Armor Group North America and Its Affiliates Pay $7.5 Million to Resolve False Claims Act Allegations

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Thursday, July 7, 2011

WASHINGTON – Armor Group North America Inc. (AGNA) and its affiliates have paid the United States $7.5 million to resolve allegations that AGNA submitted false claims for payment on a State Department contract to provide armed guard services at the U.S. Embassy in Kabul, Afghanistan, the Justice Department announced today.

The settlement resolves U.S. claims that in 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA’s management knew about the guards’ activities.

The settlement also resolves allegations that AGNA misrepresented the prior work experience of 38 third country national guards it had hired to guard the Embassy, and that AGNA failed to comply with certain Foreign Ownership, Control and Influence mitigation requirements on the embassy contract, and on a separate contract to provide guard services at a Naval Support Facility in Bahrain.

 

The settlement resolves a whistleblower suit filed in the U.S. District Court for the District of Columbia. The lawsuit was initially filed under seal by James Gordon against AGNA, ArmorGroup International plc, G4S plc and Wackenhut Services Inc. under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, called “relators”, to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. Mr. Gordon will receive $1.35 million of the settlement proceeds. During 2007 and early 2008, Mr. Gordon was employed by AGNA, as its director of operations.

 

The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit. Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties. On April 29, 2011, the

United States joined the suit.

 

“These contracts are put in place to provide essential support to personnel who are serving in our missions overseas,” said Tony West, Assistant Attorney General for the Civil Division. “The Department of Justice will actively pursue its legal remedies where contractors falsely claim taxpayer dollars for services that fall short of material requirements in their government contracts.”

“Americans deserve to know that their tax dollars are being spent wisely and consistent with our values,” said U.S. Attorney Ronald C. Machen Jr. “Our office has targeted government contractors who fail to meet their obligations to the American people. With this settlement, the U.S. Attorney’s Office for the District of Columbia has now recovered more than $140 million in False Claims Act cases so far this year.”

 

“The Department of State appreciates the work done by the Department of Justice and the Office of the Inspector General in bringing this case to resolution. The Department of State takes any allegation of contractor misconduct seriously and works as part of the inter-agency community to ensure it is adjudicated properly,” said Ambassador Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.

 

The Deputy Inspector General for the Department of State, Harold Geisel, said, “We’re pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators. Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”

 

Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes Special Agents with the Department of State Office of Inspector General, and representatives from the Department of State and the Department of the Navy, for their efforts in the investigation of this matter.

See the original at the Dept of Justice

State Department axes guard firm for Kabul embassy and ArmorGroup gets a raise

Huffington Post March 17, 2011  Associated Press

WASHINGTON — The State Department has fired a contractor hired to provide security at the U.S. Embassy in Kabul, Afghanistan, less than six months after the company won the $274 million job.

The department ended its agreement for embassy security with EOD Technology of Lenoir City, Tenn., because the company was not going to be able to start work on May 1, as the contract required, the State Department said Thursday in a statement.

ArmorGroup North America will continue to guard the embassy for at least the next four months until a replacement for EOD Technology is found.

Vetting the Employees

The State Department said in 2009 that it would not renew its contract with ArmorGroup after its guards were caught engaging in lewd behavior and drinking excessively at their living quarters.

———————————————————————–

Financial Times two days ago on Nick Buckles, the 3.8 million dollar a year man, says:

“The failure of a competitor to take on security at the US Embassy in Kabul will see G4S stay on at the expense of the failed incumbent, at an improved rate.

(“improved” over that 1 million a month they were losing due to allegedly underbidding the contract)

Gordon’s lawsuit alleges that Michael O’Connell, ArmorGroup North America’s vice president of operations, emailed Sauer on March 11, 2007, “AGNA bid this at a very low price and a very low margin,” adding the next day that the timelines and resources given to State in its proposal “don’t match up,” but it wasn’t “a big deal unless” the State Department contracting officer’s representative “calls us on it”.

The contract rollover has been won in spite of controversy over the recruitment and behaviour of staff by ArmorGroup, a subsidiary acquired by G4S in 2008, which led to a critical report by the US State Department over the running of the contract.

