONEY: Well, in America, if you committed a crime, you don’t pack them up and ship them out of the country in two days. If you're really concerned about accountability, which you testified in your testimony, you would have gone in and done a thorough investigation. And because this shooting took place within the Green Zone, this was a controllable situation. You could have gone in and done forensic and all the things that they do, but the response was to pack him up and have him leave the country within two days. And I’d like to ask you, how do you justify sending him away from Iraq, when any investigation would have only just begun?
ERIK PRINCE: Again, he was fired. The Justice Department was investigating in Baghdad. There is a Justice Department office there. He didn’t have a job with us anymore. We, as a private company, cannot detain him. We can fire, we can fine, but we can’t do anything else. The State Department --
REP. CAROLYN MALONEY: What evidence you have that the Justice Department was investigating him at that time?
ERIK PRINCE: From talking to my program management people in the country. They said it’s in the hands of the IZ police, which is Air Force, arrested him. They took him in for questioning. It was handled by the Justice Department. He was fired by us. The State Department ordered --
REP. CAROLYN MALONEY: Well, it’s been ten months, and the Justice Department has not done anything to him. Again, I repeat, if he was a US citizen or in America, he would have been arrested immediately, he would have faced criminal charges. We know about the chain of command in the military. They are court-martialed immediately. But if you work for Blackwater, you get packed up and you leave within two days and you face a $1,000 fine. So I am concerned about accountability and the fairness of this. -- I am concerned about accountability and really the unfairness of this. And I am concerned about how Blackwater may -- if I could just say, Mr. Chairman, that your actions may be undermining our mission in Iraq and really hurting the relationship and trust between the Iraqi people and the American military.
AMY GOODMAN: New York Congressmember Carolyn Maloney questioning the founder of Blackwater USA, Erik Prince. Jeremy Scahill, your response?
JEREMY SCAHILL: Well, you know, Blackwater’s founder, Erik Prince, said on numerous occasions during the hearing that contractors who violate Blackwater policy in Iraq face a choice -- window or aisle -- and said that they fire the contractors and take them out of the country. And, in fact, Blackwater says that it has fired 122 contractors. That’s about a seventh of its current Iraq deployment has been fired for various violations. Where is the Justice Department investigation? I mean, if this is one example of the kind of individual who’s fired and then taken out of the country, and he hasn’t been charged with a crime, despite what seems to be clear evidence that there was a killing of an Iraqi bodyguard to the Vice President, what about these other 122 firings that Erik Prince says have occurred in Iraq from Blackwater?
AMY GOODMAN: Who was the man who killed the bodyguard? What was his name?
JEREMY SCAHILL: Well, we don’t know. His name has not been released publicly. I understand today that there’s a report in the Seattle newspapers that he’s from that area of the country. But the government has been holding this very close to the chest.
AMY GOODMAN: Well, on the issue of profits, Erik Prince refused to respond when asked how much money Blackwater had made in Iraq. He was questioned by Connecticut Democrat Christopher Murphy.
REP. CHRISTOPHER MURPHY: As the CEO of the company, you can tell us what your profit has been in the past several years as a company?
ERIK PRINCE: I can give approximate numbers, but we’re a private company. And I’m sure it’s the Congress’s main interest in maintaining healthy competition amongst government vendors. So we’re a private company, and there’s a key word there: “private.”
REP. CHRISTOPHER MURPHY: And so, you will not disclose to us what the profit, what the annual profit over the last --
ERIK PRINCE: No, that’s not what I just said. We gave you an example of the profitability of a WPPS contract looks like, but we’re not going to -- I’m not going to go into our full financials.
REP. CHRISTOPHER MURPHY: And I guess, you know, I’m a new member of Congress, but as a representative of my constituents that pay 90% of your salary, pay 90% of the salaries of your employees, I think it’s a little difficult for us to fathom how that information isn’t relevant to this committee or this Congress. So let me ask again, after your consultation with your colleague. It’s your position that you don’t believe that it’s in the best interest of your company or this committee to have discussions with the United States Congress about the profit that you make off of US government contracts.
ERIK PRINCE: We can have that discussion, but I’m not fully prepared here, sitting today, to answer each and every one of your questions down to that level of detail.
REP. CHRISTOPHER MURPHY: I’m not asking for a level of detail. I’m asking for an approximation of your annual profit, based on the fact that you make 90% of your money from US taxpayers.
ERIK PRINCE: Again, we’ll come back to you. If you have written questions, we’ll give you written answers after the hearing is done.
REP. CHRISTOPHER MURPHY: Because you testified today that you are not sure of that number, you don’t know that number.
ERIK PRINCE: I’m not sure of that number. How can I calculate in depreciation on assets, when our helicopter parked around near the embassy in Baghdad get hit by rockets all the time, that they get fragged, that three of them have been shot down? There is a whole host of variability to our profitability, depending on when an asset is expended or destroyed.
REP. CHRISTOPHER MURPHY: You know, Mr. Prince, I’m not a businessman, but I find it pretty hard to believe that the CEO of a major company in this country, whether it be privately financed or publicly financed, can’t give an approximation of your annual profit on a year-to-year basis.
ERIK PRINCE: I think when the committee meets with any of my finance folks, they will tell you I’m not a financially driven guy.
AMY GOODMAN: The founder of Blackwater, Erik Prince, being questioned by Connecticut freshman Congressmember Christopher Murphy. Jeremy Scahill, do you have any idea how much Blackwater makes?
JEREMY SCAHILL: Well, I mean, when Erik Prince did give an estimate of the profitability of one of his contracts, he said it was about 10%. And so, if you look at Blackwater having about $1 billion just in State Department contracts for its Iraq work alone, it could be in the ballpark of $100 million in profit on that contract. It’s interesting, when they also -- one Congress member pointed out that General David Petraeus, who is overseeing the surge in Iraq, makes about $180,000 a year. And then they asked Erik Prince, whose entire company is funded 90% through federal contracts, how much money he makes. He at first tried to say he doesn’t know what his salary is, and then, when pressed on it, he said that it was over $1 million. I think one of the -- a statement that Prince made there is very telling and, I think, partially true. He said, “I’m not a financially driven man.” Well, I’m sure he is a financially driven man, but he’s also an ideological foot soldier, not just for the occupation of Iraq, but for the broader privatization agenda, and with this agenda, Blackwater’s guns are going to be kept loaded and, it seems, all too often fired at will.
AMY GOODMAN: Erik Prince also criticized the use of the term “mercenaries” when referring to Blackwater employees during the questioning by Georgia Republican Lynn Westmoreland.
REP. LYNN WESTMORELAND: …employees, it was doing a bad job and not meeting your criteria then, those are some of the people that you got rid of, right?
ERIK PRINCE: If they don’t hold to the standard, they have one decision to make: window or aisle?
REP. LYNN WESTMORELAND: And, Mr. Prince, what kinds of professional backgrounds do most of your security personnel have?
ERIK PRINCE: All of our personnel working on the WPPS-type contract come from the US military or law enforcement community. They have a number of years of experience doing that kind of work, ranging from five, eight years, up to twenty or thirty years of experience. They're discharged honorably. Most of them are decorated. They’ve gotten out of the military to choose -- to take another career path, and so we give them the ability to use those skills back again working for the US government.
And let me just say, we are not a partisan organization. That’s not on the interview form when you come to work for Blackwater, what party you affiliate with at all. We affiliate with America.
REP. LYNN WESTMORELAND: I understand that.
ERIK PRINCE: And the idea that people call us “mercenaries,” we have Americans working for America.
AMY GOODMAN: That is Erik Prince testifying before the House Oversight Committee headed by Henry Waxman. Jeremy Scahill, can you summarize what happened yesterday and what you think needs to be answered now?
JEREMY SCAHILL: Well, I think that the Congress needs to investigate every single incident of Blackwater opening fire in Iraq, because ultimately we have to remember, at the end of the day, this is a demand-based industry. Blackwater would not exist if there was not an occupation of Iraq doing what it does over there. It wouldn’t exist if the Congress discontinued the funding of these mercenary forces. And so, while some in the Congress, I think, want to portray Blackwater as a rogue company, it’s not. It’s part of a system, where the major goal of Blackwater in Iraq is to keep the principal alive, protect the noun at any cost. And so often that seems to come at a very high price to Iraqis. And so, as the Congress now embarks on a Wartime Contracting Commission headed by Jim Webb and Claire McCaskill, who are freshman senators -- and I think it’s telling that it took four years of occupation and two freshman senators to start this -- what we really need to examine in this country is this system that intimately links corporate profits to an escalation of war and violent conflict, because these companies are making a killing, and it’s the Iraqi people who are paying the price for it. And unfortunately, that has not been on the congressional table, and it should be.
AMY GOODMAN: Jeremy Scahill, thanks very much for being with us, independent journalist, Democracy Now! correspondent, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.
Enlightening! Opening statement by Rep. Henry Waxman on Blackwater Hearings
Full video of the hearings here:
http://oversight.house.gov/story.asp?ID=1511
Hearing on Private Security Contracting in Iraq and Afghanistan
Chairman Waxman's Opening Statement
Over the past 25 years, a sophisticated campaign has been waged to privatize government services. The theory is that corporations can deliver government services better and at a lower cost than the government can.
Over the last six years, this theory has been put into practice. The result is that privatization has exploded. For every taxpayer dollar spent on federal programs, over 40 cents now goes to private contractors. Our government now outsources even the oversight of the outsourcing.
"If Blackwater and other companies are really providing better service at lower cost, the experiment of privatizing is working. But if the costs are higher and performance is worse, then I don’t understand why we are doing this. It makes no sense to pay more for less. We will examine this issue today and facts, not ideology, need to guide us here."
-Chairman Waxman
At home, core government functions — like tax collection and emergency response — have been contracted out. Abroad, companies like Halliburton and Blackwater have made billions performing tasks that used to be done by our nation’s military forces.
What’s been missing is a serious evaluation of whether the promises of privatizing are actually realized. Inside our government, it has become an article of faith that outsourcing is best.
Today, we are going to examine the impact of privatization on our military forces. We will focus on a specific example: the outsourcing of military functions to Blackwater, a private military contractor providing protective services to U.S. officials in Iraq.
We will seek to answer basic questions: Is Blackwater, a private military contractor, helping or hurting our efforts in Iraq? Is the government doing enough to hold Blackwater accountable for alleged misconduct? And what are the costs to the federal taxpayer?
I want to thank Erik Prince, Blackwater’s founder and CEO, for his cooperation in this hearing. As a general rule, children from wealthy and politically connected families no longer serve in the military. Mr. Prince is an exception. He enlisted in the Navy in 1992 and joined the Navy SEALS in 1993, where he served for four years. We thank you for that service.
In 1997, he saw an opportunity to start his own company and created Blackwater. As he has said, “We’re trying to do for the national security apparatus what FedEx did for the Postal Service.”
There may be no federal contractor in America that has grown more rapidly than Blackwater over the last seven years. In 2000, Blackwater had just $204,000 in government contracts. Since then, it has received over $1 billion in federal contracts. More than half of these contracts were awarded without full and open competition.
Privatizing is working exceptionally well for Blackwater. The question for this hearing is whether outsourcing to Blackwater is a good deal for American taxpayers, the military, and our national interest in Iraq.
The first part of that question is cost. We know that sergeants in the military generally cost the government between $50,000 to $70,000 per year. We also know that a comparable position at Blackwater costs the federal government over $400,000 — six times as much.
Defense Secretary Gates testified about this problem last week. He said Blackwater charges the government so much that it can “lure highly trained soldiers out of our forces … to work for them.” He is now taking the unprecedented step of considering whether to ask our troops to sign “non-compete” agreements to prevent the U.S. military from becoming a taxpayer-funded training program for private contractors.
There are also serious questions about Blackwater’s performance. The September 16 shooting that killed at least 11 Iraqis is just the latest in a series of troubling Blackwater incidents. Earlier this year, our Committee examined the company’s mistakes in Fallujah, where four contractors were killed and their bodies burned. That incident triggered a major battle in the Iraq war.
New documents indicate that there have been a total of 195 shooting incidents involving Blackwater forces since 2005. Blackwater’s contract says the company is hired to provide defensive services. But in most of these incidents, it was Blackwater forces who fired first.
We have also learned that 122 Blackwater employees — one-seventh of the company’s current workforce in Iraq — have been terminated for improper conduct.
We have the best troops in the world. The men and women in our armed forces are extraordinarily able and dedicated. Their pay doesn’t reflect their value, but they don’t complain. So I have a high bar when I ask whether Blackwater and other private military contractors can meet the performance standards of our soldiers.
In recent days, military leaders have said that Blackwater’s missteps in Iraq are “going to hurt us badly.” One senior U.S. military official said Blackwater’s actions are creating resentment among Iraqis that “may be worse than Abu Ghraib.” If these observations are true, they mean that our reliance on private military contractors is backfiring.
The Committee’s investigation raises as many questions about the State Department’s oversight of Blackwater as it does about Blackwater itself. On December 24, 2006, a drunken Blackwater contractor shot the guard of the Iraqi Vice President. This didn’t happen out on a mission protecting diplomats: it occurred inside the protected Green Zone. If this had happened in the United States, the contractor would have been arrested and a criminal investigation launched. If a drunken U.S. soldier had killed an Iraqi guard, the soldier would face a court martial.
But all that has happened to the Blackwater contractor is that he has lost his job. The State Department advised Blackwater how much to pay the family to make the problem go away and then allowed the contractor to leave Iraq just 36 hours after the shooting. Incredibly, internal e-mails document a debate over the size of the payment. The Charge d’Affairs recommended $250,000 payment, but this was cut to $15,000 because the Diplomatic Security Service said Iraqis would try to get themselves killed for such a large payout.
It is hard to read these e-mails and not come to the conclusion that the State Department is acting as Blackwater’s enabler.
If Blackwater and other companies are really providing better service at lower cost, the experiment of privatizing is working. But if the costs are higher and performance is worse, then I don’t understand why we are doing this. It makes no sense to pay more for less. We will examine this issue today and facts, not ideology, need to guide us here.
Yesterday, the FBI announced that it launched a criminal investigation into Blackwater’s actions on September 16. This morning, the Justice Department sent a letter to the Committee asking that in light of this development, the Committee not take testimony at this time about the events of September 16. Our precedent on this Committee is that Congress has an independent right to this information. But in this case, Ranking Member Davis and I have conferred and we have agreed to postpone any public discussion of this issue as we work with the Department to obtain the information the Committee seeks. For the same reason, at the request of the Justice Department, I will ask our witness, Mr. Prince, and our State Department witnesses on the second panel, not to discuss the September 16 incident in this public setting today. The last point I want to make is directed to the families of the Blackwater employees killed in Fallujah and the families of the soldiers killed in a tragic and unnecessary accident with Blackwater Airlines, some of whom are here today. I know many of you believe that Blackwater has been unaccountable to anyone in our government. I want you to know that Blackwater will be accountable today. We will be asking tough questions about disturbing actions. But I also want to assure Mr. Prince that we will be fair. And we will not tolerate any demonstrations or disturbances from anyone attending this hearing. Thank you, and I’m looking forward to Mr. Prince’s testimony.
Full video of the hearings here:
http://oversight.house.gov/story.asp?ID=1511
Hearing on Private Security Contracting in Iraq and Afghanistan
Chairman Waxman's Opening Statement
Over the past 25 years, a sophisticated campaign has been waged to privatize government services. The theory is that corporations can deliver government services better and at a lower cost than the government can.
Over the last six years, this theory has been put into practice. The result is that privatization has exploded. For every taxpayer dollar spent on federal programs, over 40 cents now goes to private contractors. Our government now outsources even the oversight of the outsourcing.
"If Blackwater and other companies are really providing better service at lower cost, the experiment of privatizing is working. But if the costs are higher and performance is worse, then I don’t understand why we are doing this. It makes no sense to pay more for less. We will examine this issue today and facts, not ideology, need to guide us here."
-Chairman Waxman
At home, core government functions — like tax collection and emergency response — have been contracted out. Abroad, companies like Halliburton and Blackwater have made billions performing tasks that used to be done by our nation’s military forces.
What’s been missing is a serious evaluation of whether the promises of privatizing are actually realized. Inside our government, it has become an article of faith that outsourcing is best.
Today, we are going to examine the impact of privatization on our military forces. We will focus on a specific example: the outsourcing of military functions to Blackwater, a private military contractor providing protective services to U.S. officials in Iraq.
We will seek to answer basic questions: Is Blackwater, a private military contractor, helping or hurting our efforts in Iraq? Is the government doing enough to hold Blackwater accountable for alleged misconduct? And what are the costs to the federal taxpayer?
I want to thank Erik Prince, Blackwater’s founder and CEO, for his cooperation in this hearing. As a general rule, children from wealthy and politically connected families no longer serve in the military. Mr. Prince is an exception. He enlisted in the Navy in 1992 and joined the Navy SEALS in 1993, where he served for four years. We thank you for that service.
In 1997, he saw an opportunity to start his own company and created Blackwater. As he has said, “We’re trying to do for the national security apparatus what FedEx did for the Postal Service.”
There may be no federal contractor in America that has grown more rapidly than Blackwater over the last seven years. In 2000, Blackwater had just $204,000 in government contracts. Since then, it has received over $1 billion in federal contracts. More than half of these contracts were awarded without full and open competition.
Privatizing is working exceptionally well for Blackwater. The question for this hearing is whether outsourcing to Blackwater is a good deal for American taxpayers, the military, and our national interest in Iraq.
The first part of that question is cost. We know that sergeants in the military generally cost the government between $50,000 to $70,000 per year. We also know that a comparable position at Blackwater costs the federal government over $400,000 — six times as much.
Defense Secretary Gates testified about this problem last week. He said Blackwater charges the government so much that it can “lure highly trained soldiers out of our forces … to work for them.” He is now taking the unprecedented step of considering whether to ask our troops to sign “non-compete” agreements to prevent the U.S. military from becoming a taxpayer-funded training program for private contractors.
There are also serious questions about Blackwater’s performance. The September 16 shooting that killed at least 11 Iraqis is just the latest in a series of troubling Blackwater incidents. Earlier this year, our Committee examined the company’s mistakes in Fallujah, where four contractors were killed and their bodies burned. That incident triggered a major battle in the Iraq war.
New documents indicate that there have been a total of 195 shooting incidents involving Blackwater forces since 2005. Blackwater’s contract says the company is hired to provide defensive services. But in most of these incidents, it was Blackwater forces who fired first.
We have also learned that 122 Blackwater employees — one-seventh of the company’s current workforce in Iraq — have been terminated for improper conduct.
We have the best troops in the world. The men and women in our armed forces are extraordinarily able and dedicated. Their pay doesn’t reflect their value, but they don’t complain. So I have a high bar when I ask whether Blackwater and other private military contractors can meet the performance standards of our soldiers.
In recent days, military leaders have said that Blackwater’s missteps in Iraq are “going to hurt us badly.” One senior U.S. military official said Blackwater’s actions are creating resentment among Iraqis that “may be worse than Abu Ghraib.” If these observations are true, they mean that our reliance on private military contractors is backfiring.
The Committee’s investigation raises as many questions about the State Department’s oversight of Blackwater as it does about Blackwater itself. On December 24, 2006, a drunken Blackwater contractor shot the guard of the Iraqi Vice President. This didn’t happen out on a mission protecting diplomats: it occurred inside the protected Green Zone. If this had happened in the United States, the contractor would have been arrested and a criminal investigation launched. If a drunken U.S. soldier had killed an Iraqi guard, the soldier would face a court martial.
But all that has happened to the Blackwater contractor is that he has lost his job. The State Department advised Blackwater how much to pay the family to make the problem go away and then allowed the contractor to leave Iraq just 36 hours after the shooting. Incredibly, internal e-mails document a debate over the size of the payment. The Charge d’Affairs recommended $250,000 payment, but this was cut to $15,000 because the Diplomatic Security Service said Iraqis would try to get themselves killed for such a large payout.
It is hard to read these e-mails and not come to the conclusion that the State Department is acting as Blackwater’s enabler.
If Blackwater and other companies are really providing better service at lower cost, the experiment of privatizing is working. But if the costs are higher and performance is worse, then I don’t understand why we are doing this. It makes no sense to pay more for less. We will examine this issue today and facts, not ideology, need to guide us here.
Yesterday, the FBI announced that it launched a criminal investigation into Blackwater’s actions on September 16. This morning, the Justice Department sent a letter to the Committee asking that in light of this development, the Committee not take testimony at this time about the events of September 16. Our precedent on this Committee is that Congress has an independent right to this information. But in this case, Ranking Member Davis and I have conferred and we have agreed to postpone any public discussion of this issue as we work with the Department to obtain the information the Committee seeks. For the same reason, at the request of the Justice Department, I will ask our witness, Mr. Prince, and our State Department witnesses on the second panel, not to discuss the September 16 incident in this public setting today. The last point I want to make is directed to the families of the Blackwater employees killed in Fallujah and the families of the soldiers killed in a tragic and unnecessary accident with Blackwater Airlines, some of whom are here today. I know many of you believe that Blackwater has been unaccountable to anyone in our government. I want you to know that Blackwater will be accountable today. We will be asking tough questions about disturbing actions. But I also want to assure Mr. Prince that we will be fair. And we will not tolerate any demonstrations or disturbances from anyone attending this hearing. Thank you, and I’m looking forward to Mr. Prince’s testimony.
House Backs Law to Prosecute Iraq Contractors
On Capitol Hill, the House has overwhelmingly approved a measure that would subject private military contractors in Iraq to prosecution in U.S. courts. The move comes on the heels of last month’s killing of up to twenty-eight Iraqi civilians by guards working for the private military firm Blackwater USA. The bill would not be retroactive -- meaning Blackwater guards would still likely avoid prosecution. The final vote was three hundred-eighty nine to thirty. If the measure attracts the same support in the Senate, Congress would have enough votes to override a Presidential veto.
Pentagon: Blackwater Guards Fired Unprovoked
Meanwhile evidence continues to emerge the Blackwater shooting was unprovoked. A newly-disclosed Pentagon report from the attack scene says Blackwater guards were the first to fire and used excessive force. The reports follow evidence showing the Blackwater guards opened fire in another attack just minutes after the first shooting. Iraqi witnesses say Blackwater operatives fired into a group of cars just one-hundred fifty yards away from the first shooting at Nisoor Square. At least one person was killed and two injured.
both short newsitems from www.democracynow.org for Oct 5, 2007
On Capitol Hill, the House has overwhelmingly approved a measure that would subject private military contractors in Iraq to prosecution in U.S. courts. The move comes on the heels of last month’s killing of up to twenty-eight Iraqi civilians by guards working for the private military firm Blackwater USA. The bill would not be retroactive -- meaning Blackwater guards would still likely avoid prosecution. The final vote was three hundred-eighty nine to thirty. If the measure attracts the same support in the Senate, Congress would have enough votes to override a Presidential veto.
Pentagon: Blackwater Guards Fired Unprovoked
Meanwhile evidence continues to emerge the Blackwater shooting was unprovoked. A newly-disclosed Pentagon report from the attack scene says Blackwater guards were the first to fire and used excessive force. The reports follow evidence showing the Blackwater guards opened fire in another attack just minutes after the first shooting. Iraqi witnesses say Blackwater operatives fired into a group of cars just one-hundred fifty yards away from the first shooting at Nisoor Square. At least one person was killed and two injured.
both short newsitems from www.democracynow.org for Oct 5, 2007
The People vs. the Profiteers
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
The People vs. the Profiteers
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
The People vs. the Profiteers
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
The People vs. the Profiteers
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times
The People vs. the Profiteers
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times in two hours."
According to the complaint, the practice of reporting inflated figures "increases the M.W.R. budget in Iraq, allowing for more KBR facilities, administrators, staff and equipment, and boosting KBR's fee." (At a hearing in June, KBR denied basing its M.W.R. billing on the number of reported users.)
