Corruption In Iraq & World

State Dept. to start ordering staff to Iraq

About time!

The State Dept. does not "order" staff to embassies, but instead they "bid" or select where they want to go. Thus, when I was in Iraq for 23 months, most State Dept. employees were very young, and chose Iraq because they were given pay and future assignment incentives. Thus, they got priority on their next assignment, and could choose London, etc.

As a consequence, adult, or more experienced State staff never volunteered to go to Iraq unless they actually wanted Middle East experience. The result was young, inexperienced 20 and 30 somethings compared to 50 & 60 year old civilian and military staff there. We filled many of their jobs. Military people were "detailed" to fill empty State Dept. slots, and resented that they would spend a year there while fellow government State Dept. people sat in Washington, DC or other cushy slots without risk.

The same problem affects the PRT's, or Provincial Reconstruction Teams. There are now about 50 of them around Iraq and many slots are supposed to be filled by State Dept. employees, but they will not volunteer to go there. Thus the slots are empty, or filled with civilians or military detailees. I knew the original team that set up the initial 12 or so PRT's.

That is the situation described by the article below, where Condi Rice has finally said they will "direct" selected employees to go to Iraq, or they will be fired from State. About time!
vj

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from:
http://www.abcnews.go.com/Politics/WireStory?id=3783117&page=3

US to Order Diplomats to Serve in Iraq
Facing a Lack of Volunteers, State Department Prepares to Order Diplomats to Iraq
By MATTHEW LEE
The Associated Press

WASHINGTON

In the largest call-up of U.S. diplomats since the Vietnam War, the State Department is planning to order some of its personnel to serve at the American Embassy in Iraq because of a lack of volunteers.

Those designated "prime candidates" from 200 to 300 diplomats will be notified Monday that they have been selected for one-year postings to fill the 40 to 50 vacancies expected next year.

They will have 10 days to accept or reject the position. If not enough say yes, some will be ordered to go to Iraq and face dismissal if they refuse, Harry Thomas, director general of the Foreign Service, said Friday.

"Starting Nov. 12, our assignments panel will assign people to Iraq," Thomas told reporters in a conference call. "Under our system, we have all taken an oath to serve our country, we have all signed (up for) worldwide availability.

"If someone decides ... they do not want to go, we will then consider appropriate action," he said. "We have many options, including dismissal from the Foreign Service."

Only those with compelling reasons, such as a medical condition or extreme personal hardship, will be exempt from disciplinary action, Thomas said. He said the process of deciding who will go to Iraq should be complete by Thanksgiving.

Diplomats who are forced into service in Iraq will receive the same extra hardship pay, vacation time and choice of future assignments as those who have volunteered since Secretary of State Condoleezza Rice this past summer ordered Baghdad positions to be filled before all others around the world.

About 200 Foreign Service officers work in Iraq.

It is certain to be unpopular due to serious security concerns in Iraq and uncertainty over the status of the private contractors who protect U.S. diplomats there, particularly after a deadly Sept. 16 shooting in which guards from Blackwater USA protecting an embassy convoy were accused of killing 17 Iraqi civilians.

The union that represents U.S. diplomats, the American Foreign Service Association, has expressed deep concerns in the past about a possible move what are known as "directed assignments." But officials with the union could not be reached for comment late Friday.

The move to directed assignments is rare but not unprecedented.

In 1969, an entire class of entry-level diplomats was sent to Vietnam, and on a smaller scale, diplomats were required to work at various embassies in West Africa in the 1970s and 1980s.

More than 1,200 of the department's 11,500 Foreign Service officers have served in Iraq since 2003, but the generous incentives have not persuaded enough diplomats to volunteer for duty in Baghdad or with the State Department's provincial reconstruction teams.

When she ordered that Baghdad be given staffing priority, Rice had warned that unless more volunteers could be found, the department would have to implement directed assignments.

"It is my fervent hope that we will continue to see sufficient numbers ... volunteering for Iraq service, but we must be prepared to meet our requirements in any eventuality," she said in an unclassified cable sent to all diplomatic missions abroad on June 19.

That directive followed an earlier offer for any diplomats wanting to learn Arabic to leave their current post immediately for two years of language training before being posted to Iraq and an appeal from the U.S. ambassador in Baghdad, Ryan Crocker, for the urgency of the Iraq operation to be made clear to all diplomats.

Crocker has repeatedly appealed to the State Department headquarters for more and better trained personnel to staff the embassy. The embassy operation had been due to move into a vast new compound last month, but the move has been indefinitely delayed due to logistical and construction problems.