ArmorGroup Vodka Butt-Shot Contractor STILL Guarding the Kabul Embassy

ArmorGroup caused an international scandal and lost its State Department contract. Why’s the company still protecting one of America’s most dangerous diplomatic outposts?

“If there’s a better argument for making this mission an inherently governmental function, this situation is it,” she says. “We’ve got one discredited company to be replaced by another discredited company.”

by Daniel Schulman at Mother Jones

More than a year has passed since the State Department decided to drop its contract with the security firm protecting the US embassy in Kabul, following an international scandal featuring drunken debauchery fit for a Van Wilder flick. But the company that introduced the world to vodka butt-shots is still on the job—and it doesn’t seem to have plans to stand down anytime soon. Long after the expiration of its initial contract, in fact, ArmorGroup North America is currently hiring more guards to protect the Kabul embassy.

The firm sparked controversy in September 2009, when a Washington-based watchdog group sent a letter to Secretary of State Hillary Clinton highlighting a list of violations by the company, from a chronic guard shortage to the hiring of personnel who couldn’t speak English and would be unable to communicate with their colleagues in an emergency. But the most shocking charges concerned what the Project on Government Oversight called a “Lord of the Flies environment”—hazing and wild partying depicted in a series of graphic photographs showing members of the Kabul embassy security force drunk, half-naked, and engaged in an array of NSFW behavior.

Embassygate tainted not just ArmorGroup North America (AGNA) and its parent company, the security conglomerate G4S, but the State Department, too, leading to investigations by Congress and State’s inspector general. In the years leading up to the scandal, it turned out, the State Department had repeatedly found fault with the company’s performance—at one point stating in an internal memo that “the security of the US Embassy in Kabul is in jeopardy” as a result—but failed to fire AGNA. A former high-level AGNA employee also came forward to say that he’d warned the State Department about “lewd, aberrant, and sexually deviant behavior” by the company’s recruits more than two years before this conduct made global headlines. Again, no action was taken.

In December 2009, deeply embarrassed by the controversy, the State Department said it planned to axe AGNA once its contract came up for renewal that summer. But when that time came, the agency ended up extending the firm’s contract for another six months while it brought in another security provider. “Because the current KESF [Kabul Embassy Security Force] contract can only be extended through December 30th, we must have the company on the ground and operating by then,” a spokesman for the State Department’s Bureau of Diplomatic Security told Mother Jones last summer.

In late September, the agency selected the Tennessee-based firm EOD Technology to take over the contract. But December 30 came and went with no changing of the guards. And AGNA apparently believed it was staying put, at least for a while. In mid-January, the company posted a job ad on Careerbuilder noting that it was “recruiting Protective Security Specialists to provide security to the U.S. Embassy in, Kabul, Afghanistan.”

A spokeswoman for AGNA, Susan Pitcher, confirmed that the firm is still protecting the embassy, but declined to comment further, citing a State Department policy about contractors speaking to reporters. EODT also declined to comment. But a Diplomatic Security spokesman told Mother Jones that the transition has been delayed. Now, he said, the handover won’t happen until May. “In order to provide EODT with adequate time to make an orderly transition, it has been given 120 days from the end of AGNA’s contract,” the spokesman said.

Sources familiar with the security force contract questioned whether the delay has anything to do with the transition process; one suggested that the State Department may merely be stalling after unwittingly selecting a replacement for AGNA that also has a controversial background.

In October, a week after the agency chose EODT for the job, the Senate Armed Services Committee, which has conducted a years-long investigation into private security firms in Afghanistan, released a report leveling serious allegations at both EODT and AGNA. It accused the companies of relying on local warlords to staff their guard forces—strongmen with unclear allegiances and possible Taliban ties. In one case, according to the report, EODT hired a group of Afghans who had recently been fired by ArmorGroup for “providing sensitive security information to…a Taliban-affiliated warlord.” (In response, EODT claimed that “all leaders which EODT utilized were made known to the US military at every stage of mobilization.” AGNA countered that it only relied on Afghans who had been recommended by special operations troops.)

Making matters worse for EODT, federal agents raided its offices in early December in connection with an investigation into potential export violations involving the transit of weapons or other military-grade materials. The company has said it is cooperating with the investigation and has denied any wrongdoing. “We obviously would not have been selected for some of the sensitive and important projects we handle for our country around the world had we not been thoroughly investigated before and found to be trustworthy,” the firm said in a statement. A State Department official said the agency was unaware the company was the subject of a federal investigation until stories about the raid appeared in the press, and insisted the probe “has not held up the transition.”