The practice, the suit alleges, was not confined to Fallujah-which might help explain a September 2006 press statement in which KBR boasted of having served "more than 73.5 million patrons in MWR facilities." As the complaint notes, "the number of patrons that KBR says it has hosted at MWR facilities is three times the population of Iraq." Given that Iraqis weren't allowed to use the facilities, it's worth noting that the figure is roughly 565 times the total number of U.S. troops deployed in the country.
Linda Warren, a former Marine who brought up five children as a single mother in Abilene, Texas, says she "flatly refused" to fill in the bogus head counts. She had gone to Iraq for patriotic reasons, and recoiled at being asked to compile inflated records. Once, she says, "I did the head counts accurately. Next day when I got to work I could see that the sheet had been replaced."
She and her colleague Julie McBride, a former attorney from California, both protested to their KBR bosses. Having filed a formal grievance, Warren was accused of "not getting along with employees" and was fired in January 2005. "They made it clear there was no place for me any longer," she says. "There was no appeal, no accountability."
Two months later, the complaint states, McBride was summoned to the office of Kevin Clarke, KBR's top official at Camp Fallujah. Having repeated her concerns about the M.W.R. head count, she was told she was being fired for "insubordination." Among her offenses: occasionally using a pencil instead of a pen to fill in her time sheets. Shipped by helicopter to Camp Victory South, near Baghdad, she was told by Ted Kowalski, KBR's human-resources supervisor in Iraq, that she was under "house arrest." "KBR guards surrounded McBride," says the complaint. "They made her ride with them in a sports utility vehicle. They did not tell McBride where they were taking her. She feared for her safety.... They required her to stay in an isolated trailer, with no amenities. They stood guard outside the trailer throughout the night." Eventually she was escorted to the Baghdad airport and flown back to America.
Warren and Cassaday both say that neither federal agents nor D.O.J. lawyers have ever made any attempt to ask them about the claims in their suit. Mayer wasn't interviewed, either, according to Grayson. "The [D.O.J.] investigation consisted of asking KBR for an explanation," he says. "Then, without checking into its validity, they declined to prosecute. Having spoken to the firm, the government said, 'Okey-dokey, then we decline the case.'" The suit makes three further allegations, involving overpayments that run into the millions, but the D.O.J. didn't investigate them at all.
KBR declined to comment on any aspect of the suit's allegations in its statement. Meanwhile, the Justice Department's summary investigation has left the four plaintiffs in a bind. "The way this normally works, in non-Iraq cases, is that, even when the government does decline to prosecute, they subpoena records, they interview witnesses, and they tell you what they are doing," Grayson says. "We could have built on that. Here, too, they screwed us up and put us at a terrible disadvantage."
Qui tam cases from Iraq are investigated by an F.B.I. unit in Rock Island, Illinois. According to Grayson, the unit has a "standing order" to get approval from the attorneys at Vinson & Elkins before questioning anyone at Halliburton or KBR. "F.B.I. agents are not supposed to politely ask permission," he says. "The most common interview technique by the F.B.I. is a knock on your door at nine o'clock at night. They're not allowed to do that when it comes to Halliburton and KBR employees." (In its e-mailed statement, the D.O.J. said it cannot comment on how any Iraq case has been investigated; Vinson & Elkins did not respond to a request for comment.)
Inflated bills are not the only factor driving up the price of logcap. There's also this astounding fact: according to government auditors, 80 percent of the work under contract is being done not by KBR but by a bewildering array of subcontractors. In essence, Grayson says, logcap is not a contract to provide services but "a contract to shop"-to the tune of some $20 billion.
Some of these subcontracting firms are large and well-established companies from countries such as Britain, Kuwait, and Saudi Arabia; others are fly-by-night outfits owned by Iraqis who insist on having their names concealed, owing to well-founded fears of reprisal.
In one place the job of laundering soldiers' uniforms, for example, might be performed by a company working directly for KBR. But in another a subcontractor will have sub-subcontracted the work to someone else, and sometimes even sub-sub-sub-subcontracted it. "I've come across examples where you get down four or five levels," says a government auditor who spoke on condition of anonymity. "There's the U.S. prime, the subcontractor from the Middle East, then a sub-subcontractor from Pakistan, then a shell corporation with a box number in Michigan, and finally the Iraqis who're actually doing the work-for next to nothing."
This system has created great difficulties for anyone attempting to oversee the process on behalf of American taxpayers. It has also substantially increased the overall costs of the war by creating the conditions for obscene markups between contract levels. "There is an enormous need to get a closer handle on the detail in the field," says the auditor. "If you go ask one of the inspectors general, 'Tell me about the subcontracts,' they can't tell you anything. It's a black hole. What this means for oversight, and basic issues of fairness, is that there is none."
Establishing logcap as a contract to shop has had a further consequence. Whereas government contracting is bound by a stringent set of rules, the requirements are far more lax when it is KBR or one of its subcontractors that's farming out work. "The government has basically deputized Halliburton to do its contracting for it," says Grayson. "And Halliburton, rather than enforcing the rules of government contracting that have developed since World War II, has generated its own set of rules."
Instead of offering a given job to bidders in an open and public auction, for instance, KBR can approach a few favored subcontractors. And whereas government agencies tend to favor cheaper bids, the fact that logcap is cost-plus means that KBR benefits from accepting the most expensive offer. The higher the subcontract's cost, the higher KBR's "award fee" profit.
For more than three years after the Iraq invasion, matters were further obscured by KBR's insistence that all its contract data was "proprietary"-of potential value to competitors and therefore not subject to disclosure. In October 2006 a stinging report by Stuart Bowen, the sigir, found that this was making it almost impossible to determine whether logcap was delivering value for money, and was "an abuse of the procurement system." Since the report, says Bowen, KBR has begun to make more information available.
On one occasion, the secrecy engendered by multiple levels of subcontracting descended to black farce. On September 28, 2006, Tina Ballard, the deputy assistant secretary of the army, testified to the House committee on government reform about one of the watershed moments in the developing Iraqi insurgency, the lynching of four security contractors on March 31, 2004. The men were employed by the North Carolina security firm Blackwater USA, and Army Secretary Francis J. Harvey had denied in a letter that they had been doing work for KBR under logcap. That would have been a breach of contract, Ballard told the House committee, since logcap prohibits KBR from billing the government for private security. The company is supposed to rely on U.S. troops for protection.
On February 7, 2007, Ballard came before the committee again to say that her earlier claims, and Harvey's letter, had been mistaken. After "extensive research," the army had ascertained that the murdered Blackwater guards were working for KBR under logcap after all-though not directly. They had been engaged by the Kuwait-registered Regency Hotel & Hospital Company, which in turn had been subcontracted by ESS Support Services. ESS had a subcontract from KBR to build and operate dining facilities for troops. "We understand that these security costs, which were not itemized in the contracts or invoices, were factored into ESS's labor costs under its ... service contracts with KBR," Ballard said.
KBR had spent an awful lot on these guards it didn't know it had. Blackwater was paying them $500 a day, but billed their services to Regency at a rate of between $815 and $1,075 a day. Regency was adding a markup of $285 to $425 per guard per day when it in turn billed ESS, bringing the annual cost for each individual to between $401,500 and $547,000-about 4 to 10 times higher than an army sergeant's salary. All of this was billed to the government by KBR, which naturally claimed its usual fees on top. (In September, the government of Iraq threatened to expel Blackwater from the country after an incident in which at least eight civilians were killed.)
Before she went to Fallujah, Linda Warren had been supervising a KBR military laundry in Baghdad. She says KBR was billing the government $75 per bag, whereas the Iraqi sub-subcontractor whose staff actually did the work got just $12. The laundry workers themselves, several of whom would be killed by insurgents, were paid just $5 a day.
The dirtiest open secret about contracting in Iraq is that much of the real physical work is done not by Americans but by an army of "third-country nationals"-or T.C.N.'s-from places such as India, Nepal, Sri Lanka, and the Philippines. In 2006, a Pentagon investigation found that T.C.N.'s are often subject to abuses, "some of them considered widespread." In addition to "substandard living conditions" and illegal confiscation of their passports, many workers have had to deal with "deceptive" hiring practices-meaning that they weren't told that their jobs were in Iraq until they'd been shipped there. According to the State Department, T.C.N.'s seeking employment have been forced to pay large "recruitment fees," which are deducted from their future earnings. The effect is to reduce them to a state of "involuntary servitude." (KBR claims to be "an industry leader in implementing a policy in Iraq against trafficking in persons.")
"There were times when their treatment made me ashamed to be an American," says Linda Warren, who became especially close to some Filipino women while posted at Radwaniyah, an installation just outside Baghdad. "They'd come into work with a hard-boiled egg and some tea and offer to share it, while Americans were taking enough to feed five people at the chow halls and throwing most of it away. They were virtually imprisoned, told they would lose all their pay unless they served out their contracts." Several former KBR staff say that the equipment used to protect T.C.N.'s, from blast walls to body armor, was markedly inferior to that of the Americans. As of August, about 1,000 civilian contract workers had been killed in Iraq. Most were T.C.N.'s.
Like many of those who went to work for KBR in Iraq, Barrington Godfrey-a naturalized U.S. citizen who was born in Wales-is a military veteran who applied for the job because he wanted to support the war effort. He, too, is a Grayson client, and his suit was kept under seal for well over a year. When the D.O.J. asked for a further extension in April 2007, its lawyers were so confident of their chances that they showed up in court with a drafted legal order marked motion for extension granted ready to be signed. Instead, Judge Gerald Bruce Lee of the Eastern District of Virginia made a show of crossing out granted and inserting the word denied.
Now in his early 60s, Godfrey has 18 years' experience as a contract-management executive in Saudi Arabia's oil industry. When he joined KBR, in the summer of 2004, concerns had already begun to surface in Washington about overcharging from KBR's troop dining facilities-known in the trade as "D-Facs." Hoping to allay those concerns, KBR set up a "tiger team"-a group that operated outside the normal chain of command-and tasked it with negotiating new D-Fac contracts and cleaning up the existing ones. Godfrey was assigned to the unit.
The team's boss, Jill Pettibone, was another beneficiary of KBR's revolving-door relationship with the Pentagon. Until 2000 she had been executive director for operations at the Defense Contract Management Command, which had been responsible for overseeing KBR's very expensive work in the Balkans. (The body has since been renamed the Defense Contract Management Agency.)
Like most service facilities in Iraq, the D-Facs were staffed by T.C.N.'s. They were paid a bit better than the laundry workers observed by Linda Warren. Depending on their skills and seniority, they earned between $300 and $400 a month.
Unlike most qui tam plaintiffs, Godfrey managed to retain documentary records, and they reveal just how huge the margins on subcontracts can be. For example, a Kuwaiti subcontractor named ABC International Group was in charge of providing D-Fac labor at H4, a base near Mosul. Between March and November of 2004, ABC sent KBR monthly bills ranging from $756,000 to $1.38 million. Godfrey discovered that the facility employed precisely 137 people, all of them T.C.N.'s. On the most generous assumption, that they were all making $400 a month, the true amount being paid to the workers was no more than $54,800. The markup, therefore, was between 1,500 and 2,500 percent.
Until February 2004, H4's D-Fac had been staffed by a Turkish company named Serka. Actually, that continued to be the case. The only difference now was that Serka had become a sub-subcontractor to ABC. "All ABC did was take their slice of the profit. There was no change to the operation at all," Godfrey says.
Godfrey's documents show that margins well in excess of 1,000 percent were to be found at other D-Facs, which Grayson says is unexceptional among contractors in Iraq. "A thousand percent is common, 500 percent routine. I have never seen a markup of less than 100 percent." Back in the U.S., "the average markup under government contracts is 10 percent, and anything more than 12 percent will usually be rejected when the government conducts audits. If your profit margin on a government contract conducted outside Iraq is more than 10 percent, you may well be accused of committing fraud."
Huge labor markups were not the only irregularities Godfrey says he found in the ABC invoices he processed. He also came across blatant accounting inflation of the kind Linda Warren had seen in Fallujah. According to his qui tam complaint, there was a period in 2004 when the D-Fac at H4 was serving 1,000 to 2,000 people a day but billing as if there were 5,400: "At three meals a day, this was billing for almost 10,000 meals a day that were not served at H4."
Godfrey made repeated attempts to force ABC to reduce its bills. All of them, he says, were blocked inside KBR. That December, Godfrey went on leave. When he came back, his cell phone and computer had been stolen. Meanwhile, ABC's C.E.O. was writing to Tom Quigley, the KBR chief of Iraq contracts, who had once been Bunnatine Greenhouse's colleague at the Army Corps of Engineers, claiming that Godfrey was "treating ABC unfairly." Godfrey was suspended for 10 days and told by another KBR executive, "We can't have subcontractor C.E.O.'s complaining about subcontract administrators."
As a result of KBR's inaction, his complaint says, "ABC's overbilling continued through the completion of its first contract period in June 2005, and through the filing of this complaint, and beyond. The amount that ABC overbilled to KBR, and KBR overbilled to the government, exceeded $10 million." This figure covered just one of about a hundred D-Facs spread across Iraq.
In December 2004, a suicide-bomb attack on the H4 dining hall killed 22 people, including 14 troops. Afterward, according to Godfrey's complaint, ABC was paid not once but twice for new kitchen equipment and a new $2 million facility. The complaint also alleges that a Saudi firm, Gulf Catering Company, used inflated head counts to overcharge KBR by nearly $5.3 million between February and October 2004. He relayed these findings to Quigley, who promised to "forward the matter for further inquiry." Then, in a separate e-mail, Quigley told Godfrey he felt "submarined" by the disclosures. (KBR refused to comment on the suit to Vanity Fair.)
Godfrey left Iraq in February 2005, frustrated that the waste he'd encountered seemed uncontrollable. He had come across officials from the Defense Contract Management Agency, his team leader's former billet, and he had little faith that they would succeed where he had failed. "The ones I met were pathetic," he says. "Some had no experience: they'd just got their degrees. They didn't ask questions, and they missed the issues that I brought up. They had access to me and my memos, and not once did one ever come to me and say, 'Can we talk, Barry?'"
Apart from its connections in Washington, there is something else that protects KBR: the perception, widespread throughout the military, that it has provided generally good-quality services in war-zone conditions. As Grayson puts it, "Halliburton's philosophy is not to deliver crap. Halliburton's philosophy is to deliver extraordinarily overpriced but adequate services in support of the government."
That these have cost billions of dollars more than they should have is an inconvenient detail, and already the Pentagon is moving on. Officials now accept that the monopoly granted by logcap 3 had its drawbacks, and at the end of June the army announced that the contract will soon be terminated and replaced with a new one, logcap 4. Under this, the largesse will be split among three corporations: DynCorp, Fluor, and KBR. logcap 4 is another cost-plus, indefinite-delivery, indefinite-quantity contract, but at least this time KBR's income, as well as DynCorp's and Fluor's, will be capped. Over the next 10 years, KBR will have to satisfy itself with charging American taxpayers $50 billion for its services under logcap 4.
These improvements may turn out to be little more than cosmetic. According to Bowen, what's needed is full disclosure of all subcontracting arrangements and a substantial increase in the number of officials who spend their time designing and policing contracts.
With logcap 4, however, the reverse is about to happen. The government agencies responsible for oversight will be assisted by Serco, a Virginia-based services company that in February was awarded a "planning support contract" worth up to $45 million a year. The Bush administration maintains that hiring Serco to regulate logcap 4 will improve efficiency and counter fraud and waste.
David Walker, of the G.A.O., fears that the weakened state of oversight is poised to get "much worse." Not only is there a large "skills gap," but "a significant percentage of the existing contract workforce is eligible to retire or will be eligible to retire within the next few years." Outsourcing oversight brings still more problems in its wake, he says, starting with conflicts of interest, which arise whenever the company being monitored has other business, existing or potential, with the one doing the monitoring.
False Claims Act suits could help to remedy these deficiencies, if only the Department of Justice weren't suppressing them. One day, though, the seals on the complaints will have to be lifted. "I wish I could tell you about the ones that are under seal," says Grayson, "because some of them really are time bombs. They're literally burying these cases to keep the public from finding out about them, and to keep anything from being done on them. But it is a time bomb, because any normal amount of attention on these cases would result in massive amounts of money being recovered for the taxpayers."
There are a few encouraging signs that a day of reckoning is drawing near. Committees in both the House and the Senate have held hearings on contracting in Iraq, and several plan to hold more. Patrick Leahy, the Democratic chairman of the Senate judiciary committee, has introduced a War Profiteering Prevention Act, which would make it much easier to investigate corrupt contractors and call them to account. And in August, the news that tens of thousands of weapons intended for Iraqi security forces had vanished or been stolen prompted the Pentagon to announce that its inspector general, Claude M. Kicklighter, would lead an 18-person team to investigate "contracting practices" in Iraq.
In the more distant future, a Democratic administration might open up the vaults and expose the American public to the scale of what has been looted. "What we have seen up to now is the worst of the worst in terms of a deliberate cover-up," Grayson says. But if and when it comes to an end, he thinks it's entirely possible that Congress will appoint a special prosecutor-one whose targets might one day reach "an extremely high level."
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David Rose is a Vanity Fair contributing editor.
http://www.truthout.org/docs_2006/100807A.shtml
By David Rose
Vanity Fair
November 2007 Issue
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?
The army's Tina Ballard (far left) is sworn in with five contracting executives at a hearing on Capitol Hill, February 7, 2007.
On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud. Six feet four in his socks, he likes to dress flamboyantly, on the theory that items such as pink cowboy boots help retain a jury's attention. He and his Filipino wife, Lolita, chose their palm-fringed mansion in Orlando, Florida, partly because the climate alleviates his chronic asthma, and partly because they wanted their five children to have unlimited access to the area's many theme parks.
Grayson likes theme parks, too. Toward the end of two long days of interviews, he insists we break to visit Universal Studios, because it wouldn't be right for me to leave his adopted city without having sampled the rides. Later he sends me an e-mail earnestly inquiring which one I liked best.
He can be forgiven a little frivolity. In his functional home-office in Orlando, and at the Beltway headquarters of his law firm, Grayson & Kubli, Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it "the crime of the century."
So help them, God: Anti-fraud crusader Alan Grayson.
(Photo: Gasper Tringale)
His obvious adversaries are the contracting corporations themselves-especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.
Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-one that may come to haunt the legacy of the Bush administration long after it is gone.
Consider the case of Grayson's client Bud Conyers, a big, bearded 43-year-old who lives with his ex-wife and her nine children, four of them his, in Enid, Oklahoma. Conyers worked in Iraq as a driver for Kellogg, Brown & Root. Spun off by Halliburton as an independent concern in April, KBR is the world's fifth-largest construction company. Before the war started, the Pentagon awarded it two huge contracts: one, now terminated, to restore the Iraqi oil industry, and another, still in effect, to provide a wide array of logistical-support services to the U.S. military.
In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck-a "reefer," in contractor parlance-at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.
The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.... The inside of the trailer was awful."
It is not unheard of for trucks in a war zone to perform hearse duty. But both civilian and U.S.-military regulations state that once a trailer has been used to store corpses it can never again be loaded with food or drink intended for human consumption. According to the U.S. Army's Center for Health Promotion and Preventive Medicine, "Contact with whole or part human remains carries potential risks associated with pathogenic microbiological organisms that may be present in human blood and tissue." The diseases that may be communicated include aids,hepatitis, tuberculosis, septicemia, meningitis, and Creutzfeldt-Jakob disease, the human variant of mad cow.
But when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice-ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.-the public warehouse center-several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."
As late as August 31, 11 weeks after trailer R-89 was emptied of the putrefying bodies, a KBR convoy commander named Jeff Allen filed a mission log stating that it had carried 5,000 pounds of ice that day. This ice, Allen wrote, was "bio-contaminated." But to his horror, on that day alone, "approx 1,800 pounds [were] used."
Conyers and Logsdon say that R-89 was not the only truck that was loaded with ice after being used as a mortuary. They attribute this state of affairs to a chronic shortage of trucks brought about by systemic failures in KBR's operation. The firm had purchased some 200 reefers in Iraq, but only a quarter of them worked. "We had crap-assed trucks they'd bought from local dealers," Logsdon says. "Often you'd be driving one they'd pieced together from several just to get it on the road." He and other former KBR workers say that even new vehicles, some of which cost hundreds of thousands of dollars, often broke down because of an absence of affordable spare parts. Instead of paying to repair them, the company often burned disabled trucks in pits or by the side of the road. Conyers tried repeatedly to draw his superiors' attention to these and other alleged abuses, but to no avail. (In an e-mailed statement, KBR denied that it "did or does" order defective vehicles, adding that it disposes of equipment only with "the approval of designated Army personnel.")
Like many of KBR's employees, Conyers was risking his life on the job, which paid about $7,000 a month. He had already lost half a leg in an accident-coincidentally, while working for Halliburton-in 1990. Twice, in August and October 2003, his convoy was hit by roadside bombs, and although he was not seriously injured, his prosthetic leg was damaged. A third attack caused swelling and infection, making it impossible to wear the prosthesis. Then, three days after Christmas of 2003, about three months after he'd reported the contaminated ice, he was fired. His superiors accused him of refusing to work, an allegation he denies. Conyers says he had already been warned by KBR management that he was "not a team player," and he believes that the real reason for his dismissal was his refusal to keep quiet. Along with his job went his health insurance. Now confined to a wheelchair, he is still unable to work.
Others in the world of Iraq contracting have fared much better. Halliburton's stock price rose fourfold between the time of the invasion and early 2006, from $10 to $40. And in 2006 alone, according to Forbes, Halliburton C.E.O. David Lesar collected nearly $30 million in compensation.
In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government-in the shape of the Department of Justice-decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole.
A suit ordinarily remains sealed for 60 days while the D.O.J. makes up its mind about whether or not to proceed. During this period, anyone who divulged the suit's contents-plaintiff, lawyer, or journalist-would risk prosecution, fines, and imprisonment. According to court precedents, a violation of the seal might also cause the case in question to collapse. But when the seal expires, the lawsuit's contents are made public-whether the D.O.J. intervenes or not.
We must assume that Conyers did file his suit, because he now says he's unable to talk at all about his experiences with KBR in Iraq. This is presumably because the case remains under seal, though neither he nor Grayson can confirm even that. The seal is, in effect, a sweeping gag order, preventing them or anyone else from discussing the case in any way. Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.
So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. The severe terms of the False Claims Act mean that he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)
If some of Grayson's clients win their cases, he could see a return on his investment, in the shape of reimbursed costs and a percentage of any damages. There is also the possibility that he won't see a dime. Fortunately for him, he doesn't need the money. In 1990 he launched a telecommunications company and installed its switching system in a bathroom above a New York funeral home. It grew to become IDT, the world's largest calling-card corporation, nearly half of which was sold in 1998 to AT&T for $1 billion. More recently, Grayson has realized impressive returns in far-flung locations: he is, for example, the third-largest shareholder in Kentucky Fried Chicken Indonesia. "I made all this money in my spare time," he says with a shrug. "I don't quite know how it happens. I'm like Dustin Hoffman in Rain Man."
He certainly didn't start with much. Born in 1958, he grew up in the Bronx in a 21st-floor apartment next to an elevated train. His father was the principal of an elementary school where a third-grader once threatened him with a knife. Grayson's mother spent much of her time attending to her son's asthma. "I had a lot of trouble breathing, and needed special injections four times a week," he remembers. "Each time, she had to take me to the hospital. She also made huge efforts to ensure I got a good education."
Those efforts paid off. Admitted as a student at the highly selective Bronx High School of Science, Grayson went on to Harvard and then Harvard Law School. (While still a law student, he somehow managed to obtain a master's degree in public policy and to pass the exam for a Ph.D. in government.) But his struggles weren't over yet. A brief first marriage left him so broke that he once found himself locked out of the motel room where he'd been living.
In 1984, he got a job as a clerk for the D.C. federal appeals court, where he worked for future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg. The following year, he joined Ginsburg's husband, Marty, at his renowned Washington law firm, Fried, Frank, Harris, Shriver & Jacobson. "There," Grayson says, "I learned the smallest details of the law that applies to government contracting." The Federal Acquisition Regulation, 600 small-type pages of rules governing every aspect of commercial relationships between the U.S. government and private business, became his bible.
