Two and a half years ago, Texan Mark McLean found himself “running for his life” one hot evening on a military base in Baghdad.
It was, according to McLean, “the number one shelled base in Iraq for a couple of years” “ and just such a mortar event sent McLean, a Kellogg Brown & Root, Inc. water purification technician, scrambling for cover during the workday’s second shift.
According to McLean, he slid under a flight of stairs, hurting his right knee. When the shelling was over, he raised himself to his 6-foot-plus height, hitting his head on the edge of the staircase and compressing his spine. It was the night of April 7, 2007.
On the following day, McLean says a KBR medic advised him to soldier on.
“‘If you tell anybody about it, you’re probably going to get fired,’” McLean reported the medic to have said. “So I worked another year, not knowing how injured I was, but it got to the point where I couldn’t even walk to the dining facility once a day.”
McLean, who is now a part-time resident of Waring in Kendall County, said he’s received minimal medical attention since the initial injury, a deteriorating condition that’s left him crippled by constant pain.
After 12 months of wait-and-see during which his injuries didn’t resolve themselves, McLean ended up in Kuwait City, visiting a physician who pushed for “immediate surgery.”
That recommendation was made in the spring of 2008. Since McLean’s return to the U.S. in May of that year, he said he’s waited “ and waited “ and continues to wait “ for AIG, KBR’s insurance carrier under the Defense Base Act, to decide if McLean’s claim is legitimate.
Apparently, McLean’s problems are not unique. In June of this year, the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee held a hearing revealingly entitled “After Injury, the Battle Begins: Evaluating Workers’ Compensation for Civilian Contractors in War Zones.”
During the hearing, two contract workers testified that AIG “delayed and denied” their claims for months that dragged into years. In addition, a December 2007 Army audit revealed that almost $300 million that AIG received in taxpayer-funded premiums were being paid out at a rate of less than 4 percent.
Last year, congressional investigators calculated that insurance companies had collected $1.5 billion in premiums, while estimating that these companies would spend approximately $900 million in compensation.
The generally accepted numbers reveal that although thousands of contractors have been injured while working jobs on American bases, AIG is reporting profits that range between 37 to 50 percent.
In April of this year, an investigation conducted by ProPublica, ABC News and the Los Angeles Times maintained that AIG is “battling” civilian contractor claims by “routinely” denying them. According to the investigation, outstanding claims to AIG account for most of an insurance inventory including claims by more than 32,000 laborers or their families injured or killed in both Afghanistan and Iraq.
McLean certainly feels himself to be one of what some are calling the “Disposable Army.” His status as a contract worker has earned the technician and others like him, a spot in a dusty and forgotten back drawer.
Nobody cares, McLean said, because of the preconceived notions that contract workers endure. People believe he made huge sums of money, according to McLean, when in fact his paycheck stub reveals that he made $14.95 an hour, clocking 12 hours a day, seven days a week.
Others doubt his very motivation “ his patriotism – McLean said.
“I’ve had a woman spit on me and call me a mercenary. A lot of Army guys feel that way too, but I faced dangers too and I didn’t make that much money,” he said. “Where military gets people coming up to them and thanking them for being a hero “ you know, I’ve been spit upon.”
The ProPublica, ABC News and Los Angeles Times investigation reports that Texas has suffered a surprisingly high number of contractor casualties per capita ” 22 contractors have been injured or killed for every 100,000 people. It’s the second highest rate in the nation after Washington D.C.
Every four military casualties are matched by one civilian contractor death.
But McLean doesn’t so much care about these statistics aside from how they might affect his insurance hearing that has been delayed many times.
Mostly, McLean said he would just like for his pain to be addressed.
“Right now my lower back feels like it’s got a knife going in it,” McLean said. “I’ve got pain radiating down both legs and both my feet feel like they’re on fire. I live in constant pain “ constant pain, life-altering pain. And there’s nothing I can do to not feel pain. Chronic pain wears you down. You can’t concentrate.”
He’d also like to be recognized as having served the United States. Excluded earlier from military service because of asthma, McLean said he was excited, to be going to Baghdad.
“I was finally getting to do something for my country.” Instead he said, he hears comments like, “Oh, you really didn’t do anything.”
McLean keenly feels this dismissal.
“You don’t get used to living in a place like that,” he said of his service in Baghdad. “You don’t get used to putting your friends in body bags.”
Six of his civilian friends were killed by shelling during the course of the three years he was in Iraq.
“It’s so unpleasant there. You’re constantly worn out, you’re constantly tired “ it’s just a dangerous, nasty, horrible place,” McLean said, “but I kept doing it.”
Thirty days after he returned to San Antonio, McLean tried to log onto his KBR employee accounts, and that’s how he found out he’d been fired while on medical leave. “Not one person has contacted me,” McLean said. “My life is on hold.”
Living expenses for the past year have chewed through his savings, and he said he knows that under the Defense Base Act, AIG isn’t likely to grant any compensation for pain and suffering. McLean is asking for the past year’s wages and medical help.
Almost 30 months have passed since his injury and McLean’s claim is still in limbo.
Meanwhile, the Houston Business Journal reported in January that KBR was granted another $35.4 million contract for further work in Iraq.
“This whole thing is a travesty,” McLean said. “I resisted telling this story for awhile, but I think people ought to know. I served my country too, and I’ve been forgotten.”
y Farzana Shah-Asian Tribune Correspondent in Pakistan
Government of Pakistan has put, Inter Risk – A private security consultancy firm providing security to US embassy and its staff –under ban after a police raid on the office of the company located in F-6 sector of Islamabad few days back. According to ministry of Interior, Government of Pakistan, License of Inter Risk (Pvt) Ltd. has been cancelled and it no longer can continue its operations in any part of the country.
Police had recovered more than 60 assault rifles from company office license of which can not be issued to any company or individual by other than Prime minister of Pakistan. This raid was done on Saturday, 19th September 2009. US embassy has stated that they have nothing to do with these weapons.
It is learned that after raid on its office another raid was made by police on residence of owner and chief executive of firm Capt Syed Ali Jaffar Zaidi (retd), an ex-army commando who has served in special services group (SSG) of Pakistan army for more than 10 years. A ban on the firm was put when police recovered similar rifles with prohibited bore from his residence as well.
