In Part 1 of a 3-part series David Isenberg, columnist, analyst, researcher and author of Shadow Force: Private Security Contractors in Iraq provides analysis and commentary on the transcripts of testimony from the recent hearings by the Commission on Wartime Contracting which took place on the 14th of September in Washington.

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By David Isenberg

Much of the time U.S. governmental investigations and hearings into whatever is the current controversy are highly scripted affairs. Congressional hearings in particular usually have a certain kabuki drama or classic Greek play quality about them, insofar as everything that occurs is highly scripted and predetermined. Everyone knows the questions, and the answers to them, before they are even asked.

But, every now and then, one gets a rare moment of unscripted candor. In the recent hearing of the Commission on Wartime Contracting (CWC) on the ArmorGroup scandal in Afghanistan we had several such moments. And for those who are patient enough to watch or read the transcripts such moments are truly revelatory.

But before going any further let me note that, and no disrespect to other U.S. governmental agencies, I consider the CWC to be the one U.S. group in several years to be doing truly worthy work on this issue. They start with the premise that private military and security contractors are necessary. As CWC co-chair, Chris Shays, said in the first panel, “Contractors have provided critical support to American military operations since the Revolutionary War. More than 250,000 contract employees are working in Iraq and Afghanistan, and more than 1,000 have died in the line of duty. They bring special skills to bear, free up warfighters for combat missions and represent a vital resource for contingency needs. Our focus today is, therefore, on understanding how we can improve this system and make it work.”

They also acknowledge that the current situation with regard to oversight and accountability is seriously flawed. Their interim report issued earlier this year is highly worth reading

Like my previous post, what I have done below is to copy various excerpts from the hearing. Each excerpt is italicized and indented. Each excerpt is usually followed by my comment in bold. Sometimes I make observations. Sometimes I ask questions. In some cases I feel the excerpt is so fascinating in its own right that it stands on its own and I make no comment.

PANELS I, II, and III OF A HEARING OF THE COMMISSION ON WARTIME CONTRACTING; THE DEPARTMENT OF STATE AND SECURITY CONTRACTOR MISCONDUCT

September 14, 2009

PANEL I OF A HEARING OF THE COMMISSION ON WARTIME CONTRACTING;

SUBJECT: THE DEPARTMENT OF STATE AND SECURITY CONTRACTOR MISCONDUCT;

CHAIRED BY: CHRISTOPHER SHAYS AND MICHAEL THIBAULT;

WITNESS: PATRICK F. KENNEDY, UNDERSECRETARY OF STATE FOR MANAGEMENT, DEPARTMENT OF STATE;

LOCATION: 2247 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

D.C. TIME: 9:31 A.M. EDT

MR. SHAYS:

With reports of misconduct among ArmorGroup personnel surfacing as early as December 2008, and with two contracting office representatives tasked full-time to the Kabul contract, how could the State Department detect no signs of trouble until it received notice from ArmorGroup leaders in Washington, not Kabul, in late August 2009? Why did the State Department display no visible signs of outrage at the delayed notice of problems at the ArmorGroup encampment? Has the State Department issued a new tour notice or reviewed the security contract for possible default termination?

Great questions. Let us not have the equivalent of Abu Ghraib here, where wrongdoing was pinned on various enlisted men and women at the bottom of the chain of command. Instead, let’s look at the people who were supposed to be monitoring the contract from the very beginning. And yes, we’re talking about you, U.S. State Department.

It is hard to exaggerate the importance of these issues. American foreign policy goals, mission objectives and lives depend in no small part on the behavior of the contractor employees, who make up half of the contingency operation workforce in Iraq and Afghanistan. Maintaining a reputation for honorable and decent treatment of foreign nationals, as well as our own countrymen, is a key asset in the struggle against terrorists. It’s just basic common sense. Gross misconduct by employees of U.S. contractors devalues that asset. It is unfair, insulting and dangerous to the military, State Department, USAID and nongovernmental personnel working in the Southwest Asia theater to have America’s image sullied and trampled by outrageous and revolting behavior of contract employees. That concern is even more salient in countries, like Afghanistan, that have strict views of sexual misconduct and use of alcohol.

Indeed, being professional means using one’s common sense, and not just living up to the letter of the contract, although that wasn’t done either.

The incidents reported near the Kabul embassy undermine American efforts to build a stable, peaceful and democratic Afghanistan. To put it bluntly, they provide free recruiting material to the Taliban. ArmorGroup officials acknowledge the problem. They certainly can’t claim they were unaware of their obligations. Their contract with the State Department explicitly describes not only conduct requirements but also the reason for them.

Of course, lack of adult supervision by the State Department does not absolve ArmorGroup. AG can’t even claim ignorance of the requirements, as both they, and the rationale for them, are spelled out in the contract.

I’ll quote just one of those provisions. Quote, “Each contractor employee or subcontractor employee is expected to adhere to standards of conduct that reflect credit on themselves, their employee (sic) and the United States government,” end of quote.

Perhaps the AG guards and supervisors should have asked themselves how eating chips out of someone’s ass brought credit on the U.S. government.

We have seen no evidence that State Department employees participated in the incidents or had any knowledge of them until recently. That leaves open, of course, questions about the levels of vigilance and diligence that ArmorGroup and State were exercising.

Not very much apparently.

The scope and duration of misconduct are both greater than they first seemed. Initially, we thought the list of disturbing episodes comprised the parties of June 15th and August 1st and August 10th. We have since discovered that other incidents occurred during December 2008 holiday parties, and that cafeteria-catered bunker parties became a recurring event during off-duty hours.

Do we yet have the full timeline on how long the misconduct went on?

Tough young guards can’t be expected to spend their leisure hours diagramming sentences or studying the etiquette of the local tea ceremony. But we can expect them to be mature and use good judgment, and we certainly can insist that their managers and the government’s contract managers pay close attention to employee conduct on an important mission in a sensitive region. Obviously, we need a great deal of improvement on those points.

Possible contender for understatement of the year.

Honorable Patrick F. Kennedy, undersecretary of State for Management:

As the State Department’s senior management officer, I take responsibility for having failed to prevent them and for not having uncovered them earlier.

How exactly have you taken responsibility? You have not resigned and are still undersecretary. You have not suffered a demotion, a reprimand, a bad job evaluation or even a slap on the wrist.

And the consumption of alcoholic beverages has also been prohibited at Camp Sullivan.

Yet many other PSCs continue to allow the use of alcohol. But perhaps that is okay as they actually have professional guards and managers who know when it is okay to drink. Let’s face it the work is stressful. Perhaps better a few beers than using other drugs. Still, maybe people should ask if there needs to be an industry standard on this. If so, what? In the interim, until people figure it out, the State Department, can always write into the contract a simple clause that says, no alcohol whatsoever. Better yet, State needs to vastly improve its oversight mechanisms.

We have always had in place a rigorous regime of oversight for security operations by contractor personnel while they are on duty. Allegations of contractor misconduct are investigated, and if substantiated, appropriate action is taken.

You have, since when? Where was it in Iraq? Right now it looks like it is MIA.

The cost of using contractors also is often higher than it would be to hire and manage an internal workforce.

Now here is a money quote if ever there was one. Contractor industry advocates have always claimed that they are cheaper and more cost effective than their public sector counterparts, although there has never been an authoritative analysis confirming that. Now, for once, someone relatively high up in government is admitting that is not always the case.

On March 12th, 2007, a contract award was made to ArmorGroup North America after full and open competition involving a number of countries. This contract has required extensive oversight in management. Since award, we have issued seven deficiency notices addressing 25 deficiencies; one cure notice; and one show-cause notice. Each deficiency notice, cure letter and show-cause notice demanded separate corrective action plans to permanently resolve these issues.

But if the charges in James Gordon’s law lawsuit against ArmorGroup North America are true then AGNA would simply lie when they said they were taking corrective action. So how exactly did State go about verifying whether AG’s corrective actions had happened, let alone whether they actually improved anything?

Despite the administrative deficiencies discussed with ArmorGroup, the department did not observe any breaches of the mission. Through the constant oversight of the regional security office and the contracting officer, Diplomatic Security personnel on the ground in Kabul felt that the administrative contract deficiencies did not jeopardize the security and safety of the personnel assigned to our mission. Static security at Embassy Kabul, as well as all our overseas missions, is based upon multiple layers of staffing to ensure appropriate security coverage and no single point of failure.