Iraq is an extremely dangerous hardship post with near daily insurgent mortar attacks on the fortified Green Zone where the embassy is located.

The U.S. military has quietly but repeatedly complained that its forces and other Defense Department personnel have been pressed into service in jobs that should have been filled by State Department personnel.

In particular, Defense Department employees and service members were forced to fill spots on provincial reconstruction teams for months because the State Department could not get personnel there.

Military officials have complained that other federal agencies including State, Commerce and Agriculture aren't moving quickly enough to fill critical needs in Iraq. Those agencies, they argue, have the expertise to help Iraqi business people and farmers get back to their jobs and improve the economy.

Associated Press writer Lolita C. Baldor contributed to this report.

Iraq Trade Minister Tells Australia "We are not corruption-free yet"

This is an interesting sidelight from Australia - the Iraqi Minister of Trade saying that he didn't think there would be a repeat of the $300-million bribe paid by the Australia Wheat Board (AWB) to Saddam Hussein to get a wheat supply monopoly...

My favorite quote was when he said "Iraq is no longer imposing bribes on companies outside the country".

Instead, general procurement practice in Iraq is that they don't demand direct bribes from external sources, but instead ask that payments by the Iraqi government for vendor services be paid through a middle man or company who siphons off a percentage for the required kickbacks, then pays the vendor the remainder. Thus the vendor overcharges, and the siphoned bribe is hidden in the non-competitive contract pricing given to the vendor.
vj

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from:
http://www.news.com.au/story/0,23599,22601782-1702,00.html

We're not corruption-free yet: Iraq minister

By Jessica Marszalek

October 17, 2007 04:07pm
Article from: AAP

THE Iraq Government says it cannot guarantee a repeat of the Australian Wheat Board (AWB) scandal would never happen, but says it is increasingly unlikely as the country battles against corruption.

Iraq Trade Minister Abdul Falah Al-Sudani met with Australia's Trade Minister Warren Truss in Brisbane today to discuss export opportunities and the rebuilding of the wheat trade between the two countries after last year's scandal.

The AWB lost its monopoly on wheat exports after it was revealed the export body paid $300 million in illegal kickbacks to former Iraqi dictator Saddam Hussein's regime under the UN oil-for-food program.

Asked whether he could guarantee the scandal would never repeat itself, Dr Al-Sudani said there was always the possibility it would.

"There are possibilities in every time, but I think the trust between us and Australia is growing and is very strong,'' he said.

He said "certain circumstances'' which allowed the scandal to occur were no longer in place and Iraq was no longer imposing bribes on companies outside the country.

But he said he could not say the government was rid of corruption yet.

"We cannot say our government is corruption free, that is not right,'' he said.

"But we are fighting corruption ... the efforts of government is producing some good, positive results, but still we are fighting corruption.''

Mr Truss said he had ensured the Iraq Government of Australia's determination that its companies operate ethically around the world and its intention to prosecute those who did not.

"Australia was embarrassed about the circumstances surrounding the wheat trade with Iraq,'' Mr Truss said.

But both men said their countries looked forward to the grain trade beginning again, although the current drought meant that could not begin this season.

Meanwhile, Dr Al-Sudani thanked Australia for its troop contribution to his country's security, which was improving.

He said reconciliation and compromise between different political factions in Iraq was having a "calming'' effect on violence in the country.

"I think the political circumstances, political environment, may contribute in improving the security situation,'' he said.

Congress is Trying to Establish SIGIR for Afghanistan

SIGIR.mil is the independent audit group that has published most of the detailed audit reports on corruption and fraud in the Iraq Reconstruction Program.

Now, Congress is trying to establish a separate group like SIGIR for Afghanistan, and the article below indicates that the US Army has complained that it would duplicate the work of their own Inspector Generals. I doubt it.

Read my comment I tried to post on the publisher's website, but it was too long. And, read the comment from USAID to the article, which I also talk about in my comment.

First, the article, then USAID's comment, followed by my comments:
vj
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from GovernmentExecutive.com - it is also a monthly magazine for Federal executives
http://www.govexec.com/mailbagDetails.cfm?aid=38297#comments-form-area

Pentagon asks Congress to drop plan for Afghanistan IG
By Megan Scully CongressDaily October 16, 2007

The Pentagon is urging House-Senate conferees on the fiscal 2008 defense authorization bill to drop a provision in the House measure that would create a special inspector general for Afghanistan reconstruction.

