December 18, 2005
Nice Work If You Can Get It
The wheels of justice grind slowly on the question of whether a fledgling firm defrauded as much as $50 million on security contracts in Iraq.
Custer Battles was dragged into federal US District Court in September 2004 after being accused of illegally pumping up costs on plum contracts handed out by the Coalition Provisional Authority, including a $16.5 million deal in June 2003 to protect the Baghdad International Airport as well as a second $21 million security agreement to protect the program to install Iraq's new currency.
That's pretty good money for for a company that had no track record in providing security. It was even better money for the company's two founders, Scott Custer and Michael Battles, who paid themselves just under $3 million each in dividends on January 2, 2004, I am now told by a very good source.
These two budding Horatio Algers divvied up their booty just six months after bagging their first Iraq contract and seven months after they were said by a glowing Wall Street Journal story that they maxed out their credit cards and borrowed the cab fare to the airport:
Barely funded with credit cards and money borrowed from a friend, their nine-month-old company had neither guns, accountants nor guards.
How they landed the multimillion contracts (funded by a cloudy cocktail of US appropriated money and seized Iraqi assets) on the heels of the Iraq invasion remains a continuing debate. Still, most every news story that mentions the company also notes that Battles was a former Republican candidate for Congress in Rhode Island.
Other sources speculate to me that there was a close relationship with a certain Federal Aviation Administration official working in Iraq at the time.
Former Custer Battles employees and plaintiffs, W.D. "Pete Baldwin" and Robert Isakson, claim in court that the company routinely engaged in accounting trickery and used a corporate shell game involving Cayman Island subsidiaries to drum up charges by tens of millions of dollars with a clear intent on plundering funding for reconstruction efforts.
Lat July, Judge T.S. Ellis from U.S. District Court in Alexandria, Virginia, denied a motion by Custer Battles to dismiss the case on the grounds that the money involved was not drawn from U.S. funds. Then he said the case would move quickly to a conclusion on the question of fraud.
Apparently, that goal is slower than Christmas. It's now almost January, and Ellis hasn't uttered a peep on the case.
Posted by davidphinney at 10:02 PM | Comments (0)
December 13, 2005
Coalition of the Billing
Foreign Policy magazine fingers private security contractors and their enlistment of unemployed mercenaries formerly employed by South American dictators. Under the banner "Top Ten Stories You Missed in 2005," the magazine suggests that the phenomenon is a story that "fell through the cracks but will have a lasting impact for years to come."
Private security firms in Iraq are hiring an increasing number of ex-guerrillas and soldiers from Colombia, Guatemala, El Salvador, Nicaragua, and Chile. A recent ad on Iraqijobcenter.com, for example, offered the services of "a thousand Colombian combat-trained ex-soldiers and policemen" for security work in Iraq. This year, U.S. security firm Halliburton employed Colombians to protect oil installations in several Iraqi cities. Blackwater, another private security firm, has had a group of soldiers who once served for Chilean dictator Augusto Pinochet on the payroll. Recruits often come from militaries known for human rights abuses or paramilitaries with ties to narcotrafficking. So why are U.S. contractors hiring Latin American mercenaries? "If a contractor is killed," says Peter Singer, an expert on private military firms at the Brookings Institution, "it is less likely to make the news [than if it's a U.S. soldier]. If it's a contractor from another country, it is even less likely."
Posted by davidphinney at 07:42 PM | Comments (0)
December 04, 2005
No Supervision for Security Contractors in Iraq
T. Christian Miller and The Los Angeles Times picks up on an issue that has been percolating for some time now: the 60 or so private security companies under US contract that storm down the roads and highways of Iraq with guns waving do so with little supervision and under even less legal oversight.
"Private security contractors have been involved in scores of shootings in Iraq, but none have been prosecuted despite findings in at least one fatal case that the men had not followed proper procedures," begins the story.
And it continues:
The contractors function in a legal gray area. Under an order issued by the U.S.-led Coalition Provisional Authority that administered Iraq until June 2004, contractors suspected of wrongdoing are to be prosecuted in their home countries. The contractors have immunity from Iraqi courts and have so far not faced American prosecution, giving little recourse to Iraqis seeking justice for wrongful shootings."What was my innocent son's crime?" asked Zahra Ridha, the mother of a 19-year-old shot and killed by security contractors in May. "Is this what we deserve?"
Others have struck the same troubling chord, notably Jonathan Finer of The Washington Post last September. His story begins with a July 14 shooting in Irbil, Iraq of Ali Ismael -- an incident I was hounding with less success by telephone after seeing it first reported in a Kudish newspaper.