…

Thus, while the staffing shortages for ArmorGroup received deficiency notices and represented a failure to meet contract specifications, they did not represent a security risk. And based upon our reviews to date, the safety and security of our diplomats has not been compromised and the security of the embassy was not threatened.

Just keep this quote in mind for a while. We’ll come back to it later.

For the ArmorGroup contract, weekly meetings and, at times, daily meetings are held on contract performance. The contracting office is represented as a Diplomatic Security federal agent who sits in Washington and works daily with the two contracting officer representatives on the ground in Kabul, who are also both Diplomatic Security federal agents.

And yet with all those meetings the DS agent and CORs evidently had no clue about the parties at Camp Sullivan.

We simply made a mistake. We assumed that the contractor was going to be managing its conduct at the guard camp in accordance with the standards in the contract, as your fellow co-chair outlined.

Maybe you should have kept in mind the words of Ronald Reagan: “Trust but verify.”

It is clear that they should have stopped. I’ve seen the pictures. You’ve seen the pictures. It’s a no-brainer. That conduct is appalling and should have been stopped immediately.

The failure of the management onsite, to do what they should have done, to adhere to the standards of the contract, caused us to ask for their removal, which has been accomplished.

If it turns out that there was — as you used the word, and I realize you also put it in quotes — a conspiracy to keep this away from the State Department, if this turns out to be larger than that, I think I stand by the statement in my — that I made in my testimony which is, this — we are waiting for the results of the investigation. And then we will decide whether or not it is proper to continue this contract.

Are you really saying that the only reason State would terminate the contract is if it was proven that there was a conspiracy to keep this away from the State Department (one of the central charges in the Gordon lawsuit by the way)? What about the already confirmed charges of gross misconduct and unprofessionalism. Given that the governmental concerns about AG go back years is that really the only standard by which you can find justification to terminate a contract?

Now, let’s return to that security issue.

CLARK KENT ERVIN (commission member):

But I have to tell you, I am also very much troubled by the State Department’s repeated characterization, not just of these incidents but this whole litany of problems over the course of two years with this contract…

In your own statement today, you — the State Department draws a distinction — attempts to draw a distinction between contract compliance and the security of the embassy. In your statement, despite the administrative deficiencies, the department did not observe any breaches of the security of the mission.

Your own letters, the State Department’s own letters — there is a June ‘07 letter: The purpose of this letter is to advise you that I consider the contract deficiencies addressed below to endanger performance of the contract to such a degree that the security of the embassy is in jeopardy.

There is an August 28 letter: Upon review of the most recent corrective action plan, the government has serious concerns regarding ArmorGroup’s ability to respond in the aftermath of a mass casualty incident or extreme loss of personnel due to mass resignation, hostile fire, a loss of manpower due to illness, et cetera.

…

In March, before that, we had 18 guards, apparently, who were off-duty of their post, some for as long as three hours.

And then we learned in May of 2009 there was this Operation Snack Pack (sp) incident, when some guards, on their own initiative, went into Kabul dressed as Afghans and pretended to undertake a reconnaissance mission. The potential for loss of life is huge there, and for a while the embassy was night-blind as a result of that.

All of these incidents, I would argue, are not administrative deficiencies. They directly — and your own correspondence indicates that this behavior over the course of time jeopardized the security of the embassy. I’d just like your comment about that. How can you justify this distinction?

MR. KENNEDY: Commissioner, we’re — we’re not attempting to justify anything.

Yes, just as well; no point in trying to do the impossible

We’re attempting to describe a set of facts on the ground. I’m — I — I’m not offering justification for ArmorGroup’s performance. We’re saying — drawing a distinction between the off- duty conduct of a certain number of ArmorGroup personnel, which was reprehensible and totally inappropriate, to say the least, and their on-duty performance in protecting the U.S. embassy facilities in there.

Did you not understand his question? He was not talking about the party, he was talking about security breaches.

MR. ERVIN: Explain to me, then, why this language was used in these letters in 2007 and 2008.

If the course of conduct by ArmorGroup, even in those early years, did not endanger the security of the mission, why was that language used in these letters?

MR. KENNEDY: In an attempt to get ArmorGroup’s attention. We wanted to shock ArmorGroup and tell them that they were endangering their continued contractual relationship with the State Department if they did not (sic) fail to correct these deficiencies.

MR. ERVIN: It didn’t say that. It said it endangered the security of the mission. But let’s — let’s pursue that further. You could really get ArmorGroup’s attention by terminating the contract, failing to exercise the option to continue. And you didn’t do that.

You know, there’s this old adage: If you want to reward something, you — you, you know, give it — you do more of it. If you want to penalize something, you know, you do less of it. The fact of the matter is, you continued this contract. And why is it, under the circumstances that we’ve had for these two years?

So AG was deficient but it kept getting paid. Doesn’t government normally have the option of not paying a contractor when it does not perform to the terms of the contract? Is this what you call failing upward?

LINDA GUSTITUS (commissioner member):

I want to go to this issue of terminating contracts, because that issue isn’t new. And what you just told us today, both Mr. Moser and Mr. Kennedy, was, we’re going to wait for the results of this investigation and then decide whether to continue the contract. That was the exact same situation after Nisoor Square with Blackwater.

In other words, it is not as if you haven’t had to deal with this issue before

But when you didn’t terminate your contract with Blackwater after Nisoor Square and the problems in Iraq, that helped to send a message to other contractors that you can do a lot and not have your contract terminated by Blackwater.

I asked the State Department for their documentation on that decision to continue their contract with Blackwater, to extend it. It was extended shortly after Nisoor Square. And we were given — we were told that there was one document relevant to that decision, which I thought would be a fairly complex decision: Are we accomplishing the major mission of winning the hearts and minds of the people, versus the security? And there was only one document, which just said, re-up the contract with Blackwater. There was no analysis of the cost and benefits of doing so with respect to Iraq.

And I raise this because it’s in the same context. You’re giving us the exact same response as the Blackwater situation, that you’re going to await the outcome of the investigation. But I don’t know, given the history, that there’s any confidence that you’d actually take action, regardless of the outcome of the investigation.

So given its record why should we trust the State Department now?

MR. DOV ZAKHEIM (commissioner member):

And let’s be clear about this. This is the equivalent of Abu Ghraib for Afghanistan. Last night, I went on the Web, just to see how many websites they had of this — these photos. And there are loads of them. And some of them are linked to sex websites, which really is going to look really good with Muslims in Afghanistan.

Well, at least the porn industry is benefitting from this.

Another problem is that this isn’t really new for State. You say, you know, this is relatively new and a new situation. Actually, it’s five years, because my former boss, Don Rumsfeld, made that change five years ago. Five years is an awful long time. Most wars don’t even last five years. Some last less than a week. So to say we’re in a learning situation, I mean, this sounds like we’ve been in the first grade for five years. A problem there.

Is that the equivalent of saying the State Department is a special needs child?

Let’s go back to the security issue one more time

MR. ZAKHEIM: Well, again given the situation we’ve got, and as you know very well, with what could have been a crisis, I mean, let’s face it. When there were 18 guard posts vacant, you say there was no risk. Well, there was no risk because nothing happened. I guarantee you, if something had happened, there would have been a risk.

My question again is, why do you think an investigation must be completed, before you get rid of a contractor, before you descope a contractor?

MR. KENNEDY: Because of the — because of the specifications and the requirements in contract law.

MR. ZAKHEIM: But contract law allows you to descope.

MR. KENNEDY: Commissioner, we’ll look at this again.

Wait a minute Commission Zakheim. Undersecretary Kennedy just avoided answering your question. You just laid out how the law allowed State to get rid of a contractor. But Kennedy just said they will look at it again. Well, that means they looked at it previously and decided not to do anything. Why not?

MR. SHAYS:

First off, it appears that what happens in Camp Sullivan stays in Camp Sullivan, and the fact is, it didn’t, just like it didn’t stay in Abu Ghraib. In Abu Ghraib, we had a military unit run amok. In Camp Sullivan, we had Charlie Group run amok.

…

I accept that part of the answer, and — but I want to then just ask you this. We learned of these incidents from POGO — the lurid behavior, the intimidation by this rogue group. And the intimidation is something that is particularly distressful. We didn’t learn it from State, we didn’t learn it from anyone else, but — and they learned it first from a lawyer who referred people to POGO.