The office would be modeled largely on the independent investigator examining rebuilding efforts in Iraq, where the temporary office has uncovered billions of dollars of contract waste and fraud. In May, House Armed Services Chairman Ike Skelton, D-Mo., called it among one of his bill's most significant provisions, and stressed that the inspector general in Afghanistan would "ensure even greater accountability" of efforts there.

But in a package of appeals on the authorization measure sent last week to the House and Senate Armed Services committees, Pentagon officials said they view the creation of the special investigator as a redundant office that would deplete the Pentagon's inspector general of needed personnel. The Senate version of the bill also created the Afghanistan inspector general, but the Pentagon did not address that provision.

The special inspector general for Iraq reconstruction "already competes with the departmental IGs for trained staff, who must also be willing to deploy to Iraq," according to the appeal. "Staffing this new special IG for Afghanistan reconstruction would further draw on the limited pool of trained personnel, with limited resources to mentor and train less senior staff."

Pentagon officials also argued the office would take resources from other Afghanistan reconstruction efforts because the bill requires funding to be redirected from other reconstruction accounts.

The Defense Department criticized the House provision because officials believed it would be an internal organization rather than a more independent, cross-agency entity. The House provision requires the Afghanistan IG to report directly to the Defense secretary, but also gives the office oversight of other federal agencies.

A House aide familiar with the provision stressed the intent was not to make another internal Pentagon organization and said members are working to have the IG also report to the Secretary of State. Indeed, the Senate version requires the Afghanistan IG to report both to the secretaries of Defense and State.

The Iraq inspector general was created by Congress as an amendment to the fiscal 2004 emergency wartime supplemental spending measure. Last year, Congress approved language that would keep the office of the Iraq special inspector open until October 2008, overturning a House Republican-sponsored amendment to the fiscal 2007 defense authorization bill that would shutter the office a year earlier.

According to the House provision, the Afghanistan inspector general office would close 10 months after 80 percent of the funds appropriated for Afghanistan reconstruction have been spent. The Senate bill would close the office on Sept. 30, 2010.
VIEW ALL COMMENTS POST COMMENT
COMMENTS

* The USAID Office of Inspector General is opposed to the creation of a special inspector general office for Afghanistan reconstruction, as referenced in amendments SA 2150/SA 3081 to the National Defense Authorization Act for Fiscal Year 2008 (H.R. 1585). While a special inspector general may have been appropriate in Iraq based on the heavy emphasis on reconstruction, we believe that this model would not be effective in Afghanistan because the primary emphasis in Afghanistan is on development activities, and traditional inspector general oversight is most applicable. USAID OIG believes that the Inspector General Offices of Defense, State, and USAID are in the very best position to oversee the reconstruction and development programs in Afghanistan, and that the General Accountability Office is the agency to address cross-cutting oversight issues. · The individual agencies are those who best know their respective internal operations and programs and where to focus in order to most effectively coordinate activities. · We have a collective presence in Afghanistan--either through continuous TDY assignments or through a permanent presence--and are already providing comprehensive oversight, as reflected in our letter to Senator Lautenberg about the Afghanistan Working Group. · A special inspector general for Afghanistan would be duplicative of work already underway and planned for the fiscal year. · The influx of a large, new inspector general office into Afghanistan would hinder our ability to do our jobs because of the strain it would place on the very limited Embassy infrastructure in Kabul. In summary, we encourage Senator Lautenberg and others not to create a special inspector general for Afghanistan reconstruction. Instead, we encourage Congress to facilitate and augment the four oversight agencies already successfully working there. Dona M. Dinkler Posted October 17, 2007 11:05 AM

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Comment from Vance Jochim regarding the above article - posted Oct. 17, 2007