According to some reports, activities of certain members of DynCorp and Inter Risk were closely watched by security agencies which suspect them of having been involved in espionage. It was because of its suspected activities detrimental to the interests of Pakistan, security agencies opposed the issuance of visas to more than 50 personnel of DynCorp. Latest ban on Inter Risk might also be linked to these suspicious activities monitored by intelligence setup of Pakistan. Further investigations about members of banned security firm are underway at moment.
Formed in 1991 Inter Risk has been contracting with many foreign embassies and international businesses in Pakistan since then to provide specialized security services. A similar contract was signed with US embassy in Islamabad in April this year.
Inter Risk was working as sub-contractor by another US private security firm Dyncorp International. Specialized security services of another Pakistani firm Speed Flo Filter Industries were also hired by Dyncorp International for US consulate in Peshawar along with banned Inter-Risk.
By MUNIR AHMAD and NAHAL TOOSI (AP) – 55 minutes ago
ISLAMABAD — Pakistani police raided a local security firm that helps protect the U.S. Embassy on Saturday, seizing dozens of allegedly unlicensed weapons at a time when unusually intense media scrutiny of America’s use of private contractors has deepened anti-U.S. sentiment.
Two employees of the Inter-Risk company were arrested during the raids in Islamabad, police official Rana Akram said. Reporters were shown the seized weapons — 61 assault rifles and nine pistols. Akram said police were seeking the firm’s owner.
U.S. Embassy spokesman Rick Snelsire said the U.S. contract with Inter-Risk to provide security at the embassy and consulates took effect this year. It is believed to be the first U.S. contract for the firm, said Snelsire, who did not have a figure for its amount.
“Our understanding is they obtained licenses with whatever they brought into the country to meet the contractual needs,” he said. “We told the government that we had a contract with Inter-Risk.”
Akram said he had no idea about any U.S. links to Inter-Risk. A man who answered the phone number listed for the company and identified himself as Riaz Hussain confirmed the raid but gave contradictory answers when asked about any U.S. ties.
The company popped up Friday in one of a slew of local media reports that have focused on private security firms American diplomats are believed to use in Pakistan.
In particular, Pakistani reporters, anti-U.S. bloggers and others have suggested the U.S. is using the American firm formerly known as Blackwater — a claim that chills many Pakistanis because of the company’s alleged involvement in killings of Iraqi civilians.
The U.S. Embassy denies it uses Blackwater — now known as Xe Services — in Pakistan.
Scandals involving U.S. private contractors have occurred elsewhere in the region.
In Washington on Friday, the Commission on Wartime Contracting heard testimony about another contractor — ArmorGroup North America — involving alleged illegal and immoral conduct by its guards at the U.S. Embassy in Afghanistan.
Earlier this year, the Iraqi government refused to grant Xe Services an operating license amid continued outrage over a 2007 lethal firefight involving some of its employees in Baghdad, although the State Department has temporarily extended a contract with a Xe subsidiary to protect U.S. diplomats in Iraq.
Many of the reports in Pakistan have been prompted by U.S. plans to expand its embassy space and staff. Among the other rumors the U.S. denies: that 1,000 U.S. Marines will land in the capital, and that Americans will set up a Guantanamo-style prison.
The U.S. says it needs to add hundreds more staff to allow it to disburse billions of dollars in additional humanitarian and economic aid to Pakistan. The goal is to improve education and other areas, lessening the allure of extremism.
Some analysts say Islamist and other opposition groups may be planting the stories in the Pakistani press and blogs to portray Pakistan’s government as an American lackey.
Pakistani political analyst Talat Masood said Inter-Risk’s association with America “will increase the apprehensions that existed that the Americans are engaged in clandestine activities,” and that the raid shows “the Pakistan government is asserting itself.”
The U.S. considers stability in Pakistan critical to helping the faltering war effort in neighboring Afghanistan, and has pressed Pakistan to crack down on extremism on its soil. Al-Qaida and Taliban fighters are believed to use Pakistan’s northwestern regions bordering Afghanistan as hide-outs from which to plan attacks on Western troops in Afghanistan.
Pakistan has launched offensives against militants, but has also relied on some local militias to help fend off the Pakistani Taliban. Some of these militias share the same aims as the Taliban in Afghanistan, but disagree with targeting the Pakistani government.
On Saturday, one pro-government militia leader said the army had asked him to stop fighting the Pakistani Taliban. Turkistan Bhitani told The Associated Press that he and 24 aides surrendered their weapons to the army in the northwestern city of Dera Ismail Khan and that he had asked 350 of his men to do so as well.
Pakistani army spokesman Maj. Gen. Athar Abbas, however, said he knew nothing of such an arrangement.
Al-Qaida and the Pakistani Taliban have fueled violence in Pakistan, including attacks that pit Sunni Muslims against Shiite Muslims.
Police said Saturday that the death toll from a suicide car bombing at a hotel in a Shiite Muslim-dominated village in Pakistan’s northwest rose to 40. The Friday blast in Usterzai village was followed by a bomb in nearby Cho village that killed a Sunni official.
Also Saturday, the army said in a statement that 51 militants had surrendered in the last 24 hours in the northwest Swat Valley, and that another seven were arrested. It also said militants fatally shot five civilians in a minibus there.
Associated Press writers Lori Hinnant in Kabul and Ishtiaq Mahsud in Dera Ismail Khan contributed to this report.
(AP) – 1 hour ago
WASHINGTON — Attorneys for a whistleblower suing the contractor hired to protect the U.S. Embassy in Afghanistan say a top company executive was aware since July 2008 of alleged illegal and immoral conduct by guards.
The claim made Friday contradicts the sworn testimony of Samuel Brinkley, a vice president for Wackenhut Services, the owner of ArmorGroup North America. Brinkley told the Commission on Wartime Contracting that he and other corporate officials didn’t know until late August of problems that reportedly included lurid parties and ArmorGroup employees frequenting brothels in Kabul.
But in a letter to the commission, the attorneys say their client, James Gordon, told Brinkley during a meeting in July 2008 of alleged guard misconduct. Brinkley did not immediately respond to a request for comment.