Something is really off base when people have to go through a real different direction. There was no one that they could go to in ArmorGroup and get their complaint heard honestly. They were punished. There appears to be no one in State Department they felt they could go to and not be punished.

And our witness from Great Britain will tell you that he basically was forced to go because he was trying to stick up for his Afghan employees. So this is what really concerns me.

And why is that? After all the State Department Inspector General is a clearinghouse for receiving and handling allegations regarding fraud, waste, abuse, mismanagement or misconduct affecting Department of State programs and operations. One can Email: oighotline@state.gov; send mail to

Office of Inspector General

HOTLINE

P.O. Box 9778

Arlington, Virginia 22219

or Phone:

(Washington D.C., Metropolitan Area)         (202)-647-3320

(Elsewhere, Toll Free)                                 1-800-409-9926

MR. SHAYS: Is — no, let me just clarify. Is there any allegation that people were involved in either sponsoring a prostitute or — in somehow being connected with a brothel or the women?

MR. Eric BOSWELL[Assistant Secretary of State for Diplomatic Security]: There are allegations out there that are being investigated by the Office of the Inspector General.

MR. SHAYS: Relating to people — employees potentially doing more than frequenting a brothel, but actually participating?

MR. BOSWELL: I don’t think I want to get into exactly what’s — (we’ll be ?) investigating.

Uh, why not? Exactly what are you investigating?

MR. SHAYS: Why did ArmorGroup supervisors delay reporting news of misconduct in an attempt to intimidate people who might report it?

MR. KENNEDY: I have no idea, other than just to say that is totally inappropriate and —

MR. SHAYS: They gave you no reason, no justification for why it took them two weeks in this last circumstance?

MR. KENNEDY: No, they did not, sir.

MS. GUSTITUS: Did you ask them?

MR. KENNEDY: We have told them that that is an unacceptable action on their part, yes.

MR. : That’s not the question.

MS. GUSTITUS: No, the question was, did you ask them why they waited two weeks to give you the information?

MR. MOSER: Yeah, we have asked them. Yeah, we’ve asked them formally.

MS. GUSTITUS: And what was their answer?

MR. : They haven’t given — (off mike).

MR. MOSER: We have yet to get a formal answer on that.

Perhaps AG was having a bad hair day?

MR. ERVIN:

But let me ask this. If the investigation, and I hope it proceeds apace and I assume that it is, if the investigation establishes that all of these allegations we’ve been talking about and the allegations that bring us here today are true, will you pledge to terminate the contract?

MR. KENNEDY: Commissioner, it’s very, very hard for me to state a hypothetical. We don’t know what the investigation will say. I mean, I can say this. I can imagine facts unearthed in the investigation that would cause us to immediately terminate the contract.

And if you don’t terminate the contract what kind of signal does it send to other PSCs? Can Mr. Kennedy think of ANY reason or circumstance that would cause him to unambiguously recommend the contract be terminated?

MR. HENKE: Okay. I want to get at this issue of low-price, technically acceptable. In non-Beltway terms, I guess you’d call it –

MR. SHAYS: I think this needs to be the last area.

MR. HENKE: Okay. But I’d ask for two more minutes?

MR. SHAYS: Okay. Fine.

MR. HENKE: In non-Beltway terms, I think that would be called a low-bid contract. Fair? I mean, in a colloquial term?

MR. MOSER: Mr. Commissioner, all contracts are low-bid. There is always a low bidder in any contract, what their bids put out for. There’s somebody who bids lower than the other bidders.

MR. : But I’m not trying to characterize. I’m actually trying to help you. I think your — I think your hands are bound by law.

MR. KENNEDY: Correct.

MR. : By law, State has an authorization to accept the low- price, technically acceptable contractor.

But I think it’s important that we understand this. Technically acceptable means that the contractor is just pass — pass/fail, they pass. It doesn’t allow you to exercise judgment that this vendor came in with a Grade A proposal and this vendor game in with a Grade C or D proposal, right? They’re just acceptable. They both pass.

MR. KENNEDY: That is correct. They both deliver on the contract specifications.

MR. : Right.

MR. KENNEDY: One may have proposed a better way of doing it, but if their price is higher, we are unable to accept their better way of writing it.

MR. : Yes, sir.

MR. : If Company A comes in — Company A comes in with a Grade A proposal, and they propose $1.1 million, and Company D comes in with a Grade D proposal, but it’s still technically acceptable, at $1.0 million, you have to pick Company D.

MR. KENNEDY: That is correct.

MR. : You have to, by the law.

MR. KENNEDY: Provided that they are — both meet the technically acceptable definition. Yes, sir.

MR. : Right. You can’t decide, even in a wartime — in a war — let’s be plain — in a war, you can’t decide to pay a little more for a lot more quality.

MR. KENNEDY: That is correct.

MR. : Have you submitted a legislative proposal to the House and Senate to change that law?

MR. KENNEDY: We are in discussions within the executive branch on this, sir.

MR. : So you have not submitted to the Congress a legislative change?

MR. KENNEDY: We’re still — we have been — we’re in discussions within the executive branch.

MR. : Okay. So you’re thinking about it, but it hasn’t gotten up to Congress yet, fair?

MR. KENNEDY: There’s been — there is no bill at the moment on — for State Department authorization for the next cycle.

MR. : Right. I’m just going to — I’m going to end with this statement. I think the law makes no sense in peace time. In war, I think it’s egregious that you have no flexibility; you have no ability to apply your judgment and pick who you think is the best vendor even at a little more price. What do you think, Mr. Kennedy?

MR. KENNEDY: My personal opinion is, you’re absolutely right, Commissioner.

Okay, they are both in agreement, and so am I. Even if the perennial claim of the contracting industry is true, i.e., that it is more cost-effective, that is not the most relevant criterion by which to judge. So can we now please change the law?

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David Isenberg is an independent, Washington-D.C. based analyst and writer on military, foreign policy, national and international security issues and the author of Shadow Force: Private Security Contractors in Iraq.   In addition to his contributions to the Private Military Herald, Isenberg also blogs regularly at the Partnership For A Secure America.

In a Private Military Herald exclusive David Isenberg, author of Shadow Force: Private Security Contractors in Iraq dissects James Gordon’s suit against ArmorGroup North America.  To download the entire piece in pdf format click here.

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Per our past conversation here are my comments re the law suit filed by James Gordon against his former employer ArmorGroup North America (AGNA). Consider this a bit of quasi content analysis.

What I have done below is to copy various excerpts from the September 9 law suit complaint. Each excerpt is italicized and indented. Each excerpt is usually followed by my comment in bold. Sometimes I make observations. Sometimes I ask questions. In some cases I feel the except is so fascinating in its own right that it stands on its own and I make no comment.

In light of all the publicity given to the report on AGNA in Kabul released by the Project on Government Oversight, unfortunately, mostly centered around the pictures, it occurs to me that most people are not focusing on the important things. That is why I am writing this.

I think everyone in the “industry” (you may recall my past comments as to why it is not yet so) should read the whole thing. To read the full original complaint click here.

Before going any further let’s keep the obvious in mind. This is a complaint and the charges in it are, at this point, just that, charges. None of the points in the complaint have been proven in a court of law. And given the way the legal system works it will be a long time before we have any kind of findings or verdicts.

Nevertheless I don’t think it is farfetched that many people, especially on the operator side, will shake their heads in agreement if they make the time to read the complaint. There have just been too much documented wrongs with regard to PMs and PSCs in Iraq and Afghanistan since 2003 not to assume that some of the charges are likely true. At least that is my personal opinion.

Please note I am not saying that the actions described in the suit reflect a majority or even a great many people in the sector. I generally go with the not very surprising belief that most contractors are trying to do difficult jobs in difficult situations, often without much, if any, in the way of support. And it is true, as I have seen you and others state, that the government has often been missing in action when it comes to doing what it was supposed to be doing from the beginning, i.e. providing proper oversight.

But with that said it only takes a few people, especially if they are in management, to really screw things up, not only for their own company, but for the rest of the companies in the field. And I don’t think there has been nearly enough said about that. For all the purported negative media coverage I often hear and read people complaining about it is my sense that people in management largely gets a free ride, or at least a benefit of the doubt, simply because they are assumed to be ex-military, i.e., a former colonel, general, ex-SOF,… as if that is supposed to a guarantee of ethical conduct or integrity. Although, as this complaint shows, the decisions at the highest level may be made by people who have never been in the military.