The story goes that Ismael, his older brother Bayez and their driver pulled into traffic behind a convoy of four Chevrolet Suburbans. The back door of the last vehicle swung open, the brothers said in interviews, and a man wearing sunglasses and a tan flak jacket leaned out and leveled his rifle.
"I thought he was just trying to scare us, like they usually do, to keep us back. But then he fired," said Ismael, 20. His scalp was still marked by a bald patch and four-inch purple scar from a bullet that grazed his head and left him bleeding in the back seat of his Toyota Land Cruiser.
Irbil police said they believed the convoy was operated by an American security contractor stationed nearby, but a US investigation decided that no American contractors werer involved -- despite complaints to the contrary by the Ismaels, other witnesses, and local politicians. The city's top security official termed the investigation a coverup.
Recent shootings of Iraqi civilians, allegedly involving the legion of U.S., British and other foreign security contractors operating in the country, are drawing increasing concern from Iraqi officials and U.S. commanders who say they undermine relations between foreign military forces and Iraqi civilians.
On thing both Finer and Miller overlook, which just smudges the issue of using private contractors on the battlefield is that there are reports that insurgents sometimes dress and act like private security contractors. With no uniform or color of flag, how the hell do you tell them apart?
Posted by davidphinney at 03:04 PM | Comments (0)
December 03, 2005
Contract Killings?
Once upon a time, the Pentagon relied on the military for protecting civilians in wartime environments -- now it relies on private contractors with guns.
They call them private security contractors. In Iraq there are an estimated 25,000 hired to protect reconstruction contractors working in wartime conditions -- the number is more than a full military division. But unlike soldiers who serve under US and international law, these contractors have near immunity to all laws -- thanks to an order signed by Paul Bremmer when he headed the Coalition Provisional Authority after the invasion of Iraq.
For the better part of 2005, the Iraqi Ministry of Interior (and several US generals) has been whispering to a few newspaper reporters that these gun-totting contractors careening around the streets of Iraq in their armored SUVs are responsible for dozens of random shootings each month.
The Zapata security contractors were jailed for their alleged potentially deadly trigger-happy ways last May. Then we heard about the "Trophy Video," said by some to be Aegis security contractors shooting at Iraqi civilians driving behind convoys.
By September, US Army Brig. Gen. Karl R. Horst, deputy commander of the 3rd Infantry Division, which is responsible for security in and around Baghdad, told The Washington Post:
"These guys run loose in this country and do stupid stuff. There's no authority over them, so you can't come down on them hard when they escalate force....They shoot people, and someone else has to deal with the aftermath. It happens all over the place."
Hosrt told The Post that the began keeping his own count after shootings became so frequent in Baghdad last summer. Between May and July, he said, he tracked at least a dozen contractor shootings of civilians. Six Iraqis were killed and three wounded.
Now the blog Crooks and Liars has posted an apparently confidential report (submitted by another contractor, SEC) on a possible murder by security contractors of two Iraqi truck drivers traveling on the Baghdad Highway from Ramadi to Amman. They met their death a few miles from the Jordanian border in December, 2004.
The private security team, working for Triple Canopy, are said to have claimed that the truck drivers were acting erratic, so the contractors opened fire and shot 200 rounds.
When the team was stopped by an English-speaking Iraqi customs agent at the border, he asked the security convoy if there had been any incidents along the way. "Negative," said the security team.
The customs agent than inquired about 100 shell casing found near the scene of two Iraqis with their faces blown off and held the team for nine hours while the team and their vehicles were searched.
That's the end of it, except for this final comment:
"THESE GUYS WERE ON THE WAY HOME AND DECIDED THAT THEY NEEDED TO KILL A FEW IRAQIS JUST FOR THE HELL OF IT---COWBOYS AND MURDERERS LIKE THESE [EXPLETIVE DELETED] ARE GOING TO UNDERMINE THE ENTIRE EFFORT IN IRAQ. THEY HAVE STAINED THE NAMES OF THE US MILITARY PERSONNEL WHO HAVE BEEN KIA OR WIA IN IRAQ. IF I WAS [IRAQI] I'D BE TRYING TO KILL THESE [EXPLETIVE DELETED] 'CONTRACTORS', TOO!"
What is going on? Perhaps the powers-that-be prefer not to say. If private security contractors are shooting just for the hell of it, than they are endangering the lives not only of Iraqis, but they are dragging down all the peaceful working-stiff contractors who are bravely trying to help rebuild Iraq.
Posted by davidphinney at 01:57 AM | Comments (0)