Last spring, the U.S. diplomatic mission in Iraq got a makeover,replacing the scandal-plagued Blackwater private security company with a firm named Triple Canopy.
The new $1 billion contract cemented Triple Canopy’s status as the pre-eminent provider of private security services in Iraq, with its heavily armed employees appearing side by side with senior State Department diplomats.
But the company’s rise to prominence followed a long, often chaotic route, marked by questionable weapons deals, government bungling and a criminal investigation that was ultimately closed without charges being filed, according to newly released investigative files.
Company employees told federal investigators that Triple Canopy swapped booze for weapons and supplies from the U.S. military. They said the company bought guns and other arms on the black market in Iraq. Some worried that the money was flowing into the hands of insurgents, records show.
The previously undisclosed documents and interviews with current and former Triple Canopy officials raise new questions about the U.S. government’s ability to oversee private security contractors in a fluid and uncertain legal environment. And they give a glimpse into the messy business of creating a private army on the fly in the middle of a war zone.
“We’re spending a lot of money on these rifles, millions of dollars — where do you think that money is going to?”  Ronald Boline, a former Triple Canopy manager, said in a lawsuit deposition videotaped  in June 2007. “Who are we supporting in doing that? We’re supporting people who are trying to kill Americans is the logical conclusion.”
That lawsuit against the company, filed in a Virginia circuit court by other former employees who sued Triple Canopy for wrongful termination, was settled this week, records show, but no terms were disclosed.
The criminal investigation began in 2007 after federal investigators received a tip that Triple Canopy was using stolen cars and captured Iraqi weapons  to boost profits to over 40 percent on some contracts. Andrew T. Baxter, the interim U.S. attorney for the Northern District of New York, declined to comment on why his office decided not to file charges. (His office handled the case because Triple Canopy’s invoices were paid out of a nearby federal contract processing center.)
Stuart Bowen, the special inspector general for Iraq reconstruction, who oversaw the investigation, refused to talk about details. But he said the difficulty in building the case were indicative of the haphazard atmosphere in which billions of dollars of U.S. money were spent in Iraq without oversight.
“It’s unclear if anything that Triple Canopy did was criminal, but it was symptomatic of the chaos that prevailed at the time,” Bowen said. “It’s another example of contracting gone wrong.”
Triple Canopy officials said the firm had done nothing wrong. They acknowledged buying weapons in Iraq when they were unable to import U.S. guns. But Lee Van Arsdale, a retired Delta Force colonel who was the company’s CEO until recently, said in an interview before retiring that the firm had taken every precaution to ensure that no money wound up in insurgents’ hands.
“Not only are we former military, but our former colleagues are still serving in uniform, living, eating and breathing right beside us in some cases. In some cases, we’ve got family members out there,” Van Arsdale said. “To say that we’re going to fund the insurgency either directly or indirectly, that’s insulting.”
Triple Canopy began in September 2003, when two former Special Forces soldiers formed the company to take advantage of the burgeoning market for private security. Iraq was exploding in violence, and the U.S. lacked enough soldiers to protect U.S. and Iraqi officials, infrastructure and diplomatic outposts.
Within three months, the company got its first break: The U.S. awarded Triple Canopy a contract to protect more than a dozen sites across Iraq. At the time, the company had only a handful of employees. More serious, it didn’t have licenses to import the hundreds of weapons needed to guard sites across Iraq.
The company immediately applied for licenses after winning the contract, according to documents provided by Triple Canopy. Yet the government took months to approve the deal, not authorizing the company to collect the weapons until June 2004. In essence, the U.S. had awarded the company a lucrative contract, but then provided it little ability to arm for the job.
To get the firepower it needed in the meantime, the company turned to the unregulated and unlicensed Iraqi market, purchasing AK-47s and other weapons from local dealers, according to company officials and court records.
The transactions concerned some company officials, according to previously undisclosed records. One midlevel manager told federal investigators that Triple Canopy had purchased weapons “off the street.” He “wondered if the proceeds of those sales was funding the insurgency,” an investigator wrote.
Former managers also told investigators that the company obtained U.S. military equipment from troops at little or no cost. One man told investigators in an October 2008 interview that the company sometimes obtained Army supplies “for liquor,” and that Triple Canopy employees routinely made “deals with Army units that were rotating in and out of Iraq, to obtain medical supplies, water, MRE’s and vehicle tires, to name a few.”
Boline, the former manager, said the company bought Cuban cigars and liquor to trade for U.S. military equipment. He spoke to investigators in 2007, according to records and officials, and his testimony became public later that year, when he provided a sworn statement as part of the employees’ lawsuit.
“The whole mind-set at the time was, whatever it takes to get the job done we’re going to do it,”  said Boline, who had been fired from the company after disagreements with supervisors. He provided the deposition several months after his termination.
Van Arsdale acknowledged that importing U.S. weapons was “problematic” as the company began operations in Iraq. But he said the company took steps to make sure that it purchased weapons legally.
“There were a few months in there that, ‘all right, now what do we do?,’ ” Van Arsdale said. “The answer to that was that we establish … a procedure to procure weapons on the local market to mitigate the possibility of that fungible money getting into the wrong hands.”
Van Arsdale said Triple Canopy turned to a trusted local buyer recommended by the U.S. government. Triple Canopy produced documents showing that the man it said purchased the weapons, an Iraqi businessman, had been vetted by Defense Department officials.
The company also produced several letters of recommendation from military officials praising the man, who also acted as a translator for U.S. military units.
Van Arsdale said the company had not swapped goods with soldiers for equipment. He said Triple Canopy fully investigated Boline’s charges and found no evidence to support them.
He questioned Boline’s motives, noting that Boline waited until 2007 to make his accusations. In his deposition, Boline acknowledged threatening to go public with his charges if Triple Canopy officials blocked his attempts to receive a security clearance in order to obtain a new job.
Reached by e-mail, Boline declined to comment, citing a non-disclosure agreement that he signed when he took his job with Triple Canopy.
Van Arsdale acknowledged the hectic pace of fulfilling contracts. But he said that even under tight deadlines the company didn’t break the rules.