A cynic might argue that Grayson is hoping for political dividends from his Iraq-fraud campaign. He mounted a run for Congress last year in his local Florida district and, after joining the race very late, came within 2,000 votes of winning the Democratic primary. But he maintains that his emergence as a whistle-blowers' white knight was anything but calculated.
He had, he says, handled a "trickle" of qui tam cases for years, representing both whistle-blowers and contractors. Many of those cases were swiftly adopted by the D.O.J. But when the Bush administration came to power and the "war on terror" began, he quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude. More and more would-be plaintiffs began to contact his firm after hearing about it on the informal whistle-blowers' grapevine or through nonprofit organizations such as Taxpayers Against Fraud and the Project on Government Oversight, both based in D.C. "I certainly could be doing a lot of different things in my life," says Grayson. "It's possible that when all is said and done on these cases I will have lost a substantial amount of money. I'm O.K. with that. Some things you do because they're really worthwhile and important."
It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.
"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."
In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.
Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.
Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?
One such purpose might be to shield from view the monumental scale of U.S. military contracting in Iraq and elsewhere, and the size of the flaws associated with it. The Department of Defense is easily the biggest federal agency, with a budget that has ballooned more than 90 percent since 2000, to about $460 billion this year. Much of that increase has been spent on private contracting, which rose from $106 billion in 2000 to $297 billion in 2006.
KBR's Iraq logistics contract was awarded in December 2001, almost a year and a half before the war started. By August 2007 the company had received about $25 billion from the D.O.D., and the funds continue to roll in at a rate of more than $400 million a month. KBR builds America's bases and trucks in soldiers' food, cooks their meals, washes their laundry, and provides their gyms and Internet connections. When the Pentagon decided to outsource the repair of military communications equipment, this too was assigned to KBR. Soon, as Grayson points out, there will be no one left in the U.S. Army who knows how to fix a radio. This profound shift of duties from the military to private companies was supposed to save the government money, and it is an uncomfortable political fact that it has instead triggered a free-for-all of fraud and waste.
At the same time, the Bush administration has special sensitivities to claims concerning KBR and its former parent company, Halliburton. Dick Cheney's deep connection with the firm is well established. It is less widely known that former attorney general Alberto Gonzales, the Cabinet member who headed the Justice Department until August, when he was forced to resign, also has long-standing links with both Halliburton and its legal counsel, the venerable Texas firm of Vinson & Elkins.
Grayson says that all the qui tam suits he has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982 it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm's first minority partners-a promotion that his biographer Bill Minutaglio would single out as "the defining moment of his life." In 2000, Gonzales amassed a record $843,680 war chest to finance a race for the Texas Supreme Court, even though he had no Democratic opponent. V&E, which had already represented Halliburton for many years, was the source of his biggest donation-almost $30,000. Halliburton executives also stepped up, with a gift of $3,000.
The Justice Department declined to answer detailed questions about the qui tam cases, saying, "We cannot comment on the number of cases that are under investigation or under seal." In an e-mail, a spokesman wrote, "We do not agree with any statement that might suggest that the Department is not giving these cases due consideration for political or other improper reasons, and there is no support for such a conclusion." The cases, he added, "arise from allegations of fraud in a war zone, where acquiring evidence is necessarily more time consuming and complex."
Whatever the government's reason for keeping the qui tam cases under seal, its secrecy has so far obscured the true picture of alleged fraud in Iraq. For now, only slivers of the whole are visible-thanks to the handful of cases that have been opened to scrutiny.
"In my mind, one of the basic reasons, maybe even the basic reason, why the war has gone badly is war profiteering," says Grayson. "You could say that the only people who have benefited from the invasion of Iraq are al-Qaeda, Iran, and Halliburton. America has spent so much money that we literally could have hired every single adult Iraqi and it would have cost less than what it has cost to conduct this war through U.S. military forces and contractors."
In Grayson's view, a nightmare combination of jacked-up bids, waste, kickbacks, and inflated subcontracts means that as much as half the value of every contract he has seen "ends up being fraudulent in one way or another." He adds, "Cumulatively, the amount that's been spent on contractors in the four-plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent-I don't think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you're talking cumulatively about something between $10 and $50 billion."
Indeed, in February, the House Committee on Oversight and Government Reform got the news from Pentagon auditors that contractors in Iraq had claimed at least $10 billion-three times more than previous official estimates-in expenditures that were either unreasonably high or unsupported by proper documentation. Of this amount, $2.7 billion had been billed to the government by KBR.
KBR's current military-support contract is known as the Logistics Civil Augmentation Program, or logcap. This is the contract's third incarnation, and, like its predecessors, logcap 3 is a "cost-plus" contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it makes, so it pays to be profligate. All the former employees I spoke to told of KBR's over-ordering equipment such as computers, generators, and vehicles on an epic scale. Millions of dollars' worth of equipment was left to rot in yards in the desert.
logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.
The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.
logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
In the April 2005 issue of this magazine, Michael Shnayerson wrote about Bunnatine Greenhouse, a former civilian procurement chief at the Army Corps of Engineers. Greenhouse had been demoted after protesting the decision to give Halliburton the Iraqi-oil-industry contract. In the summer of 2001, she had led a team of Pentagon inspectors sent to Bosnia and Kosovo. The team, she says, found that KBR and its bills were "out of control." The General Accounting Office, now named the Government Accountability Office (G.A.O.), reached similar conclusions, reporting that KBR's Balkans operation was over-equipped and overstaffed to the point where "half of these crews had at least 40 percent of their members not engaged in work."
Verdicts such as these should have been devastating, especially since they were delivered in the fall of 2001, when the Pentagon was about to decide which of several rival corporations should be awarded the new logcap 3. The contract promised to be extremely lucrative: after 9/11, war was looming, and big foreign deployments seemed inevitable. Somehow, KBR's record of wasting government money was overlooked.
One reason may have been KBR's shrewd strategy of employing former government regulators. Tom Quigley, Bunny Greenhouse's predecessor as civilian procurement chief of the Army Corps of Engineers, went on to become KBR's logcap procurement director in Iraq. Still more senior was Chuck Dominy, who had been a three-star general with the Army Corps when Cheney hired him, at Halliburton, in 1996. When it came time to award logcap 3, Dominy was Halliburton's vice president for government affairs and chief Washington lobbyist. (KBR denies courting government favor through its hiring practices.)
Although Cheney was by then vice president, he still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office. To date, no hard evidence has surfaced to suggest that he or his staff was directly involved in awarding logcap 3. However, as Time first reported, an Army Corps internal e-mail states that the firm's Iraqi oil contract was "coordinated with the VP's [vice president's] office."
The upshot was that KBR's past sins were forgiven in 2001. "What is clear is that they took no heed of what I'd been saying about Halliburton in the Balkans," Greenhouse says. "And they should have. Many of the problems that have become apparent with logcap in Iraq, I had identified years earlier in Kosovo and Bosnia."
And they were apparent almost from the start of the Iraq war. On November 23, 2004, the sigir, Stuart Bowen, complained to the Pentagon that it had proved impossible to determine whether KBR was delivering value for money. He wrote in a memo: "The logcap contract was awarded to KBR even though the contractor did not have certified billing or cost and schedule reporting systems." In other words, there was no way to track how money was being spent, and those responsible for awarding the multi-billion-dollar contract hadn't seemed to care.
In the early years of his career, Alan Grayson spent most of his time representing military contractors. "It was the most heavily regulated business in existence anywhere in the world, and the result of that was that it was clean," he says. "There was a tremendous bureaucracy that existed to make sure that contractors stuck to the rules, and also to punish those who did not stick to the rules very severely." In one famous case, he recalls, a uniform manufacturer that had made hundreds of thousands of military garments was investigated because he asked his workers to sew one dress as a gift for his daughter.
Today, such stringency is unthinkable. "What has happened is a systematic dismantling of the protections that kept the system honest," says Grayson. Between 1991 and 2005, the size of the staff responsible for managing and auditing Pentagon contracts was cut in half. "What we have seen in recent years is an explosion in contracting, while at the same point in time we have seen a contraction of those engaged in oversight of contracting matters," says Comptroller General David M. Walker, the head of the G.A.O. This, he says, serves "to exacerbate the systemic problems that have existed for years."
G.A.O. reports on contracting in Iraq describe a state of affairs that borders on the surreal. According to one document, issued in December 2006, the Army Materiel Command-the division that assigned logcap and is responsible for cutting KBR's checks-was "unable to readily provide [the G.A.O.] with comprehensive information on the number of contractors they were using at deployed locations or the services those contractors were providing to U.S. forces."
KBR's performance is supposed to be monitored by another part of the Pentagon bureaucracy, the Defense Contract Management Agency. This, says the G.A.O. report, is so short-staffed that one of its officials, who was supposed to be overseeing logcap at 27 separate locations, "told us that he was unable to visit all these locations during his 6-month tour in Iraq." As a result, the G.A.O. remarks dryly, "he could not effectively monitor the contractor's performance at those sites." Then again, at least he got to the Middle East. Other officials from the agency supposedly overseeing KBR in Iraq are based in Germany and the United States.
The D.O.J.'s stifling of fraud claims against the big contracting companies is all the more curious in light of its willingness to prosecute individuals for offenses including bribery and embezzlement. Eight people who worked under logcap are being investigated for such crimes. Two employees of a KBR subcontractor have already pled guilty. In a separate case, a former KBR employee pled guilty in July to participating in a kickback scheme. In August 2007, Bowen reportedly promised that a new task force drawn from several government departments was escalating the fight against fraud and corruption, which he labeled the "second insurgency."
Grayson says that the crackdown on individuals "creates an illusion of activity, but so far they've done nothing against firms such as KBR." When it comes to qui tam cases, he adds, the government isn't just hiding the complaints from view; it also appears to be neglecting its obligation to investigate their claims.
In 2006, Grayson filed the most recent version of a suit on behalf of four former KBR employees: Julie McBride, Linda Warren, Denis Mayer, and Frank Cassaday. Their formal complaint, which was sealed for more than a year, focuses on the fall of 2004, when Marines in Fallujah were daily risking their lives in grim street combat. Meanwhile, KBR managers back at their base outside the city were allegedly telling their staff to record grossly exaggerated numbers of soldiers using the Morale, Welfare, and Recreation (M.W.R.) facility, a two-building complex with a gym, a cinema, a game room, and an Internet café.
"Everyone who came through the doors had to sign in," Warren says, "and that was recorded as a user visit. But if they went from one room to another-say, from the gym to the Internet area-that was supposedly another visit; the same if someone put his backpack down in the movie theater, whether he watched the film or not. If someone wanted a bottle of water, or a towel, the same person who'd already been counted would be counted again. Then there were the hourly counts: everyone using the facility was counted once more as if they'd just arrived. You could easily be counted 12 times in two hours."
According to the complaint, the practice of reporting inflated figures "increases the M.W.R. budget in Iraq, allowing for more KBR facilities, administrators, staff and equipment, and boosting KBR's fee." (At a hearing in June, KBR denied basing its M.W.R. billing on the number of reported users.)
The practice, the suit alleges, was not confined to Fallujah-which might help explain a September 2006 press statement in which KBR boasted of having served "more than 73.5 million patrons in MWR facilities." As the complaint notes, "the number of patrons that KBR says it has hosted at MWR facilities is three times the population of Iraq." Given that Iraqis weren't allowed to use the facilities, it's worth noting that the figure is roughly 565 times the total number of U.S. troops deployed in the country.
Linda Warren, a former Marine who brought up five children as a single mother in Abilene, Texas, says she "flatly refused" to fill in the bogus head counts. She had gone to Iraq for patriotic reasons, and recoiled at being asked to compile inflated records. Once, she says, "I did the head counts accurately. Next day when I got to work I could see that the sheet had been replaced."
She and her colleague Julie McBride, a former attorney from California, both protested to their KBR bosses. Having filed a formal grievance, Warren was accused of "not getting along with employees" and was fired in January 2005. "They made it clear there was no place for me any longer," she says. "There was no appeal, no accountability."
Two months later, the complaint states, McBride was summoned to the office of Kevin Clarke, KBR's top official at Camp Fallujah. Having repeated her concerns about the M.W.R. head count, she was told she was being fired for "insubordination." Among her offenses: occasionally using a pencil instead of a pen to fill in her time sheets. Shipped by helicopter to Camp Victory South, near Baghdad, she was told by Ted Kowalski, KBR's human-resources supervisor in Iraq, that she was under "house arrest." "KBR guards surrounded McBride," says the complaint. "They made her ride with them in a sports utility vehicle. They did not tell McBride where they were taking her. She feared for her safety.... They required her to stay in an isolated trailer, with no amenities. They stood guard outside the trailer throughout the night." Eventually she was escorted to the Baghdad airport and flown back to America.
Warren and Cassaday both say that neither federal agents nor D.O.J. lawyers have ever made any attempt to ask them about the claims in their suit. Mayer wasn't interviewed, either, according to Grayson. "The [D.O.J.] investigation consisted of asking KBR for an explanation," he says. "Then, without checking into its validity, they declined to prosecute. Having spoken to the firm, the government said, 'Okey-dokey, then we decline the case.'" The suit makes three further allegations, involving overpayments that run into the millions, but the D.O.J. didn't investigate them at all.
KBR declined to comment on any aspect of the suit's allegations in its statement. Meanwhile, the Justice Department's summary investigation has left the four plaintiffs in a bind. "The way this normally works, in non-Iraq cases, is that, even when the government does decline to prosecute, they subpoena records, they interview witnesses, and they tell you what they are doing," Grayson says. "We could have built on that. Here, too, they screwed us up and put us at a terrible disadvantage."
Qui tam cases from Iraq are investigated by an F.B.I. unit in Rock Island, Illinois. According to Grayson, the unit has a "standing order" to get approval from the attorneys at Vinson & Elkins before questioning anyone at Halliburton or KBR. "F.B.I. agents are not supposed to politely ask permission," he says. "The most common interview technique by the F.B.I. is a knock on your door at nine o'clock at night. They're not allowed to do that when it comes to Halliburton and KBR employees." (In its e-mailed statement, the D.O.J. said it cannot comment on how any Iraq case has been investigated; Vinson & Elkins did not respond to a request for comment.)
Inflated bills are not the only factor driving up the price of logcap. There's also this astounding fact: according to government auditors, 80 percent of the work under contract is being done not by KBR but by a bewildering array of subcontractors. In essence, Grayson says, logcap is not a contract to provide services but "a contract to shop"-to the tune of some $20 billion.
Some of these subcontracting firms are large and well-established companies from countries such as Britain, Kuwait, and Saudi Arabia; others are fly-by-night outfits owned by Iraqis who insist on having their names concealed, owing to well-founded fears of reprisal.
In one place the job of laundering soldiers' uniforms, for example, might be performed by a company working directly for KBR. But in another a subcontractor will have sub-subcontracted the work to someone else, and sometimes even sub-sub-sub-subcontracted it. "I've come across examples where you get down four or five levels," says a government auditor who spoke on condition of anonymity. "There's the U.S. prime, the subcontractor from the Middle East, then a sub-subcontractor from Pakistan, then a shell corporation with a box number in Michigan, and finally the Iraqis who're actually doing the work-for next to nothing."
This system has created great difficulties for anyone attempting to oversee the process on behalf of American taxpayers. It has also substantially increased the overall costs of the war by creating the conditions for obscene markups between contract levels. "There is an enormous need to get a closer handle on the detail in the field," says the auditor. "If you go ask one of the inspectors general, 'Tell me about the subcontracts,' they can't tell you anything. It's a black hole. What this means for oversight, and basic issues of fairness, is that there is none."
Establishing logcap as a contract to shop has had a further consequence. Whereas government contracting is bound by a stringent set of rules, the requirements are far more lax when it is KBR or one of its subcontractors that's farming out work. "The government has basically deputized Halliburton to do its contracting for it," says Grayson. "And Halliburton, rather than enforcing the rules of government contracting that have developed since World War II, has generated its own set of rules."
Instead of offering a given job to bidders in an open and public auction, for instance, KBR can approach a few favored subcontractors. And whereas government agencies tend to favor cheaper bids, the fact that logcap is cost-plus means that KBR benefits from accepting the most expensive offer. The higher the subcontract's cost, the higher KBR's "award fee" profit.
For more than three years after the Iraq invasion, matters were further obscured by KBR's insistence that all its contract data was "proprietary"-of potential value to competitors and therefore not subject to disclosure. In October 2006 a stinging report by Stuart Bowen, the sigir, found that this was making it almost impossible to determine whether logcap was delivering value for money, and was "an abuse of the procurement system." Since the report, says Bowen, KBR has begun to make more information available.
On one occasion, the secrecy engendered by multiple levels of subcontracting descended to black farce. On September 28, 2006, Tina Ballard, the deputy assistant secretary of the army, testified to the House committee on government reform about one of the watershed moments in the developing Iraqi insurgency, the lynching of four security contractors on March 31, 2004. The men were employed by the North Carolina security firm Blackwater USA, and Army Secretary Francis J. Harvey had denied in a letter that they had been doing work for KBR under logcap. That would have been a breach of contract, Ballard told the House committee, since logcap prohibits KBR from billing the government for private security. The company is supposed to rely on U.S. troops for protection.
On February 7, 2007, Ballard came before the committee again to say that her earlier claims, and Harvey's letter, had been mistaken. After "extensive research," the army had ascertained that the murdered Blackwater guards were working for KBR under logcap after all-though not directly. They had been engaged by the Kuwait-registered Regency Hotel & Hospital Company, which in turn had been subcontracted by ESS Support Services. ESS had a subcontract from KBR to build and operate dining facilities for troops. "We understand that these security costs, which were not itemized in the contracts or invoices, were factored into ESS's labor costs under its ... service contracts with KBR," Ballard said.
KBR had spent an awful lot on these guards it didn't know it had. Blackwater was paying them $500 a day, but billed their services to Regency at a rate of between $815 and $1,075 a day. Regency was adding a markup of $285 to $425 per guard per day when it in turn billed ESS, bringing the annual cost for each individual to between $401,500 and $547,000-about 4 to 10 times higher than an army sergeant's salary. All of this was billed to the government by KBR, which naturally claimed its usual fees on top. (In September, the government of Iraq threatened to expel Blackwater from the country after an incident in which at least eight civilians were killed.)
Before she went to Fallujah, Linda Warren had been supervising a KBR military laundry in Baghdad. She says KBR was billing the government $75 per bag, whereas the Iraqi sub-subcontractor whose staff actually did the work got just $12. The laundry workers themselves, several of whom would be killed by insurgents, were paid just $5 a day.
The dirtiest open secret about contracting in Iraq is that much of the real physical work is done not by Americans but by an army of "third-country nationals"-or T.C.N.'s-from places such as India, Nepal, Sri Lanka, and the Philippines. In 2006, a Pentagon investigation found that T.C.N.'s are often subject to abuses, "some of them considered widespread." In addition to "substandard living conditions" and illegal confiscation of their passports, many workers have had to deal with "deceptive" hiring practices-meaning that they weren't told that their jobs were in Iraq until they'd been shipped there. According to the State Department, T.C.N.'s seeking employment have been forced to pay large "recruitment fees," which are deducted from their future earnings. The effect is to reduce them to a state of "involuntary servitude." (KBR claims to be "an industry leader in implementing a policy in Iraq against trafficking in persons.")
"There were times when their treatment made me ashamed to be an American," says Linda Warren, who became especially close to some Filipino women while posted at Radwaniyah, an installation just outside Baghdad. "They'd come into work with a hard-boiled egg and some tea and offer to share it, while Americans were taking enough to feed five people at the chow halls and throwing most of it away. They were virtually imprisoned, told they would lose all their pay unless they served out their contracts." Several former KBR staff say that the equipment used to protect T.C.N.'s, from blast walls to body armor, was markedly inferior to that of the Americans. As of August, about 1,000 civilian contract workers had been killed in Iraq. Most were T.C.N.'s.
Like many of those who went to work for KBR in Iraq, Barrington Godfrey-a naturalized U.S. citizen who was born in Wales-is a military veteran who applied for the job because he wanted to support the war effort. He, too, is a Grayson client, and his suit was kept under seal for well over a year. When the D.O.J. asked for a further extension in April 2007, its lawyers were so confident of their chances that they showed up in court with a drafted legal order marked motion for extension granted ready to be signed. Instead, Judge Gerald Bruce Lee of the Eastern District of Virginia made a show of crossing out granted and inserting the word denied.
Now in his early 60s, Godfrey has 18 years' experience as a contract-management executive in Saudi Arabia's oil industry. When he joined KBR, in the summer of 2004, concerns had already begun to surface in Washington about overcharging from KBR's troop dining facilities-known in the trade as "D-Facs." Hoping to allay those concerns, KBR set up a "tiger team"-a group that operated outside the normal chain of command-and tasked it with negotiating new D-Fac contracts and cleaning up the existing ones. Godfrey was assigned to the unit.
The team's boss, Jill Pettibone, was another beneficiary of KBR's revolving-door relationship with the Pentagon. Until 2000 she had been executive director for operations at the Defense Contract Management Command, which had been responsible for overseeing KBR's very expensive work in the Balkans. (The body has since been renamed the Defense Contract Management Agency.)
Like most service facilities in Iraq, the D-Facs were staffed by T.C.N.'s. They were paid a bit better than the laundry workers observed by Linda Warren. Depending on their skills and seniority, they earned between $300 and $400 a month.
Unlike most qui tam plaintiffs, Godfrey managed to retain documentary records, and they reveal just how huge the margins on subcontracts can be. For example, a Kuwaiti subcontractor named ABC International Group was in charge of providing D-Fac labor at H4, a base near Mosul. Between March and November of 2004, ABC sent KBR monthly bills ranging from $756,000 to $1.38 million. Godfrey discovered that the facility employed precisely 137 people, all of them T.C.N.'s. On the most generous assumption, that they were all making $400 a month, the true amount being paid to the workers was no more than $54,800. The markup, therefore, was between 1,500 and 2,500 percent.
Until February 2004, H4's D-Fac had been staffed by a Turkish company named Serka. Actually, that continued to be the case. The only difference now was that Serka had become a sub-subcontractor to ABC. "All ABC did was take their slice of the profit. There was no change to the operation at all," Godfrey says.
Godfrey's documents show that margins well in excess of 1,000 percent were to be found at other D-Facs, which Grayson says is unexceptional among contractors in Iraq. "A thousand percent is common, 500 percent routine. I have never seen a markup of less than 100 percent." Back in the U.S., "the average markup under government contracts is 10 percent, and anything more than 12 percent will usually be rejected when the government conducts audits. If your profit margin on a government contract conducted outside Iraq is more than 10 percent, you may well be accused of committing fraud."
Huge labor markups were not the only irregularities Godfrey says he found in the ABC invoices he processed. He also came across blatant accounting inflation of the kind Linda Warren had seen in Fallujah. According to his qui tam complaint, there was a period in 2004 when the D-Fac at H4 was serving 1,000 to 2,000 people a day but billing as if there were 5,400: "At three meals a day, this was billing for almost 10,000 meals a day that were not served at H4."
Godfrey made repeated attempts to force ABC to reduce its bills. All of them, he says, were blocked inside KBR. That December, Godfrey went on leave. When he came back, his cell phone and computer had been stolen. Meanwhile, ABC's C.E.O. was writing to Tom Quigley, the KBR chief of Iraq contracts, who had once been Bunnatine Greenhouse's colleague at the Army Corps of Engineers, claiming that Godfrey was "treating ABC unfairly." Godfrey was suspended for 10 days and told by another KBR executive, "We can't have subcontractor C.E.O.'s complaining about subcontract administrators."
As a result of KBR's inaction, his complaint says, "ABC's overbilling continued through the completion of its first contract period in June 2005, and through the filing of this complaint, and beyond. The amount that ABC overbilled to KBR, and KBR overbilled to the government, exceeded $10 million." This figure covered just one of about a hundred D-Facs spread across Iraq.
