Background first:
Iraq expels American security contractor Blackwater
March 12, 2008
Blackwater was used in New Orleans after Katrina.
For more on Blackwater, see the work done by The Nation’s Jeremy Scahill.
Also see:
Private Contractors Outnumber US Troops in Iraq by T. Christian Miller of the Los Angeles Times.
Reasons contractors in Iraq are bad news:
- Questionable jurisdiction…no wait, completely free from any legal jurisdiction, according to Order 17 Paul Bremer put in place just before leaving.
- Hides true number of troops and casualties from American public
- Breaks down military order…can refuse to provide troops needs when under fire
- Morale buster.
- Minimum wage troops performing alongside contractors performing similar duties for much more money.
Iraq expels American security firm By ROBERT H. REID, Associated Press Writer
Monday, September 17, 2007The Iraqi government Monday ordered Blackwater USA, the security firm that protects U.S. diplomats, to stop work and leave the country after the fatal shooting of eight Iraqi civilians following a car bomb attack against a State Department convoy.
The order by the Interior Ministry, if carried out, would deal a severe blow to U.S. government operations in Iraq by stripping diplomats, engineers, reconstruction officials and others of their security protection.
The presence of so many visible, aggressive Western security contractors has angered many Iraqis, who consider them a mercenary force that runs roughshod over people in their own country.
Sunday’s shooting was the latest in a series of incidents in which Blackwater and other foreign contractors have been accused of shooting to death an unknown number of Iraqi citizens. None has faced charges or prosecution.
Secretary of State Condoleezza Rice telephoned Prime Minister Nouri al-Maliki late Monday and the two agreed to conduct a “fair and transparent investigation” and hold any wrongdoers accountable, said Yassin Majid, an adviser to the prime minister. Rice was expected to visit the Mideast on Tuesday.
Majid made no mention of the order to expel Blackwater, and it was unlikely the United States would agree to abandon a security company that plays such a critical role in American operations in Iraq.
A State Department official confirmed the call but said he could not describe the substance. The U.S. clearly hoped the Iraqis would be satisfied with an investigation, a finding of responsibility and compensation to the victims’ families — and not insist on expelling a company that the Americans cannot operate here without.
Interior Ministry spokesman Abdul-Karim Khalaf said eight civilians were killed and 13 were wounded when contractors believed to be working for Blackwater USA opened fire on civilians Sunday in the predominantly Sunni neighborhood of Mansour in western Baghdad.
“We have canceled the license of Blackwater and prevented them from working all over Iraqi territory. We will also refer those involved to Iraqi judicial authorities,” Khalaf said.
He said witness reports pointed to Blackwater involvement but added that the shooting was still under investigation. One witness, Hussein Abdul-Abbas, said the explosion was followed by about 20 minutes of heavy gunfire and “everybody in the street started to flee immediately.”
U.S. officials said the motorcade was traveling through Nisoor Square on the way back to the Green Zone when the car bomb exploded, followed by volleys of small-arms fire that disabled one of the vehicles but caused no American casualties.
According to TIME.com, which obtained a U.S. incident report, a separate convoy arriving to help was “blocked/surrounded by several Iraqi police and Iraqi national guard vehicles and armed personnel.”
American officials refused to discuss Iraqi casualties, nor would they confirm that Blackwater personnel were involved. They also refused to explain the legal authority under which Blackwater operates in Iraq or say whether the company was complying with the order. It also was unclear whether the contractors involved in the shooting were still in Iraq.
While Blackwater has recently undertaken an effort to improve its image by emphasizing its humanitarian efforts and vision for “a safer world,” it didn’t immediately step forward to defend itself Monday. Several messages left with officials were not returned, and vice chairman Cofer Black, a former director of the CIA’s counterterrorism center, declined to comment when reached at his Virginia home.
The incident drew attention to one of the controversial American practices of the war — the use of heavily armed private security contractors who Iraqis complain operate beyond the control of U.S. military and Iraqi law.
The events in Mansour also illustrate the challenge of trying to protect U.S. officials in a city where car bombs can explode at any time, and where gunmen blend in with the civilian population.
“The Blackwater guys are not fools. If they were gunning down people, it was because they felt it was the beginning of an ambush,” said Robert Young Pelton, an independent military analyst and author of the book “Licensed to Kill.”
“They’re famous for being very aggressive. They use their machine guns like car horns. But it’s not the goal to kill people.”
In one of the most horrific attacks of the war, four Blackwater employees were ambushed and killed in Fallujah in 2004 and their charred bodies hung from a bridge over the Euphrates River.