“We defined the gold standard for training and equipping people at great expense to ourselves as well as great time to ourselves,” he said. “At a period of hurry up, hurry up, hurry up, we took over two weeks to train guys to make sure they were prepared to go in country. To say that we’re cutting corners and we’re opportunistic and we’re war profiteers, all of the facts argue against that.
“In terms of weapons procurement, the rules were clear and we followed them,” Van Arsdale said.
But former senior officials with the Coalition Provisional Authority, the U.S. occupation government that controlled Iraq until June 2004, questioned whether there were any established procedures for buying weapons from Iraqis.
They noted that any Iraqis with large quantities of weapons to sell were most likely businessmen or military officials associated with the former regime of Saddam Hussein.
Some former U.S. officials in Iraq said that buying guns locally was by definition illicit. Steve Casteel, the U.S. senior adviser to the Iraqi Ministry of the Interior at the time, said there was a “disconnect” between Washington and what was happening on the ground in Iraq.
“There was no legal market for the sale of weapons, so if they bought them it had to be black market,” said Casteel, who now works for another private security company. “It wouldn’t have been legal under U.S. guidance. It wouldn’t have been legal under any Iraq law that I’m aware of.”
Triple Canopy’s frustrations with the U.S. government were hardly unique. In numerous interviews, former U.S. and industry officials described a crazed atmosphere in which U.S. contracting officers demanded guns on the ground and asked few questions.
One private security company official said Iraqi vendors sold weapons at open-air markets, the tables stacked high with AK-47s and other armaments, in full view of U.S. officials.
“It was wide open. It was like a swap meet,” said the official, who works for a Triple Canopy competitor and did not want to be identified. “I’m not aware of any company that didn’t use it.”
Companies that wanted to conduct business in normal channels were stymied by short deadlines, constantly changing requirements and bureaucratic clashes between U.S. officials on the ground in Iraq and in offices back in Washington.
“People needed to have weapons,” said one former official with the Coalition Provisional Authority. “So of course you went out and bought them on the black market because you couldn’t get them from anywhere else. If you have a demand, you are going to have a supply.”
CPA officials were aware that there were few controls over the weapons used by their private security contractors. But ideas to exert greater control were ignored.
“We recognized there was a problem, the CPA official said. “We had inconsistent quality. There was not as much control and accountability of those weapons as we wanted.”
Other companies also found means. Blackwater, now known as Xe, said in a statement that it had obtained valid U.S. import and export licenses for its employees’ weapons. The company has been investigated for weapons smuggling, though no charges were filed and it denies the allegations.
An official with DynCorp, the second largest security contractor in Iraq, said weapons were obtained from a variety of sources. In some contracts, requests for licenses were granted, allowing the import of U.S. weapons. For other contracts, requests were denied and the firm turned to the local weapons market.
“We were forced to turn to the local market even for U.S. government contracts and subcontracts because there weren’t mechanisms in place to allow export of weapons in Iraq, yet we had the responsibility to provide services under those government contracts,” said one DynCorp official, who declined to be named because of the sensitivity of the topic.
A State official acknowledged that the department had been slow to respond to the need to arm the private companies it was hiring to carry guns. Until late 2004, the department’s Directorate of Defense Trade Controls blocked most requests for the export of automatic weapons to private firms — the result of a decades-old policy to cut down on international arms trafficking.
When private security companies began requesting weapons to fulfill U.S.-issued contracts, the department was caught off guard, the official said. It wasn’t until November 2004 that the policy was changed to grant private security companies export licenses —more than a year and a half after the first such firms were hired in Iraq.
“This was something that the State Department hadn’t considered as a possibility until the (requests for) licenses started coming in,” said the official, who spoke on background per department policy. “What they did was go through a relatively long discussion and decision process to figure out how to deal with the problem.”
While the system for importing weapons has improved in Iraq, industry and State Department officials acknowledged that problems remain in Afghanistan.
Partly, this reflects the fact that more groups are at work there. Unlike Iraq, there is a substantial presence of nonprofits and international aid organizations in need of security. Companies buying weapons from local sources continue to run the risk of money flowing to insurgents, one official said.
Afghanistan is similar in one way, however. Just as in the early days in Iraq, there are comparatively few investigators on the ground to watch the billions of dollars now flowing into the country.
“It’s an even worse Catch-22 over there,” one industry official said.
The Associated Press
Wednesday, September 16, 2009
WASHINGTON — A U.S. contractor in Afghanistan helping train the national police was found dead last week of a possible drug overdose, just months after his company was reprimanded by the State Department for another worker’s drug-related death.
The deaths have raised questions over how well DynCorp International selects and manages those assigned to the police training contract, a crucial component of the U.S. effort to hand over more of the security burden to the Afghans.
The leaders of an independent panel investigating wartime spending said Wednesday they are troubled by the deaths of two workers at 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?'”
The employee was found dead in his quarters in Kabul, the capital, on Sept. 10. State Department spokesman Ian Kelly said an investigation is under way.
DynCorp spokesman Douglas Ebner said the company would not speculate on the cause of the death.
Michael Thibault, who along with Shays heads the contracting commission, said DynCorp officials informed the panel last week that a syringe, needle, and a drug vial were found near the body. A toxicology test will be conducted to determine if drugs were a factor.
The employee, a medic, had arrived in Afghanistan in late August. Given his profession, it would not be unusual for medical supplies to be found in his room.
On March 17, a DynCorp employee assigned to the same contract was found dead in the company’s housing in Kabul. Drug use was suspected in that death, which remains under investigation. After that death, the State Department ordered the company to replace its senior project managers on the police training contract.
Both the departments of State and Defense depend heavily upon contractors such as DynCorp for support in war zones for construction, transportation, security, food service and laundry. But how well federal authorities are watching over the performance and conduct of this industrial army is a long-standing concern.
Most recently, the State Department has been criticized by the commission and public interest groups for failing to know that private security guards hired to protect the U.S. Embassy in Afghanistan were engaging in lewd and inappropriate behavior that may have compromised the U.S. effort there.
DynCorp has been training police in Afghanistan since 2003, according to information on the Falls Church, Va.-based company’s Web site. The latest installment of the training contract was awarded by the State Department in August 2008 and is worth $317 million.