I was in the Green Zone working for IRMO for 23 months as Chief Auditor for the US advisors setting up CPI. The short story is that I saw so much waste and mis-management in ALL USG programs that SIGIR.mil was the only effective audit group there. I knew several of them and also interfaced periodically with DCAA, State IG etc. to see how they were contributing. They weren't. GAO wasn't there, but that was where SIGIR got most of their people, not from the IG's. In my opinion the IG's were ineffective and as a recent articles and Congressional oversight committee hearings have found, the State IG prevented audits, and USAID's audit that were published were lightweight and NEVER placed responsibility on USAID or their managers. I worked for 18 years as Audit Director in large organizations like ARCO, Nissan and County of Los Angeles, and SIGIR was the only effective group there looking at the big picture. One problem was that SIGIR would not review USAID work until late 2005 because they "relied" on the USAID auditors, but problems in program management became so bad, they finally started to look at USAID programs. Afghanistan could use a SIGIR type group, but they need to look at USAID also.
A big reason why corruption has festered is that the State Dept. controls all activities in foreign countries, so when I was there, they refused to let GAO auditors into the country. Additionally, in 2003 (before I was there) and 2004, it would have been tremendous if GAO, OMB or other management and audit focused agencies had specialists on the ground to TRAIN and MODIFY existing Iraqi internal accounting systems to detect and prevent fraud and corruption. But no US agencies except the military, state and Commerce (through State Dept.) have groups focused on providing information and advice outside of the US borders. And, when IRMO was formed (based upon a Presidential Directive), many US agencies wouldn't supply "detailees" to IRMO because no funds were provided to pay for replacing the people that went. Thus, the Sr. Advisor's office for Finance in IRMO was really all people from the US Treasury and they were concerned with the banking system and paying government salaries (with pallets of cash) and NOT fixing the broken, communist based accounting and work processes in government. Why send hordes of auditors if you haven't fixed the internal accounting systems first???
Additonally, during CPA days, the primary liasion to the Iraqi Board of Supreme Audit (BSA - their version of GAO) was a Brit who had no clue about accounting and just liked to pontificate - I went with him to visit the BSA.)

PS: One reason that IRMO was supposedly created to manage Iraq Reconstruction is that USAID screwed up so much in early Afghanistan construction projects that Donald Rumsfeld demanded the formation of a separate, independent agency (IRMO) to manage reconstruction in Iraq. My personal experience is that USAID is run by very liberal ex-PeaceCorps people who do NOT have the technical expertise to run construction projects. (See my earlier posts) and my professional opinion is that their audit reports are lightweight and never indicate that anyone in USAID had mis-managed anything. (I read a number of them). Search on GAO audit reports on Google related to USAID and Afghanistan, or Iraq, and see what the GAO has to say about them. USAID has a massive public relations dept. and influence to cover up technical weaknesses. When I was in Iraq, they periodically sent out publicity memos taking credit for programs run by IRMO.
vj

Vance Jochim
Certified Internal Auditor
IRMO in Baghdad - May,2004 to March, 2006

US State Dept. Official Iraq Anti-Corruption Briefing

Recently, Henry Waxman's Congressional Committee on Oversight grilled State Dept. officials regarding the role of Blackwater Security, and also about sharing details on the ability of the Al-Maliki Iraqi Government to fight corruption in Iraq. The State Dept. stonewalled the committee ( I watched the hearing ) and would not share details, saying any information shared would harm diplomatic relations with Iraq.

Then, this week, the House of Representatives, led by Waxman, along with many Republicans, passed a resolution, H-Res 734 that instructed the State Dept. to share the restricted details with Congress. It passed.
So, below is a "On-the-Record" hearing on Iraqi Anti-Corruption efforts conducted by State Dept. Sr. Advisor on Iraq David Satterfield (who also was leading the team grilled by the Committee). Satterfield was the DCM (Deputy Chief of Mission = #2 behind the Ambassador) of the US Embassy in Iraq when I was there.

The sections where he described progress are a whitewash - he mentions providing resources to CPI, but didn't mention that Maliki just forced the Commissioner of CPI, Judge Radhi, out of office, and replaced him with a person who (I have been told) was earlier accused of corruption.

This is a very diplomatic response that doesn't offer any specific new information. Basically, State Dept. doesn't have the technical experts to really address anti-corruption or understand it, thus they avoid being specific. No matter what they say, anti-corruption is not a priority with the State Dept., when it is my opinion you shouldn't support ANY regime that allows massive corruption. If you were buying fur, would you continue to do business with suppliers when you knew they were clubbing baby animals (i.e. like seals, etc.) to get the furs? It is a matter of morals over "diplomacy". Thus Satterfield is in a position like a Defense attorney who KNOWS his client is guilty of murder, but keeps defending him. But, there is no law I know that says diplomats should continue to protect corrupt countries, but they still choose to defend corrupt Iraqi ministries or leaders in other corrupt countries and not take a stand against dealing with their corruption.
vj

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from
http://www.state.gov/p/nea/rls/rm/2007/93587.htm

On-The-Record Briefing: Anti-Corruption Efforts in Iraq
David M. Satterfield, Senior Advisor to the Secretary and Coordinator for Iraq

Via Conference Call
Washington, DC
October 16, 2007

(3:15 p.m. EDT)

OPERATOR: Welcome, and thank you for standing by. At this time, all participants are on listen-only mode until the question-and-answer period of today's conference call. During the question-and-answer period, if you'd like to ask a question, please press *1 on the touchpad of your phone. You'll be asked to record your name prior to asking a question.

