Gold9472
02-07-2007, 08:49 AM
Army confirms security contract in Iraq
http://www.kansascity.com/mld/kansascity/business/16640776.htm
LARRY MARGASAK
Associated Press
2/7/2007
WASHINGTON -After numerous denials, the Pentagon has confirmed that a North Carolina company provided armed security guards in Iraq under a subcontract that was buried so deeply the government couldn't find it.
The secretary of the Army on Tuesday wrote two Democratic lawmakers that the Blackwater USA contract was part of a huge military support operation by run by Halliburton subsidiary KBR.
Vice President Dick Cheney ran Halliburton before he became vice president.
Several times last year, Pentagon officials told inquiring lawmakers they could find no evidence of the Blackwater contract. Blackwater, of Moyock, N.C., did not respond to several requests for comment.
The discovery shows the dense world of Iraq contracting, where the main contractor hires subcontractors who then hire additional subcontractors. Each company tacks on a charge for overhead, a cost that works its way up to U.S. taxpayers.
"This ongoing episode demonstrates the Pentagon's complete failure to safeguard taxpayer dollars," said Rep. Chris Van Hollen, D-Md., one of the lawmakers who had asked about the Blackwater contract and received denials.
"They continue to look the other way in the face of overwhelming evidence that Halliburton was charging taxpayers for unauthorized security services," Van Hollen said.
The hidden contract not only cost taxpayers money, but it might have been illegal. The Halliburton subsidiary's main contract for military support services prohibited hiring subcontractors to provide armed security. That job is left to the U.S. military, unless the theater commander decides otherwise.
Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, scheduled a hearing Wednesday on the Blackwater contract.
Waxman, D-Calif., has cited examples in news reports that Blackwater paid employees $600 a day, and those charges increased to $1,500 a day by the time several layers of subcontractors tacked on their charges to the main contractor.
Waxman is at the forefront of Democrats who want to investigate fraud, waste and abuse in the Bush administration, and on Tuesday he promised two years of such scrutiny.
On Tuesday, Army Secretary Francis Harvey wrote Van Hollen and Waxman that on Jan. 30 the Army learned that ESS Support Services Worldwide, a dining facilities subcontractor under the KBR contract, hired Blackwater.
ESS didn't hire Blackwater directly, but did so through a hotel company, further obscuring the contract.
Harvey further said the security costs were not itemized anywhere, yet were factored into ESS' labor costs under KBR's contract, which in turn is financed by U.S. taxpayers.
"The U.S. Army is continuing to investigate this matter and we are committed to providing full disclosure of the results of our investigations to the committee," he wrote.
In July Harvey sent a letter to Rep. Christopher Shays, R-Conn., then chairman of the committee's national security subcommittee, that cited KBR as saying it never had directly hired a private security contractor under its overall support contract.
Harvey added that KBR "has queried ESS and they are unaware of any services under the ... contract that were provided by Blackwater USA."
In September, an Army procurement official, Tina Ballard, appeared before the committee and said she verified that Harvey's prior letter - asserting that no contract could be found - was correct.
Van Hollen held up a copy of Blackwater's contract at the hearing, and Ballard still contended Blackwater provided no services to the Halliburton subsidiary.
At the end of November, the lawmakers received further evidence that the Pentagon was wrong. The parent firm of ESS, responding to questions posed by Republican committee staff, confirmed that it used Blackwater for security under the contract with Halliburton's subsidiary.
Van Hollen and Waxman pressed the Pentagon again, leading to the Army secretary's admission Tuesday that the contract existed.
Blackwater employees have suffered heavy casualties in Iraq. In 2004 an Iraqi mob killed four employees, dragged their bodies through the streets of Fallujah and hung two from a bridge.
In September 2005, the company said three of its employees were killed in Mosul.
And last month, Blackwater confirmed that five of its employees were killed in a helicopter that went down in Baghdad under heavy fire.
http://www.kansascity.com/mld/kansascity/business/16640776.htm
LARRY MARGASAK
Associated Press
2/7/2007
WASHINGTON -After numerous denials, the Pentagon has confirmed that a North Carolina company provided armed security guards in Iraq under a subcontract that was buried so deeply the government couldn't find it.
The secretary of the Army on Tuesday wrote two Democratic lawmakers that the Blackwater USA contract was part of a huge military support operation by run by Halliburton subsidiary KBR.
Vice President Dick Cheney ran Halliburton before he became vice president.
Several times last year, Pentagon officials told inquiring lawmakers they could find no evidence of the Blackwater contract. Blackwater, of Moyock, N.C., did not respond to several requests for comment.
The discovery shows the dense world of Iraq contracting, where the main contractor hires subcontractors who then hire additional subcontractors. Each company tacks on a charge for overhead, a cost that works its way up to U.S. taxpayers.
"This ongoing episode demonstrates the Pentagon's complete failure to safeguard taxpayer dollars," said Rep. Chris Van Hollen, D-Md., one of the lawmakers who had asked about the Blackwater contract and received denials.
"They continue to look the other way in the face of overwhelming evidence that Halliburton was charging taxpayers for unauthorized security services," Van Hollen said.
The hidden contract not only cost taxpayers money, but it might have been illegal. The Halliburton subsidiary's main contract for military support services prohibited hiring subcontractors to provide armed security. That job is left to the U.S. military, unless the theater commander decides otherwise.
Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, scheduled a hearing Wednesday on the Blackwater contract.
Waxman, D-Calif., has cited examples in news reports that Blackwater paid employees $600 a day, and those charges increased to $1,500 a day by the time several layers of subcontractors tacked on their charges to the main contractor.
Waxman is at the forefront of Democrats who want to investigate fraud, waste and abuse in the Bush administration, and on Tuesday he promised two years of such scrutiny.
On Tuesday, Army Secretary Francis Harvey wrote Van Hollen and Waxman that on Jan. 30 the Army learned that ESS Support Services Worldwide, a dining facilities subcontractor under the KBR contract, hired Blackwater.
ESS didn't hire Blackwater directly, but did so through a hotel company, further obscuring the contract.
Harvey further said the security costs were not itemized anywhere, yet were factored into ESS' labor costs under KBR's contract, which in turn is financed by U.S. taxpayers.
"The U.S. Army is continuing to investigate this matter and we are committed to providing full disclosure of the results of our investigations to the committee," he wrote.
In July Harvey sent a letter to Rep. Christopher Shays, R-Conn., then chairman of the committee's national security subcommittee, that cited KBR as saying it never had directly hired a private security contractor under its overall support contract.
Harvey added that KBR "has queried ESS and they are unaware of any services under the ... contract that were provided by Blackwater USA."
In September, an Army procurement official, Tina Ballard, appeared before the committee and said she verified that Harvey's prior letter - asserting that no contract could be found - was correct.
Van Hollen held up a copy of Blackwater's contract at the hearing, and Ballard still contended Blackwater provided no services to the Halliburton subsidiary.
At the end of November, the lawmakers received further evidence that the Pentagon was wrong. The parent firm of ESS, responding to questions posed by Republican committee staff, confirmed that it used Blackwater for security under the contract with Halliburton's subsidiary.
Van Hollen and Waxman pressed the Pentagon again, leading to the Army secretary's admission Tuesday that the contract existed.
Blackwater employees have suffered heavy casualties in Iraq. In 2004 an Iraqi mob killed four employees, dragged their bodies through the streets of Fallujah and hung two from a bridge.
In September 2005, the company said three of its employees were killed in Mosul.
And last month, Blackwater confirmed that five of its employees were killed in a helicopter that went down in Baghdad under heavy fire.