For Danielle Brian, the executive director of the Project on Government Oversight, the fact that the State Department handed the embassy job to a company saddled with its own serious baggage illustrates the flawed logic of placing contractors in roles that she believes should be performed by US government personnel. “If there’s a better argument for making this mission an inherently governmental function, this situation is it,” she says. “We’ve got one discredited company to be replaced by another discredited company.”

Please see the original at Mother Jones

State Department Inspector General Documents AGNA Antics in Afghanistan

What AGNA ArmorGroup North America?? You mean Michael O’Connell??

Thank you POGO

The State Department Office of the Inspector General (OIG) today released a damning performance evaluation of ArmorGroup North America (AGNA), the contractor responsible for guarding the U.S. Embassy in Kabul, Afghanistan.

Among the revelations from today’s OIG report:

• AGNA employed, and the State Department’s Bureau of Diplomatic Security failed to scrutinize, “Nepalese guards without verifiable experience, training, or background investigations in violation of its contract.”
• “AGNA cannot account for 101 U.S. Government-furnished weapons that have been missing since 2007. AGNA used U.S. Government-furnished weapons for training rather than required contractor-furnished weapons.”
• “AGNA regularly allows individuals who are not vetted by Embassy Kabul’s regional security office unescorted access to Camp Sullivan, a U.S. Government-owned camp containing sensitive materials.”

The report confirms and expands on the findings of our investigation last year, which pulled back the curtain on a “Lord of the Flies environment” that had taken hold of the Embassy security guard force.

Lewd and obscene photos of AGNA security guards helped our investigation garner considerable attention—but the key revelation, as detailed in our letter to Secretary of State Hillary Clinton, was that the State Department was failing to conduct oversight of a contractor performing an incredibly important service. Today’s OIG report is just one more piece of evidence demonstrating that the State Department continues to struggle in its oversight of private security contractors.

Find statements by POGO Executive Director Danielle Brian and POGO investigator Jake Wiens here.

ArmorGroup’s contract expired on June 30, 2010, but the company will continue to guard the Embassy through the end of 2010. The State Department has selected EOD Technology, Inc. (EODT) to take over security at the Embassy.

— Bryan Rahija

See also:

• Testimony of Danielle Brian before the Commission on Wartime Contracting in Iraq and Afghanistan Regarding Private Security Contractors
• Senate Report Says ArmorGroup Funded Warlords In Bed With the Taliban
• Did Triple Canopy Instruct Its Guards to Lie to State Department Investigators?
• Kabul Embassy Deja Vu
• Kabul Embassy Guards Back in the Spotlight
• POGO Letter to Secretary of State Hillary Clinton regarding U.S. Embassy in Kabul

Review finds that bomb-sniffing dogs in Afghanistan and Iraq may not be up to snuff

LA Unleashed

The State Department’s inspector general said Friday that bomb-sniffing dogs in Afghanistan and Iraq aren’t being tested properly and may not be able to effectively detect explosives.

The inspector general’s review found that the companies hired to supply and train the animals weren’t testing them for all of the scents of the most commonly encountered explosives, increasing the chance of a dog missing a bomb in a vehicle or luggage. That puts U.S. diplomats at risk, the inspector general said.

The companies — U.S. Training Center in Moyock, N.C., a business unit of the company formerly known as Blackwater, and RONCO Consulting Corp. in Washington — also used expired or potentially contaminated materials for the scent tests, the inspector general’s report said.

Susan Pitcher, a spokeswoman for Wackenhut Services, RONCO’s parent company, called the inspector general’s review “inaccurate.” She said a canine expert engaged by the State Department to verify the detection capabilities of the dogs concluded that they complied with the required standards.

Pitcher, however, said that the company had not been provided the expert’s report, receiving instead what she described as “on-site briefings” about the results.

The inspector general’s office said it had not been given the results of the expert’s inspection when it released its report.

The U.S. Training Center did not respond to a request for comment on the inspector general’s report.

