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Today's Must Read
Ambassador Patrick Kennedy has finally delivered his assessment of the State Department's relationship with security contractors in Iraq to Condoleezza Rice. Behind closed doors yesterday, the ambassador, who was tasked with making a comprehensive review of State's contractors following the Nisour Square shooting, told the secretary of state that there were serious problems "with virtually every aspect of the department’s security practices, especially in and around Baghdad, where Blackwater has responsibility," reports The New York Times.
Combined with today's report from Stuart Bowen, the special inspector general for Iraq reconstruction, that finds an "environment" conducive to waste and fraud in the oversight of DynCorp's $1.2 billion Iraq contract, it's easy to see why one State Department official told the paper that the department's contracting process is caught in "a perfect storm of bad events."
Among Kennedy's recommendations is to create a "special coordination center" with the U.S. military to ensure that contractor movements within a military commander's area of operations don't conflict with the commander's orders. It's unclear whether that means the military would actually control contractor operations, as Defense Secretary Bob Gates is reportedly considering, but it would move Blackwater, DynCorp and Triple Canopy contractors out of the exclusive control of the State Department for the first time. When Gates returns from his European trip, he and Rice will discuss the future of State contractors in Iraq.
In a great understatement, Kennedy also recommends closer coordination with the Iraqi ministries:
“They don’t have the right communications, they don’t have the right procedures in place, and you’ve got people operating on their own,” said one official who has been briefed on the report but who spoke on the condition of anonymity because it has not been released yet. “This is not up to the degree it should be.”
And, needless to say, they're also vulnerable to being murdered by drunken Blackwater contractors during rip-roaring Green Zone Christmas parties.
If that's not bad enough, inspector-general Bowen found that until earlier this year, the State Department tasked only two officials in Iraq to oversee 700 DynCorp contractors working on a billion-plus dollar contract to train the Iraqi police. Bookkeeping -- criticized by Henry Waxman yesterday -- is so poor Bowen had to temporarily shut down his investigation of the State Department's bureau responsible for the contract. He called the training program "the weakest-staffed, most poorly overseen large-scale program in Iraq."
That's right -- worse than the corruption-plagued electricity grid rebuilding, or the equipping program that saw hundreds of thousands of guns simply disappear. Nice going, Bureau of International Narcotics and Law Enforcement Affairs.
Thomas A. Schweich, the acting director of the law enforcement bureau, said it had increased staffing in October 2006 and had thoroughly checked all DynCorp invoices since then. He said a detailed review of all DynCorp spending was under way. “We put more people in place,” he said, referring to three additional staff members sent to Iraq to oversee DynCorp. “We have put together a team of 11 people to review historical invoices.”A review of DynCorp’s spending over the past year identified $29 million in overcharges by DynCorp, including $108,000 in business travel, according to a State Department letter in response to Mr. Bowen’s auditors. A separate review by the Defense Contracting Audit Agency found that DynCorp had billed for $162,869 of labor hours “for which it did not pay its workers.”
Schweich's staff say it will take "three to five years" to identify all the DynCorp overcharges that occurred between February 2004, when the contract began, and early 2006. He's going to have an awesome time explaining that when he testifies to Waxman's House oversight committee.
Update: This post has been corrected.
Comments (21)
C92 wrote on October 23, 2007 9:21 AM:Hooray for Pat Kennedy. He's a truth teller, and a career diplomat. The country needs more like him.
Next stop, please examine the extravigant spending of State Department dollars by White House personnel on Presidential and First Lady overseas visits. Luxury hotels, chauffeuered cars, first class airfares, extravigant public event sets. The abuses are out there.
TheraP wrote on October 23, 2007 10:27 AM:C92: all while denying healthcare to children!
Eric Benjamin wrote on October 23, 2007 10:33 AM:I want to start a tax revolt. Henry David Thoreau went to prison for non-payment of taxes as a protest against the incursion into Mexico. He then wrote "On Civil Disobedience".
Bush wants more money and I think the spoiled rich kid needs to be shown that if you waste what you're given and ask for more it's called "throwing good money after bad."
I was against this Iraq thing from the moment I heard of it and I do not want another penny of my tax obligation going to it. I understand how taxation works and you have to make compromises in the way that public money is assessed and spent - that some projects and programs will be funded that I do not support, but I think it's time for a radical statement.
When I read that Blackwater has dodged tax payments and see the corruption and waste (I'm embarrassed that I haven't mentioned the human loss and suffering already) I wonder if this is the only way that Congress and the admin would get the idea. Money - maybe that's the language that Bush speaks. It clearly isn't English.