In December 2004, a suicide-bomb attack on the H4 dining hall killed 22 people, including 14 troops. Afterward, according to Godfrey's complaint, ABC was paid not once but twice for new kitchen equipment and a new $2 million facility. The complaint also alleges that a Saudi firm, Gulf Catering Company, used inflated head counts to overcharge KBR by nearly $5.3 million between February and October 2004. He relayed these findings to Quigley, who promised to "forward the matter for further inquiry." Then, in a separate e-mail, Quigley told Godfrey he felt "submarined" by the disclosures. (KBR refused to comment on the suit to Vanity Fair.)
Godfrey left Iraq in February 2005, frustrated that the waste he'd encountered seemed uncontrollable. He had come across officials from the Defense Contract Management Agency, his team leader's former billet, and he had little faith that they would succeed where he had failed. "The ones I met were pathetic," he says. "Some had no experience: they'd just got their degrees. They didn't ask questions, and they missed the issues that I brought up. They had access to me and my memos, and not once did one ever come to me and say, 'Can we talk, Barry?'"
Apart from its connections in Washington, there is something else that protects KBR: the perception, widespread throughout the military, that it has provided generally good-quality services in war-zone conditions. As Grayson puts it, "Halliburton's philosophy is not to deliver crap. Halliburton's philosophy is to deliver extraordinarily overpriced but adequate services in support of the government."
That these have cost billions of dollars more than they should have is an inconvenient detail, and already the Pentagon is moving on. Officials now accept that the monopoly granted by logcap 3 had its drawbacks, and at the end of June the army announced that the contract will soon be terminated and replaced with a new one, logcap 4. Under this, the largesse will be split among three corporations: DynCorp, Fluor, and KBR. logcap 4 is another cost-plus, indefinite-delivery, indefinite-quantity contract, but at least this time KBR's income, as well as DynCorp's and Fluor's, will be capped. Over the next 10 years, KBR will have to satisfy itself with charging American taxpayers $50 billion for its services under logcap 4.
These improvements may turn out to be little more than cosmetic. According to Bowen, what's needed is full disclosure of all subcontracting arrangements and a substantial increase in the number of officials who spend their time designing and policing contracts.
With logcap 4, however, the reverse is about to happen. The government agencies responsible for oversight will be assisted by Serco, a Virginia-based services company that in February was awarded a "planning support contract" worth up to $45 million a year. The Bush administration maintains that hiring Serco to regulate logcap 4 will improve efficiency and counter fraud and waste.
David Walker, of the G.A.O., fears that the weakened state of oversight is poised to get "much worse." Not only is there a large "skills gap," but "a significant percentage of the existing contract workforce is eligible to retire or will be eligible to retire within the next few years." Outsourcing oversight brings still more problems in its wake, he says, starting with conflicts of interest, which arise whenever the company being monitored has other business, existing or potential, with the one doing the monitoring.
False Claims Act suits could help to remedy these deficiencies, if only the Department of Justice weren't suppressing them. One day, though, the seals on the complaints will have to be lifted. "I wish I could tell you about the ones that are under seal," says Grayson, "because some of them really are time bombs. They're literally burying these cases to keep the public from finding out about them, and to keep anything from being done on them. But it is a time bomb, because any normal amount of attention on these cases would result in massive amounts of money being recovered for the taxpayers."
There are a few encouraging signs that a day of reckoning is drawing near. Committees in both the House and the Senate have held hearings on contracting in Iraq, and several plan to hold more. Patrick Leahy, the Democratic chairman of the Senate judiciary committee, has introduced a War Profiteering Prevention Act, which would make it much easier to investigate corrupt contractors and call them to account. And in August, the news that tens of thousands of weapons intended for Iraqi security forces had vanished or been stolen prompted the Pentagon to announce that its inspector general, Claude M. Kicklighter, would lead an 18-person team to investigate "contracting practices" in Iraq.
In the more distant future, a Democratic administration might open up the vaults and expose the American public to the scale of what has been looted. "What we have seen up to now is the worst of the worst in terms of a deliberate cover-up," Grayson says. But if and when it comes to an end, he thinks it's entirely possible that Congress will appoint a special prosecutor-one whose targets might one day reach "an extremely high level."
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David Rose is a Vanity Fair contributing editor.
http://www.truthout.org/docs_2006/100807A.shtml
www.democracynow.org Oct. 11, 2007
AMY GOODMAN: We begin our show with a Democracy Now! exclusive. A lawsuit is being filed today against the private military firm Blackwater USA over last month's shooting in Baghdad, when Blackwater guards shot dead seventeen Iraqis and injured many more. Earlier this week, the Iraqi government called on the Bush administration to sever its ties with Blackwater in Iraq and for the company to pay $8 million in compensation to each of the Iraqi families.
Now, Blackwater is being sued in US courts over the company's actions in Iraq. The Center for Constitutional Rights is filing a lawsuit today under the Alien Tort Claims Act on behalf of the families of three of the Iraqis killed last month, as well as another Iraqi who was injured in the shooting.
Susan Burke joins us now in Washington, D.C., attorney in Philadelphia who’s working with the Center for Constitutional Rights on the suit. Jeremy Scahill also joins us, Democracy Now! correspondent, author of the New York Times bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army.
Susan, explain this lawsuit.
SUSAN BURKE: We were approached by the families of three gentlemen who were shot and killed, as well as a gentleman who was very seriously injured. They came to us because they know of our work representing the torture victims at Abu Ghraib, and they asked us whether it would be possible to try to get some form of justice, some form of accountability, against this rogue corporation.
So we put together a lawsuit that is being filed this morning in federal court in the District of Columbia on behalf of the families of three gentlemen who were killed: Mr. Atban, Mr. Abbass and Mr. Ibraheem The three gentlemen, amongst them, had fourteen children, including one, Mr. Atban, had a newborn baby daughter. So, needless to say, we are very interested in holding this company accountable and in pursuing the lawsuit vigorously.
AMY GOODMAN: Can you describe your understanding of what happened on that day, on September 16?
SUSAN BURKE: My understanding, based on the media reports, as well as on information that we’re receiving from eyewitnesses in Iraq, is that Blackwater essentially began just an unprovoked shooting. And they -- one of the first shots fired killed a gentleman whose car -- who slumped over, and his head was on the steering wheel, his foot on the accelerator, so the car kept rolling, and that basically led to chaos, where Blackwater was firing indiscriminately around the square. There was one Blackwater guard who apparently tried to stop his colleagues from this wanton and senseless murdering of innocents, but he was not effective in doing so.
JUAN GONZALEZ: And would CCR be working with Iraqi attorneys on the ground there, because I would assume that if this case were to move forward, the issue of being able to recruit witnesses or talk to witnesses would be very difficult, given the war situation there?
SUSAN BURKE: Well, as the situation is now, my firm, Burke O’Neil, and then Shereef Akeel’s firm, Akeel & Valentine, as well as CCR, we actually have a steady presence in Iraq. There are two gentleman that work for us and that have been doing so since June of 2004. So we have the ability, you know, to talk directly to people, to communicate on a daily basis via email.
AMY GOODMAN: Jeremy Scahill, your reaction to this lawsuit that has now just been filed?
JEREMY SCAHILL: Well, I mean, this is an incredible development. We have to remember that upwards of a million Iraqis have died since the beginning of the US invasion and the names of the victims of both the US military and these private military companies are almost never reported. And this is the first major case brought by Iraqi civilians against a private military company like Blackwater.
And one of the chilling parts of this lawsuit, as I was reading through the complaint, it says this action seeks punitive damages in an amount sufficient to punish Erik Prince and his Blackwater companies for the repeated callous killing of innocents. We have to remember there are two other major lawsuits against Blackwater right now. One was brought by the families of four Blackwater operatives who were killed in Fallujah; the other was brought by the families of active-duty servicemen who were killed in a Blackwater plane crash in Afghanistan in 2004.
And what Blackwater’s pattern has been is to argue essentially that it can’t be sued, that it should have the same immunity from civilian litigation enjoyed by the US military. In the case of Iraqi victims of Blackwater, the pattern we’ve seen emerging is the State Department facilitating Blackwater, paying thousands of dollars in hush money to the victims' families. We certainly heard Erik Prince acknowledge that they had paid $20,000 to the family of the bodyguard for the Iraqi vice president, who was allegedly shot and killed by a Blackwater contractor, drunken Blackwater contractor, on Christmas Eve 2006 inside of the Green Zone.
This is a very different scenario now, where you have Iraqi families not seeking some hush money, but actually being willing to put their names to a lawsuit and sue Erik Prince in the most appropriate place, and that is in the United States, which deployed his forces in Iraq.
JUAN GONZALEZ: And, Jeremy, there have been almost now daily reports, new revelations each day, about Blackwater. For instance, CBS reported yesterday that there seems to be no indication that the FBI investigation is actually proceeding, that, in fact, that the car that was shot up in the incident is still sitting there and hasn’t been like impounded or is not being checked for forensic evidence.
JEREMY SCAHILL: Well, let’s remind people here -- and your paper, Juan, the New York Daily News, actually broke an interesting story on this front. The State Department -- the initial State Department report on the Nisoor Square shootings was actually written by a Blackwater contractor on official stationery. So, you know, I mean, what’s next here? Is Cofer Black, the vice chairman of Blackwater, he’s going to be the judge that oversees this case? And then, the story I’m referring to in the Daily News was that when the FBI team was going to go over initially to investigate Blackwater, they were going to be guarded by Blackwater, and then they had to back off and then say, “Now, we’re going to be investigating it under the protection of official military sources.” I mean, the State Department and Blackwater have acted as one actor in this thing from the beginning.
AMY GOODMAN: Susan Burke, what about the issue of whose law does Blackwater abide by, and how does that affect your lawsuit?
SUSAN BURKE: Well, I think one of the interesting things to point out is that the Bremer order, which is widely viewed as immunizing these contractors, actually just says that the Iraqi courts will not have jurisdiction over them. So I think as a practical matter that the general choice of law principles still apply that Iraqi law would apply. But in addition, the conduct that we're talking about offends and violates the law of every nation. So when we bring the lawsuit here, whether you apply, you know, the law of the District of Columbia or the law of Iraq, you come to the same conclusion: you’re not allowed to gun down innocents.
JUAN GONZALEZ: And, Susan, the recent shooting by the Australian security firm, where that firm took a decidedly different approach in terms of immediately apologizing and offering compensation, although that still, of course, doesn’t deal with the fact of their actual culpability, but at least it shows a completely different approach than the Blackwater situation.
SUSAN BURKE: Yeah, Blackwater has deliberately and intentionally fostered a real cowboy culture among its employees, and that’s a lot of why it’s important to hold the corporate entities and Erik Prince responsible. This is not the first such incident. I mean, even their own self-reporting, which dramatically underestimates the amount of shootings -- but even by their own self-reporting, 84% of the shootings occur when Blackwater fires first. So you essentially have a very -- you know, a lawless group that is making over a billion dollars.
AMY GOODMAN: Susan Burke, explain the Alien Tort Claims Act.
SUSAN BURKE: That is a statute that does not create new causes of action, but simply provides that anything that violates international law is able to be brought here in the United States courts. And what’s interesting to note about our lawsuit is that we bring it under the Alien Tort Statute, but we also bring it under just straight tort law. So there’s actually six counts. The Alien Tort counts are for extrajudicial killing and for war crimes. And then we have the wrongful death, assault and battery, intentional and negligent infliction of emotional distress, as well as a count for negligent hiring, training and supervision. So the Alien Tort claims is one piece of the legal strategy.
AMY GOODMAN: Jeremy Scahill, the law that has just been passed in Congress, the bill, can you explain what it is?
JEREMY SCAHILL: Well, there was legislation that passed the House overwhelmingly last week that was sponsored by Representative David Price, who’s a Democrat from North Carolina. And there was a -- I think because of the Nisoor Square shootings, a lot of Republicans jumped on board with it. The White House is against it. And I think it’s very problematic legislation. It’s being referred to as legislation that would pave the way for contractor accountability and prosecution of the kinds of crimes that we’ve seen committed over the past four years, but there's actually something quite insidious at play, and that is that what the -- because the mercenary industry itself is endorsing the legislation. Blackwater is backing this legislation, because it looks very good on paper, and it’s totally unenforceable.
The Democratic-led plan, which the Republicans are largely endorsing, would have an FBI field office opened up in Baghdad, so that actually US personnel that would be sent over there to monitor the activities of 180,000 contractors. I mean, the military, with its massive bureaucracy, doesn’t even effectively monitor the activities and crimes of its soldiers. And so, what the Democrats are actually doing is giving the mercenary industry a tremendous victory, because they’re further integrating them into the US war machine. And what the Bush administration has done is to double the size of the US occupation through the use of the private sector, and the Democrats are now basically legislating their legitimization.
AMY GOODMAN: Susan Burke, what is the chronology of what’s going to happen right now, today? You actually, as we speak, have not yet filed this lawsuit.
SUSAN BURKE: We are filing as the court opens this morning. And then we will our investigation. We’ll continue to be in touch with the people in Iraq and then proceed with regular civil litigation. We anticipate that they’ll try to throw up, as they typically do, various forms of immunities and defenses, but the courts have been holding that Blackwater is not entitled to any of those defenses. So our goal is to try to push this as quickly as possible in order to get a trial for the family members of these unfortunate victims, as well as for the injured Mr. Deewan, who was very seriously injured.
AMY GOODMAN: You're holding a news conference at the National Press Club today at 10:00 a.m.?
SUSAN BURKE: At 10:00 a.m., yes, we are going to hold a press conference.
AMY GOODMAN: Susan Burke, thanks for joining us.
SUSAN BURKE: Glad to be here.
AMY GOODMAN: Attorney in Philadelphia working with the Center for Constitutional Rights. They have brought a lawsuit against Blackwater for the September 16th shooting. This is Democracy Now!, democracynow.org, the War and Peace Report. When we come back, we’re going to learn about another case, this in Afghanistan, that Jeremy Scahill just talked about. We’re going to turn to a lawyer in Jacksonville, Florida, representing US soldiers killed when they were flying in a Blackwater plane. Stay with us.
JUAN GONZALEZ: Blackwater is also facing a lawsuit over its actions in Afghanistan. In 2004, a plane operated by a subsidiary of Blackwater crashed there. Three Army soldiers and three Blackwater employees died in the crash. The families of the soldiers filed a wrongful death suit against Blackwater subsidiary Presidential Airways. Blackwater has claimed the lawsuit should be dismissed, but last week three judges on the 11th US Circuit Court of Appeals in Atlanta rejected that argument.
AMY GOODMAN: Robert Spohrer joins us now from Jacksonville, Florida. He’s the attorney representing the families of the Army soldiers.
Robert Spohrer, welcome to Democracy Now! Tell us about the significance of this case and what the court ruled last week.
ROBERT SPOHRER: Good morning. Thank you very much. The 11th Circuit Court of Appeals on Friday rejected the claims to immunity that Blackwater and Presidential, its subsidiary, were raising in the court. Basically, Blackwater said because they were doing work traditionally done by the military -- that is, transporting soldiers from one place to another -- that they should have the immunity that the federal government would have: sovereign immunity. And the court rejected that argument and said, “No, you're not part of the government. You’re a for-profit private corporation. You negotiated this contract at arm’s length. You have liability insurance for this type of event. And so, we’re not going to extend the immunity that is enjoyed by the sovereign to private corporations.”
The second legal argument that was raised by Blackwater was that this case would involve the courts second-guessing military decision-making. It’s called the Political Question Doctrine. And the doctrine simply means that one branch of the government should not second-guess or interfere with the work of another branch of the government. The court said, “We agree with that in principle, but this is a simple case involving a plane that flew into a mountain in clear weather. There was no hostile activity. There was no mechanical malfunction. It involves simple negligence on the part of the crew, and therefore the courts will not be second-guessing any military decisions.” So the courts resoundingly rejected Blackwater's claims to immunity.
AMY GOODMAN: The Afghanistan plane crash was brought up at last week's congressional hearing on Blackwater. This is California Congressmember Henry Waxman, the chair, questioning Blackwater founder Erik Prince.
REP. HENRY WAXMAN: The crash was investigated, a joint -- by a joint Army and Air Force task force and by the National Transportation Safety Board. The NTSB report found that Blackwater captain and first officer behaved unprofessionally, were deliberately flying the nonstandard route low through the valley for fun. The report found that the pilots were unfamiliar with the route, deviated almost immediately after takeoff, and failed to maintain adequate terrain clearance.
They also had a transcript of the cockpit voice recording, and on this recording the flight crew joked with each other, saying, “You’re an x-wing fighter Star Wars man, and you’re (expletive) right. This is fun!” The captain stated, “I swear to God, they wouldn’t pay me if they knew how much fun this was,” end-quote.
Mr. Prince, one allegation raised recently about Blackwater's action is that your contractors have acted irresponsibly. One senior US commander told the Washington Post, quote, "They often act like cowboys," end-quote. Let me ask you about that crash of Blackwater Flight 61. In this case, did Blackwater's pilots act responsibly, or were they, in the words of the US commander, acting like cowboys?
ERIK PRINCE: I disagree with the assertion that they acted like cowboys. They -- we provide a very reliable, valuable service to the Air Force and the Army in Afghanistan. Anytime you have an accident, it’s an accident; something could have been done better. It is not a Part 135 US-type flying operation. There's no flight services. There’s no flight routes. There’s no Navaids. It is truly a rugged, Alaska-style bush flying.
AMY GOODMAN: That’s Erik Prince, the founder of Blackwater. The House Oversight Committee Chair Henry Waxman also asked the Blackwater founder to explain why Blackwater should be paid millions of dollars to perform jobs traditionally done by the military.
REP. HENRY WAXMAN: One of the great ironies of this accident is that while the aircraft was being piloted by an inexperienced Blackwater pilot, a skilled military pilot with an exemplary safety record, Lieutenant Colonel Michael McMahon, was on board the flight as a passenger. This is what his widow wrote to me. She is Colonel Jeanette McMahon, and she works at West Point. She said, “Mike, like Mr. Prince, was a CEO of sorts in the military as an aviation commander and, as such, had amassed a great safety record in his unit. It’s ironic and unfortunate that he had to be a passenger on this plane versus one of the people responsible for its safe operation. Some would say it was simply a tragic accident, but this accident was due to the gross lack a judgment in managing this company.”
Mr. Prince, Colonel McMahon is asking why the taxpayers should be paying your company millions to conduct military transport missions over dangerous terrain, when the military's own pilots are better trained and a lot less expensive. How do you respond?
ERIK PRINCE: We were hired to fill that void, because there is a different -- it’s a different kind of airlift mission going in and out of the very short strips in Afghanistan. You have high altitude, short strips, unimproved runways, and you have transport aircraft that are designed to support a large conventional battle. We're doing small missions. Typical cost of payload maxes out at 4,000 pounds. They can’t even hold that, because of the short altitude -- or the high altitude, short strips they have to go in and out of.
AMY GOODMAN: Blackwater founder Erik Prince, responding to the questions of the House Oversight Committee Chair Henry Waxman. Robert Spohrer, you're representing the three men who were killed, their families, the Army soldiers. Your response?
ROBERT SPOHRER: Well, this was a preventable, tragic and unnecessary crash. It’s been thoroughly investigated, first by the Army and the Air Force, who place the blame squarely on the Blackwater operation. Blackwater at that time rejected that and said they don’t know what they’re doing. They said, “Wait for the NTSB report.” Well, the National Transportation Safety Board then conducted a very thorough investigation and came to the same conclusion, that the sole cause of this crash was negligence on the part of the pilots. Blackwater has now said they reject the NTSB findings, as well.
Look, there is an expression in aviation, that you plan your flight, and you fly your plan. That didn’t happen here. Instead of flying a recognized route to the west, the crew went sightseeing in the mountains to the north of Bagram. They got into a box canyon. The plane they were flying could not climb above the 16,000-foot peak. They were in a canyon where they could not turn around, and tragically all six souls on board died.
Mr. Prince doesn’t address the question, which is, his company is paid hundreds of millions of dollars to provide responsible services, and they don’t do it. And then when they have a tragedy like this occur, they come to the court and ask for immunity. They basically want to be held -- not held to account at all for their negligent conduct in this case. And the 11th Circuit at least has said, “No, we’re going to allow this case to go forward and let a jury hear the evidence and decide whether or not this crew was negligent and how this crash occurred.” So we're looking forward to seeing Mr. Prince in the courtroom and having him answer some of our questions.
JUAN GONZALEZ: And, Mr. Spohrer, there was one survivor, wasn't there, of that crash? What happened with that person?
ROBERT SPOHRER: The conclusion of the investigators was that Specialist Harley Miller, who was twenty-four years of age, survived the initial crash. We know that, because he had pulled survival gear from the plane. We see evidence where he had smoked cigarettes and tried to survive in the 14,000-foot elevation of the Hindu Kush Mountains in Afghanistan. He died within seven to ten hours of the crash.
But one of the tragedies here is that had this plane been on a normal course, that the search-and-rescue aircraft would have known where to look for him, and he perhaps could have been saved. But as it was, they were way off of any recognized course up in the mountains, and so the search-and-rescue people were looking in the wrong area. So, sadly, Specialist Miller died along with the other five men in the airplane.
JUAN GONZALEZ: And the fact that the Army, on the one hand, did lay the blame at Blackwater, but then has recently given them a $92 million -- the same firm -- a $92 million contract?
ROBERT SPOHRER: That’s correct. What our investigation shows is that there was an initial immediate suspension for Blackwater. They were prohibited from carrying passengers for a short period of time, until certain safety steps were taken. But then, a short time later, they were permitted to resume carrying passengers, and now, as you say, just last month a new $92 million contract was let from the Pentagon again to Presidential Airways. I can’t understand why that would be allowed to happen. Certainly, this -- problems with the safety of this aircraft would be unacceptable in a Part 135 operation here in the United States.
AMY GOODMAN: Jeremy Scahill, the AP report that says the State Department could possibly cancel the Blackwater USA contract in Iraq, awarding it to another company, in line with an Iraqi government demand. And this just out, as well, the UN wanting probes to determine whether private security contractors in Iraq have committed war crimes and for governments to ensure that the rule of law is applied. Ivana Vuco, the UN senior human rights officer in Iraq, told a news conference that private security contractors are still subject to international humanitarian law, and that means there are specific consequences for any breach.
JEREMY SCAHILL: Well, there is a United Nations working group on the use of mercenaries that has been investigating this issue, particularly the use of forces from countries in Latin America and elsewhere, whose home governments are actually opposed to the war. And, of course, Blackwater has made it a practice to hire up Chilean commandos, Colombian soldiers, and deploy them to Iraq, even though the home government of Chile, for instance, is completely opposed to the invasion and occupation. But we know the Bush administration's stance on the United Nations: it’s a discussion group. International law has been rendered quaint. And so, where that’s going to go ultimately, we don’t know.
On the issue of Blackwater perhaps losing its work with the State Department, even if Blackwater were to leave Iraq tomorrow, it wouldn’t address the fundamental problem. You could give the work that Blackwater is doing to the other two major US companies, Triple Canopy and DynCorp, which are already operating on State Department contracts in Iraq, and it doesn’t go away. You still have this cowboy atmosphere of lawless mercenaries roaming Iraq and shooting civilians. And so, at the end of the day, there’s no legislation right now in the Congress that addresses the linking of corporate profits to war-making or addresses the radical privatization of the US war machine. And until the Congress does that and stops passing legislation that legitimizes the use of mercenary forces, this is only going to continue to grow. There are more mercenary companies operating in the world today than there are nations registered at the UN. I mean, this is an incredible subversion of world order and a very significant threat to peace.
AMY GOODMAN: Finally, the latest on the Christmas Eve shooting?