But Iraqis have long complained about high-profile, heavily armed security vehicles careering through the streets, with guards pointing weapons at civilians and sometimes firing warning shots at anyone deemed too close. And Iraqi officials were quick to condemn the foreign guards.
Al-Maliki late Sunday condemned the shooting by a “foreign security company” and called it a “crime.”
Interior Minister Jawad al-Bolani described the shooting as “a crime about which we cannot be silent.”
“Everyone should understand that whoever wants good relations with Iraq should respect Iraqis,” al-Bolani told Al-Arabiya television. “We are implementing the law and abide by laws, and others should respect these laws and respect the sovereignty and independence of Iraqis in their country.”
Defense Minister Abdul-Qadir al-Obaidi told Iraqi television that “those criminals” responsible for deaths “should be punished” and that the government would demand compensation for the victims’ families.
Despite threats of prosecution, government spokesman Ali al-Dabbagh told Alhurra television that contractors cannot be prosecuted by Iraqi courts because “some of them have immunity.”
In April, the Defense Department said about 129,000 contractors of many nationalities were operating in Iraq — nearly as many as the entire U.S. military force before this year’s troop buildup.
About 4,600 contractors are in combat roles, such as protecting supply convoys along Iraq’s dangerous, bomb-laden highways.
Blackwater, a secretive North Carolina-based company run by a former Navy SEAL, is among the biggest and best known security firms, with an estimated 1,000 employees in Iraq and at least $800 million in government contracts.
In May 2007, a Blackwater employee shot and killed a civilian who was thought to be driving too close to a company security detail.
Last Christmas Eve, an inebriated Blackwater employee shot and killed a security guard for an Iraqi vice president, according to Iraqi and U.S. officials. The contractor made his way to the U.S. Embassy where Blackwater officials arranged to have him flown home to the United States, according U.S. officials who spoke only on the condition of anonymity because they were not authorized to speak to the media.
The contractor has been fired and Blackwater is cooperating with federal investigators, company spokeswoman Anne Tyrrell has said.
___
AP correspondents Deborah Hastings in New York, Mike Baker in Raleigh, N.C., and Matthew Lee in Washington contributed to this report.
Posted on March 11th, 2008 by Frank Gormlie
Is it just a coincidence that Blackwater beat a retreat out of Potrero on the eve of a Washington inquiry into claims that it violated tax and labor laws? On March 7th we learned that Blackwater pulled its application for the Potrero mercenary camp, and then, in an Associated Press article by Anne Flaherty that appeared March 10th, it was reported that a senior House Democrat has called for a far-reaching federal investigation into Blackwater Worldwide, alleging that the private security contractor violated tax and labor laws by classifying its guards as independent contractors rather than company employees.
It is very possible that the company decided to cut its losses out in the West in order to concentrate on the upcoming inquiry in the East, which it knew was developing ever since Blackwater reps have faced the Klieg lights of Congressional questionings. If the inquiry in the East goes badly for the company, it won’t be able to afford to even purchase the egg ranch out here an hour’s drive from downtown San Diego.
The AP article quoted Blackwater spokeswoman Anne Tyrrell calling Waxman’s charges “completely without merit, ” and then she continued: “Blackwater’s classification of its personnel is accurate, and Blackwater has always been forthcoming about this aspect of its business with its customer, the U.S. government.”
However, Rep. Henry Waxman, chair of the House Committee on Oversight and Government Reform, said Blackwater’s claims on its business status “appear dubious.” Waxman requested that the Internal Revenue Service and the Labor Department investigate whether Blackwater defrauded the government of tax revenue and violated labor laws. He did this with letters sent Monday, the 10th, to the agencies. Further, Waxman asked the Small Business Administration (SBA) to determine whether the company had violated federal regulations by claiming it was eligible for small business preferences. Waxman is a Democratic House representative from California.
“The implications of Blackwater’s actions are significant,” Waxman said in a memorandum to the Committee. “Committee staff have estimated that Blackwater has avoided paying or withholding up to $50 million in federal taxes by treating its guards as independent contractors rather than employees.”
Waxman asserted that Blackwater’s claim as a small business has earned it more than $144 million in contracts, despite being one of the largest private military contractors and receiving nearly $1.25 billion in federal business since 2000.
Blackwater mouthpiece Tyrell stated that the company “looks forward to continuing its cooperation with all inquiries that may result from these letters” and that “the company regrets the chairman’s decision to publicly air misleading information.”