Jake D. wrote on October 23, 2007 10:33 AM:O.K., so they ARE "contractors" at least for the purposes of murders during rip-roaring Green Zone Christmas parties?
henry porter wrote on October 23, 2007 10:46 AM:"Contractors" refers to the fact tha the COMPANY has a CONTRACT with the government. It's a completely different thing than classifying the people fulfilling the contract as "independent contractors".
Or are you seriously trying to say that Erik Prince is also a "contractor"?
Putz.
Jake D. wrote on October 23, 2007 10:55 AM:Read the article (again?) to see the word "contractor" used several times -- unless you are trying to say that Erik Prince also murdered someone during a rip-roaring Green Zone Christmas party?
Troll Patrol wrote on October 23, 2007 11:06 AM:our troll must have been constipated, after being banned, and now is spewing the contents.
Ignore the troll - and constipated contents.
Jake D. wrote on October 23, 2007 11:10 AM:For the record, I was simply asking questions about the following small part of this topic: ". . . needless to say, they're also vulnerable to being murdered by drunken Blackwater contractors during rip-roaring Green Zone Christmas parties."
jolly ranchero wrote on October 23, 2007 11:22 AM:Jake cares not a whit that an innocent Iraqi was gunned down in cold blood by a drunken man never prosecuted for the crime, but cares very deeply what title he's assigned in a newspaper article.
If this doesn't sum up modern Republicans, nothing does.
carlton wrote on October 23, 2007 11:41 AM:Blackwater is a "contractor" for the US government. The IRS question that Prince is trying to tapdance around is whether the individual mercenaries actually work *for Blackwater*, or are "independent contractors."
Undisputed: Blackwater works for the US pursuant to a contract, and therefore is a contractor.
Disputed (by Blackwater): whether the individuals doing the work are employees of Blackwater, or are instead independent contractors *to Blackwater*.
If they do work for Blackwater, then the company has (apparently) engaged in massive evasion of employment and social security taxes. Which is a problem.
Jake D. wrote on October 23, 2007 11:43 AM:I'm actually registered Independent.
Alguien wrote on October 23, 2007 11:59 AM:Jake D.
Martin wrote on October 23, 2007 12:04 PM:You may be registered Independent but I don't see any "independence" registering in any your posts.
You look more like a "closet Republican" to the rest of the world.
[Have you ever voted for a non Republican? I doubt it!]
Jake D. giving independents a bad name since 2007.
Anonymous wrote on October 23, 2007 12:10 PM:Hey, about that "rip-roaring Christmas party"...
Who do you suspect threw said party? Was it Haliburton? Keep in mind, the US Army's MWR division pays for this sort of stuff for soldiers - unit funds, parties, morale/welfare stuff.
And who better than Halburton to truck booze and turkeys and snacks into a war zone?
Jake D. wrote on October 23, 2007 12:10 PM:Wow! Simply asking a few innocent questions about the following small part of this topic: ". . . needless to say, they're also vulnerable to being murdered by drunken Blackwater contractors during rip-roaring Green Zone Christmas parties" means I am a "closet Republican" and/or gives all Independents a "bad name"?! I asked the same type of questions when Clinton was in office. I have also voted for non-Republicans.
ched wrote on October 23, 2007 12:13 PM:Doesn't matter what a newspaper calls them, or what the SBA calls them; it doesn't even matter what they call themselves (in fact, in an effort to avoid taxes and vicarious liability, BW takes great pains to refer to their mercenary employees as "contractors"). The ONLY description that matters is that of the IRS. And based on the plain meaning of the IRS Code, Blackwater mercenaries are employees, plain and simple. Which means Prince owes a LOT of money to us, the US taxpayers.
MikeC wrote on October 23, 2007 12:48 PM:I have been seeing more and more references from this administration attributing their bad fortune to being caught in the 'perfect storm'. How many 'perfect storms' can there be? The common denominator here is not the vagaries of chance. Just as it is said that 'chance favors the prepared mind'... bad luck follows the incompetent one.
Going forward, perhaps the question that needs to be asked of this class of presidential hopefuls is: "Given the record of incompetence from this administration, would you knowingly hire any of its alumni?"
Mary wrote on October 23, 2007 2:12 PM:On the off chance that you truly are as hopelessly confused as you sound, Jake, here is how it works.
