Friday, September 18, 2009

Former Iraq Security Contractors Say Firm Bought Black Market Weapons, Swapped Booze for Rockets

by T. Christian Miller, ProPublica and Aram Roston, Special to ProPublica - September 18, 2009 10:05 am EDT (Excerpts reprinted from ProPublica under Creative Commons License)

Last spring, the U.S. diplomatic mission in Iraq got a makeover,replacing the scandal-plagued Blackwater private security company with a firm named Triple Canopy.

The new $1 billion contract cemented Triple Canopy's status as the pre-eminent provider of private security services in Iraq, with its heavily armed employees appearing side by side with senior State Department diplomats.

But the company's rise to prominence followed a long, often chaotic route, marked by questionable weapons deals, government bungling and a criminal investigation that was ultimately closed without charges being filed, according to newly released investigative files.

Company employees told federal investigators that Triple Canopy swapped booze for weapons and supplies from the U.S. military. They said the company bought guns and other arms on the black market in Iraq. Some worried that the money was flowing into the hands of insurgents, records show.

The previously undisclosed documents and interviews with current and former Triple Canopy officials raise new questions about the U.S. government's ability to oversee private security contractors in a fluid and uncertain legal environment. And they give a glimpse into the messy business of creating a private army on the fly in the middle of a war zone.

"We're spending a lot of money on these rifles, millions of dollars -- where do you think that money is going to?” [1] Ronald Boline, a former Triple Canopy manager, said in a lawsuit deposition videotaped [2] in June 2007. “Who are we supporting in doing that? We're supporting people who are trying to kill Americans is the logical conclusion."

That lawsuit against the company, filed in a Virginia circuit court by other former employees who sued Triple Canopy for wrongful termination, was settled this week, records show, but no terms were disclosed.

The criminal investigation began in 2007 after federal investigators received a tip that Triple Canopy was using stolen cars and captured Iraqi weapons [3] to boost profits to over 40 percent on some contracts. Andrew T. Baxter, the interim U.S. attorney for the Northern District of New York, declined to comment on why his office decided not to file charges. (His office handled the case because Triple Canopy’s invoices were paid out of a nearby federal contract processing center.)

Stuart Bowen, the special inspector general for Iraq reconstruction, who oversaw the investigation, refused to talk about details. But he said the difficulty in building the case were indicative of the haphazard atmosphere in which billions of dollars of U.S. money was spent in Iraq without oversight.

"It's unclear if anything that Triple Canopy did was criminal, but it was symptomatic of the chaos that prevailed at the time," Bowen said. "It's another example of contracting gone wrong." {snip} A State Dept. official acknowledged that the department had been slow to respond to the need to arm the private companies it was hiring to carry guns. Until late 2004, the department's Directorate of Defense Trade Controls blocked most requests for the export of automatic weapons to private firms — the result of a decades-old policy to cut down on international arms trafficking.

When private security companies began requesting weapons to fulfill U.S.-issued contracts, the department was caught off guard, the official said. It wasn't until November 2004 that the policy was changed to grant private security companies export licenses — more than a year and a half after the first such firms were hired in Iraq.

"This was something that the State Department hadn't considered as a possibility" until the requests for licenses started coming in, said the official, who spoke on background per department policy. "What they did was go through a relatively long discussion and decision process to figure out how to deal with the problem."

While the system for importing weapons has improved in Iraq, industry and State Department officials acknowledged that problems remain in Afghanistan.

Partly, this reflects the fact that more groups are at work there. Unlike Iraq, there is a substantial presence of nonprofits and international aid organizations in need of security. Companies buying weapons from local sources continue to run the risk of money flowing to insurgents, one official said.

Afghanistan is similar in one way, however. Just as in the early days in Iraq, there are comparatively few investigators on the ground to watch the billions of dollars now flowing into the country.

"It's an even worse Catch-22 over there," one industry official said.

Read the whole thing here.

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