Jeremy Scahill - Blackwater

The story became even more complicated in July 2006, when the Secretary of the Army, Francis Harvey, wrote a letter to Republican Congressman Christopher Shays of the House Committee on Government Reform, stating, “Based on information provided to the Army by Kellogg, Brown and Root (KBR), KBR has never directly hired a private security contractor in support of the execution of a statement of work under any LOGCAP III Task Order. Additionally, KBR has queried ESS and they are unaware of any services under the LOGCAP contract that were provided by Blackwater USA… the U.S. military provides all armed force protection for KBR unless otherwise directed.” 55Harvey wrote that the theater commander had not “authorized KBR or any LOGCAP subcontractor to carry weapons. KBR has stated they have no knowledge of any subcontractor utilizing private armed security under the LOGCAP contract.” 56Testifying in front of the House Committee on Government Reform in September 2006, Tina Ballard, an undersecretary of the Army, said it was the Army’s contention that Blackwater provided no services to KBR. 57

For its part, KBR told the producers of PBS’s Frontline program, “[W]e can tell you that it is KBR’s position that any efforts being undertaken by [ESS or Blackwater] when the March 31, 2004, attack occurred were not in support of KBR or its work in Iraq… this was not a KBR-directed mission.” 58KBR also said it was not responsible for supplying kitchen equipment to Camp Ridgeway, the Blackwater contractors’ ultimate destination when they were killed in Fallujah. 59KBR’s assertions had to be viewed in the context of what the Pentagon’s own auditors found regarding the company’s practices in Iraq. “KBR routinely marks almost all of the information it provides to the government as KBR proprietary data… [which] is an abuse of [Federal Acquisition Regulations] procedures, inhibits transparency of government activities and the use of taxpayer funds,” according to an October 2006 report by the Special Inspector General for Iraq Reconstruction. 60“In effect, KBR has turned FAR provisions… into a mechanism to prevent the government from releasing normally transparent information, thus potentially hindering competition and oversight.” 61In Iraq, Halliburton/KBR has been secretive to the point of not naming its subcontractors. 62“All information available to KBR confirms that Blackwater’s work for ESS was not in support of KBR and not under a KBR subcontract,” said Halliburton spokesperson Melissa Norcross in December 2006. “Blackwater provided services for the Middle East Regional Office of KBR. This office is not associated with any government contract…. These services were provided outside of the Green Zone and were not directly billed to any government contract.” 63This all raised crucial questions: Whom was Blackwater ultimately working for when it sent those four men on that fateful Fallujah mission? And what was that mission’s official, documented connection to the U.S. military?

These were questions California Representative Henry Waxman, Congress’s lead investigator, had been looking into since November 2004, when reports first emerged on the layers of subcontracts involved with the Fallujah mission. On December 7, 2006, the story took yet another twist when Waxman revealed that he had obtained a November 30, 2006, legal memo from Compass Group, ESS’s British parent company, that asserted ESS had a subcontract under Halliburton’s LOGCAP contract and used Blackwater “to provide security services” under that subcontract. 64“If the ESS memo is accurate, it appears that Halliburton entered into a subcontracting arrangement that is expressly prohibited by the contract itself,” Waxman asserted in a letter to Rumsfeld, adding that the memo appeared to contradict what Army Secretary Harvey had presented in his July 2006 letter, as well as Undersecretary Ballard’s subsequent sworn testimony. The memo also appeared to introduce another major war contractor into the mix. “The ESS memo also discloses that Blackwater was operating under a subcontract with [KBR competitor] Fluor when four Blackwater employees were killed in Fallujah in March 2004,” according to Waxman. He charged that Blackwater appeared to be “providing security services under the LOGCAP contract in violation of the terms of the contract and without the knowledge or approval of the Pentagon.” 65

Finally, in early February 2007, Waxman was able to get the answer to the question he had been asking for nearly three years. Following the Democrats’ victory in the 2006 Congressional elections, Waxman became chair of the powerful Committee on Oversight and Government Reform and moved swiftly to hold a hearing on the ambush. What the public learned the day of that hearing was that the contract under which the Blackwater men killed in Fallujah were operating was indeed traceable to the largest war contractor in Iraq, KBR.

This was a complete about-face that contradicted many previous claims, including denials from KBR and the military that any such connection existed. Tina Ballard, the Army’s head contracting officer, had assured the same committee six months earlier that Blackwater had not been hired under a KBR subcontract.

But during the February hearing, Ballard said that “after extensive research” it turned out her earlier statements had been wrong. Further, she said that if KBR “knowingly or unknowingly incurred costs for private security subcontractors… the US Army will take appropriate steps under the contract terms to recoup any funds paid for those services.” 66At the end of the hearing, Ballard announced that the Army would dock KBR $20 million now that it was clear that—under several layers of subcontracts—Blackwater had in fact been hired in violation of KBR’s master contract with the military, which stated that only the official military could provide security services. 67That it took nearly three years to get an answer to one simple question was an ominous commentary on the state of oversight of the mercenary industry in the United States.

At the same hearing, Blackwater attorney Andrew Howell told Congress the company would not turn over its incident report on the Fallujah ambush, saying, “We cannot turn over classified information. It would be a criminal act.” Waxman shot back, “That’s not an accurate statement. We are entitled to receive classified information in this committee.” 68

Waxman subsequently demanded that Blackwater hand over the document to the committee, and a company lawyer responded, “Blackwater lacks unilateral authority to provide the Committee with any classified incident reports.” 69Waxman, quite understandably, found it outrageous that a private company was telling him, a U.S. House committee chair, that it could not share “classified” information with him. As it turned out, the Congressional investigation found that “none of the documents about the Fallujah incident were classified.” 70Waxman alleged that Blackwater’s chief operating officer, Joseph Schmitz, “acknowledged to Committee staff that rather than immediately produce the report by the Coalition Provisional Authority to the Committee, he instead hand-delivered it to [the] Defense Department and requested that it be reviewed to determine whether it should be classified. He took these steps even though the report was marked ‘unclassified,’ no portion of it was marked as classified, and neither Blackwater nor its outside counsel had stored it in a classified manner…. [Later,] the Defense Department produced the report to the Committee and confirmed that it did not consider this document to be classified.” 71

Waxman alleged that Schmitz did this with another document as well, asking “that it be reviewed for classification purposes” by the Defense Department. The Pentagon informed Blackwater that it too was unclassified. In another instance, Waxman alleged, Blackwater refused to hand over documents under a subpoena and produced them only when “the Committee threatened a vote to hold Blackwater in contempt of Congress.” 72Blackwater later said it had “obtained the permission” to release the documents by “working with the Executive branch.” 73