Bush's Shadow Army
The firm was also eager to stake out a role in crafting the rules that would govern mercenaries under US contract. "Because of the public events of March 31, [Blackwater's] visibility and need to communicate a consistent message has elevated here in Washington," said Blackwater's new lobbyist Chris Bertelli. "There are now several federal regulations that apply to their activities, but they are generally broad in nature. One thing that's lacking is an industry standard. That's something we definitely want to be engaged in." By May Blackwater was leading a lobbying effort by the private military industry to try to block Congressional or Pentagon efforts to place their forces under the military court martial system.
But while Blackwater enjoyed its new status as a hero in the "war on terror" within the Administration and the GOP-controlled Congress, the families of the four men killed at Falluja say they were being stonewalled by Blackwater as they attempted to understand the circumstances of how their loved ones were killed. After what they allege was months of effort to get straight answers from the company, the families filed a ground-breaking wrongful death lawsuit against Blackwater in January 2005, accusing the company of not providing the men with what they say were contractually guaranteed safeguards. Among the allegations: The company sent them on the Falluja mission that day short two men, with less powerful weapons than they should have had and in Pajero jeeps instead of armored vehicles. This case could have far-reaching reverberations and is being monitored closely by the war-contractor industry--former Halliburton subsidiary KBR has even filed an amicus brief supporting Blackwater. If the lawsuit is successful, it could pave the way for a tobacco litigation-type scenario, where war contractors find themselves besieged by legal claims of workers killed or injured in war zones.
As the case has made its way through the court system, Blackwater has enlisted powerhouse Republican lawyers to defend it, among them Fred Fielding, who was recently named by Bush as White House counsel, replacing Harriet Miers; and Kenneth Starr, former Whitewater prosecutor investigating President Clinton, and the company's current counsel of record. Blackwater has not formally debated the specific allegations in the suit, but what has emerged in its court filings is a series of legal arguments intended to bolster Blackwater's contention that it is essentially above the law. Blackwater claims that if US courts allow the company to be sued for wrongful death, that could threaten the nation's war-fighting capacity: "Nothing could be more destructive of the all-volunteer, Total Force concept underlying U.S. military manpower doctrine than to expose the private components to the tort liability systems of fifty states, transported overseas to foreign battlefields," the company argued in legal papers. In February Blackwater suffered a major defeat when the Supreme Court declined its appeal to hear the Falluja case, paving the way for the state trial--where there would be no cap on damages a jury could award--to proceed.
Congress is beginning to take an interest in this potentially groundbreaking case. On February 7 Representative Henry Waxman chaired hearings of the Oversight and Government Reform Committee. While the hearings were billed as looking at US reliance on military contractors, they largely focused on Blackwater and the Falluja incident. For the first time, Blackwater was forced to share a venue with the families of the men killed at Falluja. "Private contractors like Blackwater work outside the scope of the military's chain of command and can literally do whatever they please without any liability or accountability from the US government," Katy Helvenston, whose son Scott was one of the Blackwater contractors killed, told the committee. "Therefore, Blackwater can continue accepting hundreds of millions of dollars in taxpayer money from the government without having to answer a single question about its security operators."
Citing the pending litigation, Blackwater's general counsel, Andrew Howell, declined to respond to many of the charges levied against his company by the families and asked several times for the committee to go into closed session. "The men who went on the mission on March 31, each had their weapons and they had sufficient ammunition," Howell told the committee, adding that the men were in "appropriate" vehicles. That was sharply disputed by the men's families, who allege that in order to save $1.5 million Blackwater did not provide the four with armored vehicles. "Once the men signed on with Blackwater and were flown to the Middle East, Blackwater treated them as fungible commodities," Helvenston told lawmakers in her emotional testimony, delivered on behalf of all four families.
The issue that put this case on Waxman's radar was the labyrinth of subcontracts underpinning the Falluja mission. Since November 2004 Waxman has been trying to pin down who the Blackwater men were ultimately working for the day of the ambush. "For over eighteen months, the Defense Department wouldn't even respond to my inquiry," says Waxman. "When it finally replied last July, it didn't even supply the breakdown I requested. In fact, it denied that private security contractors did any work at all under the [Pentagon's contracting program]. We now know that isn't true." Waxman's struggle to follow the money on this one contract involving powerful war contractors like KBR provides a graphic illustration of the secretive nature of the whole war contracting industry.
What is not in dispute regarding the Falluja incident is that Blackwater was working with a Kuwaiti business called Regency under a contract with the world's largest food services company, Eurest Support Services. ESS is a subcontractor for KBR and another giant war contractor, Fluor, in Iraq under the Pentagon's LOGCAP contracting program. One contract covering Blackwater's Falluja mission indicated the mission was ultimately a subcontract with KBR. Last summer KBR denied this. Then ESS wrote Waxman to say the mission was conducted under Fluor's contract with ESS. Fluor denied that, and the Pentagon told Waxman it didn't know which company the mission was ultimately linked to. Waxman alleged that Blackwater and the other subcontractors were "adding significant markups" to their subcontracts for the same security services that Waxman believes were then charged to US taxpayers. "It's remarkable that the world of contractors and subcontractors is so murky that we can't even get to the bottom of this, let alone calculate how many millions of dollars taxpayers lose in each step of the subcontracting process," says Waxman.
While it appeared for much of the February 7 hearing that the contract's provenance would remain obscure, that changed when, at the end of the hearing, the Pentagon revealed that the original contractor was, in fact, KBR. In violation of military policy against LOGCAP contractors' using private forces for security instead of US troops, KBR had entered into a subcontract with ESS that was protected by Blackwater; those costs were allegedly passed on to US taxpayers to the tune of $19.6 million. Blackwater said it billed ESS $2.3 million for its services, meaning a markup of more than $17 million was ultimately passed on to the government. Three weeks after the hearing, KBR told shareholders it may be forced to repay up to $400 million to the government as a result of an ongoing Army investigation.
It took more than two years for Waxman to get an answer to a simple question: Whom were US taxpayers paying for services? But, as the Falluja lawsuit shows, it is not just money at issue. It is human life.