Dyncorp has 16,000 employees in Iraq and Afghanistan and expects to expand that number to 20,000 as demands for its services increase.
William Ballhaus, DynCorp’s president and chief executive officer, was asked about the Sept. 10 death during a hearing held Monday by the wartime contracting panel on a separate State Department contract.
Ballhaus didn’t discuss the cause of the death or provide any details about the employee. But he did say company managers in Afghanistan treated the area where the employee died as a “crime scene,” securing the room with guards to make sure evidence wasn’t removed.
He also said the company immediately notified the State Department and the FBI. “We’re talking about tens of minutes on this timeline,” Ballhaus said.
The body was brought to back to the U.S. on Sunday at Dover Air Force Base in Delaware, he added.
Ballhaus said he and other DynCorp officials reviewed how the employee was recruited, hired and trained. “We wanted to make sure our process was intimately followed, and it was,” he said.
Pentagon Study Proposes Overhaul of Defense Base Act to Cover Care for Injured Contractors
by T. Christian Miller, ProPublica – September 15, 2009 6:52 pm EDT
WASHINGTON, DC – Congress could save as much as $250 million a year through a sweeping overhaul of the controversial U.S. system to care for civilian contractors injured in war zones, according to a new Pentagon study.
In the most extensive review ever of the taxpayer-financed system, the Pentagon suggested that the government could issue its own insurance to cover the skyrocketing costs of medical care and disability pay for injured civilians.
Currently, the U.S. pays more than $400 million annually to AIG and a handful of other carriers to purchase special workers compensation insurance policies required for overseas civilian contractors by a law known as the Defense Base Act, the study found.
By cutting out insurance company profits as high as 35%, the government could self-insure the contractors for less money, according to a copy of the study obtained by ProPublica . The study is due to be released Friday.
The Pentagon’s suggestion would require a massive legislative revision of the government’s 60-year-old system to care for injured civilians, which has been criticized as expensive and ineffective for modern war zones where civilian contractors account for half the work force.
Despite the possible savings, it remains unclear whether anyone in Congress will champion such a bill. And the Pentagon hedged its bets by saying that it would pursue reforms to the current system of private insurance while “considering” the pursuit of legislative authority to change to a system of self insurance.
Such a proposal could also improve the delivery of care to injured contractors, the report found. Civilian contractors have faced protracted battles with insurance carriers to obtain medical treatment and disability pay, according to an investigation  by ProPublica, the Los Angeles Times and ABC News.
“In the long run, the self-insurance alternative may have the greatest potential for minimizing DBA insurance costs, and it has several administrative and compliance advantages as well,” the report said. A Pentagon spokeswoman declined comment since the report has not yet been made public.
Under the proposed system, the U.S. would pay directly for medical benefits and disability benefits rather than relying upon private insurance providers. The government would hire an outside firm to administer the claims to avoid the expense of training and hiring examiners.
The report makes clear, however, that such a fundamental change to the system would face a battle from the insurance industry. AIG dominates the market for the insurance, which exploded from an $18 million a business to more than $400 million per year after civilian contractors flooded into war zones in Iraq and Afghanistan, the report said.
AIG controls about 75% of the market, followed by Chicago-based CNA and Bermuda-based ACE Group. Together, the three firms collect 97% of all premiums paid by defense contractors for the insurance, the cost of which is reimbursed by the government.
Changing to a self-insurance system “has the potential to have the most financial benefit, if implemented government-wide,” the report found. However, under the heading “Cons,” the report said that legislation to change the current private insurance system “has potential for significant political pressure from those most directly affected by such a change (carriers, brokers, etc.)”
AIG and ACE did not immediately return requests for comment. The industry has said that profits are reasonable and that claims are handled fairly.
CNA said it was examining the recommendations. “We are in the process of carefully reviewing and digesting the DOD report. As previously stated, we welcome changes and improvements to the DBA program,” the company said in a statement.
The chance for such fundamental reform is uncertain. The Obama administration has not put forth a specific bill, though the Pentagon and Labor Dept., which administers claims, worked together in producing the report. A Labor Dept. spokesman said Tuesday that the agency was not prepared to comment on the report.
In the House, Rep. Ike Skelton , (D-Mo.) chair of the House Armed Services Committee, called the report’s findings “interesting, surprising, and worth considering for next year’s defense authorization bill.”
“The House Armed Services Committee will closely examine the report as we seek ways to lower the costs associated with Defense Base Act insurance,” Skelton said in a statement.
The Senate Armed Services Committee, chaired by Sen. Carl Levin , (D-Mich.) would wait for the Defense Dept. to suggest changes in its spring legislative proposal, a spokesman said.
Rep. Elijah Cummings  (D-Md.) has announced plans for cutting costs and improving the delivery of care for contractors, but has yet to offer details. Sen. Bernie Sanders , (I-Vt.) has also called for change.
Sen. Bernie Sanders (I-Vt.) “The current system for providing health insurance and workers compensation for our military contract workers in Iraq and Afghanistan is broken and wasting millions of dollars in payments to companies like AIG,” Sanders said in a statement. “If the Pentagon, the Department of Labor and Congress modernize the current insurance system, we can save up to $250 million and finally give these workers and their survivors the basic health care and support they need and deserve.”
In the absence of a major legislative overhaul in the next three years, the report recommends reforms to the current system of paying private insurance carriers for policies. Chief among them is a proposal that the government collect information on how much such claims cost.
Unlike state workers compensation systems, where rates are regulated and based on years of occupational injury data, the federal system for contractors relies upon individual insurance carriers to set rates. In the early years of the war, rates skyrocketed but the government had no way of determining whether such increases were justified.
The Pentagon tried to reduce rates by creating a umbrella program in 2005 in which one carrier, CNA, won a bidding contest to issue insurance for all contractors working for the U.S. Army Corps of Engineers. The State Dept. and the U.S. Agency for International Development have similar programs.
While initial studies by the Army Corps found significant cost savings, the current Pentagon report said that CNA’s rates in the umbrella program were higher on average than policies purchased by individual defense contractors.