Please note that I am happy if people comment re the below excerpts. I don’t assume my views are the only way to look at this. After all, there is much to be said and read in the future as this goes to trial. But I am pretty sure that at this point “industry” has a problem. If it is to continue on in the future it needs to address this now and not bunker down in the office and complain about the liberal media.

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

JAMES GORDON V. ARMORGROUP NORTH AMERICA, INC.; CORPORATION SERVICE COMPANY ; ARMORGROUP INT’L, PLC; WACKENHUT SERVICES,

PRENTICE-HALL CORPORATION SYSTEM, INC.; JERRY HOFFMAN; and CORNELIUS MEDLEY

COMPLAINT FOR DECLARATORY, INJUNCTIVE, AND MONETARY RELIEF

AND JURY DEMAND

3. During his seven-month tenure as Director of Operations, Plaintiff investigated, attempted to stop, and reported to DoS a myriad of serious violations committed by Defendants, including:

• understaffing the guard force necessary to protect the U.S. Embassy to such an

extent that Plaintiff felt compelled to warn DoS that under AGNA’s staffing

scheme, “if one person gets sick or slips on a banana peel the whole thing falls

apart like a cheap suit;”

• hiring and retaining a Gurkha workforce to guard the U.S. Embassy, the vast

majority of whom could not speak English, in violation of AGNA’s contract with

DoS, and misrepresenting the workforce’s language qualifications to DoS;

• allowing the AGNA project manager and employees to frequent brothels

notorious for housing trafficked women in violation of the Trafficking Victims

Protection Act, and shutting down Plaintiff’s efforts to investigate and put a stop

to these violations;

• deliberately withholding documents relating to reports of violations of the

Trafficking Victims Protection Act by AGNA’s Program Manager and other

AGNA employees and other acts of misconduct under the contract when

responding to a document demand from Congressman Henry Waxman on behalf

of the Congressional Committee on Oversight and Government Reform;

• endangering the safety of the guard force during transport to and from the

Embassy by attempting to substitute company-owned, subpar, refurbished

vehicles from Iraq rather than purchasing armored escort vehicles as promised to

DoS, despite Defendants’ awareness that without proper escort vehicles the

transportation of guards would remain, in Defendant AGI’s own words, “a

laughing matter within the Kabul private security industry”;

• knowingly using DoS funds to procure cheap counterfeit goods from a company

in Lebanon owned by the wife of AGNA’s Logistics Manager; and

• Defendants’ practice of attempting to maximize profit from the contract with

reckless disregard for the safety and security of the guard force, the U.S.

Embassy, and its personnel.

…

5. Plaintiff vigorously complained of Defendants’ improper activities to Defendants and to DoS, attempted to correct AGNA’s numerous deficiencies, insisted that Defendants refrain from making material misstatements and omissions to Congress, and made clear to Defendants that he would not communicate false information to DoS.

6. In retaliation for these protected disclosures, his refusals to violate the law, his

efforts to stop violations of the False Claims Act, his investigation and reporting in furtherance of a potential action under the False Claims Act, and his disclosures to AGNA management and DoS about AGNA’s violations of the Trafficking Victims Protection Act, Defendants conspired together to strip Plaintiff of his job duties, subject him to a hostile work environment, and drive him to an involuntary termination in an effort to silence him and conceal the unlawful practices he had identified. Defendants’ termination of Plaintiffs employment is in keeping with their pattern and practice of retaliating against conscientious employees who raise concerns about and report to DoS AGNA’s contractual and statutory violations and material misstatements to the U.S. government.

The above are the central charges.  Note that this is not a case about AGNA making just a few innocent mistakes. The charges indicate a pattern of willful contractual violations and a continuing conspiracy to cover it up and to ignore, marginalize and ultimately force out Gordon who sought only to do his job as required by contract.

16. The Trafficking Victims Protection Act (“TVPA”) and its implementing

regulations provide that that the United States has adopted a “zero tolerance policy” regarding trafficking in persons. The TVPA and its implementing regulations prohibit Contractors, like AGNA, AGI, WSI, and their employees, from engaging in severe forms of trafficking in persons and from procuring commercial sex acts during the period of performance of the contract. The Contractor must inform its employees of these prohibitions and the corrective actions that will be taken against violators, including removal from the contract, reduction in benefits, or termination of employment. The Contractor must notify the Contracting Officer immediately of any information it receives from any source that alleges a Contractor employee has engaged in prohibited conduct and the corrective actions taken, if any, by the Contractor against the employee. A Contractor’s failure to comply with these requirements may result in suspension of contract payments, loss of award fees, termination of the contract, suspension or debarment.

This pretty clear cut — U.S. contractors shall not frequent whorehouses, regardless of whether the prostitutes are willing or not. The law and thus, AGNA contract, says if you see it you report it, which is what Gordon did.

22. In response to the RFP, Defendants AGI and AGNA, through the assistance of

James D. Schmitt, then Vice President of Business Development for AGNA, submitted a bid for this government contract, in which they knowingly made exaggerated and demonstrably false statements about AGNA’ s ability — including its capacities, experience, staffing capabilities, equipment, personnel, and facilities — to provide a guard force to protect the U.S. Embassy in Afghanistan. Defendants’ bid included material false statements about Camp Anjuman, a two acre base modestly comprised of a series of trailers that served as Defendant AGI’s base of operations in Afghanistan. The bid also made outlandish misrepresentations about AGNA’s infrastructure, government contacts, ISAF/NATO contacts, equipment, and support personnel.

This speaks volumes about the U.S. government’s ability, or lack thereof, to judge the value of contracts. Everyone says they should be judged on the basis of best value, not just cost, but how many people are there in government qualified to judge? More important, what recourse does the government have if a company lies? Obviously this is not just a business question. What if the embassy had been successfully attacked while AGNA held the contract?

Among other things, Schmitt is a former U.S. Army officer with service in Special Operations and Infantry units, In 2007 he served as the chairman of the board for the International Peace Operations Association. ArmorGroup has been a member company of IPOA since August 2003.

On September 14 the Commission on Wartime Contracting, a congressionally established body mandated to study wartime contracting in Iraq and Afghanistan, held a hearing. Among the witnesses was Doug Brooks, founder and president of IPOA. He said, “membership in IPOA is not automatic and requires disclosure and information not typical of trade associations. Companies can be expelled if they violate the association’s code of conduct.” IPOA’s code, currently in its twelfth version, adopted Feb. 11, 2009, states:

3.2 Signatories shall support effective legal accountability to relevant authorities for their actions and the actions of their personnel. Signatories shall proactively address minor infractions, and to the extent possible and subject to contractual and legal limitations, fully cooperate with official investigations into allegations of contractual violations and breaches of international humanitarian and human rights laws.

3.3. Signatories shall take firm and definitive action if their personnel engage in unlawful activities. For serious infractions, such as grave breaches of international humanitarian and human rights laws, Signatories should report such offences to the relevant authorities.

6.12 Signatories shall not engage or allow their personnel to engage in the act of trafficking in persons. Signatories shall remain vigilant for instances of trafficking in persons and, where discovered, shall report such instances to relevant authorities.

6.13. Personnel shall be expected to conduct themselves humanely with honesty, integrity, objectivity and diligence.

11.4. Signatories shall have an effective mechanism for personnel to internally report suspected breaches of international humanitarian and human rights laws and violations of other applicable laws or the IPOA Code of Conduct. Signatories shall not retaliate against any person who reports in good faith and on reasonable grounds such suspected violations.

24. Upon their arrival in Afghanistan, up until the date of their unlawful terminations on June 13, 2007, Messrs. Sauer, Martino and Gorman raised significant concerns, on almost a daily basis, with senior management of the ArmorGroup Defendants about AGNA’s inability to provide appropriate protection for the U.S. Embassy and Embassy personnel, to no avail. They objected to Defendants’ attempts to enhance AGNA’s profits by significantly altering the work schedules of the guard force. Over their heated objections and in contravention of the DoS RFP, which was designed around an 8-hour-day shift schedule, the ArmorGroup Defendants implemented plans requiring more hours per individual and fewer shifts of staff in order to cut costs and maximize their profit margin. By violating the maximum workable hours per week, as mandated by the DoS contract, AGNA was able to cut the needed guard force by approximately twenty percent, resulting in a substantial savings to AGNA.

If one cuts the guard force to save money that means longer shifts for the remaining guards with the inevitable exhaustion that entails. From a security viewpoint this is dangerous and is clearly in violation of the terms of the contract.