Blackwater is unlike other security companies operating in Iraq in that it claims that the guards that it trains, equips and deploys to Iraq and elsewhere are independent contractors, not company employees - independent contractors that are hired directly by the federal government, the article reported. Naturally, with U.S. law, companies must pay Social Security and other federal taxes on employees.
Waxman raised this very issue last year, the article said, after he obtained a March letter from the IRS that warned that the company’s classification of a security guard as an independent contractor was “without merit.” This had been the result of an inquiry filed by a Blackwater guard. Upon Blackwater’s appeal, the company alleged that it had received assurances from the SBA that its security guards did not have to be classified as company employees.
The article continued:
the primary factor in determining whether a worker is an employee or independent contractor is the degree of control the business has over its worker. Incorrectly classifying a worker could mean steep penalties for the company, including a $25,000 penalty if the IRS determines an appeal is frivolous or groundless. In its March letter to Blackwater, the IRS noted the company paid all of the guard’s travel expenses and signed a written agreement detailing the type of work required. “A worker who is required to comply with another person’s instructions about when, where and how he or she is to work is ordinarily an employee,” the IRS stated in the letter. Waxman said Blackwater is trying to have it both ways. In defending itself against last year’s shootings involving its security guards, company officials asserted that they retained tight control of its guards and even fired some 122 guards in Iraq due to improper conduct. At the same time, Blackwater contends it does not have enough control over its guards to classify them as company employees, Waxman said.
Blackwater may very well have to pay the federal government millions of dollars. If so, it had a cover to pull the Potrero plan without admitting that it was retreating due to the community’s pressure. It is simply cutting its losses. And the Potrero operation would have been so much easier and cheaper if everyone had just shut up and gone about their own business.
Share This!By Patrick O'Connor
In a letter to acting IRS Commissioner Linda E. Stiff, Waxman asked the agency to review whether Blackwater had complied with federal tax law by designating its security guards as "independent contractors" instead of "employees," directing IRS investigators to "take any appropriate enforcement action." In separate requests, Waxman also asked the Dept. of Labor and the Small Business Administration to open similar investigations.
Aides on the Oversight Committee estimate the security firm has failed to pay $50 million in federal taxes since 2000 under the guidelines of its contract with the State Department, according to an internal memorandum distributed to panel members Modnay. Waxman first notified Blackwater CEO Erik Prince in October 2007 that he believed the company had evaded paying millions of dollars in federal taxes for improperly classifying the security guards who work for his firm. As evidence, committee aides cite more than $144 million in small business set-asides the firm has claimed since 2000 and a series of previous legal arguments, including an IRS ruling from March of last year.
The private security firm has been in the congressional crosshairs since Democrats took power. Prince was forced to testify before the Oversight panel last fall about his company's contracts with the federal government after U.S. media outlets chronicled a spasm of violence in Iraq involving Blackwater security personnel.
Stephen M. Ryan, a lawyer in the Washington office of McDermott, Will & Emery who represented Blackwater before Congress last year, was out of the office Monday morning and unavailable to comment on the oversight chairman's request.
The firm has received nearly $1.25 billion in federal contracts since 2000, according to the Oversight memorandum.
Copyright 2008 POLITICO
By Laura Palotie, Inc.com
Published: March 11, 2008
House Democrats are calling for an investigation into whether a controversial private security firm working in Iraq and Afghanistan violated federal small-business contract size standards.
In letters to the Internal Revenue Service, the Small Business Administration and the Secretary of Labor, Rep. Henry Waxman (D-Calif.) claimed Blackwater Worldwide had improperly classified its security guards as independent contractors in order to be eligible for federal small-business contracts, among other benefits.
Blackwater says Waxman's claims were unwarranted.
In the past eight years, the company has received about $144 million in federal small-business contracts, despite earning more than $1.25 billion in government business, according to Waxman.
By listing its employees as independent contractors, Blackwater has also sidestepped anti-discrimination and affirmative action laws applied to federal contractors, Waxman said. He added the company has issued contradictory statements on the degree of control it exercises over its security guards overseas.
Last year, Congress tightened rules on federal contractors in Iraq following reports of civilian deaths involving Blackwater workers. In March 2004, four Blackwater workers were killed and dragged through the streets of Fallujah, Iraq.
Sen. John Kerry, the chairman of the Senate Committee on Small Business and Entrepreneurship, has pressed the Bush administration to investigate the company since October. He says Blackwater has avoided over $31 million in taxes by classifying its employees as contractors.
Inc.com, 2007. All Rights Reserved