JEREMY SCAHILL: Right. Well, this was a case that we’ve talked about a lot on Democracy Now!: the Iraqi Vice President Adil Abdul-Mahdi, his bodyguard, shot and killed allegedly by a drunken Blackwater contractor on Christmas Eve 2006. We did know that Blackwater had whisked him out of the country within thirty-six hours of that killing and that Blackwater paid $20,000 in money to the victim's family. What we’ve learned in recent days -- the New York Times broke the story -- they identified this individual as a twenty-seven-year-old named Andrew Moonen, who lives in Seattle. He has an attorney. He is not exactly denying that he killed the bodyguard. They say that it’s a --
AMY GOODMAN: Blackwater flew him out after the killing.
JEREMY SCAHILL: Blackwater flew him out, yes, after the killing, and they say that the US government had instructed them to do so. And Erik Prince made a big deal about talking about how this individual was taken out of the country, was fired from Blackwater, was fined, was forced to pay for his plane ticket home, and, most significantly, had his security clearance withdrawn. But lo and behold, two months after the shooting takes place, Andrew Moonen is back in the Middle East working for another military contractor with the Pentagon, and he worked there from February to August and then recently, we understand, purchased a $270,000 home in Seattle. And it raises very serious questions that this individual is still walking around a free man with no charges brought against him yet.
AMY GOODMAN: I want to thank you all for being here. Robert Spohrer, thanks for joining us from Jacksonville, Florida. We’ll certainly continue to follow this court case, as you represent the families of the three Army soldiers killed in the Blackwater plane crash in Afghanistan. And, Jeremy Scahill, author of the book Blackwater: The Rise of the World’s Most Powerful Mercenary Army.
AMY GOODMAN: I want to bring into this conversation Janessa Gans. She is a former US official who worked in Iraq from 2003 to 2005. Well, on Saturday, she published an article, an op-ed piece in the Los Angeles Times called "I Survived Blackwater," talking about her experiences with Blackwater in Iraq.
Janessa Gans, talk about what it was like to be, well, guarded by Blackwater.
JANESSA GANS: Well, I was frequently the beneficiary of Blackwater rides through downtown Baghdad, and it was a rollercoaster ride, to say the least. You're crammed in the back of an armored Suburban with your body armor and helmet on. And you’re holding on for dear life, basically, as we careened around corners in excess of speeds of a hundred miles an hour and jumped across road divides and stopped to pelt cars with water bottles and then often pointed guns at them. So -- and to say the least, Baghdad’s roads are not the nicest or the smoothest, so it’s a bumpy ride to begin with. So it felt very much like a rollercoaster.
JUAN GONZALEZ: You mention in your article one particular ride in the town of Irbil, where they actually -- the Blackwater security group in front of you actually rammed a civilian car?
JANESSA GANS: Yeah, that was the most poignant and infuriating incident for me, because we were approaching this car -- it was clearly a family in front of us, an older gentleman driving and probably his wife beside him and his three children in the back seat -- and as we approached, I just saw the children's eyes get wider and wider and their mouths agape with terror, and we started honking furiously, because in our speeds, we didn’t want any obstacles in our way to get from point A to point B, and there was really nowhere for them to go, because it was a very narrow road. And as we were swerving to kind of go around them, we hit their car into the barrier on the side of the road, because they didn’t get over in time.
And I just was so shocked that this was an innocent family puttering down the road. Was it really necessary to damage their vehicle? Were they such a threat? And the answer I got back was even more disturbing, that this was a product of their training. “Ma'am, we’re viewed to see any obstacle, any vehicle, as a possible terrorist decoy, as a threat, and that’s what we do. We're completing our mission to get you from point A to point B, and that’s our job.”
AMY GOODMAN: Janessa Gans, what were you doing in Iraq? And could the Iraqis distinguish between US soldiers and Blackwater guards?
JANESSA GANS: I was not often -- I only rode in the military convoy a couple of times, and the stance was very different from those couple of experiences between Blackwater. But more importantly, I rode frequently with other private security contractors that adopted a low-profile stance, and they did not go with sirens and honking and these three armored suburban convoys escorted by two armored Humvees. They blended into the traffic, into the population, sometimes with unarmored cars disguised as taxicabs or as beat-up Mercedes. And they weren’t such an affront or an antagonism to the population.
JUAN GONZALEZ: And so, your sense was that even among the other contractors -- we’ve already heard about how the US military has such a negative outlook on Blackwater -- but that even other contractors viewed them this way?
JANESSA GANS: Sorry. Even other contractors were viewed the same as Blackwater?
JUAN GONZALEZ: No, that other security companies also saw Blackwater as unusual or different in their approach, more aggressive in their approach.
JANESSA GANS: Right. They did have that reputation, as being the most aggressive and the most elite. So I was -- I’m familiar with that, with that attitude. My brother was a Navy Seal for ten years, and they just knew that they were the best of the best and they had the most resources. They were the most well-paid. So it just -- I think that blended in with this aggressive stance that they adopted, as well.
JUAN GONZALEZ: And your reaction when you heard that the Iraqi government was calling for them to be removed from the country?
JANESSA GANS: I actually was surprised that it had taken this long. You know, I used to often think, well, I benefited personally so much from their protection and their security and without which I could have not done my job, but I used to think if there were foreign armed convoys going through my streets every day, delaying traffic, if I got anywhere too close, I would be pelted with water bottles or have guns pointed at me, I would have piped up right away and made a complaint. So I’m just surprised that they waited this long.
AMY GOODMAN: Janessa Gans, I want to thank you for being with us, US official in Iraq from 2003 to 2005, now a visiting political science professor at Principia College.
AMY GOODMAN: We begin our show with a Democracy Now! exclusive. A lawsuit is being filed today against the private military firm Blackwater USA over last month's shooting in Baghdad, when Blackwater guards shot dead seventeen Iraqis and injured many more. Earlier this week, the Iraqi government called on the Bush administration to sever its ties with Blackwater in Iraq and for the company to pay $8 million in compensation to each of the Iraqi families.
Now, Blackwater is being sued in US courts over the company's actions in Iraq. The Center for Constitutional Rights is filing a lawsuit today under the Alien Tort Claims Act on behalf of the families of three of the Iraqis killed last month, as well as another Iraqi who was injured in the shooting.
Susan Burke joins us now in Washington, D.C., attorney in Philadelphia who’s working with the Center for Constitutional Rights on the suit. Jeremy Scahill also joins us, Democracy Now! correspondent, author of the New York Times bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army.
Susan, explain this lawsuit.
SUSAN BURKE: We were approached by the families of three gentlemen who were shot and killed, as well as a gentleman who was very seriously injured. They came to us because they know of our work representing the torture victims at Abu Ghraib, and they asked us whether it would be possible to try to get some form of justice, some form of accountability, against this rogue corporation.
So we put together a lawsuit that is being filed this morning in federal court in the District of Columbia on behalf of the families of three gentlemen who were killed: Mr. Atban, Mr. Abbass and Mr. Ibraheem The three gentlemen, amongst them, had fourteen children, including one, Mr. Atban, had a newborn baby daughter. So, needless to say, we are very interested in holding this company accountable and in pursuing the lawsuit vigorously.
AMY GOODMAN: Can you describe your understanding of what happened on that day, on September 16?
SUSAN BURKE: My understanding, based on the media reports, as well as on information that we’re receiving from eyewitnesses in Iraq, is that Blackwater essentially began just an unprovoked shooting. And they -- one of the first shots fired killed a gentleman whose car -- who slumped over, and his head was on the steering wheel, his foot on the accelerator, so the car kept rolling, and that basically led to chaos, where Blackwater was firing indiscriminately around the square. There was one Blackwater guard who apparently tried to stop his colleagues from this wanton and senseless murdering of innocents, but he was not effective in doing so.
JUAN GONZALEZ: And would CCR be working with Iraqi attorneys on the ground there, because I would assume that if this case were to move forward, the issue of being able to recruit witnesses or talk to witnesses would be very difficult, given the war situation there?
SUSAN BURKE: Well, as the situation is now, my firm, Burke O’Neil, and then Shereef Akeel’s firm, Akeel & Valentine, as well as CCR, we actually have a steady presence in Iraq. There are two gentleman that work for us and that have been doing so since June of 2004. So we have the ability, you know, to talk directly to people, to communicate on a daily basis via email.
AMY GOODMAN: Jeremy Scahill, your reaction to this lawsuit that has now just been filed?
JEREMY SCAHILL: Well, I mean, this is an incredible development. We have to remember that upwards of a million Iraqis have died since the beginning of the US invasion and the names of the victims of both the US military and these private military companies are almost never reported. And this is the first major case brought by Iraqi civilians against a private military company like Blackwater.
And one of the chilling parts of this lawsuit, as I was reading through the complaint, it says this action seeks punitive damages in an amount sufficient to punish Erik Prince and his Blackwater companies for the repeated callous killing of innocents. We have to remember there are two other major lawsuits against Blackwater right now. One was brought by the families of four Blackwater operatives who were killed in Fallujah; the other was brought by the families of active-duty servicemen who were killed in a Blackwater plane crash in Afghanistan in 2004.
And what Blackwater’s pattern has been is to argue essentially that it can’t be sued, that it should have the same immunity from civilian litigation enjoyed by the US military. In the case of Iraqi victims of Blackwater, the pattern we’ve seen emerging is the State Department facilitating Blackwater, paying thousands of dollars in hush money to the victims' families. We certainly heard Erik Prince acknowledge that they had paid $20,000 to the family of the bodyguard for the Iraqi vice president, who was allegedly shot and killed by a Blackwater contractor, drunken Blackwater contractor, on Christmas Eve 2006 inside of the Green Zone.
This is a very different scenario now, where you have Iraqi families not seeking some hush money, but actually being willing to put their names to a lawsuit and sue Erik Prince in the most appropriate place, and that is in the United States, which deployed his forces in Iraq.
JUAN GONZALEZ: And, Jeremy, there have been almost now daily reports, new revelations each day, about Blackwater. For instance, CBS reported yesterday that there seems to be no indication that the FBI investigation is actually proceeding, that, in fact, that the car that was shot up in the incident is still sitting there and hasn’t been like impounded or is not being checked for forensic evidence.
JEREMY SCAHILL: Well, let’s remind people here -- and your paper, Juan, the New York Daily News, actually broke an interesting story on this front. The State Department -- the initial State Department report on the Nisoor Square shootings was actually written by a Blackwater contractor on official stationery. So, you know, I mean, what’s next here? Is Cofer Black, the vice chairman of Blackwater, he’s going to be the judge that oversees this case? And then, the story I’m referring to in the Daily News was that when the FBI team was going to go over initially to investigate Blackwater, they were going to be guarded by Blackwater, and then they had to back off and then say, “Now, we’re going to be investigating it under the protection of official military sources.” I mean, the State Department and Blackwater have acted as one actor in this thing from the beginning.
AMY GOODMAN: Susan Burke, what about the issue of whose law does Blackwater abide by, and how does that affect your lawsuit?
SUSAN BURKE: Well, I think one of the interesting things to point out is that the Bremer order, which is widely viewed as immunizing these contractors, actually just says that the Iraqi courts will not have jurisdiction over them. So I think as a practical matter that the general choice of law principles still apply that Iraqi law would apply. But in addition, the conduct that we're talking about offends and violates the law of every nation. So when we bring the lawsuit here, whether you apply, you know, the law of the District of Columbia or the law of Iraq, you come to the same conclusion: you’re not allowed to gun down innocents.
JUAN GONZALEZ: And, Susan, the recent shooting by the Australian security firm, where that firm took a decidedly different approach in terms of immediately apologizing and offering compensation, although that still, of course, doesn’t deal with the fact of their actual culpability, but at least it shows a completely different approach than the Blackwater situation.
SUSAN BURKE: Yeah, Blackwater has deliberately and intentionally fostered a real cowboy culture among its employees, and that’s a lot of why it’s important to hold the corporate entities and Erik Prince responsible. This is not the first such incident. I mean, even their own self-reporting, which dramatically underestimates the amount of shootings -- but even by their own self-reporting, 84% of the shootings occur when Blackwater fires first. So you essentially have a very -- you know, a lawless group that is making over a billion dollars.
AMY GOODMAN: Susan Burke, explain the Alien Tort Claims Act.
SUSAN BURKE: That is a statute that does not create new causes of action, but simply provides that anything that violates international law is able to be brought here in the United States courts. And what’s interesting to note about our lawsuit is that we bring it under the Alien Tort Statute, but we also bring it under just straight tort law. So there’s actually six counts. The Alien Tort counts are for extrajudicial killing and for war crimes. And then we have the wrongful death, assault and battery, intentional and negligent infliction of emotional distress, as well as a count for negligent hiring, training and supervision. So the Alien Tort claims is one piece of the legal strategy.
AMY GOODMAN: Jeremy Scahill, the law that has just been passed in Congress, the bill, can you explain what it is?
JEREMY SCAHILL: Well, there was legislation that passed the House overwhelmingly last week that was sponsored by Representative David Price, who’s a Democrat from North Carolina. And there was a -- I think because of the Nisoor Square shootings, a lot of Republicans jumped on board with it. The White House is against it. And I think it’s very problematic legislation. It’s being referred to as legislation that would pave the way for contractor accountability and prosecution of the kinds of crimes that we’ve seen committed over the past four years, but there's actually something quite insidious at play, and that is that what the -- because the mercenary industry itself is endorsing the legislation. Blackwater is backing this legislation, because it looks very good on paper, and it’s totally unenforceable.
The Democratic-led plan, which the Republicans are largely endorsing, would have an FBI field office opened up in Baghdad, so that actually US personnel that would be sent over there to monitor the activities of 180,000 contractors. I mean, the military, with its massive bureaucracy, doesn’t even effectively monitor the activities and crimes of its soldiers. And so, what the Democrats are actually doing is giving the mercenary industry a tremendous victory, because they’re further integrating them into the US war machine. And what the Bush administration has done is to double the size of the US occupation through the use of the private sector, and the Democrats are now basically legislating their legitimization.
AMY GOODMAN: Susan Burke, what is the chronology of what’s going to happen right now, today? You actually, as we speak, have not yet filed this lawsuit.
SUSAN BURKE: We are filing as the court opens this morning. And then we will our investigation. We’ll continue to be in touch with the people in Iraq and then proceed with regular civil litigation. We anticipate that they’ll try to throw up, as they typically do, various forms of immunities and defenses, but the courts have been holding that Blackwater is not entitled to any of those defenses. So our goal is to try to push this as quickly as possible in order to get a trial for the family members of these unfortunate victims, as well as for the injured Mr. Deewan, who was very seriously injured.
AMY GOODMAN: You're holding a news conference at the National Press Club today at 10:00 a.m.?
SUSAN BURKE: At 10:00 a.m., yes, we are going to hold a press conference.
AMY GOODMAN: Susan Burke, thanks for joining us.
SUSAN BURKE: Glad to be here.
AMY GOODMAN: Attorney in Philadelphia working with the Center for Constitutional Rights. They have brought a lawsuit against Blackwater for the September 16th shooting. This is Democracy Now!, democracynow.org, the War and Peace Report. When we come back, we’re going to learn about another case, this in Afghanistan, that Jeremy Scahill just talked about. We’re going to turn to a lawyer in Jacksonville, Florida, representing US soldiers killed when they were flying in a Blackwater plane. Stay with us.
JUAN GONZALEZ: Blackwater is also facing a lawsuit over its actions in Afghanistan. In 2004, a plane operated by a subsidiary of Blackwater crashed there. Three Army soldiers and three Blackwater employees died in the crash. The families of the soldiers filed a wrongful death suit against Blackwater subsidiary Presidential Airways. Blackwater has claimed the lawsuit should be dismissed, but last week three judges on the 11th US Circuit Court of Appeals in Atlanta rejected that argument.
AMY GOODMAN: Robert Spohrer joins us now from Jacksonville, Florida. He’s the attorney representing the families of the Army soldiers.
Robert Spohrer, welcome to Democracy Now! Tell us about the significance of this case and what the court ruled last week.
ROBERT SPOHRER: Good morning. Thank you very much. The 11th Circuit Court of Appeals on Friday rejected the claims to immunity that Blackwater and Presidential, its subsidiary, were raising in the court. Basically, Blackwater said because they were doing work traditionally done by the military -- that is, transporting soldiers from one place to another -- that they should have the immunity that the federal government would have: sovereign immunity. And the court rejected that argument and said, “No, you're not part of the government. You’re a for-profit private corporation. You negotiated this contract at arm’s length. You have liability insurance for this type of event. And so, we’re not going to extend the immunity that is enjoyed by the sovereign to private corporations.”
The second legal argument that was raised by Blackwater was that this case would involve the courts second-guessing military decision-making. It’s called the Political Question Doctrine. And the doctrine simply means that one branch of the government should not second-guess or interfere with the work of another branch of the government. The court said, “We agree with that in principle, but this is a simple case involving a plane that flew into a mountain in clear weather. There was no hostile activity. There was no mechanical malfunction. It involves simple negligence on the part of the crew, and therefore the courts will not be second-guessing any military decisions.” So the courts resoundingly rejected Blackwater's claims to immunity.
AMY GOODMAN: The Afghanistan plane crash was brought up at last week's congressional hearing on Blackwater. This is California Congressmember Henry Waxman, the chair, questioning Blackwater founder Erik Prince.
REP. HENRY WAXMAN: The crash was investigated, a joint -- by a joint Army and Air Force task force and by the National Transportation Safety Board. The NTSB report found that Blackwater captain and first officer behaved unprofessionally, were deliberately flying the nonstandard route low through the valley for fun. The report found that the pilots were unfamiliar with the route, deviated almost immediately after takeoff, and failed to maintain adequate terrain clearance.
They also had a transcript of the cockpit voice recording, and on this recording the flight crew joked with each other, saying, “You’re an x-wing fighter Star Wars man, and you’re (expletive) right. This is fun!” The captain stated, “I swear to God, they wouldn’t pay me if they knew how much fun this was,” end-quote.
Mr. Prince, one allegation raised recently about Blackwater's action is that your contractors have acted irresponsibly. One senior US commander told the Washington Post, quote, "They often act like cowboys," end-quote. Let me ask you about that crash of Blackwater Flight 61. In this case, did Blackwater's pilots act responsibly, or were they, in the words of the US commander, acting like cowboys?
ERIK PRINCE: I disagree with the assertion that they acted like cowboys. They -- we provide a very reliable, valuable service to the Air Force and the Army in Afghanistan. Anytime you have an accident, it’s an accident; something could have been done better. It is not a Part 135 US-type flying operation. There's no flight services. There’s no flight routes. There’s no Navaids. It is truly a rugged, Alaska-style bush flying.
AMY GOODMAN: That’s Erik Prince, the founder of Blackwater. The House Oversight Committee Chair Henry Waxman also asked the Blackwater founder to explain why Blackwater should be paid millions of dollars to perform jobs traditionally done by the military.
REP. HENRY WAXMAN: One of the great ironies of this accident is that while the aircraft was being piloted by an inexperienced Blackwater pilot, a skilled military pilot with an exemplary safety record, Lieutenant Colonel Michael McMahon, was on board the flight as a passenger. This is what his widow wrote to me. She is Colonel Jeanette McMahon, and she works at West Point. She said, “Mike, like Mr. Prince, was a CEO of sorts in the military as an aviation commander and, as such, had amassed a great safety record in his unit. It’s ironic and unfortunate that he had to be a passenger on this plane versus one of the people responsible for its safe operation. Some would say it was simply a tragic accident, but this accident was due to the gross lack a judgment in managing this company.”
Mr. Prince, Colonel McMahon is asking why the taxpayers should be paying your company millions to conduct military transport missions over dangerous terrain, when the military's own pilots are better trained and a lot less expensive. How do you respond?
ERIK PRINCE: We were hired to fill that void, because there is a different -- it’s a different kind of airlift mission going in and out of the very short strips in Afghanistan. You have high altitude, short strips, unimproved runways, and you have transport aircraft that are designed to support a large conventional battle. We're doing small missions. Typical cost of payload maxes out at 4,000 pounds. They can’t even hold that, because of the short altitude -- or the high altitude, short strips they have to go in and out of.
AMY GOODMAN: Blackwater founder Erik Prince, responding to the questions of the House Oversight Committee Chair Henry Waxman. Robert Spohrer, you're representing the three men who were killed, their families, the Army soldiers. Your response?
ROBERT SPOHRER: Well, this was a preventable, tragic and unnecessary crash. It’s been thoroughly investigated, first by the Army and the Air Force, who place the blame squarely on the Blackwater operation. Blackwater at that time rejected that and said they don’t know what they’re doing. They said, “Wait for the NTSB report.” Well, the National Transportation Safety Board then conducted a very thorough investigation and came to the same conclusion, that the sole cause of this crash was negligence on the part of the pilots. Blackwater has now said they reject the NTSB findings, as well.
Look, there is an expression in aviation, that you plan your flight, and you fly your plan. That didn’t happen here. Instead of flying a recognized route to the west, the crew went sightseeing in the mountains to the north of Bagram. They got into a box canyon. The plane they were flying could not climb above the 16,000-foot peak. They were in a canyon where they could not turn around, and tragically all six souls on board died.
Mr. Prince doesn’t address the question, which is, his company is paid hundreds of millions of dollars to provide responsible services, and they don’t do it. And then when they have a tragedy like this occur, they come to the court and ask for immunity. They basically want to be held -- not held to account at all for their negligent conduct in this case. And the 11th Circuit at least has said, “No, we’re going to allow this case to go forward and let a jury hear the evidence and decide whether or not this crew was negligent and how this crash occurred.” So we're looking forward to seeing Mr. Prince in the courtroom and having him answer some of our questions.
JUAN GONZALEZ: And, Mr. Spohrer, there was one survivor, wasn't there, of that crash? What happened with that person?
ROBERT SPOHRER: The conclusion of the investigators was that Specialist Harley Miller, who was twenty-four years of age, survived the initial crash. We know that, because he had pulled survival gear from the plane. We see evidence where he had smoked cigarettes and tried to survive in the 14,000-foot elevation of the Hindu Kush Mountains in Afghanistan. He died within seven to ten hours of the crash.
But one of the tragedies here is that had this plane been on a normal course, that the search-and-rescue aircraft would have known where to look for him, and he perhaps could have been saved. But as it was, they were way off of any recognized course up in the mountains, and so the search-and-rescue people were looking in the wrong area. So, sadly, Specialist Miller died along with the other five men in the airplane.
JUAN GONZALEZ: And the fact that the Army, on the one hand, did lay the blame at Blackwater, but then has recently given them a $92 million -- the same firm -- a $92 million contract?
ROBERT SPOHRER: That’s correct. What our investigation shows is that there was an initial immediate suspension for Blackwater. They were prohibited from carrying passengers for a short period of time, until certain safety steps were taken. But then, a short time later, they were permitted to resume carrying passengers, and now, as you say, just last month a new $92 million contract was let from the Pentagon again to Presidential Airways. I can’t understand why that would be allowed to happen. Certainly, this -- problems with the safety of this aircraft would be unacceptable in a Part 135 operation here in the United States.
AMY GOODMAN: Jeremy Scahill, the AP report that says the State Department could possibly cancel the Blackwater USA contract in Iraq, awarding it to another company, in line with an Iraqi government demand. And this just out, as well, the UN wanting probes to determine whether private security contractors in Iraq have committed war crimes and for governments to ensure that the rule of law is applied. Ivana Vuco, the UN senior human rights officer in Iraq, told a news conference that private security contractors are still subject to international humanitarian law, and that means there are specific consequences for any breach.
JEREMY SCAHILL: Well, there is a United Nations working group on the use of mercenaries that has been investigating this issue, particularly the use of forces from countries in Latin America and elsewhere, whose home governments are actually opposed to the war. And, of course, Blackwater has made it a practice to hire up Chilean commandos, Colombian soldiers, and deploy them to Iraq, even though the home government of Chile, for instance, is completely opposed to the invasion and occupation. But we know the Bush administration's stance on the United Nations: it’s a discussion group. International law has been rendered quaint. And so, where that’s going to go ultimately, we don’t know.
