Jeremy Scahill - Blackwater

Blackwater was paying its men $600 a day but billing Regency $815, according to the contracts and reporting in the Raleigh News and Observer . 24“In addition,” the paper reported, “Blackwater billed Regency separately for all its overhead and costs in Iraq: insurance, room and board, travel, weapons, ammunition, vehicles, office space and equipment, administrative support, taxes and duties.” Regency would then bill ESS an unknown amount for these services. Kathy Potter told the News and Observer that Regency would “quote ESS a price, say $1,500 per man per day, and then tell Blackwater that it had quoted ESS $1,200.” 25In its contract with Blackwater /Regency, ESS made reference to its contract with Halliburton subsidiary KBR, apparently indicating that Blackwater was working under a KBR subcontract with ESS. The News and Observer reported that ESS billed KBR for the Blackwater services and that KBR in turn billed the federal government an unknown amount for these same services. 26KBR/Halliburton, which makes a policy of not disclosing its subcontractors, said they were “unaware of any services” that Blackwater may have provided to ESS.

In February 2007, representatives of ESS, KBR, and Blackwater appeared together before a Congressional committee investigating waste and abuse among Iraq War contractors. 27A representative from Regency was scheduled to appear but did not attend. In sworn testimony during the hearing, Blackwater’s legal counsel, Andrew Howell, stated, “The assumption that anything other than the amount paid in labor costs is pure markup and pure profit is wrong,” saying the difference reflected other costs incurred by Blackwater. The ESS representative made a similar claim. Howell said Blackwater would have made just over $10 in profit per man per day on that contract, which he claimed Blackwater was never paid for. During the hearing, Representative Dennis Kucinich disputed Blackwater’s portrayal of its billing practices, charging that Howell’s statements didn’t “square with some facts.” This would remain a point of contention as Congress continued its investigation.

The original contract between Blackwater/Regency and ESS, signed March 8, 2004, recognized that “the current threat in the Iraqi theater of operations” would remain “consistent and dangerous,” and called for a minimum of three men in each vehicle on security missions “with a minimum of two armored vehicles to support ESS movements.” 28[Emphasis added.] But on March 12, 2004, Blackwater and Regency signed a subcontract that specified security provisions identical to the original except for one word: “armored.” It was deleted from the contract, allegedly saving Blackwater $1.5 million. 29

John Potter reportedly brought that omission to the attention of Blackwater management and Regency. 30Further delays could have resulted in Blackwater/Regency losing profits by hindering the start of the ESS job, and they were gung-ho to start to impress ESS and win further contracts. “Regency, all they cared about was money,” Kathy Potter alleged. “They didn’t care about people’s lives.” 31But the call to go ahead with the project without armored vehicles would have been Blackwater’s to make. As the News and Observer reported, “The contract gives Blackwater complete control over how and when the convoys move, based on its judgment and the threat level. Kathy Potter said that Blackwater signed off on the mission.” 32On March 24, Blackwater removed John Potter as program manager, allegedly replacing him with Justin McQuown, who lawyers for Helvenston’s family allege was the man known as “Shrek” whom Helvenston had clashed with at training in North Carolina. 33McQuown, through his lawyer, declined to be interviewed. Word reached Helvenston in Kuwait that both Kathy and John Potter had been removed. “The one thing I do know is that both John and Kathy put their hearts and souls into this job,” Helvenston wrote. “It is my opinion that whatever the severity of their wrongdoing they should not have been fired.” 34

