The bizarre history of Custer Battles has been coming out in dribs and drabs on dKos, but no single diary has put more than a few of the many pieces together. This absurdly corrupt company is on trial for fraudulent claims made to DOD for its rather meager security services in Iraq. Much information came out last week at the Democratic hearings chaired by Byron Dorgan, but the MSM did little digging. This article by
Griff Witte in WaPo of Feb. 15 sheds some light, but you really would need more information in order to understand fully what CB represents about the colossal failure of the Iraq reconstruction effort. Over at
World O'Crap today S.Z. has done the necessary work, by comparing Witte's article with an Aug. 14 piece for the AP by
Neil King Jr.. Do check her out. More below the break.
The AP piece is a profile of Battles and his company. Besides the two articles that S.Z. discusses, there is another article co-written by King at the
WSJ from Aug. 24, which adds some further info. It is a strange puff piece about Custer Battle's absolutely
mahvalous success as a new startup company--yet it includes enough information about their checkered history and weird practices as to give anybody but a reader of WSJ the dry heaves.
Briefly, these are some of the highlights of what we know: Custer Battles was a small and utterly undistinguished domestic security firm, on the verge of bankruptcy, when in May 2003 co-founder Michael Battles borrowed money to fly to Iraq in a desperate search for any kind of business. Battles had made a failed run for Congress in RI as a Republican in 2002, and as far as I can figure out he also had just incorporated some kind of real estate firm in RI in May. Custer Battles had no background that prepared it for any of the reconstruction or security work in Iraq.
With no real plans once in Baghdad, he hung out in the hallways of the Occupational Authority handing out business cards, until he heard that the Baghdad airport's security contract was going up for bid. Having no experience with the difficulty of managing such an operation, Battles submitted a hail-mary bid promising to get a security force in place weeks before any experienced contractor thought practical. That was enough to get awarded the contract! Custer Battles had no money and little infrastructure, could not even get a loan from a bank to start hiring people, so Bremer's people decided to cancel the contract--no wait, they called Battles into their offices and piled two million dollars in cash into his duffel bag. On that basis, CB hired a ragtag security force, set themselves up like potentates in the airport, and began a career in corruption.
They seized material from Iraqis, and then charged the CAP obscene fees for 'renting' it. The airport went out of use for the most part (there's a story), so CB shifted personnel to other activities but continued to charge for airport security as if all their employees were still doing that job. They created front companies, and subcontracted goods and services back and forth to inflate the charges billed to the CAP. The Coalition Provisional Authority accidently stumbled across one of CB's records where they bragged about their success in overbilling the US. Yet they got plenty of other contracts. One contract in particular became notorious back in DC. CB was awarded $12,000,000 to guard high-voltage towers under repair. The company pocketed $8,000,000 and did nothing, while subcontracting the actual work to an Iraqi company for only $4,000,000. Many of the contracts CB obtained were awarded with little or no competition. Battles reportedly has claimed to have contacts in the White House with whom he speaks regularly.
At long last Custer Battles was prohibited from bidding on any further contracts, and now is going on trial in Virginia for some of this fraud. The justice department originally looked into cooperating with DOD in the trial, but has now decided that it does not have an interest in taking part. For its sake, CB claims that it has done nothing illegal--because Iraqi law had no force under the Occupation, and US courts have no jurisdiction in Iraq--and therefore the remaining payments on its contracts must be paid in full.
That, in brief, is the sad story of the CAP and the almost unmitigated disaster that Bush's "reconstruction" of Iraq has been. From this distance, it appears that many of the people involved in CPA or as official contractors in the reconstruction can boast of some combination of the following skills: incompetence; amateurishness; stupidity; cupidity; corruption; arrogance; dishonesty; brutality. Did I leave out anything essential?
Btw, here are links to some of the previous diaries that have mentioned Custer Battles prominently: One of the earliest diaries was by USAmnesia on Oct. 13. There was a very good diary on war profiteering by firedoglake on Jan. 3. Here is a diary with much discussion of why payments were being made in duffel bags of cash in Iraq by RangerShade on Feb. 13. On Feb. 15 zenbowl linked to an NBC report about allegations that employees of Custer Battles brutalized civilians in Iraq.