The inspector general’s review was limited to three canine programs handled by U.S. Training Center and RONCO. The report did not say how many dogs each contractor provides.

Overall, the State Department uses nearly 200 bomb-sniffing dogs. The report only offers a glimpse of the costs of these services, saying the State Department pays $24 million a year alone for canine services at the U.S. Embassy in Baghdad.

The report faults the department’s Bureau of Diplomatic Security, which is responsible for managing the canine program, for weak oversight. Investigators found that the contractors, not the bureau, were running the program and policing themselves.

During visits to Afghanistan and Iraq, the investigators did not meet any bureau personnel with expertise in bomb-sniffing dogs. “They depended upon the knowledge and expertise of the contractors to ensure all contractual requirements and other standards were met,” according to the report.

The contractors told the investigators “that no outside organization with expertise in explosive detection canines had ever reviewed their operations in Iraq or Afghanistan,” the report said.

In comments printed in the report, the Bureau of Diplomatic Security said it is taking steps to improve the canine program and plans to hire an independent expert who will ensure all the contract requirements are met properly.

Original Article here

Senate Report Says ArmorGroup Funded Warlords In Bed With the Taliban

Project of Government Oversight

“Money is ammunition; don’t put it in the wrong hands,” Gen. David Petraeus warned in an August memo that gave counterinsurgency (COIN) guidance. But apparently the U.S. government is doing just that. Yesterday, the Senate Armed Services Committee released a report detailing examples where the U.S. has fueled warlords connected with the Taliban and Iranian intelligence. This is at least the third government report made public that asserts that weak contract oversight is undermining U.S. efforts in Iraq and Afghanistan–in sum, we may be funding the very folks we’re fighting against.

According to the Senate report, its “inquiry uncovered evidence of private security contractors funneling U.S. taxpayers dollars to Afghan warlords and strongmen linked to murder, kidnapping, bribery as well as Taliban and other anti-Coalition activities.” The report delves into numerous problems connected to the more than 26,000 private security personnel in Afghanistan, an estimated 90 percent of whom are funded through U.S. contracts or subcontracts. The issues range from untrained guards to insufficient weaponry to unmanned posts.

Read the entire article here

Report says Ronco and The US Training Center (Blackwater) bomb-sniffing dogs not up to snuff

Update by Richard Lardner Associated Press at CB Online

WASHINGTON (AP) – The State Department’s inspector general said Friday that bomb-sniffing dogs in Afghanistan and Iraq aren’t being tested properly and may not be able to effectively detect explosives.

The inspector general’s review found that the companies hired to supply and train the animals weren’t testing them for all of the scents of the most commonly encountered explosives, increasing the chance of a dog missing a bomb in a vehicle or luggage. That puts U.S. diplomats at risk, the inspector general said.

The companies — U.S. Training Center in Moyock, N.C., a business unit of the company formerly known as Blackwater, and RONCO Consulting Corp. in Washington — also used expired or potentially contaminated materials for the scent tests, the inspector general’s report said.

Representatives from RONCO, owned by Wackenhut Services, and the U.S. Training Center did not immediately respond to a request for comment on the inspector general’s report.

The inspector general’s review was limited to three canine programs handled by U.S. Training Center and RONCO. The report does not say how many dogs each contractor provides.

Overall, the State Department uses nearly 200 bomb-sniffing dogs. And the report only offers a glimpse of the costs of these services, saying the State department pays $24 million a year alone for canine services at the U.S. Embassy in Baghdad.

The report faults the department’s Bureau of Diplomatic Security, which is responsible for managing the canine program, for weak oversight. Investigators found that the contractors, not the bureau, were running the program and policing themselves.

During visits to Afghanistan and Iraq, the investigators did not meet any bureau personnel with expertise in bomb-sniffing dogs. “They depended upon the knowledge and expertise of the contractors to ensure all contractual requirements and other standards were met,” according to the report.

And the contractors told the investigators “that no outside organization with expertise in explosive detection canines had ever reviewed their operations in Iraq or Afghanistan,” the report said.

In comments printed in the report, the department’s Bureau of Diplomatic Security said it is taking steps to improve the canine program and plans to hire an independent expert who will ensure all the contract requirements are met properly.