26. By email dated March 11, 2007, Mr. Sauer raised concerns about AGNA’s

screening and ability to hire personnel to staff up the contract. In response, by email dated March 11, 2007, AGNA Vice-President of Operations Michael O’Connell advised Mr. Sauer that the “main concern” for AGNA President Semancik is that Defendant AGI’s “Business Development guys developed the transition budget w/o input from you or the Ops folks” and the budget “may be SIGNIFICANTLY below what is required for you to stand this program up.” He went on to explain that “AGNA bid this at a very low price and a very low margin.., which means that if we don’t adhere to the transition budget closely … we/you are going to take a huge hit in the profit on year one.” He stated: “I’m sure you won’t give a rats (sic) if you have to take a huge hit but Karl [Semancik] is now the CEO and ultimately responsible for your program which means that Karl will have to take a huge hit from London and there’s the rub.” In ending this email, Mr. O’Connell stated: “You made an observation that ‘Anjuman [AGI’s base of operations] is not as well flushed out as some of you may think.’ I would suggest that you consider that a universal law for all support you require and expect.”

27. The following day, Mr. O’Connell admitted to Mr. Sauer that the timelines and resources in AGNA’s proposal to DoS “don’t match up,” which he described as “[p]robably not a big deal unless COR [the DoS Contracting Officer’s Representative] calls us on it.” He then encouraged Mr. Sauer to assure DoS, falsely, that AGNA had recruited and was in the process of vetting appropriate personnel. In response to Mr. Sauer’ s complaints to Mr. Semancik about the 12 ArmorGroup Defendants’ deceptive business practices, Mr. Semancik explained in a March 17, 2007, email exchange that AGNA had seriously underbid [my emphasis] the proposal to provide security for the U.S. Embassy in Kabul. In response, Mr. Sauer told Mr. Semancik that it would be preferable “to pull out of the contract than to jeopardize the Embassy security.” Mr. Semancik acknowledged that he was not sure that AGNA could do the project successfully.

I ask this sincerely. How often do people in the field get told by people back at corporate HQ to keep silent, when they note improprieties or contractual irregularities or reporting violations? Certainly, AGNA is not the first time this has happened. And how big a problem is underbidding?

29. By email dated April 1, 2007, Mr. O’Connell emphasized that despite the

formidable problems that AGNA was having in complying with the contract, he had little

concern that DoS would actually pull the contract from AGNA because the DoS contracting officer was “under severe pressure to make it work” given the intense Congressional scrutiny for all procurements out of his office as a result of Blackwater. Mr. O’Connell subsequently admonished Mr. Sauer not to tell U.S. Embassy personnel that AGNA had problems with staffing under the contract.

Well, isn’t this interesting. Not to excuse AGNA but if Gordon has been able to report all violations as legally and contractually required, how seriously would the State Department has taken him? And exactly who at State was exerting “severe pressure” on the State COR?

30. Messrs. Sauer and Martino also clashed with Mr. Semancik and Mr. O’Connell about: 1) AGNA‘ s failure spend sufficient funds to acquire appropriate annored vehicles to safely move the guard force to and from the U.S. Embassy; 2) AGNA’s failure to implement a strict policy to ensure that the safety and security of the U.S. Embassy and its personnel were not compromised by the guard force’s off-hours activities; 3) AGNA’s failure to ensure that “Moderate Risk Public Trust” security clearances were obtained for AGNA hirees before they were deployed to Afghanistan; and 4) AGNA slashing Gurkha salaries. Mr. Sauer advised them that AGNA “needed to either fund the project correctly or pull out, given that the operational chaos could lead to a loss of life.” When the Gurkha guard force walked off the job in May 2007 because of the low wages and poor treatment they were receiving from AGI, Carol Ruart, AGI’ s Human Resources Director, insisted that AGNA “lock [the Gurkhas] in their rooms until they agree to work for less.”

Lock the guards in their rooms? What, are they children being sent off because they refused to eat their spinach? Is management saying it has to be able to discipline its employees to ensure compliance with the terms of original contract? If so, what happens when the conditions detailed in the original contract change, i.e., become more dangerous? And, more importantly, is there anything in the contract that says employees have to suffer silently at the hands of stupid and incompetent management. Remember, this is not the military. They don’t have to follow all orders because someone says to.

And failing to spend sufficient funds to acquire appropriate armored vehicles to safely move the guard force? I mean, come on, how many times since Blackwater at Fallujah are we going to see crap like this?

32. By email dated May 31, 2007, to high-level AGNA and AGI managers, Mr. Sauer stated that “there’s one more thing that may be slipping the corporate mind: The U.S. Embassy Kabul is a national security issue even more than a business issue.”

Well, that kind of encapsulates the divide nicely. People in the field often say, rightfully, that for them it is not just about the money but about serving the country. But does anybody back at corporate give a damn? What happens when the greater public good means cutting into the profit margin?

Years ago, back when MPRI was being bought up by L-3, I predicted two things could happen, either separately or simultaneously. Either the greater financial and administrative resources that the bigger firms, which were buying up the specialized PSCs, were providing could make them far more effective, or, second, the people at the parent corporations would seek only to maximize profit, even if it means screwing people in the field. Undoubtedly both have happened but anecdotal impressions seem to indicate more of the latter.

34. During this period, Messrs. Sauer, Martino and Gorrnan received reports that

recruits for guard force positions who were then in pre-deployment training in Texas had been engaging in lewd, aberrant, and sexually deviant behavior, including sexual hazing, urination on one another and equipment, bullying, “mooning,” exposing themselves, excessive drinking, and other conduct making them unfit for service on the contract. Messrs. Sauer and Martino immediately notified Mr. Semancik about these reports and objected vehemently to allowing those involved to deploy to Afghanistan. Mr. Semancik insisted that the men would be deployed given the chronic staffing shortages AGNA was experiencing.

So, there were problems with AG guards long before they even got to Kabul? What does this say about AG vetting and training procedures? Remember that back in September 2004 AG International published a white paper arguing that companies offering armed guards abroad should be vetted under the 2001 Private Security Industry Act. At that time only companies offering services within the United Kingdom were covered by the law. Christopher Beese, director of ArmorGroup International, said “It seems extraordinary that the doorman for a nightclub, catering for a particular clientele in a particular part of town may have to be vetted and licensed, when the same man can be equipped with a rifle and an armoured vehicle and be engaged to protect diamond concessions for a foreign regime in clear breach of public interest and perhaps even in contravention of human rights, but needs no such regulation.”

Beese was still AG International’s Chief Administrative Officer at the time the events described in the complaint were happening.

35. Mr. Sauer further highlighted the dangers of allowing mentally unbalanced personnel to come to Kabul and be armed, and insisted that he had an obligation to inform the RSO. They also advised Mr. McConnell that the staffing and shift rotation plan AGNA corporate officials had come up with was “unrealistic and not in keeping with the requirements of the RFP.” Mr. O’Connell rejected their concerns and charged that ArmorGroup was a “publicly held corporation” and that their “ultimate responsibility” was to its investors.

Well, I guess, that answers my above question, “What happens when the greater public good means cutting into the profit margin?”

36. Messrs. Sauer, Martino and Gorman were disgusted by AGNA’s “profit over

safety” mentality and concluded that they had a legal duty to report Defendants’ fraudulent misstatements concerning AGNA’ s capacities, qualifications and readiness to take over security of the U.S. Embassy. Accordingly, on the evening of June 12, 2007, they went to the U.S. Embassy and reported their concerns verbally and in writing to the Assistant RSO Neil Pietrowicz. They informed him that AGNA personnel were not being properly screened and vetted and complained about AGNA’s hiring of an employee “who had been fired from a previous project for pulling a pistol on another employee while drunk.” They further complained that “the training program run for new hires has been plagued with hazing and intimidation of students by students. This included physical threats and perversions.”

37. Assistant RS0 Pietrowicz advised them that given the seriousness of the concerns they had raised, he would immediately report the information to the Regional Security Officer and to the Department of State in Washington, D.C. He informed them that the ArmorGroup Defendants would be notified “at once” about the serious concerns Messrs. Sauer, Martino and Gorman had raised, and that the information they had provided would negatively impact on a separate $500 million proposal the ArmorGroup Defendants had submitted to provide security services in Iraq.