1. If an individual works for a person or organization and that person or organization provides certain tools and/or controls certain aspects of the work performed, then the individual is an employee. This means, for tax purposes, that the individual has employment taxes withdrawn from their paychecks (the employee's portion) and the employer (person or organization) is required by law to pay employer share of employment taxes (and deduct those against income). Also, the individual who is an employee is required by law to be able to participate in certain programs if the employer (person or organization) offers them - such as healthcare programs, 401K etc.
2. Sometimes an individual performs work for a person or organization and that individual provides their own tools and sets their own schedule. For example, a lawyer that has their own practice, own physical office, own computers, own staff, own research capacities, other clients, etc. almost always works "for" others but in that type of situation is not an employee. No payroll taxes are withheld on payments made by the person or organization and no payroll taxes are separately owed by the person or organization. Here, although the individual is working "for" the person or organization, they are performing those services as an independent contra
3. There can be grey areas as to whether or not an individual is an independent contractor or an employee, but as numerous people have mentioned, given the overall circumstances of providing services in Iraq, there is no reasonable scenario that could be constructed in connection with those security services being rendered whereby the individual performing those services pursuant to the contract held with the State Dept by the organization
"Blackwater" would meet any of the tests of being an independent contractor. Indeed, it appears that in the one known case where a security service provider in Iraq for Blackwater took the case to the IRS, the IRS ruled that the individual was an employee (and this ruling would extend to all like circumstances unless there is solid factual grounds to differentiate between the individuals and their conditions and rendering of service).
There may be individuals and situations in Iraq where some who work for Blackwater are "independent contractors." For example, if they have someone who comes in now and then to pick up trash, clean the quarters, work on vehicles, change lightbulbs, etc. then, depending on the overall circumstances, you might be able to structure a valid claim of independent contractor status. However, due to the equipment, training, scheduling, living quarters, etc. totalities of the security service providers' situation, there is no valid argument to make to call them independents.
4. Only individuals can be employees at law. When the State Department "hires" the Blackwater organization to provide services, the only legally possible relationships would be that Blackwater is a "contractor" for, or an "affiliate" of, the State Department. In this situation, State does not exercise ownership control of Blackwater and the services are provided through a contract for services - written or verbal - so Blackwater is a contractor of State.
5. If the individuals providing services through Blackwater were providing them directly to the State Department without the Blackwater entity as an intermediary, then those individuals would be "employees" of State because of the situation surrounding their services. However, for profit purposes, Blackwater interposes itself as the intermediate entity and facilitator so the employees are theirs and not States.
This is a very easy concept but you seem to struggle with it.
Blackwater can ONLY be a contractor with the State Dept (or any govt entity) because Blackwater is not an "individual" and because Blackwater is not an affiliated agency of the government.
Individuals who work for Blackwater can be employees or independent contractors, depending on their circumstances.
Individuals working for Blackwater in Iraq purusant to the security services contract between Blackwater and the State Dept, who have training, equipment, vehicles, lodging, etc. provided by Blackwater and who do not have discretion on when and how they will deliver services, are going to be treated by the law - if not by Blackwater - as being employees.
Have a nice day.
Jake D. wrote on October 23, 2007 3:14 PM:Hi, Mary. I am not "struggling" with the difference between Blackwater's contract and their employees/independent contractors. Thank you very much for your post and your well wishes. I will, in turn, at least agree with this sentence:
"Individuals who work for Blackwater can be employees or independent contractors, depending on their circumstances."
Just because you cannot imagine any such reasonable scenario in Iraq, as to security service providers, does not mean make it so.
Mary wrote on October 23, 2007 4:08 PM:I'm sure you are correct Jake D and there is a "bring your own gun, train yourself, supply your own humvee, supply your own helicopter, find a Motel 8 you like, get your own ammo, and show up when you like, where you like" aspect to the Blackwater hires that you will be able to rely upon, with no struggle whatsoever after the pharmaceuticals hit.
I guess after they do hit, my well wishes are superfluous - you are pretty guaranteed a nice day at that point. Still, enjoy.
Dennis wrote on October 24, 2007 10:04 AM:"Hooray for Pat Kennedy. He's a truth teller, and a career diplomat. The country needs more like him."
Please permit me to disagree. Near the end of the Waxman "Blackwater hearing", Ambassador Kennedy was asked a series of questions about the results (if any existed) of investigating other "incidents" going back at least to 2005.
He REFUSED to answer what the results were or even if any investigations had taken place. Nor was he nice in his reply, but rather arrogant.
None of the MSM picked up on this and it was also missed by TPM.