On the issue of Blackwater perhaps losing its work with the State Department, even if Blackwater were to leave Iraq tomorrow, it wouldn’t address the fundamental problem. You could give the work that Blackwater is doing to the other two major US companies, Triple Canopy and DynCorp, which are already operating on State Department contracts in Iraq, and it doesn’t go away. You still have this cowboy atmosphere of lawless mercenaries roaming Iraq and shooting civilians. And so, at the end of the day, there’s no legislation right now in the Congress that addresses the linking of corporate profits to war-making or addresses the radical privatization of the US war machine. And until the Congress does that and stops passing legislation that legitimizes the use of mercenary forces, this is only going to continue to grow. There are more mercenary companies operating in the world today than there are nations registered at the UN. I mean, this is an incredible subversion of world order and a very significant threat to peace.
AMY GOODMAN: Finally, the latest on the Christmas Eve shooting?
JEREMY SCAHILL: Right. Well, this was a case that we’ve talked about a lot on Democracy Now!: the Iraqi Vice President Adil Abdul-Mahdi, his bodyguard, shot and killed allegedly by a drunken Blackwater contractor on Christmas Eve 2006. We did know that Blackwater had whisked him out of the country within thirty-six hours of that killing and that Blackwater paid $20,000 in money to the victim's family. What we’ve learned in recent days -- the New York Times broke the story -- they identified this individual as a twenty-seven-year-old named Andrew Moonen, who lives in Seattle. He has an attorney. He is not exactly denying that he killed the bodyguard. They say that it’s a --
AMY GOODMAN: Blackwater flew him out after the killing.
JEREMY SCAHILL: Blackwater flew him out, yes, after the killing, and they say that the US government had instructed them to do so. And Erik Prince made a big deal about talking about how this individual was taken out of the country, was fired from Blackwater, was fined, was forced to pay for his plane ticket home, and, most significantly, had his security clearance withdrawn. But lo and behold, two months after the shooting takes place, Andrew Moonen is back in the Middle East working for another military contractor with the Pentagon, and he worked there from February to August and then recently, we understand, purchased a $270,000 home in Seattle. And it raises very serious questions that this individual is still walking around a free man with no charges brought against him yet.
AMY GOODMAN: I want to thank you all for being here. Robert Spohrer, thanks for joining us from Jacksonville, Florida. We’ll certainly continue to follow this court case, as you represent the families of the three Army soldiers killed in the Blackwater plane crash in Afghanistan. And, Jeremy Scahill, author of the book Blackwater: The Rise of the World’s Most Powerful Mercenary Army.
AMY GOODMAN: I want to bring into this conversation Janessa Gans. She is a former US official who worked in Iraq from 2003 to 2005. Well, on Saturday, she published an article, an op-ed piece in the Los Angeles Times called "I Survived Blackwater," talking about her experiences with Blackwater in Iraq.
Janessa Gans, talk about what it was like to be, well, guarded by Blackwater.
JANESSA GANS: Well, I was frequently the beneficiary of Blackwater rides through downtown Baghdad, and it was a rollercoaster ride, to say the least. You're crammed in the back of an armored Suburban with your body armor and helmet on. And you’re holding on for dear life, basically, as we careened around corners in excess of speeds of a hundred miles an hour and jumped across road divides and stopped to pelt cars with water bottles and then often pointed guns at them. So -- and to say the least, Baghdad’s roads are not the nicest or the smoothest, so it’s a bumpy ride to begin with. So it felt very much like a rollercoaster.
JUAN GONZALEZ: You mention in your article one particular ride in the town of Irbil, where they actually -- the Blackwater security group in front of you actually rammed a civilian car?
JANESSA GANS: Yeah, that was the most poignant and infuriating incident for me, because we were approaching this car -- it was clearly a family in front of us, an older gentleman driving and probably his wife beside him and his three children in the back seat -- and as we approached, I just saw the children's eyes get wider and wider and their mouths agape with terror, and we started honking furiously, because in our speeds, we didn’t want any obstacles in our way to get from point A to point B, and there was really nowhere for them to go, because it was a very narrow road. And as we were swerving to kind of go around them, we hit their car into the barrier on the side of the road, because they didn’t get over in time.
And I just was so shocked that this was an innocent family puttering down the road. Was it really necessary to damage their vehicle? Were they such a threat? And the answer I got back was even more disturbing, that this was a product of their training. “Ma'am, we’re viewed to see any obstacle, any vehicle, as a possible terrorist decoy, as a threat, and that’s what we do. We're completing our mission to get you from point A to point B, and that’s our job.”
AMY GOODMAN: Janessa Gans, what were you doing in Iraq? And could the Iraqis distinguish between US soldiers and Blackwater guards?
JANESSA GANS: I was not often -- I only rode in the military convoy a couple of times, and the stance was very different from those couple of experiences between Blackwater. But more importantly, I rode frequently with other private security contractors that adopted a low-profile stance, and they did not go with sirens and honking and these three armored suburban convoys escorted by two armored Humvees. They blended into the traffic, into the population, sometimes with unarmored cars disguised as taxicabs or as beat-up Mercedes. And they weren’t such an affront or an antagonism to the population.
JUAN GONZALEZ: And so, your sense was that even among the other contractors -- we’ve already heard about how the US military has such a negative outlook on Blackwater -- but that even other contractors viewed them this way?
JANESSA GANS: Sorry. Even other contractors were viewed the same as Blackwater?
JUAN GONZALEZ: No, that other security companies also saw Blackwater as unusual or different in their approach, more aggressive in their approach.
JANESSA GANS: Right. They did have that reputation, as being the most aggressive and the most elite. So I was -- I’m familiar with that, with that attitude. My brother was a Navy Seal for ten years, and they just knew that they were the best of the best and they had the most resources. They were the most well-paid. So it just -- I think that blended in with this aggressive stance that they adopted, as well.
JUAN GONZALEZ: And your reaction when you heard that the Iraqi government was calling for them to be removed from the country?
JANESSA GANS: I actually was surprised that it had taken this long. You know, I used to often think, well, I benefited personally so much from their protection and their security and without which I could have not done my job, but I used to think if there were foreign armed convoys going through my streets every day, delaying traffic, if I got anywhere too close, I would be pelted with water bottles or have guns pointed at me, I would have piped up right away and made a complaint. So I’m just surprised that they waited this long.
AMY GOODMAN: Janessa Gans, I want to thank you for being with us, US official in Iraq from 2003 to 2005, now a visiting political science professor at Principia College.
AMY GOODMAN: I want to go to the private military contractor Blackwater. Last week, your organization, Center for Constitutional Rights, sued Blackwater on behalf of the families of three Iraqis killed by Blackwater forces on September 16th in Baghdad. President Bush was asked about Blackwater during his news conference on Wednesday.
REPORTER: As commander-in-chief, are you in control of and responsible for military contractors in Iraq? And if not, who is?
PRESIDENT GEORGE W. BUSH: Yes, I'm responsible in that the State Department has hired those military contractors.
REPORTER: Are you satisfied with their performance? And, if not, what are you doing to satisfy yourself that --
PRESIDENT GEORGE W. BUSH: I will be anxious to see the analysis of their performance. There's a lot of studying going on, both inside Iraq and out, as to whether or not people violated rules of engagement. I will tell you, though, that a firm like Blackwater provides a valuable service. They protect people's lives. And I appreciate the sacrifice and the service that the Blackwater employees have made. And they, too, want to make sure that if there's any inconsistencies or, you know, behavior that shouldn't -- that ought to be modified, that we do that.
AMY GOODMAN: Michael Ratner, your response?
MICHAEL RATNER: Well, you can already see the President beginning to distance himself from Blackwater, saying there’s an investigation going on. You see what you said in the earlier part of the program that the State Department is considering not renewing the contract. I think Blackwater is considering not even applying, because they know they’re not going to get it. And then, of course, when he says they’re doing their job, yeah, if their job is to terrorize the Iraqi population, they’re doing their job.
AMY GOODMAN: Wednesday was not the first time that President Bush was asked about Blackwater. In April of last year, President Bush spoke at the School of Advanced International Studies at Johns Hopkins University. After his talk, he took questions from students at the school.
STUDENT: My question is in regards to private military contractors. The Uniform Code of Military Justice does not apply to these contractors in Iraq. I asked your Secretary of Defense a couple of months ago what law governs their actions. Mr. Rumsfeld --
PRESIDENT GEORGE W. BUSH: I was going to ask him. Go ahead. Help.
STUDENT: I was hoping your answer might be a little more specific. Mr. Rumsfeld answered that Iraq has its own domestic laws, which he assumed applied to those private military contractors. However, Iraq is clearly not currently capable of enforcing its laws, much less against -- you know, over our American military contractors. I would submit to you that in this case, this is one case that privatization is not a solution. And, Mr. President, how do you propose to bring private military contractors under a system of law?
PRESIDENT GEORGE W. BUSH: Yeah, I appreciate that very much. I wasn't kidding. I was going to -- I pick up the phone and say, Mr. Secretary, I’ve got an interesting question. This is what delegation -- I don't mean to be dodging the question, although it’s kind of convenient in this case, but never -- I really will. I’m going to call the secretary and say you brought up a very valid question, and what are we doing about it? It’s -- that’s how I work.
AMY GOODMAN: Michael Ratner?
MICHAEL RATNER: Well, Amy, I mean, you want to weep for America when you see that. When you see the President making a joke about Blackwater, which has been alleged to be involved in all kinds of incidents, killings, etc., and then the audience, press people, just laughing about it, you know that this country is not in a great place. I mean, this is a private military force, essentially, operating overseas in Iraq that’s been accused of all kinds of things, and they’re making -- including murders of Iraqi citizens -- and they’re making jokes about it. The President and, no less guilty, the audience of reporters who were looking at it.
AMY GOODMAN: Actually, the person who asked that was just a student at Johns Hopkins. It might be a lesson to some reporters on how to ask a question.
MICHAEL RATNER: I think so, Amy.
AMY GOODMAN: On Sunday, Blackwater founder Erik Prince appeared on CNN. He was asked to respond to the CCR -- your -- lawsuit. This is what he said.
ERIK PRINCE: First, the lawsuit, the lawyers, the trial lawyers that filed this lawsuit are the same guys that defended the World Trade Center bombings in 1993, the Blind Sheikh, and have defended a bunch of killers of FBI agents and other cops. So this is very much a politically motivated lawsuit for media attention.
AMY GOODMAN: That’s Erik Prince. Michael Ratner, he’s talking about CCR.
MICHAEL RATNER: Well, obviously, I mean, this is like a transparent attempt to try and divert attention from Blackwater’s actions, particularly in the September killings, where there’s many, many witnesses and much evidence that basically says no one fired on Blackwater, Blackwater just fired and killed seventeen people. So that’s an obvious attempt. It’s barely worthy of a response, because that’s all that’s going on.
Although the killing of the two FBI agents is important to bring out, because what he’s speaking of there is the man who’s in prison right now, Leonard Peltier, for those two killings at the reservation in South Dakota, and that man is unjustly -- that Indian man is unjustly in that prison. And so, that’s a case that particularly is galling, because you have this Indian leader who’s been unjustly imprisoned for twenty-five years.
AMY GOODMAN: We’ll leave it there. Michael Ratner, president of the Center for Constitutional Rights, thank you for joining us.
from democracynow.org for Oct. 17, 2007
REPORTER: As commander-in-chief, are you in control of and responsible for military contractors in Iraq? And if not, who is?
PRESIDENT GEORGE W. BUSH: Yes, I'm responsible in that the State Department has hired those military contractors.
REPORTER: Are you satisfied with their performance? And, if not, what are you doing to satisfy yourself that --
PRESIDENT GEORGE W. BUSH: I will be anxious to see the analysis of their performance. There's a lot of studying going on, both inside Iraq and out, as to whether or not people violated rules of engagement. I will tell you, though, that a firm like Blackwater provides a valuable service. They protect people's lives. And I appreciate the sacrifice and the service that the Blackwater employees have made. And they, too, want to make sure that if there's any inconsistencies or, you know, behavior that shouldn't -- that ought to be modified, that we do that.
AMY GOODMAN: Michael Ratner, your response?
MICHAEL RATNER: Well, you can already see the President beginning to distance himself from Blackwater, saying there’s an investigation going on. You see what you said in the earlier part of the program that the State Department is considering not renewing the contract. I think Blackwater is considering not even applying, because they know they’re not going to get it. And then, of course, when he says they’re doing their job, yeah, if their job is to terrorize the Iraqi population, they’re doing their job.
AMY GOODMAN: Wednesday was not the first time that President Bush was asked about Blackwater. In April of last year, President Bush spoke at the School of Advanced International Studies at Johns Hopkins University. After his talk, he took questions from students at the school.
STUDENT: My question is in regards to private military contractors. The Uniform Code of Military Justice does not apply to these contractors in Iraq. I asked your Secretary of Defense a couple of months ago what law governs their actions. Mr. Rumsfeld --
PRESIDENT GEORGE W. BUSH: I was going to ask him. Go ahead. Help.
STUDENT: I was hoping your answer might be a little more specific. Mr. Rumsfeld answered that Iraq has its own domestic laws, which he assumed applied to those private military contractors. However, Iraq is clearly not currently capable of enforcing its laws, much less against -- you know, over our American military contractors. I would submit to you that in this case, this is one case that privatization is not a solution. And, Mr. President, how do you propose to bring private military contractors under a system of law?
PRESIDENT GEORGE W. BUSH: Yeah, I appreciate that very much. I wasn't kidding. I was going to -- I pick up the phone and say, Mr. Secretary, I’ve got an interesting question. This is what delegation -- I don't mean to be dodging the question, although it’s kind of convenient in this case, but never -- I really will. I’m going to call the secretary and say you brought up a very valid question, and what are we doing about it? It’s -- that’s how I work.
AMY GOODMAN: Michael Ratner?
MICHAEL RATNER: Well, Amy, I mean, you want to weep for America when you see that. When you see the President making a joke about Blackwater, which has been alleged to be involved in all kinds of incidents, killings, etc., and then the audience, press people, just laughing about it, you know that this country is not in a great place. I mean, this is a private military force, essentially, operating overseas in Iraq that’s been accused of all kinds of things, and they’re making -- including murders of Iraqi citizens -- and they’re making jokes about it. The President and, no less guilty, the audience of reporters who were looking at it.
AMY GOODMAN: Actually, the person who asked that was just a student at Johns Hopkins. It might be a lesson to some reporters on how to ask a question.
MICHAEL RATNER: I think so, Amy.
AMY GOODMAN: On Sunday, Blackwater founder Erik Prince appeared on CNN. He was asked to respond to the CCR -- your -- lawsuit. This is what he said.
ERIK PRINCE: First, the lawsuit, the lawyers, the trial lawyers that filed this lawsuit are the same guys that defended the World Trade Center bombings in 1993, the Blind Sheikh, and have defended a bunch of killers of FBI agents and other cops. So this is very much a politically motivated lawsuit for media attention.
AMY GOODMAN: That’s Erik Prince. Michael Ratner, he’s talking about CCR.
MICHAEL RATNER: Well, obviously, I mean, this is like a transparent attempt to try and divert attention from Blackwater’s actions, particularly in the September killings, where there’s many, many witnesses and much evidence that basically says no one fired on Blackwater, Blackwater just fired and killed seventeen people. So that’s an obvious attempt. It’s barely worthy of a response, because that’s all that’s going on.
Although the killing of the two FBI agents is important to bring out, because what he’s speaking of there is the man who’s in prison right now, Leonard Peltier, for those two killings at the reservation in South Dakota, and that man is unjustly -- that Indian man is unjustly in that prison. And so, that’s a case that particularly is galling, because you have this Indian leader who’s been unjustly imprisoned for twenty-five years.
AMY GOODMAN: We’ll leave it there. Michael Ratner, president of the Center for Constitutional Rights, thank you for joining us.
from democracynow.org for Oct. 17, 2007
read and weep....
State Dept Gives Immunity to Blackwater Forces
Government officials have revealed that the Blackwater forces involved in last month's deadly shooting in Baghdad have been secretly given immunity by the State Department. Officials said the immunity deal has undermined efforts to prosecute anyone from Blackwater for the deaths of the 17 Iraqi civilians killed on Sept. 16. The immunity deal has also delayed a criminal inquiry into the shootings. The State Department's Bureau of Diplomatic Security gave immunity to all of the Blackwater guards involved in the killings even though they did not have the authority to do so. The director of the state department's diplomatic security bureau, Richard Griffin, resigned last week. The New York Times reports prosecutors at the Justice Department had no advance knowledge of the immunity deal.
Family of Dead U.S. Soldier Sues UK Private Military Company
Meanwhile the British private military company Erinys has been sued in Texas over the death of a U.S. soldier who died after being hit by one of the company's convoys in Iraq. The lawsuit was filed by Perry Monroe, father of Christopher Monroe who died in southern Iraq two years ago. The lawsuit accuses the Erinys convoy of ignoring warnings and traveling at excessive speed after dark without lights fully on. At the time of the incident, the British company was working under a contract with the U.S. Army Corps of Engineers.
from www.democracynow.org Oct 30, 07
State Dept Gives Immunity to Blackwater Forces
Government officials have revealed that the Blackwater forces involved in last month's deadly shooting in Baghdad have been secretly given immunity by the State Department. Officials said the immunity deal has undermined efforts to prosecute anyone from Blackwater for the deaths of the 17 Iraqi civilians killed on Sept. 16. The immunity deal has also delayed a criminal inquiry into the shootings. The State Department's Bureau of Diplomatic Security gave immunity to all of the Blackwater guards involved in the killings even though they did not have the authority to do so. The director of the state department's diplomatic security bureau, Richard Griffin, resigned last week. The New York Times reports prosecutors at the Justice Department had no advance knowledge of the immunity deal.
Family of Dead U.S. Soldier Sues UK Private Military Company
Meanwhile the British private military company Erinys has been sued in Texas over the death of a U.S. soldier who died after being hit by one of the company's convoys in Iraq. The lawsuit was filed by Perry Monroe, father of Christopher Monroe who died in southern Iraq two years ago. The lawsuit accuses the Erinys convoy of ignoring warnings and traveling at excessive speed after dark without lights fully on. At the time of the incident, the British company was working under a contract with the U.S. Army Corps of Engineers.
from www.democracynow.org Oct 30, 07
Blackwater Shot Dead Three Guards at Iraqi News Outlet in Feb.
More questions are being raised about the actions of the private military company Blackwater in Iraq. The Washington Post is reporting Blackwater forces shot dead three guards working for the state-funded Iraqi Media Network last February. Forces from Blackwater opened fire from the roof of the Iraqi Justice Ministry. An Iraqi police report described the shootings as a "act of terrorism." The police concluded that Blackwater opened fire without any provocation. But the U.S. government concluded that the actions of the Blackwater guards fell within approved rules governing the use of force. The Iraqi Media Network sought to sue Blackwater in an Iraqi court but an Iraqi judge rejected the petition citing a 2004 law signed by L. Paul Bremer, the former head of the U.S. occupation.
AMY GOODMAN: I want to read from the Washington Post, the top story today. It says, “How Blackwater Sniper Fire Felled 3 Iraqi Guards.” It’s by Steve Fainaru. He writes: "Last Feb. 7, a sniper employed by Blackwater USA, the private security company, opened fire from the roof of the Iraqi Justice Ministry. The bullet tore through the head of a 23-year-old guard for the state-funded Iraqi Media Network, who was standing on a balcony across an open traffic circle. Another guard rushed to his colleague's side and was fatally shot in the neck. A third guard was found dead more than an hour later on the same balcony. Eight people who responded to the shootings -- including media network and Justice Ministry guards and an Iraqi army commander -- and five network officials in the compound said none of the slain guards had fired on the Justice Ministry, where a U.S. diplomat was in a meeting." That’s from the front page of the Washington Post today.
Well, a new congressional measure is calling for the speedy removal of hundreds of armed private military contractors from Iraq. On Wednesday, Democratic Congressmember Jan Schakowsky of Illinois introduced a bill that would withdraw all guards with the firms Blackwater, DynCorp and Triple Canopy over the next six months. Each company is paid an estimated $1.2 billion to guard US officials in Iraq. The private military industry has come under unprecedented scrutiny following another killing, the September killing of seventeen Iraqis by Blackwater guards. Under Schakowsky's proposal, the initial removal would be followed by a full withdrawal of an estimated 48,000 armed contractors by 2009.
Congressmember Jan Schakowsky has been one of the leading congressional critics of the private military industry, joining us right here in Washington, D.C. Welcome to Democracy Now!, Congressmember Schakowsky.
REP. JAN SCHAKOWSKY: It’s a pleasure to be with you, Amy. I’m a big fan, and I want to say hello to all the people watching on CAN TV in Chicago. I’m so glad that you’re there.
AMY GOODMAN: That’s right. Every morning, live at 7:00. Thanks so much for joining us, Congressmember. Explain what your SOS bill is exactly.
REP. JAN SCHAKOWSKY: Well, we think that it’s time to remove these private for-profit unaccountable security companies, private military companies -- this is a burgeoning industry of a kind of “have war, will travel” -- and get them out of Iraq and eventually out of anywhere that the United States is in conflict. They are working “at cross-purposes” -- those are the words of Secretary of Defense Gates -- right now in a war zone, and they have no business being there. There have been -- they’re completely unaccountable and operating with impunity.
AMY GOODMAN: And so, how exactly do you propose to have them removed? How does it work? And how much support do you have?
REP. JAN SCHAKOWSKY: Well, they would simply be replaced by people who wear the badge of the United States of America, either by military personnel or by expanding the State Department's Diplomatic Security Service.
You know, after 9/11, when we were worried about aviation security, every single person involved in security at the airports was made a public employee so that we could be in full control of the training, of the hiring, so that we would know exactly who was there, and we would feel more secure. We’ve done exactly the opposite in Iraq and in Afghanistan, where -- and in Colombia. You heard on the last segment that there is a presence of private contractors really on every continent right now. And so, we would just replace them over the next six months.
AMY GOODMAN: How do you respond to those politicians who have said, to the private security firms, what many call “mercenary” firms, have said are -- these are highly trained people, often former Navy Seals, etc., that provide the kind of security that the US military cannot provide?
REP. JAN SCHAKOWSKY: Well, that’s a pretty serious condemnation of the US military, if we now have to rely on these private companies, some of which are actually skimming the most-trained people out of our military, offering them salaries that can’t be matched by the military. And that’s, by the way, creating a big morale problem among our uniformed servicemen and women who are also risking their lives and yet being paid a fraction of what these guards are being paid.
But, absolutely, we can have people of equal quality. But you know what? They also have people who worked under the Pinochet government when there were death squads, who formerly worked for Milosevic, or people who were graduates of the School of the Americas or pro-apartheid fighters from South Africa. These are often the people that populate these private military companies.
They're not all cowboys, but, you know, in fact, the four Blackwater employees who were killed in Fallujah were very skilled people. They should never have been sent on a mission by Blackwater that was doomed to failure from the beginning. And their killing in Fallujah changed the entire direction of the war in Iraq, helped promote and spark the insurgency there, created the battle of Fallujah, where twenty-seven Marines were killed. They are changing the mission. They’re changing it for the worse and endangering our troops, who, all of them, I think, should be out of Iraq. But these private companies are making it worse.
AMY GOODMAN: Congressmember Schakowsky, have you gotten to read this front-page Washington Post story today? On February 7th, not the September 16th, but, well, almost, what, eight months before…
REP. JAN SCHAKOWSKY: You know, I just -- I glanced at it this morning. There was also a murder in the Green Zone by a Blackwater employee on Christmas Eve of last year. There have been zero prosecutions completed -- only two started -- of all of the private contractors. That would include even the Halliburtons who provide different services in Iraq. Imagine, Amy, there’s been literally hundreds of thousands of private contractors in Iraq and only two prosecutions. That’s impossible in a population that size. And the reason for that is that there are no rules governing them. And in fact, the CPA, the Coalition Provisional Authority, gave them immunity from prosecution. And Secretary Rice said there is clearly of a hole in the law. This is a serious problem. We have to get them out of there.