38. On June 13, 2007, Mr. O’Connell terminated Messrs. Sauer and Martino and

directed that they be confined against their will to the compound. AGNA personnel then stripped them of their weapons, cell phones, computers, and vehicles, making it impossible for them to communicate with the RSO or other government officials, and forced them to fly out of Afghanistan. AGNA pressured Mr. Gorman to tender his resignation and leave Kabul on the same flight as Sauer and Martino. Later, Mr. Schmitt candidly admitted to Mr. Gordon that “AGNA cut them off at the knees” because “they had gone to the RSO to seek asylum.”

Okay, that also seems pretty clear. If you try to do the ethical, not to mention legally required, thing management is going to fire you. Probably smear and blackball (see 118-119 below) you too. Anybody wonder what kind of message this sends other companies, like, say those working on the WPPS contract?

39. AGNA installed Nick Du Plessis, a South African national, to replace Mr. Sauer as Program Manager, even though as a foreign national he was unable to obtain a U.S. security clearance, as required for the position.

So AGNA just said screw it? Exactly who or what did DuPlessis know that enable him to get the job?

43. After submitting its response to the Cure Notice to DoS, AGNA promoted Mr.

Gordon to the position of Director of Operations purportedly to implement AGNA’s corrective action plan, which unbeknownst to Mr. Gordon it had no intention of doing. Immediately upon assumption of the position of Director of Operations, Mr. Gordon sent an email dated September 3, 2007, to Program Manager Du Plessis and his staff stating:

You can rest assured that there is no hiding of information from DoS. Anyone who thinks that they can get away with this will probably end up in a Federal Penitentiary. It is our duty to report on all aspects of the contract performance and we are required to be transparent and honest in our dealings. Personally I wouldn’t accept anything else.

Mr. Gordon’s admonition to Mr. Du Plessis went unheeded. For the remainder of his tenure at AGNA, Mr. Gordon was placed in the impossible position of trying to reign in a rogue Program Manager who refused to comply with mission critical terms of the Kabul embassy contract and who took his direction from AGI, the foreign parent corporation, while simultaneously dealing with corporate executives who were unwilling to spend the necessary funds to bring the contract into compliance.

Yep, Joe Heller is smiling from heaven looking at this latest Catch-22. Anybody else experience problems like this?

46. From the outset, AGNA lacked the requisite necessary administrative staff to run the Kabul Embassy contract. Instead, AGNA was little more than a shell company set up by AGI to bid for and obtain U.S. contracts that could only be awarded to American companies. During most of Mr. Gordon’s tenure, the entire AGNA staff in the United States consisted of 21 employees whose time was spent overseeing several U.S. contracts that had been awarded to AGNA. Only two members of Mr. Gordon’s staff were dedicated to the U.S. Kabul Embassy contract. Although Mr. Gordon repeatedly informed AGI that AGNA could never bring the contract into compliance with the staff on hand, AGI Chief Operating Officer Noel Philp refused to permit AGNA to hire additional administrative staff. One of the consequences of AGI’ s refusal to allow AGNA to hire an adequate number of administrative staff was that AGNA repeatedly failed to perform requisite background checks for new employees or even to contact

prior employers. This resulted in AGNA’s hiring and training of unqualified personnel that lacked the requisite licenses and clearance and ultimately to the rejection by DoS of many of AGNA’s proposed hires, including several with serious criminal records. It also led to the hiring of personnel who had track records for engaging in misconduct, including drunken, lewd, and deviant behavior both at previous places of employment and during pre-deployment training.

We have all seen the criticisms in the past of insufficient, inexperienced, and undertrained government auditors and CORs. We know that it is indeed bad, very bad. No question about that. But what about the reverse situation, when it is the company which is lacking? Could the whole AGNA scandal have been avoided if some corporate suit had approved hiring a couple more admin staff?

47. Determined to increase its “profit margin,” AGI took over AGNA’s responsibility for recruiting and hiring the Gurkha and non-U.S. expatriate guards. (Gurkhas are people from Nepal and Northern India who are known for their history of bravery and strength in the Indian Army’s Gurkha regiments and the British Army’s Brigade of Gurkhas. The term “Gurkha” may also be used generically to describe guards from the region who are employed by private security contractors. There is a high degree of variability in the skills and training.) AGI’s goal was to do this as cheaply as possible, regardless of whether the personnel recruited and hired were qualified to assume the critical task of guarding the U.S. Embassy. AGI imposed several cost cutting measures, such as reducing the proposed Gurkha salaries by half, eliminating an entire guard shift, and increasing guard shifts from eight to twelve hours in order to reap a greater profit margin for the company.

So we have someone struggling to stay awake towards the end of a 12 hour shift, guarding the embassy, a magnet for attacks if ever there is one. Need we say more?

50. Despite AGNA’s representation in its contract proposal that it had a rigorous

program to ensure that all guards assigned to the U.S. Embassy were able to converse in the required languages with employees and visitors while on posts and that it would conduct language proficiency tests for its TCN workforce, Defendants hired Gurkha guards who could not speak English. AGNA falsified [my emphasis] their language qualifications in its submissions to DoS. When Mr. Gordon sought to ascertain what language tests had been administered to the workforce to determine whether their language skills complied with contract requirements, he learned that no language tests had been administered. Mr. Gordon informed DoS of this contract violation and immediately sought to rectify it. Subsequently, AGI hired a language teacher to perform language assessments who concluded that that the Gurkha workforce would need years of language training in order to meet the contract language requirements.

Yes, speaking the same language as your client probably IS a good idea, even a necessity.

53. Under the International Traffic in Arms Regulations (ITAR), a set of U.S.

government regulations that control the export and import of defense-related articles and services, AGNA was required to possess a license issued by the United States Directorate of Defense Trade Controls to conduct training of non-U.S. personnel for the performance of guard services at the U.S. Embassy in Kabul and to export munitions from the U.S. to Afghanistan for training.

54. On October 19, 2007, AGNA became aware that it had allowed its ITAR license to lapse on August 31, 2007. After learning of this, Mr. Gordon ordered a halt to all training of non-U.S. personnel until the issue was resolved. Mr. Semancik discussed this problem with AGI’s CEO, Mr. Seaton, who told him that AGNA should delay disclosing the ITAR lapse to Contracting Officer Rogers pending further word from the Directorate of Defense Trade Controls

about how long it would take to renew the license.

Okay, how does a PSC not stay on top of the paperwork that allows it to lawfully possess arms and ammo, and all the other things that go along with it. Seriously, how does it overlook that? Remember, we are talking about paperwork that has is required by the USG, not that required by a possibly corrupt ministry in the local government.

62. On October 10, 2007, AGNA’s guard force in Kabul was involved in a number of serious incidents which included: 1) the detention by AGNA guards of a group of Afghan civilians and their involuntary transport to the U. S. Embassy; 2) a verbal and physical altercation between AGNA guards and an Afghanistan Ministry of Interior policeman in which the guards handcuffed the policeman; 3) a confrontation between AGNA guards and an Afghani General and several Ministry of Interior policemen; and 4) the refusal of AGNA guards to obey an order given by the U.S. Regional Security Officer order to withdraw from a checkpoint in order to defuse a potentially explosive situation.

“the detention by AGNA guards of a group of Afghan civilians?” Did someone decide to use Jack Idema as a role model? Refuse to listen to the RSO? Sounds serious, anybody have details?

85. Throughout the fall of 2007, AGNA routinely delayed sending invoices to DoS because the data received from Mr. Du Plessis about personnel and hours worked did not comport with the time cards. When invoices were submitted, DoS’s audits revealed errors and therefore routinely rejected them.

Was that mere incompetence or an attempt at deliberate deception?

86. On November 27, 2007, AGI announced that its operating profits had dropped

from the prior year and that CEO Seaton had been asked to resign. AGI blamed its declining profits in part on the “onerous administrative and human resource requirements for the US Embassy contract in Afghanistan, which have had a significant impact on the profitability of its operations in the country.” AGI further announced that AGI had “recently restructured the management team involved in running the contract and believes that this strategic project will become profitable in the early part of 2008.”

This seems to indicate the role of the profit motive’s impact on proper execution of the complaint as clearly as anywhere in the complaint.