Using a formula which weighed factors such as the size of the contract, CNA charged contractors in the umbrella program 8.3% of payroll costs on average, while individual contractors paid about 5.3% of their payroll for the insurance, the report found. That means the Army Corps paid $8,300 to purchase worker’s compensation insurance for a civilian contractor making $100,000 a year, compared with $5,300 for a civilian working for a different agency.
“The department’s overall conclusion, based on its comprehensive analysis of the current DBA premium data, is that the open market—when it involves adequate price competition among carriers—results in rates that are lower than those in a single-provider program,” the report said.
No matter which program, however, the report found that insurance carriers “may be achieving significant” profit from selling the insurance.
The Pentagon attempted to determine exactly how much money private carriers made from the taxpayer-financed policies, but insurance companies refused to turn over any data, the report said.
Previous investigations by the House Committee on Oversight and Government Reform found that carriers made more than 50% profit from some polices—far in excess of normal workers’ compensation insurance.
Written by the Pentagon’s Defense Acquisition and Technology Office, the report was based on interviews and data from industry players, including two insurance carriers, six brokers and seven defense contractors.
The Pentagon has denied  a Freedom of Information Act request by ProPublica to release documents submitted by the firms as part of the review, claiming that the information is proprietary business data.
A recent insurance industry study  confirmed that companies paid far more for workers compensation insurance in Iraq and Afghanistan than other countries. The higher rates have drawn criticism since the government reimburses carriers for the cost of combat injuries.
NEW ORLEANS — The case of a Texas woman who alleges she was gang-raped by co-workers while working for a military contractor in Iraq will go to court.
A three-judge panel from the 5th Circuit Court of Appeals in New Orleans ruled Tuesday that Jamie Leigh Jones’ claims against Halliburton Co., former subsidiary KBR and several affiliates can be tried in open court. The companies contended Jones signed an agreement that requires all of her claims against the companies to be resolved privately through arbitration.
The Associated Press usually does not identify people alleging sexual assault, but Jones’ face and name have been broadcast in media reports and on her Web site. She also described her allegations in testimony before a congressional subcommittee.
Halliburton and KBR are headquartered in Houston.
By KIMBERLY HEFLING (AP) – 40 minutes ago
WASHINGTON — Senate Majority Leader Harry Reid on Monday asked the State Department and Pentagon to investigate the electrocution of a 25-year-old private security contractor while showering in his dormitory in Baghdad.
Reid said he wants to know whether Adam Hermanson’s death resulted from faulty electrical work. Hermanson, who died Sept. 1, grew up in San Diego and Las Vegas. Reid is a Nevada senator.
Electrical wiring has been an ongoing problem in Iraq that the military has been trying to fix with widespread inspections and repairs. At least three troops have been electrocuted while showering since the start of the Iraq war, and others have been electrocuted elsewhere.
Reid made the request Monday in letters to Secretary of State Hillary Clinton and Defense Secretary Robert Gates.
Hermanson served three tours in Iraq with the Air Force. He’d recently left the military and was an employee of the Herndon, Va.-based private contractor Triple Canopy at the time of his death.
A request for comment was referred to the military in Baghdad, where the request was not immediately returned. Darby Holladay, a State Department spokesman, said Reid’s letter had not yet been received.
(AP) – 2 hours ago
BAGHDAD — A civilian contractor was shot and killed Sunday on an American military base in the Iraqi city of Tikrit and a U.S. soldier has been detained in connection with the incident, the military said.
The contractor was shot at 8:30 a.m. at Camp Speicher, the military said in a statement.
Houston-based KBR confirmed in a short statement that the man killed was one of its employees, 27-year-old Lucas Vinson.
“As the Army is leading the investigation of the incident, KBR is not providing further comment at this time,” spokeswoman Heather Browne said in an e-mailed statement. “We are of course fully cooperating with the Army on its continued investigation.”
Maj. Derrick Cheng, a public affairs officer, said a soldier had been detained in connection with the incident, but that he could not divulge any more information while the investigation is ongoing.
“We offer our sincere condolences to the family of the individual,” he said.
The U.S. military makes wide use of contractors in Iraq for security, technical support and supply functions.
KBR is the primary support contractor in Iraq, providing troops with essential services, including housing, meals, mail delivery and laundry.
As of June 30, 1,395 civilian employees of U.S. government contractors had been killed in Iraq, according to an AP count.
The military said the name of the contractor is being withheld pending notification of next of kin.
The incident is under investigation, and the military did not immediately respond to an e-mail request for more details.
WASHINGTON (Reuters) – Sixteen private guards have been removed from the U.S. Embassy in Afghanistan in a scandal over sexual hazing and lewd behavior, the State Department said on Thursday as the security contractor faced new allegations of misconduct.
A federal whistle-blower lawsuit filed on Thursday against ArmorGroup North America charged that the firm contracted to protect the embassy had ignored brothel visits by guardsmen, sexual hazing and other misconduct because of what a lawyer said was a “myopic preoccupation with profit.”
The lawsuit by ArmorGroup North America’s former director of operations, James Gordon, was the second time in as many weeks the Virginia-based firm has come under fire for its performance in a five-year, $187 million contract with the State Department.
A watchdog report on September 1 charged that ArmorGroup jeopardized security at the embassy by chronically understaffing the facility and ignoring lewd, drunken conduct and sexual hazing by some guards.
The report by the Project on Government Oversight included photos of nearly naked men dancing near a bonfire at their camp and urinating on each other while colleagues snapped photos. A video showed men pouring alcohol down the bare backside of a new recruit and drinking it as it spilled from his buttocks.
Spokesman P.J. Crowley said investigators had interviewed more than 150 people over the past week in connection with the watchdog’s allegations. Eight guards were removed, four resigned of their own accord, two managers were dismissed and two others left voluntarily, he said.
“The State Department continues to fully investigate allegations regarding ArmorGroup,” Crowley said. “We have aggressively overseen this contract since it was awarded in March of 2007 and went into force in July of 2007.”
CITED NINE TIMES
As evidence of aggressive oversight, he said the firm had been cited nine times for performance deficiencies and each time the State Department and ArmorGroup had agreed on measures to remedy the problem.