AMY GOODMAN: Well, [Steve] Fainaru’s piece is an extremely extensive piece. It goes onto a full page of the Washington Post after the top headline story. And it says, “The Feb. 7 shootings convulsed the Iraqi Media Network, one of the most prominent symbols of the new Iraq, in anger and recrimination. U.S. officials and the security company, now known as Blackwater Worldwide, offered no compensation or apology to the victims' families, according to relatives of the guards and officials of the network, whose programming reaches 22 million Iraqis.”
REP. JAN SCHAKOWSKY: Isn't that interesting, though, that we didn’t know about that, either, that this is being exposed -- that was February of this year, and it’s just being exposed here now? So the untold harm that these companies are creating, in terms of the hatred that they’re stimulating -- and Iraqis don’t distinguish between those people who are Americans in uniform or out of uniform, and very often, by the way, it looks like a uniform that they’re wearing. This is actually helping to recruit more of the terrorists, more people who hate the United States of America. This is counterproductive in every way, except to these companies that are now, because of US taxpayer dollars, reaping billions of dollars for their companies.
AMY GOODMAN: Congressmember Jan Schakowsky, I wanted to read to you a piece, from Jeremy Scahill's piece, that is coming out in The Nation magazine on the bill, on your SOS bill. Of course, SOS, “Stop Outsourcing Security.” He says, “The SOS bill is by far the most hard-hitting legislation to target private forces in Iraq, but it’s not without its problems. While Schakowsky understands this issue better than most in Congress, there’s a potential loophole in the bill that could unwittingly aid the permanent expansion of the war machine.” And he says, “Calling for the government to take over from Blackwater, Triple Canopy and Dyncorp, rather than addressing the State Department’s already-massive paramilitary force in Iraq, could amount to de facto support for what is already a dramatic unprecedented militarization of the Department’s Diplomatic Security Division by the White House. The department's worldwide personnel protection program was originally envisioned as a small-scale bodyguard operation tasked with protecting small groups of US diplomats and other officials in countries around the world. In Iraq, the administration has turned into a paramilitary force several thousand strong. Spending on the program jumped from $50 million in 2003 to $613 million in 2006.” Your comment on this?
REP. JAN SCHAKOWSKY: Well, I understand what Jeremy, who has done an amazing job with his book about Blackwater -- I understand what he’s saying, but I’m a founding member of the Out of Iraq Caucus. I think we should be getting out of there entirely. But we certainly don't, at the same time as this war proceeds ahead, help build this private mercenary army and aid and abet these companies. I think it -- he absolutely has a point, but I think that what we want to do is get out of Iraq, get a new administration, have a diplomatic surge rather than a surge of war all over the globe. The world’s on fire right now because of this administration. So I want to deal with that issue, too, but I think that having these private companies being funded at the rate they are by taxpayers is absolutely against our interest over the long term.
AMY GOODMAN: Congressmember Schakowsky, I want to ask you about another issue. Front page of The Hill this week: “GOP Turns Impeachment Resolution Against Dems” about Kucinich’s motion on Cheney, forces procedural fight. “House Republicans [on Tuesday] nearly forced Democratic leaders to vote on a resolution to impeach Vice President Cheney. [The] anti-war presidential candidate Dennis Kucinich” -- your colleague from Ohio -- “introduced a privileged resolution, used to circumvent the committee process, to get his impeachment measure to the House floor. The vote to kill Kucinch’s privileged resolution began as a largely party-line affair, but halfway through the vote, [Rep. John] Shadegg (R-Ariz.) persuaded Republican leaders to get rank-and-file GOP lawmakers to change their votes to force the debate.” Tell us what’s happening here. Are you for impeachment?
REP. JAN SCHAKOWSKY: Well, I signed on, after giving it about ten seconds thought, to Dennis's resolution to impeach Dick Cheney. But here is the question for progressives who believe that Dick Cheney should be impeached: Do we want to have that vote? And, actually, I wanted to have that vote. You know, I voted in favor of having that vote. Do we want to have a vote, though, that loses overwhelmingly? That’s the fear. And that was what the Republicans were essentially saying: “Fine. Go ahead. Have your vote and see how many actually would have voted for the impeachment resolution.” I think it actually would have been pretty much of a handful of us who have signed on as co-sponsors, and I’m just not sure that it would have advanced our cause. They knew that.
AMY GOODMAN: And what about the impeachment of President Bush?
REP. JAN SCHAKOWSKY: Well, we certainly don’t want to impeach President Bush without impeaching Cheney. I think that many of the most drastic and radical of the actions taken by this administration -- I think Dick Cheney would have no hesitation, for example, to go in and bomb Iran. So, having Cheney as the President in the interim -- now, if we did both and Nancy Pelosi were the President of the United States and that were actually feasible in the next year, I would be all for that.
AMY GOODMAN: Well, I want to thank you very much for being with us, Congressmember Jan Schakowsky, Democratic Congress member from Illinois.
REP. JAN SCHAKOWSKY: Well, I want to thank you, Amy, for all the important messages that you’re getting out that counter some of the propaganda that we hear from the other side, so thank you.
AMY GOODMAN: Congressmember Schakowsky has introduced the Stop Outsourcing Security Act, known as the SOS Act, that would phase out the use of private military contractors in Iraq and Afghanistan. Independent Senator Bernie Sanders has done the same thing in the Senate.
www.democacynow.org Nov. 6 2007
More questions are being raised about the actions of the private military company Blackwater in Iraq. The Washington Post is reporting Blackwater forces shot dead three guards working for the state-funded Iraqi Media Network last February. Forces from Blackwater opened fire from the roof of the Iraqi Justice Ministry. An Iraqi police report described the shootings as a "act of terrorism." The police concluded that Blackwater opened fire without any provocation. But the U.S. government concluded that the actions of the Blackwater guards fell within approved rules governing the use of force. The Iraqi Media Network sought to sue Blackwater in an Iraqi court but an Iraqi judge rejected the petition citing a 2004 law signed by L. Paul Bremer, the former head of the U.S. occupation.
AMY GOODMAN: I want to read from the Washington Post, the top story today. It says, “How Blackwater Sniper Fire Felled 3 Iraqi Guards.” It’s by Steve Fainaru. He writes: "Last Feb. 7, a sniper employed by Blackwater USA, the private security company, opened fire from the roof of the Iraqi Justice Ministry. The bullet tore through the head of a 23-year-old guard for the state-funded Iraqi Media Network, who was standing on a balcony across an open traffic circle. Another guard rushed to his colleague's side and was fatally shot in the neck. A third guard was found dead more than an hour later on the same balcony. Eight people who responded to the shootings -- including media network and Justice Ministry guards and an Iraqi army commander -- and five network officials in the compound said none of the slain guards had fired on the Justice Ministry, where a U.S. diplomat was in a meeting." That’s from the front page of the Washington Post today.
Well, a new congressional measure is calling for the speedy removal of hundreds of armed private military contractors from Iraq. On Wednesday, Democratic Congressmember Jan Schakowsky of Illinois introduced a bill that would withdraw all guards with the firms Blackwater, DynCorp and Triple Canopy over the next six months. Each company is paid an estimated $1.2 billion to guard US officials in Iraq. The private military industry has come under unprecedented scrutiny following another killing, the September killing of seventeen Iraqis by Blackwater guards. Under Schakowsky's proposal, the initial removal would be followed by a full withdrawal of an estimated 48,000 armed contractors by 2009.
Congressmember Jan Schakowsky has been one of the leading congressional critics of the private military industry, joining us right here in Washington, D.C. Welcome to Democracy Now!, Congressmember Schakowsky.
REP. JAN SCHAKOWSKY: It’s a pleasure to be with you, Amy. I’m a big fan, and I want to say hello to all the people watching on CAN TV in Chicago. I’m so glad that you’re there.
AMY GOODMAN: That’s right. Every morning, live at 7:00. Thanks so much for joining us, Congressmember. Explain what your SOS bill is exactly.
REP. JAN SCHAKOWSKY: Well, we think that it’s time to remove these private for-profit unaccountable security companies, private military companies -- this is a burgeoning industry of a kind of “have war, will travel” -- and get them out of Iraq and eventually out of anywhere that the United States is in conflict. They are working “at cross-purposes” -- those are the words of Secretary of Defense Gates -- right now in a war zone, and they have no business being there. There have been -- they’re completely unaccountable and operating with impunity.
AMY GOODMAN: And so, how exactly do you propose to have them removed? How does it work? And how much support do you have?
REP. JAN SCHAKOWSKY: Well, they would simply be replaced by people who wear the badge of the United States of America, either by military personnel or by expanding the State Department's Diplomatic Security Service.
You know, after 9/11, when we were worried about aviation security, every single person involved in security at the airports was made a public employee so that we could be in full control of the training, of the hiring, so that we would know exactly who was there, and we would feel more secure. We’ve done exactly the opposite in Iraq and in Afghanistan, where -- and in Colombia. You heard on the last segment that there is a presence of private contractors really on every continent right now. And so, we would just replace them over the next six months.
AMY GOODMAN: How do you respond to those politicians who have said, to the private security firms, what many call “mercenary” firms, have said are -- these are highly trained people, often former Navy Seals, etc., that provide the kind of security that the US military cannot provide?
REP. JAN SCHAKOWSKY: Well, that’s a pretty serious condemnation of the US military, if we now have to rely on these private companies, some of which are actually skimming the most-trained people out of our military, offering them salaries that can’t be matched by the military. And that’s, by the way, creating a big morale problem among our uniformed servicemen and women who are also risking their lives and yet being paid a fraction of what these guards are being paid.
But, absolutely, we can have people of equal quality. But you know what? They also have people who worked under the Pinochet government when there were death squads, who formerly worked for Milosevic, or people who were graduates of the School of the Americas or pro-apartheid fighters from South Africa. These are often the people that populate these private military companies.
They're not all cowboys, but, you know, in fact, the four Blackwater employees who were killed in Fallujah were very skilled people. They should never have been sent on a mission by Blackwater that was doomed to failure from the beginning. And their killing in Fallujah changed the entire direction of the war in Iraq, helped promote and spark the insurgency there, created the battle of Fallujah, where twenty-seven Marines were killed. They are changing the mission. They’re changing it for the worse and endangering our troops, who, all of them, I think, should be out of Iraq. But these private companies are making it worse.
AMY GOODMAN: Congressmember Schakowsky, have you gotten to read this front-page Washington Post story today? On February 7th, not the September 16th, but, well, almost, what, eight months before…
REP. JAN SCHAKOWSKY: You know, I just -- I glanced at it this morning. There was also a murder in the Green Zone by a Blackwater employee on Christmas Eve of last year. There have been zero prosecutions completed -- only two started -- of all of the private contractors. That would include even the Halliburtons who provide different services in Iraq. Imagine, Amy, there’s been literally hundreds of thousands of private contractors in Iraq and only two prosecutions. That’s impossible in a population that size. And the reason for that is that there are no rules governing them. And in fact, the CPA, the Coalition Provisional Authority, gave them immunity from prosecution. And Secretary Rice said there is clearly of a hole in the law. This is a serious problem. We have to get them out of there.
AMY GOODMAN: Well, [Steve] Fainaru’s piece is an extremely extensive piece. It goes onto a full page of the Washington Post after the top headline story. And it says, “The Feb. 7 shootings convulsed the Iraqi Media Network, one of the most prominent symbols of the new Iraq, in anger and recrimination. U.S. officials and the security company, now known as Blackwater Worldwide, offered no compensation or apology to the victims' families, according to relatives of the guards and officials of the network, whose programming reaches 22 million Iraqis.”
REP. JAN SCHAKOWSKY: Isn't that interesting, though, that we didn’t know about that, either, that this is being exposed -- that was February of this year, and it’s just being exposed here now? So the untold harm that these companies are creating, in terms of the hatred that they’re stimulating -- and Iraqis don’t distinguish between those people who are Americans in uniform or out of uniform, and very often, by the way, it looks like a uniform that they’re wearing. This is actually helping to recruit more of the terrorists, more people who hate the United States of America. This is counterproductive in every way, except to these companies that are now, because of US taxpayer dollars, reaping billions of dollars for their companies.
AMY GOODMAN: Congressmember Jan Schakowsky, I wanted to read to you a piece, from Jeremy Scahill's piece, that is coming out in The Nation magazine on the bill, on your SOS bill. Of course, SOS, “Stop Outsourcing Security.” He says, “The SOS bill is by far the most hard-hitting legislation to target private forces in Iraq, but it’s not without its problems. While Schakowsky understands this issue better than most in Congress, there’s a potential loophole in the bill that could unwittingly aid the permanent expansion of the war machine.” And he says, “Calling for the government to take over from Blackwater, Triple Canopy and Dyncorp, rather than addressing the State Department’s already-massive paramilitary force in Iraq, could amount to de facto support for what is already a dramatic unprecedented militarization of the Department’s Diplomatic Security Division by the White House. The department's worldwide personnel protection program was originally envisioned as a small-scale bodyguard operation tasked with protecting small groups of US diplomats and other officials in countries around the world. In Iraq, the administration has turned into a paramilitary force several thousand strong. Spending on the program jumped from $50 million in 2003 to $613 million in 2006.” Your comment on this?
REP. JAN SCHAKOWSKY: Well, I understand what Jeremy, who has done an amazing job with his book about Blackwater -- I understand what he’s saying, but I’m a founding member of the Out of Iraq Caucus. I think we should be getting out of there entirely. But we certainly don't, at the same time as this war proceeds ahead, help build this private mercenary army and aid and abet these companies. I think it -- he absolutely has a point, but I think that what we want to do is get out of Iraq, get a new administration, have a diplomatic surge rather than a surge of war all over the globe. The world’s on fire right now because of this administration. So I want to deal with that issue, too, but I think that having these private companies being funded at the rate they are by taxpayers is absolutely against our interest over the long term.
AMY GOODMAN: Congressmember Schakowsky, I want to ask you about another issue. Front page of The Hill this week: “GOP Turns Impeachment Resolution Against Dems” about Kucinich’s motion on Cheney, forces procedural fight. “House Republicans [on Tuesday] nearly forced Democratic leaders to vote on a resolution to impeach Vice President Cheney. [The] anti-war presidential candidate Dennis Kucinich” -- your colleague from Ohio -- “introduced a privileged resolution, used to circumvent the committee process, to get his impeachment measure to the House floor. The vote to kill Kucinch’s privileged resolution began as a largely party-line affair, but halfway through the vote, [Rep. John] Shadegg (R-Ariz.) persuaded Republican leaders to get rank-and-file GOP lawmakers to change their votes to force the debate.” Tell us what’s happening here. Are you for impeachment?
REP. JAN SCHAKOWSKY: Well, I signed on, after giving it about ten seconds thought, to Dennis's resolution to impeach Dick Cheney. But here is the question for progressives who believe that Dick Cheney should be impeached: Do we want to have that vote? And, actually, I wanted to have that vote. You know, I voted in favor of having that vote. Do we want to have a vote, though, that loses overwhelmingly? That’s the fear. And that was what the Republicans were essentially saying: “Fine. Go ahead. Have your vote and see how many actually would have voted for the impeachment resolution.” I think it actually would have been pretty much of a handful of us who have signed on as co-sponsors, and I’m just not sure that it would have advanced our cause. They knew that.
AMY GOODMAN: And what about the impeachment of President Bush?
REP. JAN SCHAKOWSKY: Well, we certainly don’t want to impeach President Bush without impeaching Cheney. I think that many of the most drastic and radical of the actions taken by this administration -- I think Dick Cheney would have no hesitation, for example, to go in and bomb Iran. So, having Cheney as the President in the interim -- now, if we did both and Nancy Pelosi were the President of the United States and that were actually feasible in the next year, I would be all for that.
AMY GOODMAN: Well, I want to thank you very much for being with us, Congressmember Jan Schakowsky, Democratic Congress member from Illinois.
REP. JAN SCHAKOWSKY: Well, I want to thank you, Amy, for all the important messages that you’re getting out that counter some of the propaganda that we hear from the other side, so thank you.
AMY GOODMAN: Congressmember Schakowsky has introduced the Stop Outsourcing Security Act, known as the SOS Act, that would phase out the use of private military contractors in Iraq and Afghanistan. Independent Senator Bernie Sanders has done the same thing in the Senate.
www.democacynow.org Nov. 6 2007
AMY GOODMAN: We turn now to the latest in the unfolding controversy surrounding the private military contractor Blackwater. On Friday, the State Department’s top investigator was forced to resign, following the disclosure his brother sat on Blackwater’s advisory board. Inspector General Howard Krongard had initially denied his brother’s ties to the company. Current and former State Department officials have previously accused Krongard of thwarting probes into contracting waste and crimes in Iraq, including alleged arms smuggling by Blackwater guards.
Meanwhile, after initially indicating it would let Blackwater’s contract expire in May, State Department officials are now raising the likelihood of a renewal. The acting head of US diplomatic security, Gregory Starr, has reportedly told Blackwater it will be judged on its actions “from here on out.” That would preclude from consideration the September shooting deaths of seventeen Iraqi civilians by Blackwater guards in Baghdad.
In his latest piece in The Nation magazine, independent journalist and Democracy Now! correspondent Jeremy Scahill writes that Blackwater isn’t taking any chances on keeping its lucrative deals. Scahill says Blackwater has launched a major rebranding campaign aimed at winning new government contracts far beyond Iraq. And it’s also playing a role in the presidential race, establishing deep ties to Republican hopeful Mitt Romney.
Jeremy Scahill joins me now in the firehouse studio, author of the bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army. Welcome, Jeremy.
JEREMY SCAHILL: Thanks, Amy.
AMY GOODMAN: Well, let’s take these one by one. First, Krongard resigning—how significant is this, and who was he?
JEREMY SCAHILL: Well, this is very significant. I mean, Cookie Krongard, as his nickname was, Howard Krongard, was the top official at the State Department responsible for investigating waste, fraud and abuse. And he was directly responsible for investigating Blackwater, because Blackwater works for the US State Department.
One of the original scandals that erupted with Krongard was when Henry Waxman raised the prospect that Krongard had been stifling a Justice Department criminal investigation into allegations that Blackwater involved in some kind of an arms smuggling operation in Iraq. Krongard, instead of assigning a seasoned liaison to work with the Justice Department from the State Department, actually assigned his congressional liaison and media person. And Waxman says that that ultimately caused a delay of about two weeks in the investigation. So he was already under fire at the time.
Now, I have to say, before Cookie Krongard appeared before Waxman’s committee a couple of weeks ago, where it was revealed that his brother Alvin “Buzzy” Krongard was in fact a paid consultant to Blackwater, had been—had accepted a position as a paid consultant to Blackwater on the company’s advisory board, the Krongards were familiar to me. I, in fact, had written in my book about Buzzy Krongard. He wasn’t just a guy who joined Blackwater’s advisory board as a paid consultant in the midst of this scandal. He was one of the central people at the Central Intelligence Agency responsible for getting Erik Prince’s men from Blackwater into the mercenary business. Buzzy Krongard, at the time that Blackwater jumped into the mercenary business in 2002, shortly after 9/11, he was the number three man at the CIA, the executive director. He was a hunting buddy of Erik Prince. And he was the one who got Blackwater—was central to getting Blackwater its first mercenary contract that we know of, which was a $5 million black contract to go into Afghanistan in the aftermath of 9/11. Erik Prince went over with that initial team. So, there was a prolonged five-plus-year relationship between Blackwater and the brother of the man who then would ultimately be responsible for investigating potential crimes or allegations of misconduct on the part of Blackwater.
Now, an interesting side note to this is that apparently the Krongard brothers hate each other, and they actually have tried to wheel that out as a defense in this case. But it would be an extraordinary coincidence that the man responsible at the CIA for getting Blackwater into the mercenary business with the US government, his brother just happens to be the guy investigating the company or supposed to be investigating the company and accused of failing to do so at the very moment when a cornucopia of scandals present themselves.
AMY GOODMAN: Now, after initially indicating that it would let Blackwater’s contract expire in May, the State Department is now saying, acting head of US diplomatic security, Gregory Starr, that Blackwater will be judged on its actions “from here on out”?
JEREMY SCAHILL: Well, then that probably means that a lot of Blackwater people will be going to jail. I mean, the reality is that on—and that’s not going to happen—the reality is that on December 3, Blackwater released a job posting seeking snipers and more protective security specialists because of an extension of its State Department contract. So apparently Blackwater knows something that has not been revealed publicly, because they’re hiring new guards under their WPPS contract, their State Department contract, which is how they work in Iraq.
AMY GOODMAN: Let’s go to the campaign. I want to play Mitt Romney’s comments at the Republican CNN/YouTube debate last month. In an exchange with Senator John McCain, Romney refused to say whether he thinks waterboarding is torture.
MITT ROMNEY: I did not say and I do not say that I’m in favor of torture. I am not. I’m not going to specify the specific means of what is and what is not torture so that the people that we capture will know what things we’re able to do and what things we’re not able to do. And I get that advice from Cofer Black, who is a person who was responsible for counterterrorism in the CIA for some thirty-five years. I get that advice by talking to former generals in our military. And I don’t believe—
ANDERSON COOPER: Time.
MITT ROMNEY: I don’t believe it’s appropriate for me, as a presidential candidate, to lay out all of the issues one by one—
ANDERSON COOPER: Time.
MITT ROMNEY: —get questioned one by one: Is this torture? Is that torture?
AMY GOODMAN: Mitt Romney. Jeremy Scahill?
JEREMY SCAHILL: Right. Well, it’s interesting that Mitt Romney brings up Cofer Black and wheels him out in his defense of his refusal to label waterboarding torture and says we’re not going to tell the enemies what we’re going to do to them when I’m president. Anyone who knows anything about the career of Cofer Black, who’s the number two man at Blackwater, the head of their new private intelligence company called Total Intelligence Solutions, none of the things that Mitt Romney is saying will come as a surprise. For much of the past year, Cofer Black, who currently remains the number two man, the vice chairman of Blackwater Worldwide, he has been Mitt Romney’s senior advisor on counterterrorism. And so, when you hear Mitt Romney refuse to call waterboarding torture and say things like, we’re not going to talk about the tactics we’re going to use, and call for a doubling of Guantanamo, you have to understand that the man who’s telling him to say these things, who’s advising him on these policies, is one of the biggest thugs to serve in US government.
I mean—and the other thing is that Cofer Black, what Mitt Romney said about him was a dramatic exaggeration. He said he ran—he was responsible for counterterrorism at the CIA for thirty-five years. Well, first of all, Black was only in the CIA for twenty-eight years, and he only ran the counterterrorism program for three of those. But nonetheless, Cofer Black was in charge of counterterrorism at one of the most crucial times in recent history. On 9/11, it was Cofer Black who was head of the CIA’s Counterterrorism Center. This is a man who was seemingly obsessed with corporal mutilation. He would talk about having flies crawling across the eyeballs of America’s enemies, putting skulls on pikes, whacking off heads with machetes, bringing heads, severed heads, back in cardboard boxes on dry ice of bin Laden to present to President Bush. He was the man responsible for escalating the use of Bill Clinton’s extraordinary rendition program, the US government-sanctioned kidnapping and torture program.
And now he apparently is one of the key people in the Romney campaign. I mean , if Mitt Romney became president, it raises the prospect of Blackwater’s lucrative business under Bush looking like a church bake sale.
AMY GOODMAN: How significant is Cofer Black to Mitt Romney’s campaign?
JEREMY SCAHILL: I think he’s incredibly significant. And the fact is that when John McCain goes after Mitt Romney on this issue, which McCain has been pretty forceful on, having been tortured himself, and one of the only Republicans who really is speaking out against it in a clear way, the fact that he tries to wheel out Cofer Black in response to McCain saying, “Well, you should talk to people like Colin Powell,” indicates that not only does Romney get his advice from Cofer Black, but he seems to want to use him as a propaganda tool, as well. And let’s be clear here, Cofer Black, while working with the Romney campaign, also is running a private intelligence company, Total Intelligence Solutions, is one of the key people behind the scenes at Blackwater and one of the major figures in this world of private security and private intelligence, one the dons of the industry.