89. As a “sweetener” to induce DoS to release the withheld funds, Defendants

directed Mr. Gordon to promise DoS that if the funds were released they would be used, in part, for the immediate purchase of the critically needed armored escort vehicles. On December 5, 2007, Mr. Gordon appealed to DoS Contracting Officer Rogers to release some of the funds due to AGNA and assured him that a portion of the released funds would be used to procure the armored vehicles that AGNA had agreed to purchase. Mr. Gordon also represented, per his instructions from Defendants, that the monies would be used to meet payroll and pay AGNA’s outstanding invoices. Mr. Gordon advised Mr. Rogers that ifAGNA did not receive payment of the outstanding invoices immediately, its financial crisis would most likely lead the company to default on the contract. Mr. Gordon successfully convinced DoS to release the approximately $5.5 million in contract funds based on these representations, which it did on December 6, 2007.

Unbeknownst to Mr. Gordon, at the time he made these representations to Contracting Officer Roger, AGI had no intention of permitting AGNA to retain the released funds to pay AGNA’s outstanding bills and honor its contractual commitments. Rather, as soon as the money was transferred into AGNA’s account, AGI’s Chief Financial Officer, Matthew Braben, directed AGNA’s Finance Manager to send AGI all funds AGNA received from DoS, leaving AGNA without funds to pay its bills and to purchase the requisite armored escort vehicles.

So Gordon is set up to lie on behalf of AG. That’s cold.

91. In lieu of purchasing the required armored vehicles as AGNA promised DoS it

would do, AGI sought to transfer subpar, refurbished AGI vehicles from Iraq that did not come close to meeting the workforce needs.

Nothing is too good for our boys so that’s what we’ll give them, nothing.

103. In mid-to-late January 2008, AGNA formulated a response to Congress’

document demand that deliberately omitted inclusion of any documents relating to the allegations that AGNA’s Program Manager, Armorer, and Medic frequented brothels, the subsequent investigation of and disciplinary action taken against Mr. Du Plessis, the outbreak of STDs among the workforce, or the incident involving the trainee referenced above. AGNA also omitted information on the purchase of counterfeit goods by the AGNA Logistic Manager from his wife’s company.

104. Mr. Gordon discussed the submission with Mr. Schmitt, who had assumed

responsibility for preparing the report to Congressman Waxman. During this discussion, it became clear to Mr. Gordon that Defendants intended to conceal information from Congress. In response to Mr. Gordon’s strong objections, Mr. Schmitt responded that AGNA decided that those items “were best left out of the report,” as it would “not look good for the company.” Mr. Gordon also raised the issue with Mr. Hoffman, who responded that these incidents would not be helpful to AGNA and should not be disclosed.

At what point does trying to put the best spin on things become what we, back in the old days, used to call a cover-up?

105. After much discussion, Mr. Hoffman came to the same conclusion as Mr. Gordon that, given Mr. Du Plessis’s unethical and illegal conduct and the recent revelations regarding AGNA’s purchase of counterfeit goods, it was necessary to remove him from his position as the Program Manager. On or around February 5, 2008, Mr. Hoffman and Mr. Gordon also informed Contracting Officer Mr. Rogers that Mr. Du Plessis would be removed as Program Manager. Mr. Rogers agreed that it was a necessary decision and “well overdue.”

106. Mr. Hoffman departed for Kabul on or around February 10, 2008, with the

express purpose of terminating Mr. Du Plessis from the Program Manager position. Upon information and belief, AGI personnel, including Carolyn Ruart, leaked word of the impending termination to Mr. Du Plessis. In an effort to save his job and in complete disregard for the security of the Embassy and its personnel, Mr. Du Plessis persuaded the Gurkha workforce to threaten to walk off the job and leave the U.S. Embassy unprotected if AGNA removed Mr. Du Plessis from the position. Mr. Du Plessis had been instrumental in hiring them, despite the fact that they failed to meet the language requirements set out in the DoS contract.

107. Upon his arrival in Afghanistan, Mr. Hoffman was confronted with the threat of the Gurkha workforce walking off the job. As Mr. Hoffman subsequently informed Mr. Gordon, he concluded that AGNA was left with no choice but to retain Mr. Du Plessis.

“persuaded the Gurkha workforce to threaten to walk off the job and leave the U.S. Embassy unprotected if AGNA removed Mr. Du Plessis from the position.” Extraordinary. Now, how did DuPlessis manage that? Really, how?

118. Subsequently, Mr. Hoffman met with Mr. Gordon to discuss his complaint. Mr. Gordon reiterated that he could not work under the hostile conditions and for a company that continued to engage in unlawful practices. He further indicated that, given the removal of his duties and responsibilities and his exclusion from meetings, he felt that he had no choice but to resign. Mr. Hoffman did not dispute Mr. Gordon’s conclusion that AGNA had indicated by its actions a desire to get rid of him, nor did he try to address Mr. Gordon’s concerns in the interest of encouraging him to remain with the company. Rather, Mr. Hoffman instructed Mr. Gordon to submit a formal and favorable letter of resignation to allow AGNA to save face with DoS, in exchange for which he would provide Mr. Gordon with a letter of reference.

119. Mr. Gordon was well aware of actions AGNA took to disparage and blackball Messrs. Sauer, Martino and Gorman following their terminations. Accordingly, he acceded to this demand and submitted the requested letter because he feared that he too would be blackballed in the industry if he did not do so. Additionally, Mr. Gordon had recently married a U.S. citizen and was concerned that if he did not accede to Mr. Hoffman’s demand, AGNA might try to impede his application for his U.S. legal permanent residence. [my emphasis} Left with no options, Mr. Gordon was forced into an involuntary resignation on February 29, 2008.

126. In fact, after Defendant Medley assumed responsibility for the Kabul Embassy contract, the ammunition inventory count revealed a shortfall of tens of thousands of rounds of ammunition. Mr. Medley directed AGNA employee Misty Maldonado, who was responsible for preparing the inventory report for DoS, to alter the report to remove any reference to the missing ammunition or the disappearance of the inventory. Only when Deputy Director of Operations Gregory Vrentas challenged Mr. Medley’s direction to provide false reports to DoS did Mr. Medley back down.

What happened to the ammo? Did it make it way to the local black market? Is it now being used by the Taliban? Will some contractor or ISAF soldier be killed by one of those rounds?

128. Upon information and belief, after Mr. Gordon’s departure, AGNA again violated its ITAR license. AGNA had a valid ITAR license which listed David Smallwood as the ITAR approved trainer. Mr. Du Plessis dismissed Mr. Smallwood; however, AGNA did not obtain a modified ITAR license, as required by law. Consequently, it conducted training in Afghanistan without a valid ITAR license.

Rather difficult to inculcate respect for the rule of law in a country, when one’s own contractors ignore it.

130. AGNA was cognizant of its serious breaches of its contractual obligations to DoS. In March 2008, AGNA conducted an audit of the company’s compliance with 45 specific requirements from the DoS contract and its own procedures. It concluded that of the areas audited, 40% were found to be non-compliant to various degrees. Of those areas that were determined to be non-compliant, AGNA’s audit deemed one-third to be in mission-critical areas, including, most problematically, in the area of hiring and retention of a stable personnel force. Upon information and belief, AGNA failed to provide a copy of its voluminous audit and report to DoS or to disclose the serious problems identified by AGNA’s auditors.

If you can’t live up to the contract requirements don’t tell anyone.

140. By letter dated April 1, 2009, DoS denied AGNA’s request for a waiver to meet contractual language proficiency obligations, the third request of its kind. DoS stated: “[W]e are quite dismayed to learn that after nearly two years of contract performance, AGNA still has language deficiencies among [its) guard force…. AGNA took a huge risk in placing these individuals in positions for which they did not meet the full qualifications.”

What about the risk to residents of the Embassy who were under the mistaken belief they were being safely guarded?

141. Because of his ongoing concerns that AGNA and its new owner Wackenhut had failed to take appropriate action under the contract, that DoS remained lax and ineffective in its oversight of the U.S. Embassy Kabul contract, and that conditions existed which endangered the safety of the U.S. Embassy, Mr. Gordon took his concerns to Senator Claire McCaskill, Chairman of the Subcommittee on Contracting Oversight. The Subcommittee held oversight hearings on June 10, 2009. Mr. Brinkley provided false testimony to the Committee about AGNA’s full compliance with contractual requirements, insisting that the contract was fully staffed.

There need to be some way for people seeking to do the right thing, other than going to Congress or a watchdog group as a last resort. More internal investigations and audits need to be conducted by or on behalf of outside actors, particularly governments, not the companies themselves. To that end they could use the same standards and practices used by various Inspector Generals, If the Inspector General Act was used as a model, a private entity could provide oversight for PMCs. Given that the government has essentially resigned itself to continued dependence on PMCs this could actually provide more accountability.