Richard Lardner Associated Press

WASHINGTON — The State Department’s inspector general says bomb-sniffing dogs used in Afghanistan and Iraq aren’t being tested properly and may not be able to effectively detect explosives.

In a report released Friday, the inspector general said its review found that the companies hired to supply and train the dogs weren’t testing them for all of the scents of the most commonly encountered explosives, increasing the chance of a dog missing a bomb in a vehicle or luggage. That puts U.S. troops at risk.

The companies also used expired or contaminated materials for the scent tests.

In comments printed in the report, the department’s Bureau of Diplomatic Security says it is taking steps to improve the canine program and plans to hire a contractor that will ensure all the contract requirements are met.

Federal Judge Denies Defendants ArmorGroup’s and Wackenhut’s Motions to Dismiss False Claims Act Whistleblower Lawsuit Involving Fraudulent Practices at the U.S. Embassy in Kabul

ALEXANDRIA, Va., Aug. 27/ — Judge James Cacheris of the United States District Court for the Eastern District of Virginia has denied Defendants ArmorGroup North America (“AGNA”), ArmorGroup International, Wackenhut Services, Inc., and Cornelius Medley’s motions to dismiss whistleblower James Gordon’s lawsuit brought under the False Claims Act.

On September 9, 2009, Mr. Gordon, former Director of Operations of AGNA, filed a whistleblower retaliation lawsuit under the False Claims Act in United States District Court for the District of Columbia, charging that ArmorGroup management retaliated against him for whistleblowing, internally and to the United States Department of State (“DoS”), about illegalities committed by ArmorGroup in the performance of AGNA’s contracts with the United States to provide security services at the U.S. Embassy in Kabul, Afghanistan and at the U.S. Naval base in Bahrain.

The Complaint charges that during Mr. Gordon’s seven-month tenure as Director of Operations, he investigated, attempted to stop, and reported to DoS a myriad of serious violations committed by ArmorGroup, including:

• Severely understaffing the guard force necessary to protect the U.S. Embassy;
• Allowing AGNA managers and employees to frequent brothels notorious for housing trafficked women in violation of the Trafficking Victims Protection Act;
• Endangering the safety of the guard force during transport to and from the Embassy by attempting to substitute company-owned subpar, refurbished vehicles from Iraq rather than purchasing armored escort vehicles as promised to DoS;
• Knowingly using funds to procure cheap counterfeit goods from a company in Lebanon owned by the wife of AGNA’s Logistics Manager; and
• Engaging in practices to maximize profit from the contract with reckless disregard for the safety and security of the guard force, the U.S. Embassy, and its personnel

In his Memorandum Opinion (August 27, 2010), Judge Cacheris noted that “Plaintiff alleges and Defendants offer no facts to dispute that Defendants … began to try to constructively discharge [Mr. Gordon] by ‘making [his] working conditions intolerable.'”  Judge Cacheris further noted that “Plaintiff alleges, and Defendants have not offered any evidence refuting the fact, that [Defendant] Medley excluded Plaintiff from management meetings, shunned him, and relegated him to a position of persona non grata in the office” and that “Medley made clear to Plaintiff by his behavior, and to other staff members by his direct boasts, that his priority was to force Gordon to quit.”  In denying Defendants’ Motion for Summary Judgment, Judge Cacheris concluded that “there is a genuine issue of material fact regarding the continued nature and duration of the allegedly illegal acts Plaintiff was requested and required to participate in.”  The parties will now proceed into the discovery phase of the litigation.

According to Debra S. Katz, counsel for Mr. Gordon, “this is an important victory for conscientious employees, like Mr. Gordon, who blow the whistle on fraudulent practices by defense contractors and wind up then paying the ultimate price.  The court’s decision today makes clear that such employees can bring federal claims under the False Claims Act to obtain redress.”

Debra S. Katz and Lisa Banks, attorneys at Katz, Marshall & Banks, LLP, along with Janet Goldstein and Robert Vogel at Vogel, Slade & Goldstein, LLP, represent James Gordon.

Judge Cacheris’ opinion is available at http://www.kmblegal.com/2010/08/27/court-denies-summary-judgment-in-false-claims-act-whistleblower-retaliation-suit-by-kmb-client-james-gordon-against-afghanistan-defense-contractor-armorgroup/.