AMY GOODMAN: Jeremy Scahill, talk about the re-branding of Blackwater.
JEREMY SCAHILL: Yeah. Well, I mean, the industry itself, the mercenary industry, has been engaged in a re-branding campaign to take this old dirty profession of soldiers, you know, for hire and remake it as a peacekeeping operation. Blackwater has undergone a major overhaul of its website. It’s no longer called Blackwater USA; it’s called Blackwater Worldwide. Their logo, which used to be a bear paw in a sniper scope, is now a bear paw surrounded by two half-ovals. It almost looks reminiscent of the United Nations logo. No longer are Blackwater mercenaries referred to even as “personal security operatives” or “personal security details;” they are “global stabilization professionals.” And so, the terms that are being wheeled out—on the Blackwater website, you can purchase a teddy bear with a Blackwater t-shirt on it, a onesie for your infant. It comes in both blue and pink.
And recently, Blackwater paratroopers staged a dramatic aerial landing not in Baghdad or Kabul, but in San Diego at halftime of the San Diego State-BYU football game, where they came down in parachutes with the Blackwater flag. They actually at one point inadvertently dragged the American flag on the ground, which has gotten the attention of some bloggers. And it’s interesting that Blackwater did this in San Diego, their paratroopers landing on the field, because they’re fighting back major fierce local resistance to their attempt to open an 824-acre mercenary camp based right on the US/Mexico border.
But Blackwater’s business, in many ways, Amy, has never been better. They’re being considered for part of a $15 billion contract with the Pentagon to operate in the so-called war on drugs. They recently got a $92 million contract to operate flights for the Pentagon in Central Asia. The intelligence company is growing. They have a maritime division with a 184-foot vessel that has been fitted for paramilitary use. They recently test-flew their unmanned airship, called the Polar 400, which they’re marketing to the Department of Homeland Security. And also, they’re making—
AMY GOODMAN: Along the border, to be used?
JEREMY SCAHILL: Yes, to monitor the US/Mexico border. But they’re also saying it could be used by government and non-government entities alike. They also are making an armored vehicle called the Grizzly, which they’re sort of portraying as the most versatile armored vehicle in history, combining the durability of an armored vehicle with the versatility of an SUV. And Erik Prince intends to have that vehicle modified so that it would be legal for use on US highways and roads.
AMY GOODMAN: Potrero, where this controversy is taking place, whether they’ll set up a base there, used—Blackwater used the fires in California, helped some people out there?
JEREMY SCAHILL: Right. Well, Amy, look, Blackwater really jumped into the domestic operations component of its business in the aftermath of Hurricane Katrina. They started a whole new division of the company for domestic operations. I think Blackwater sees disaster response as a gateway, one of the gateways, into a massive Homeland Security budget and that the Department of Homeland Security, like all agencies of the federal government, is being radically privatized. 70% of the US national intelligence budget—sixteen intelligence agencies—70% of that budget is in the hands of private contractors. The Border Patrol is—it faces the prospect of being privatized. DynCorp, one of Blackwater’s competitors, has said it wants to put boots on the ground as privatized border patrol.
Blackwater is a very innovative, cutting-edge company, and they are sticking their fingers into every pot that they can get them into, and Homeland Security is a major one. And one of the gateways into it, like Darfur for international peacekeeping, is to say, “We can be the first responders. We can respond to the hurricanes, the floods, the fires.” It’s a gateway.
AMY GOODMAN: And what is the problem you see with that?
JEREMY SCAHILL: Well, there’s a number of problems. I mean, first of all, it raises serious constitutional questions about, are the civil liberties of individuals being protected that Blackwater comes in contact with? But on a deeper level, it has to do with how we distribute resources in this country. If the poor are left to drown and starve and the rich can then hire their private fire departments or have private utilities, that means that in this country you have to be a person of means to be entitled to services that the government normally provides. And so, this radical privatization agenda ultimately is a pulling out of the rug from the most needy people in the society.
AMY GOODMAN: We’re talking to Jeremy Scahill, author of the book Blackwater. Scott Horton also joins us. He teaches law at Columbia Law School. He participates in the blog “No Comment” at Harper’s Magazine and was the chair of the International Law Committee at the New York Bar Association. What do you see as the issue of Blackwater here, the problem of Blackwater here?
SCOTT HORTON: Well, I think Jeremy puts his finger right on it. It really is—it’s a massive privatization of national security operation, including intelligence operations. But we have a major aspect of it that’s now in focus in Congress, and that’s the accountability problem. If we look at the situation in Afghanistan and Iraq today, we see that US men and women in uniform, if they do something wrong, there’s a proper accountability process for it, including discipline and court-martial. If it’s Blackwater or if it’s another contractor, nothing happens. It’s effective impunity. And, in fact, we have thousands of recorded incidents out there that have gone without punishment of any kind. At most, the employee who’s involved gets fired and sent back to the States. But then, frequently enough, they’re back on another plane, back working for a different contractor in Iraq or Afghanistan within a matter of weeks.
AMY GOODMAN: And, Jeremy, the status of the September 16th killings that took place in Baghdad?
JEREMY SCAHILL: Where seventeen Iraqis were killed, twenty-four others wounded. And actually those—some of the victims’ families and survivors are suing Blackwater, not just for wrongful death, but for war crimes under the Alien Tort Statute. And what’s interesting now is that there is the federal grand jury that’s been convened, and we understand it’s looking at a number of cases, not just at this case. But some witnesses and potentially people who were involved with the shooting in Nisour Square have testified in front of the grand jury.
And we understand from media reports—this is a grand jury that was convened in Washington, D.C.—we understand from media reports—and maybe Scott can add to this—that there potentially could be an attempt to prosecute as many as three of the Blackwater individuals involved at Nisour Square. And the way that they would most likely be prosecuted is under US civilian law, called the Military Extraterritorial Jurisdiction Act, essentially saying that contractors commit a crime abroad, they can be prosecuted criminally for that at home. The problem is, is that the law was written in a way that it applies only to contractors accompanying the Armed Forces or working directly for the Armed Forces. Blackwater works for the State Department. And so, some legal observers say it’s like trying to cram a square into a circle, and if they go forward with this prosecution under a law that doesn’t exactly appear to apply to Blackwater, that it ultimately could be a step backwards. Now, Congress is trying to amend that so that it would apply to Blackwater, but it can’t be applied retroactively. And many of the legal experts I’ve talked to say there almost literally is no law that could be applied to Blackwater, except war crimes. And, I mean, that’s something that Scott has been looking at.
AMY GOODMAN: Scott Horton?
SCOTT HORTON: Well, that’s exactly correct. I’ll just say, first, if they go forward with this prosecution, this will be the first time ever that the Department of Justice has prosecuted a security contractor in Iraq with respect to a crime involving violence against locals. That’s never happened before, notwithstanding thousands of incidents. If they do it and they go forward with the prosecution on the basis of the MEJA alone, then I think there is—you know, there’s a serious question as to whether or not it’s going to apply. I’m not quite sure I come out exactly where Jeremy does. I think there is a basis for saying that it’ll cover them. The question is not whether they’re DOD contractors, but whether or not they’re involved in the contingency operation. And there, of course, they’re going to say that their function is just to provide security for Department of State personnel. I think you could look at it fairly and say, no, they’re really a part of this overall operation in Iraq. But the bottom line is, really, it’s a war crime question. There clearly is jurisdiction and a basis to act against them under the War Crimes Act. But the Bush administration doesn’t want to go there, doesn’t want to touch that. I think they’ve made that point clear.
AMY GOODMAN: Well, we’re going to leave it here. I want to thank you very much, Jeremy Scahill, for joining us, author of the bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army. Scott Horton, I’d like to stay after break, as we talk about the CIA tapes that the CIA has destroyed of interrogations.
www.democracynow. Dec. 10, 2007
Meanwhile, after initially indicating it would let Blackwater’s contract expire in May, State Department officials are now raising the likelihood of a renewal. The acting head of US diplomatic security, Gregory Starr, has reportedly told Blackwater it will be judged on its actions “from here on out.” That would preclude from consideration the September shooting deaths of seventeen Iraqi civilians by Blackwater guards in Baghdad.
In his latest piece in The Nation magazine, independent journalist and Democracy Now! correspondent Jeremy Scahill writes that Blackwater isn’t taking any chances on keeping its lucrative deals. Scahill says Blackwater has launched a major rebranding campaign aimed at winning new government contracts far beyond Iraq. And it’s also playing a role in the presidential race, establishing deep ties to Republican hopeful Mitt Romney.
Jeremy Scahill joins me now in the firehouse studio, author of the bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army. Welcome, Jeremy.
JEREMY SCAHILL: Thanks, Amy.
AMY GOODMAN: Well, let’s take these one by one. First, Krongard resigning—how significant is this, and who was he?
JEREMY SCAHILL: Well, this is very significant. I mean, Cookie Krongard, as his nickname was, Howard Krongard, was the top official at the State Department responsible for investigating waste, fraud and abuse. And he was directly responsible for investigating Blackwater, because Blackwater works for the US State Department.
One of the original scandals that erupted with Krongard was when Henry Waxman raised the prospect that Krongard had been stifling a Justice Department criminal investigation into allegations that Blackwater involved in some kind of an arms smuggling operation in Iraq. Krongard, instead of assigning a seasoned liaison to work with the Justice Department from the State Department, actually assigned his congressional liaison and media person. And Waxman says that that ultimately caused a delay of about two weeks in the investigation. So he was already under fire at the time.
Now, I have to say, before Cookie Krongard appeared before Waxman’s committee a couple of weeks ago, where it was revealed that his brother Alvin “Buzzy” Krongard was in fact a paid consultant to Blackwater, had been—had accepted a position as a paid consultant to Blackwater on the company’s advisory board, the Krongards were familiar to me. I, in fact, had written in my book about Buzzy Krongard. He wasn’t just a guy who joined Blackwater’s advisory board as a paid consultant in the midst of this scandal. He was one of the central people at the Central Intelligence Agency responsible for getting Erik Prince’s men from Blackwater into the mercenary business. Buzzy Krongard, at the time that Blackwater jumped into the mercenary business in 2002, shortly after 9/11, he was the number three man at the CIA, the executive director. He was a hunting buddy of Erik Prince. And he was the one who got Blackwater—was central to getting Blackwater its first mercenary contract that we know of, which was a $5 million black contract to go into Afghanistan in the aftermath of 9/11. Erik Prince went over with that initial team. So, there was a prolonged five-plus-year relationship between Blackwater and the brother of the man who then would ultimately be responsible for investigating potential crimes or allegations of misconduct on the part of Blackwater.
Now, an interesting side note to this is that apparently the Krongard brothers hate each other, and they actually have tried to wheel that out as a defense in this case. But it would be an extraordinary coincidence that the man responsible at the CIA for getting Blackwater into the mercenary business with the US government, his brother just happens to be the guy investigating the company or supposed to be investigating the company and accused of failing to do so at the very moment when a cornucopia of scandals present themselves.
AMY GOODMAN: Now, after initially indicating that it would let Blackwater’s contract expire in May, the State Department is now saying, acting head of US diplomatic security, Gregory Starr, that Blackwater will be judged on its actions “from here on out”?
JEREMY SCAHILL: Well, then that probably means that a lot of Blackwater people will be going to jail. I mean, the reality is that on—and that’s not going to happen—the reality is that on December 3, Blackwater released a job posting seeking snipers and more protective security specialists because of an extension of its State Department contract. So apparently Blackwater knows something that has not been revealed publicly, because they’re hiring new guards under their WPPS contract, their State Department contract, which is how they work in Iraq.
AMY GOODMAN: Let’s go to the campaign. I want to play Mitt Romney’s comments at the Republican CNN/YouTube debate last month. In an exchange with Senator John McCain, Romney refused to say whether he thinks waterboarding is torture.
MITT ROMNEY: I did not say and I do not say that I’m in favor of torture. I am not. I’m not going to specify the specific means of what is and what is not torture so that the people that we capture will know what things we’re able to do and what things we’re not able to do. And I get that advice from Cofer Black, who is a person who was responsible for counterterrorism in the CIA for some thirty-five years. I get that advice by talking to former generals in our military. And I don’t believe—
ANDERSON COOPER: Time.
MITT ROMNEY: I don’t believe it’s appropriate for me, as a presidential candidate, to lay out all of the issues one by one—
ANDERSON COOPER: Time.
MITT ROMNEY: —get questioned one by one: Is this torture? Is that torture?
AMY GOODMAN: Mitt Romney. Jeremy Scahill?
JEREMY SCAHILL: Right. Well, it’s interesting that Mitt Romney brings up Cofer Black and wheels him out in his defense of his refusal to label waterboarding torture and says we’re not going to tell the enemies what we’re going to do to them when I’m president. Anyone who knows anything about the career of Cofer Black, who’s the number two man at Blackwater, the head of their new private intelligence company called Total Intelligence Solutions, none of the things that Mitt Romney is saying will come as a surprise. For much of the past year, Cofer Black, who currently remains the number two man, the vice chairman of Blackwater Worldwide, he has been Mitt Romney’s senior advisor on counterterrorism. And so, when you hear Mitt Romney refuse to call waterboarding torture and say things like, we’re not going to talk about the tactics we’re going to use, and call for a doubling of Guantanamo, you have to understand that the man who’s telling him to say these things, who’s advising him on these policies, is one of the biggest thugs to serve in US government.
I mean—and the other thing is that Cofer Black, what Mitt Romney said about him was a dramatic exaggeration. He said he ran—he was responsible for counterterrorism at the CIA for thirty-five years. Well, first of all, Black was only in the CIA for twenty-eight years, and he only ran the counterterrorism program for three of those. But nonetheless, Cofer Black was in charge of counterterrorism at one of the most crucial times in recent history. On 9/11, it was Cofer Black who was head of the CIA’s Counterterrorism Center. This is a man who was seemingly obsessed with corporal mutilation. He would talk about having flies crawling across the eyeballs of America’s enemies, putting skulls on pikes, whacking off heads with machetes, bringing heads, severed heads, back in cardboard boxes on dry ice of bin Laden to present to President Bush. He was the man responsible for escalating the use of Bill Clinton’s extraordinary rendition program, the US government-sanctioned kidnapping and torture program.
And now he apparently is one of the key people in the Romney campaign. I mean , if Mitt Romney became president, it raises the prospect of Blackwater’s lucrative business under Bush looking like a church bake sale.
AMY GOODMAN: How significant is Cofer Black to Mitt Romney’s campaign?
JEREMY SCAHILL: I think he’s incredibly significant. And the fact is that when John McCain goes after Mitt Romney on this issue, which McCain has been pretty forceful on, having been tortured himself, and one of the only Republicans who really is speaking out against it in a clear way, the fact that he tries to wheel out Cofer Black in response to McCain saying, “Well, you should talk to people like Colin Powell,” indicates that not only does Romney get his advice from Cofer Black, but he seems to want to use him as a propaganda tool, as well. And let’s be clear here, Cofer Black, while working with the Romney campaign, also is running a private intelligence company, Total Intelligence Solutions, is one of the key people behind the scenes at Blackwater and one of the major figures in this world of private security and private intelligence, one the dons of the industry.
AMY GOODMAN: Jeremy Scahill, talk about the re-branding of Blackwater.
JEREMY SCAHILL: Yeah. Well, I mean, the industry itself, the mercenary industry, has been engaged in a re-branding campaign to take this old dirty profession of soldiers, you know, for hire and remake it as a peacekeeping operation. Blackwater has undergone a major overhaul of its website. It’s no longer called Blackwater USA; it’s called Blackwater Worldwide. Their logo, which used to be a bear paw in a sniper scope, is now a bear paw surrounded by two half-ovals. It almost looks reminiscent of the United Nations logo. No longer are Blackwater mercenaries referred to even as “personal security operatives” or “personal security details;” they are “global stabilization professionals.” And so, the terms that are being wheeled out—on the Blackwater website, you can purchase a teddy bear with a Blackwater t-shirt on it, a onesie for your infant. It comes in both blue and pink.
And recently, Blackwater paratroopers staged a dramatic aerial landing not in Baghdad or Kabul, but in San Diego at halftime of the San Diego State-BYU football game, where they came down in parachutes with the Blackwater flag. They actually at one point inadvertently dragged the American flag on the ground, which has gotten the attention of some bloggers. And it’s interesting that Blackwater did this in San Diego, their paratroopers landing on the field, because they’re fighting back major fierce local resistance to their attempt to open an 824-acre mercenary camp based right on the US/Mexico border.
But Blackwater’s business, in many ways, Amy, has never been better. They’re being considered for part of a $15 billion contract with the Pentagon to operate in the so-called war on drugs. They recently got a $92 million contract to operate flights for the Pentagon in Central Asia. The intelligence company is growing. They have a maritime division with a 184-foot vessel that has been fitted for paramilitary use. They recently test-flew their unmanned airship, called the Polar 400, which they’re marketing to the Department of Homeland Security. And also, they’re making—
AMY GOODMAN: Along the border, to be used?
JEREMY SCAHILL: Yes, to monitor the US/Mexico border. But they’re also saying it could be used by government and non-government entities alike. They also are making an armored vehicle called the Grizzly, which they’re sort of portraying as the most versatile armored vehicle in history, combining the durability of an armored vehicle with the versatility of an SUV. And Erik Prince intends to have that vehicle modified so that it would be legal for use on US highways and roads.
AMY GOODMAN: Potrero, where this controversy is taking place, whether they’ll set up a base there, used—Blackwater used the fires in California, helped some people out there?
JEREMY SCAHILL: Right. Well, Amy, look, Blackwater really jumped into the domestic operations component of its business in the aftermath of Hurricane Katrina. They started a whole new division of the company for domestic operations. I think Blackwater sees disaster response as a gateway, one of the gateways, into a massive Homeland Security budget and that the Department of Homeland Security, like all agencies of the federal government, is being radically privatized. 70% of the US national intelligence budget—sixteen intelligence agencies—70% of that budget is in the hands of private contractors. The Border Patrol is—it faces the prospect of being privatized. DynCorp, one of Blackwater’s competitors, has said it wants to put boots on the ground as privatized border patrol.
Blackwater is a very innovative, cutting-edge company, and they are sticking their fingers into every pot that they can get them into, and Homeland Security is a major one. And one of the gateways into it, like Darfur for international peacekeeping, is to say, “We can be the first responders. We can respond to the hurricanes, the floods, the fires.” It’s a gateway.
AMY GOODMAN: And what is the problem you see with that?
JEREMY SCAHILL: Well, there’s a number of problems. I mean, first of all, it raises serious constitutional questions about, are the civil liberties of individuals being protected that Blackwater comes in contact with? But on a deeper level, it has to do with how we distribute resources in this country. If the poor are left to drown and starve and the rich can then hire their private fire departments or have private utilities, that means that in this country you have to be a person of means to be entitled to services that the government normally provides. And so, this radical privatization agenda ultimately is a pulling out of the rug from the most needy people in the society.
AMY GOODMAN: We’re talking to Jeremy Scahill, author of the book Blackwater. Scott Horton also joins us. He teaches law at Columbia Law School. He participates in the blog “No Comment” at Harper’s Magazine and was the chair of the International Law Committee at the New York Bar Association. What do you see as the issue of Blackwater here, the problem of Blackwater here?
SCOTT HORTON: Well, I think Jeremy puts his finger right on it. It really is—it’s a massive privatization of national security operation, including intelligence operations. But we have a major aspect of it that’s now in focus in Congress, and that’s the accountability problem. If we look at the situation in Afghanistan and Iraq today, we see that US men and women in uniform, if they do something wrong, there’s a proper accountability process for it, including discipline and court-martial. If it’s Blackwater or if it’s another contractor, nothing happens. It’s effective impunity. And, in fact, we have thousands of recorded incidents out there that have gone without punishment of any kind. At most, the employee who’s involved gets fired and sent back to the States. But then, frequently enough, they’re back on another plane, back working for a different contractor in Iraq or Afghanistan within a matter of weeks.
AMY GOODMAN: And, Jeremy, the status of the September 16th killings that took place in Baghdad?
JEREMY SCAHILL: Where seventeen Iraqis were killed, twenty-four others wounded. And actually those—some of the victims’ families and survivors are suing Blackwater, not just for wrongful death, but for war crimes under the Alien Tort Statute. And what’s interesting now is that there is the federal grand jury that’s been convened, and we understand it’s looking at a number of cases, not just at this case. But some witnesses and potentially people who were involved with the shooting in Nisour Square have testified in front of the grand jury.
And we understand from media reports—this is a grand jury that was convened in Washington, D.C.—we understand from media reports—and maybe Scott can add to this—that there potentially could be an attempt to prosecute as many as three of the Blackwater individuals involved at Nisour Square. And the way that they would most likely be prosecuted is under US civilian law, called the Military Extraterritorial Jurisdiction Act, essentially saying that contractors commit a crime abroad, they can be prosecuted criminally for that at home. The problem is, is that the law was written in a way that it applies only to contractors accompanying the Armed Forces or working directly for the Armed Forces. Blackwater works for the State Department. And so, some legal observers say it’s like trying to cram a square into a circle, and if they go forward with this prosecution under a law that doesn’t exactly appear to apply to Blackwater, that it ultimately could be a step backwards. Now, Congress is trying to amend that so that it would apply to Blackwater, but it can’t be applied retroactively. And many of the legal experts I’ve talked to say there almost literally is no law that could be applied to Blackwater, except war crimes. And, I mean, that’s something that Scott has been looking at.
AMY GOODMAN: Scott Horton?
SCOTT HORTON: Well, that’s exactly correct. I’ll just say, first, if they go forward with this prosecution, this will be the first time ever that the Department of Justice has prosecuted a security contractor in Iraq with respect to a crime involving violence against locals. That’s never happened before, notwithstanding thousands of incidents. If they do it and they go forward with the prosecution on the basis of the MEJA alone, then I think there is—you know, there’s a serious question as to whether or not it’s going to apply. I’m not quite sure I come out exactly where Jeremy does. I think there is a basis for saying that it’ll cover them. The question is not whether they’re DOD contractors, but whether or not they’re involved in the contingency operation. And there, of course, they’re going to say that their function is just to provide security for Department of State personnel. I think you could look at it fairly and say, no, they’re really a part of this overall operation in Iraq. But the bottom line is, really, it’s a war crime question. There clearly is jurisdiction and a basis to act against them under the War Crimes Act. But the Bush administration doesn’t want to go there, doesn’t want to touch that. I think they’ve made that point clear.
AMY GOODMAN: Well, we’re going to leave it here. I want to thank you very much, Jeremy Scahill, for joining us, author of the bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army. Scott Horton, I’d like to stay after break, as we talk about the CIA tapes that the CIA has destroyed of interrogations.
www.democracynow. Dec. 10, 2007
Buzzy Krongard may well have had a connection to 9/11. Interesting that he should subsequently profit from the invasion and occupation of Iraq as a paid consultant of Blackwater.
More dadgum coincidences. It's a small world, isn't it?
http://www.fromthewilderness.com/free/ww3/...1_krongard.html
More dadgum coincidences. It's a small world, isn't it?
http://www.fromthewilderness.com/free/ww3/...1_krongard.html
QUOTE (Ron Ecker @ Dec 11 2007, 04:45 PM)
Buzzy Krongard may well have had a connection to 9/11. Interesting that he should subsequently profit from the invasion and occupation of Iraq as a paid consultant of Blackwater.
More dadgum coincidences. It's a small world, isn't it?
http://www.fromthewilderness.com/free/ww3/...1_krongard.html
More dadgum coincidences. It's a small world, isn't it?
http://www.fromthewilderness.com/free/ww3/...1_krongard.html
Smaller yet in the crowded little closet known as the Secret Government. As John Judge says, "you can call me a conspiracy theorist, if I can call you a coincidence theorist." More here:
http://educationforum.ipbhost.com/index.php?showtopic=11654
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