The State Department extended ArmorGroup’s contract for another year in June despite citing the firm three months earlier for letting 18 guardposts go unstaffed for 30 hours and other shortcomings.
Crowley declined to comment on the specific charges in the Gordon lawsuit, but repeated the U.S. view that “at no time … was the security of the embassy ever threatened or compromised.”
Gordon, noting that many of the security guards do not speak English, told reporters in a telephone briefing from Afghanistan it was “ludicrous for anyone to think that is a safe environment and that is an effective security force.”
“I don’t see how anybody could say, firstly, that the government is getting what they are paying for, and secondly, that that does not compromise the security of the embassy itself,” he said.
The lawsuit filed by Gordon charged that three senior guards — the person in charge of weapons, the top guard manager and a medic — frequented a Kabul brothel in violation of the U.S. Trafficking Victims Protection Act.
Gordon, a former New Zealand army captain, said when he tried to investigate the matter, it was handed over to the company’s London-based parent firm, which produced a “whitewashed” three-page report that resulted in a warning letter being placed in the project manager’s employee file.
Gordon’s suit makes a number of other allegations against ArmorGroup, now owned by Florida-based Wackenhut Services. It charges Gordon was effectively forced to leave his job when he warned the company and the State Department about failures to fully implement the contract.
By most counts, the death toll of U.S. soldiers in America’s wars in Iraq and Afghanistan stood at 5,157 in the second week of September. Add at least 1,360 private contractors working for the U.S. and the number tops 6,500.
Contractor deaths and injuries (around 30,000 so far) are rarely reported but they highlight America’s steadily growing dependence on private enterprise. It’s a dependence some say has slid into incurable addiction. Contractor ranks in Iraq and Afghanistan have swollen to just under a quarter million. They outnumber American troops in Afghanistan and they almost match uniformed soldiers in Iraq.
The present ratio of about one contractor for every uniformed member of the U.S. armed forces is more than double that of every other major conflict in American history, according to the Congressional Budget Office. That means the world’s only superpower cannot fight its war nor protect its civilian officials, diplomats and embassies without support from contractors.
“As the military operations in Iraq and Afghanistan have progressed, the military services, defense agencies and other stakeholder agencies…continue to increase their reliance on contractors. Contractors are now literally in the center of the battlefield in unprecedented numbers,” according to a report to Congress by the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan.
“In previous wars, the military police protected bases and the battle space as other military service members engaged and pursued the enemy,” said the report. In listing the 1,360-plus contractor casualties, it noted that criticism of the present system and suggestions for reforming it “in no way diminish their sacrifices.”
So why are they not routinely added to military casualty counts? And why should they? A full accounting for total casualties is important because both Congress and the public tend to gauge a war’s success or failure by the size of the force deployed and the number of killed and wounded, according to George Washington university scholar Steven Schooner.
In other words: the higher the casualty number, the more difficult it is for political and military leaders to convince a sceptical public that a war is worth fighting, particularly a war that promises to be long, such as the conflict in Afghanistan. Polls show that a majority of Americans already think the Afghan war is not worth fighting.
Figures on deaths and injuries among the vast ranks of civilians in war zones are tracked by the U.S. Department of Labor on the basis of claims under an insurance policy, the Defense Base Act, which all U.S. contracting companies and subcontractors must take out for the civilians they employ outside the United States.
EXPENDABLE PROFITEERS, ROGUES?
The Labor Department compiles the statistics on a quarterly basis but only releases them in response to requests under the Freedom of Information Act. This can take weeks. The Department gives no details of the nationalities of the contractors, saying that doing so would “constitute an unwarranted invasion of personal privacy” under the U.S. Privacy Act.
Writing in last autumn’s Parameters, the quarterly journal of the U.S. Army War College, Schooner said that an accurate tally was critical to any discussion of the costs and benefits of the military’s efforts in the wars. What’s more, the American public needs to know that their government is delegating to the private sector “the responsibility to stand in harm’s way and, if required, die for America.”
Schooner wrote it was troubling that few Americans considered the deaths of contractors relevant or significant even though many of them performed roles carried out by uniformed military only a generation ago. “Many…concede that they perceive contractor personnel as expendable profiteers, adventure seekers, cowboys, or rogue elements not entitled to the same respect or value due to the military.”
That’s not surprising after a series of ugly incidents involving armed security contractors. They make up for a small proportion of the total (about 8 percent) but account for almost all the headlines that have deepened negative perceptions and prompted labels from mercenary and merchant of death to “the coalition of the billing.”
In the most notorious incident, two years ago, employees of the company then known as Blackwater opened fire in a crowded Baghdad square, killing 17 Iraqis. Five of the Blackwater shooters, who were working for the Department of State, have been indicted on manslaughter and weapons charges.
The Pentagon describes private contractors as a “force multiplier” because they let soldiers concentrate on military missions. Some of the actions of private security contractors could be termed a “perception multiplier.” Such as the after-hours antics of contractors from the company ArmorGroup North America guarding the U.S. embassy in Kabul.
Shaking off the image of rogues became even more difficult for private security contractors after a Washington-based watchdog group, the Project on Government Oversight, accompanied a detailed report on misconduct and morale problems among the guard force with photographs showing nearly nude, drunken employees in a variety of obscene poses and fondling each other.
Whether contractors, even rogue elements and cowboys, should not be counted in the toll of American wars is another matter. Doing so would be part of the transparency Barack Obama promised when he ran for president.
Congressman Announces Plan to Reform U.S. System to Care for Injured Civilian Contractors
Rep. Elijah Cummings (Mark Wilson/Getty Images)
Rep. Elijah Cummings, D-Md., said Wednesday that he will introduce legislation later this year to improve the delivery of medical care to civilian contractors injured while working with the military in Iraq and Afghanistan.
Cummings declined to provide details about his proposal but said he hoped it would reduce the $300 million a year paid by defense contractors to insurance companies.
“The system is broken, and the insurance companies have reaped the benefits,” said Cummings, who pushed for hearings  earlier this year after investigations  by ProPublica, ABC News and the Los Angeles Times found that insurance carriers routinely denied claims by injured contractors.