One final thought is this. To this day many in the “industry” say that self-regulation is the way to go. It was not that long ago that the British government came out with its long awaited recommendations, saying just that. Perhaps someday industry will be in a position to credibly demand that. But now is not that time. It had its chance in Iraq and Afghanistan and, I’m sorry to say, it has not demonstrated that it is capable of being trusted to effectively oversee itself.

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David Isenberg is an independent, Washington-D.C. based analyst and writer on military, foreign policy, national and international security issues and the author of Shadow Force: Private Security Contractors in Iraq.  In addition to his contributions to the Private Military Herald, Isenberg also blogs regularly at the Partnership For A Secure America.

Associated Press article taken from the Washington Post

A U.S. contractor helping to train Afghanistan’s national police was found dead of a possible drug overdose last week in Kabul, just months after the State Department reprimanded his company for another worker’s drug-related death.

The deaths have raised questions about DynCorp International’s vetting and management of employees assigned to the police-training contract, a crucial component of the U.S. effort to hand over security responsibilities to the Afghans.

The leaders of an independent panel investigating wartime spending said Wednesday that they are troubled that drugs appear to be involved in the deaths of two workers hired by the State Department’s largest contractor.

“This shouldn’t be treated as an isolated event that [the State Department] can ignore,” said Christopher Shays, co-chairman of the Commission on Wartime Contracting. “They really need to step in and say, ‘Do we have a drug problem at DynCorp?’ ”

A State Department spokesman said an investigation is underway. A toxicology test will be conducted to determine if drugs were a factor.

A DynCorp spokesman said the company would not speculate on the cause of the death.

By Matt Loe

The other day I was watching a show called Democracy Now headlined by Amy Goodman and Jeremy Scahill, and I was appalled.  They had the family of Adam Hermanson on the show, and the supposed focus was the accidental death of Adam Hermanson in Iraq.  You would think the show would be centered on who did the electrical work that caused the death of this security contractor?  Or maybe even a focus on the lack of management and quality control by the contracting officers and construction company that was tasked with building Camp Olympia and it’s facilities?  But that wasn’t the case, and instead it was a disgusting display of politics.

What the show presented was Adam’s family being used as pawns by both Amy and Jeremy. Or basically,  the family was being used in Amy and Jeremy’s overall goal of demonizing security contractors in this war. They spent the show ripping apart Triple Canopy, or Obama’s New Blackwater, and chose not to focus on how this accident happened and who was responsible. What an insult to the family and friends!

Worse yet, every time Jeremy is on that show, Amy plugs his slanderous and poorly researched book about Blackwater.  And during this deal, he was completely cozying up to the family, and wrapping himself up in the death of the ‘poor victim’ of this accident, that happened to be a security contractor.

But wait, isn’t that security contractor named Adam Hermanson, a mercenary and member of Obama’s Blackwater (Triple Canopy)? I am just curious on how all of a sudden Adam changes from a ‘blood thirsty, war mongering mercenary’ to victim who so desperately needs Scahill and Goodman to defend them?

Lets take that a step further.  Would Jeremy or Amy have sat down with Adam when he was alive and have a beer with the guy? How about the family? Oh but love the security contractor when it is politically convenient and could potentially sell books.

I know I would have liked to of hung out with Adam, because we probably would have known some of the same people.  I know I would have asked him about his contract, and his thoughts about the pay and everything…typical contractor conversation. I just wonder if Adam would have liked to have sat down with Jeremy and Amy, and do the same thing?

Now if I was to sit down with Adam’s ghost, the conversation would have been a little different. I would have asked him what happened exactly.  Then I would have promised him that I would find out who was responsible for the poor electrical work and managing that work.  That is the least I could do.  I would also ask if he would want Amy and Jeremy to use his memory for political purposes and to sell books, and if he approved of this show.

Would Adam want his good name associated with these folks that basically would have had nothing to do with him prior to his death? After all, according to these two, Adam’s service to country, both as a contractor and in the military was worthless.  All of the guys that Adam knew that died in the war, all died for a worthless and despicable cause, according Scahill and Goodman, and I wonder what Adam would have thought about that?

That is what I kept thinking during this show, and it made me want to puke. It pissed me off, because I doubt that Adam would want to have his name associated with a group that certainly despised him and his sacrifice in this war.

The other angle on this, is that Triple Canopy just lost a family member as well.  They owe it to the family and friends to get the story correct on what exactly happened. That requires an investigation, and that can be difficult to accomplish in some circumstances. It is important to remember that this is a war zone, and not some city in America. The family deserves to know what happened, but they also have to understand that it takes a little bit of work and time to put together exactly what happened in some cases. But I do agree that Triple Canopy should work as fast as possible to get the family all the information and help they need.  The security contracting community and Triple Canopy lost a comrade too, and we all would like to know what happened.

Now if TC was responsible for the wiring, and they were covering things up to hide some kind of liability for such a thing, then of course they should be held accountable. But listening to Amy and Jeremy, you would think that Triple Canopy is already guilty, and that is politics.

That brings up another point.  Scahill and Goodman both fueled the idea that Triple Canopy was trying to cover this up. Ok guys, then investigate that responsibly, and see where it goes.  Try being more journalist, than political hacks, and maybe my community and the family would have more respect for what you are doing.  But instead of focusing on who actually built the facilities, they decided to focus on demonizing the security contracting industry. Is that journalism, or is that an agenda?  It would be like if someone got killed in a freak accident at a movie theater, and then going after the the victim’s employer because you don’t like their employer.  It is a strawman attack, and this bias and distraction does a huge disservice to the family and the memory of Adam.

So lets talk about Camp Olympia.  According to the comments section at MsSparky’s blog (the Hermanson family has made comments there as well, so that is why it is relevant), the readers had some interesting points to make. I found out about this, just by typing ‘Camp Olympia, Iraq’, in a Google search, and it came up on the first page.

For one, it is alleged that the First Kuwaiti Construction Company was the company that built up Camp Olympia.(says Sam) This is the same company that built the new Embassy compound in Baghdad.  There is even  a wikipedia page about the company that Jeremy and Amy could have visited, to learn more about the company and it’s history of faulty construction. I know Jeremy and Amy are aware of the construction problems at the embassy, so it is curious why they didn’t make the connection or even do a basic Google search about Camp Olympia?

According to the wiki, the Washington Post wrote a critical article of the company, ‘both for the physical quality of their work, and for allegations of labor abuse which came to light in testimony given by former First Kuwaiti employees’.  If I was Adam’s family, those are the folks I would be mad at if they were the ones that were responsible for the construction at the camp.  I would also be angry at the government for not monitoring the construction of the camp and applying some kind of quality control.

Finally, and I want to leave the reader on this important note.  You should talk with your family about your final wishes if killed out there.(speaking to my fellow security contractors)  Your death, like in the case of Adam Hermanson, could be used by some morally and ethically corrupt individuals who are just trying to sell books and political agendas.

If you are a family member of a contractor, it would also be wise to think what your loved one’s wishes would have been in regards to relations with the media.  Your actions can forever impact the memory and good name of your deceased loved one, and you need to be protective and respectful of that memory. And in the case of Adam Hermanson, I just don’t think he would have sat down and had a beer with Jeremy Scahill or Amy Goodman while he was alive, and I am pretty sure Adam would not have approved of those two using his good name to sell books and agendas.

I could be wrong, and I apologize in advance if that is the wishes of Adam.  I am just looking at this, as if I was in Adam’s shoes. I am a security contractor and I have worked in these camps in Iraq. I have seen first hand the burned out trailers caused by electrical fires, and I am completely aware of accidental electrical deaths.  Believe me, I have showered in plenty of facilities that gave me pause.  But I also know enough about the system to put blame, where blame is due.  In the case of Adam Hermanson, the blame needs to be placed on who built the facility, and who was tasked with managing and monitoring that contract.

Unfortunately, politics seems to be more important to the media these days, than respecting the memory of a security contractor or finding out the truth of what happened to him.

See article source here.

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Matt Loe is a former Marine, a seasoned security contractor and a  frequent contributor to the Private Military Herald.  His blog, Feral Jundi, is an excellent source for news and commentary related to the private security sector as well as the U.S. military and foreign policy.