In the meantime, Helvenston had been shuffled around a bit in Kuwait before being assigned to the Blackwater team he was slated to deploy to Iraq with in a few days. “We spent the last two days working, going out for meals, getting to know one another and in general bonding,” he wrote on March 27, 2004. “We have been told that we are scheduled to leave two days from now to escort a bus up to Baghdad.” 35Helvenston wrote that he and his new team went out for dinner that night in Kuwait to continue their bonding and then to a “hukha bar” when a series of fateful events began to unfold, beginning with a call on Helvenston’s mobile. “At roughly 2200 hrs. this evening I receive a call asking me if I can leave tomorrow 0500 with a new team leader,” he wrote. “God’s honest truth…. I am sitting there with a fruit drink and a piece pipe in my mouth (completely legal) feeling… well… dizzy as shit and a bit nasuated and my response was no. My bags were not packed and I just didn’t feel up to it.” Helvenston said he returned to his room in Kuwait and his team leader “went to speak with Justin. He frankly did not want to lose me as a team member and I think he felt that there was a hidden agenda. ‘Lets see if we can screw with Scott’” [ sic ]. 36

Then, according to Helvenston’s e-mail, things got ugly. He alleged that Shrek and another individual came to his hotel room late that night “to front me. No, not confront me. FRONT ME!” The man with Shrek, Helvenston wrote, called Helvenston a “coward” and “Stands as if he wants to fight Justin does the same. I draw my ASP [handgun] and this coward is ready to rock & roll. I just had a premintion [ sic ] it was going to happen. My roommate Chris breaks it up and Justin says I am fired and on a plane tomorrow. We exchange pleasantries and the result is him assuming my GLOCK [pistol] for which he has giving [ sic ] me permission to keep in my room.” 37Helvenston’s family would later allege that McQuown “threatened to fire Helvenston if he did not leave early the next morning with the new team.” 38Regardless of the alleged conflict that night, Helvenston would soon find himself in Iraq. McQuown’s lawyer said his client lacked any “involvement in the planning or implementation of [the] mission,” 39on which Helvenston would be dispatched a few days later. The e-mail Helvenston sent the night before he deployed to Iraq was addressed to the “Owner, President and Upper Management” of Blackwater. Its subject: “extreme unprofessionalism.” 40It was the last e-mail Scott Helvenston would ever send.

AROUND THEtime Scott Helvenston arrived in the Middle East, in mid-March 2004, the situation in Fallujah was reaching an incendiary point. Following the massacre outside the school on Hay Nazzal Street in April 2003, the U.S. forces withdrew to the city’s perimeter. Like Muqtada al-Sadr’s Shiite followers in the Sadr City section of Baghdad, Fallujans had organized themselves and, before U.S. forces entered the city, created a local system of governance—appointing a Civil Management Council with a manager and mayor—in a direct affront to the authority of the occupation. According to Human Rights Watch, “Different tribes took responsibility for the city’s assets, such as banks and government offices. In one noted case, the tribe responsible for al-Falluja’s hospital quickly organized a gang of armed men to protect the grounds from an imminent attack. Local imams urged the public to respect law and order. The strategy worked, in part due to cohesive family ties among the population. Al-Falluja showed no signs of the looting and destruction visible, for example, in Baghdad.” 1They were also fierce in their rejection of any cooperation with the United States and its Iraqi allies. In January 2004, Maj. Gen. Charles Swannack, commander of the Army’s Eighty-second Airborne Division, said the region was “on a glide path toward success,” declaring, “We have turned the corner, and now we can accelerate down the straightaway.” 2But Swannack’s forces had largely operated on the outskirts of the city, which, to the great consternation of Bremer and other U.S. officials, remained semiautonomous and patrolled by local militias. “Iraqis consider this period only a truce,” said Fallujan shopkeeper Saad Halbousi in the weeks following the massacre at The Leader School and the subsequent U.S. withdrawal to the city’s perimeter. “They will eventually explode like a volcano. We’ve exchanged a tyrant for an occupier.” 3In February, in a highly organized, broad-daylight raid, resistance fighters stormed a U.S.-backed Iraqi police center in Fallujah, killing twenty-three officers and freeing dozens of prisoners. 4The next month, with militia openly patrolling Fallujah and antioccupation sentiment rising across Iraq, the U.S. determined to make an example of the city. “The situation is not going to improve until we clean out Fallujah,” declared Bremer. “In the next ninety days [before the official ‘handover’ of sovereignty], it’s vital to show that we mean business.” 5