A new study released today found that insurance carriers charge defense contractors far higher rates in war zones to cover routine injuries and accidents. That baffles congressional officials, who have noted that the government separately pays for all war-related injuries to civilian contractors. Why, they ask, should it cost significantly more to insure an employee in Iraq against a slip or fall then one in Tunisia?
“The industry report underscores the need for major reforms of a very expensive and broken system that ostensibly is designed to help private contract workers in places like Iraq and Afghanistan,” Sen. Bernie Saunders, I-Vt., said in a statement. “Insurance companies such as A.I.G. should not make unjustifiable profits by overcharging the U.S. government for basic workers compensation. During the June congressional oversight hearing, I pressed the Pentagon and the Department of Labor to make the necessary reforms so wounded workers get the support they deserve. The Pentagon has said that the recommendations will be on my desk next week and I will take a hard look at their ideas.”
The study by insurance broker Aon Corp. was an anonymous survey involving 18 defense contractors which purchase the specialized workers compensation policies required under a federal law known as the Defense Base Act . Most of the firms said they were charged higher rates for workers compensation insurance in Iraq and Afghanistan than for comparable workers hired in other foreign countries.
In some cases, defense companies in Iraq and Afghanistan paid more than double for the insurance, which covers medical costs and disability benefits for injured civilians. One defense firm paid 18 percent of its payroll for insurance — meaning that the company had to spend $18,000 to purchase a single worker’s compensation policy for an employee making $100,000 a year.
The cost of such policies became controversial after 9/11, when rates skyrocketed as civilian contractors flooded into Iraq and Afghanistan. An arm of troubled insurance giant AIG, recently renamed Chartis, sold the bulk of the policies, turning an obscure and lightly regulated insurance line into a billion-dollar business.
Taxpayers ultimately pay for the insurance as part of the cost of federal contracts.
Congressional investigators and government auditors have accused AIG and other carriers of exploiting a market with limited competition to overcharge for the insurance, pointing to profit margins as high as 40 percent on some policies . Insurance firms, however, have said that higher premiums reflect heightened risks of routine injury in Iraq and Afghanistan.
The Aon study found that AIG continued to control “significant” market share, but was facing increased competition from ACE Group and Zurich Financial Services Group. Aon concluded that “key factors” driving rates included things such as market competition, the type of work performed by employees and local conditions.
Charlie Skinner, the Aon managing director in charge of the market survey, noted that Iraq’s roads are in poor shape after six years of war, raising the possibility of more road accidents. The survey did not directly examine, however, whether underwriters factored in war hazards in determining policy rates. “You might need to talk to underwriters to drill into that. We don’t get inside their rating models,” Skinner said.
The study, the largest of its kind to date, mirrors earlier findings by the GAO and the House Committee on Oversight and Government Reform. It comes as the Defense Department prepares later this fall to release recommendations on ways to overhaul the system.
One option under consideration would replace private insurance with government insurance — a potential blow to Aon and other firms in the industry. Skinner said Aon had contributed “factual” material to the Defense Department, but he declined to say whether the firm had recommended a course of action.
“As in most insurance and risk management decisions, there’s often not a black and white answer,” he said.
Cummings said the new legislation would “create some cost containment and improve the care for the brave men and women assisting the military.”
A recruiter operating in Iraq says there are well-paid jobs for foreign managers there but experience in war zones is a must.
Nick Fishlock, director of Zoiren International Ltd., told iCON that while there are some highly-paid positions for foreign managers, Iraqi contractors still require previous experience in either Iraq or Afghanistan.
He also said that while the US is taking a lower profile in Iraq, American civilians still have an advantage in competing for jobs because they can get around the country using spare space on American military transport, which removes from Iraqi employers the costly burden of providing safe transit.
A small, UK-based company, Zoiren International started supplying construction management candidates to Iraq in October 2007, and has found jobs for 24 people since then. More than half of these were Americans, with British, Canadians and South Africans making up the remainder.
Mr. Fishlock said the recession has led to a surge in interest from UK professionals for jobs in Iraq and Afghanistan, and that roles such as site managers and project directors were regularly attracting over 3,000 applicants, more than double the number this time last year.
In the beginning Zoiren targeted the first tier of Iraqi subcontractors working for US giants like Parsons, KBR and others who were mopping up big contracts let by the American administration. But as power shifted to the Iraqi government headed by Prime Minister Nouri al-Maliki, those subcontractors started moving into main-contractor roles.
Mr. Fishlock said that projects Zoiren is currently or has recently been recruiting for include the construction of a mass fuel dump at Baghdad airport, a hotel in Kurdistan, two military barracks and a non-military residential development in Basra. He said he has not been to Iraq himself but works via a partner firm there.
English is widely spoken and contractors need experienced site, project and construction managers, Mr. Fishlock said.
“But they won’t look at people without experience in Iraq or Afghanistan because they don’t understand how bad it is,” he said.
For one thing, while security has improved significantly since 2006-07, when the numbers of civilian deaths reached peaks not seen since the invasion in 2003, Iraq is still a very dangerous place.
On 19th August truck bombs and mortars killed at least 95 people and wounded more than 500 in Baghdad in the deadliest attacks in months. One vehicle exploded outside the foreign ministry near the perimeter of the Green Zone and another blast went off close to the finance ministry building.
Iraq’s foreign minister said that members of the country’s own security forces may have collaborated with attackers to get them through checkpoints to the city centre. Earlier in August terrorists bombed two construction sites in ethnically mixed neighbourhoods in Baghdad.
Mr. Fishlock said that contractors often house project staff on site in semi-permanent tent accommodation for security reasons, leaving little to do outside work.
He added that contractors need managers with experience of multi-national project teams and who take a very hands-on approach.
“They’re not desperately concerned about academic qualifications, but you need real hands-on experience,” he said. “You need to be out on site, not sitting in front of your Microsoft Project screen. You can also count on losing 40% of your equipment and material before it even gets to site.”
Mr. Fishlock said that Iraqi contractors will spend a long time negotiating over prices and fee structures but are excellent at paying on time.
He said Iraq is potentially a major growth area for his company but that success there depended on the cessation of violence and getting its oil to market, which is the country’s main source of revenue.
“I would say the feeling is that it’s still about 50/50 as to whether it’s all going to work or implode,” he said.