At this time, I would like to turn the conference call to Mr. Tom Casey. Sir, you may begin.

MR. CASEY: Okay, good afternoon to everybody. Thanks for joining us here. As we mentioned, there had been a lot of questions that have come up in the last couple of weeks concerning our anti-corruption efforts in Iraq, working both on our own and with the Iraqi Government in this effort. We wanted to take an opportunity to let David Satterfield, the Secretary's Special Advisor on Iraq, talk to you a little bit about what our activities are, the kinds of things that we've been doing, and then answer whatever questions you might have.

So, David, let me turn it over to you for your opening comments.

AMBASSADOR SATTERFIELD: Thanks, Tom. We want to try to use this as an opportunity to get out some points, all of which have been made or most of which have been made either in testimony or in response to the various Q&As that have taken place on this over the last couple of weeks. But let me put them back to you again, maybe in a little bit stronger fashion.

First the issue here: Corruption in Iraq, public corruption, is a major issue. It is a very serious concern to us because of our concerns for the future of Iraq. It is a very serious concern to the people of Iraq, who are the first to suffer from it. It must be a concern for the Government of Iraq and it is formally identified as such.

This is a post-conflict country. It is a country which, as Ambassador Crocker has noted, is undergoing revolutionary transformation and change, the dynamics of which have oftentimes been violent, exacerbated by both internal and external divisions and pressures. It is not unusual for any state in such circumstances to find corruption a real, endemic, pernicious problem. It is certainly such a problem in Iraq.

It's not new. It has been an issue we have focused on for the last several years. We've worked to combat it through a variety of processes, through a variety of programs, working with Iraqis, working with PVOs and NGOs. But it is a slow and steady process. It is not something on which overnight progress can be made.

But I want to make very clear here, corruption is a reality in Iraq, it is a major problem and it is not one that we have ever attempted to diminish the importance of, to cover, to mask or to protect. Iraqis at every level have failed to put the nation's interest ahead of sectarian, tribal, personal, particularist agendas.

It doesn't mean every Iraqi political figure, every Iraqi person in a position of authority is corrupt. But it means this is a problem at all levels of Iraqi society.

Now, Prime Minister Maliki, like his predecessor, has been frustrated with corruption and inefficiencies in his government. He wants to make changes to the cabinet, but Iraqi political realities are such that right now those changes have not been carried out. One of the reasons he wishes to make those changes, because of concern over corruption.

Corruption, at the end of the day, folks, in Iraq, it's an outgrowth of a process, of a set of dynamics, as I said at the beginning. The ongoing power struggle for authority, for resources. And that's something that needs to be addressed progressively by all the other steps we're taking in Iraq: to establish greater security and stability; to improve the ability of the government to provide services in a transparent manner; above all, to get a budget execution process in place which is structured, efficient and transparent.

And there we have made very significant progress over the course of the last year with cabinet budget execution going up from the low 20 percentage rate last year to what we estimate will be around 70 or 70 percent plus this year. The more effective, the more transparent the budgeting processes are at a national and a provincial level, the more corruption gets reduced. So this has got to be done. Security has to be improved. Stability has to be enhanced. The budgeting process at a local and national level has to be made more transparent. Progress on every one of those fronts, as I think you will know from other fora and other questions, many of which Ryan and David Petraeus answered, are improving.

But even with those changes, there is still a major problem here. Now, what have the Iraqis done about this? Are we the only party to be concerned? The answer is no. The Iraqi Commission of Public Integrity, the CPI, has conducted over 4,000 investigations. It's made numerous high-level arrests, including former ministers of electricity, of labor, officials in the ministry of oil. Over 2,000 cases have been referred for prosecution to the Central Criminal Court of Iraq. That's what Iraqis have done. More, clearly, has to be done. But the Iraqis themselves have not been absent from the scene in terms of prosecution of this issue.

Iraq had for years a major sink point of corruption in the way Baiji refinery, one of the country's primary refineries, was run. This year, Prime Minister Maliki, working closely with MNFI, ordered Iraqi forces, with our assistance, to replace the corruption-riddled civilian force that was guarding that oil refinery. Corruption there has been dramatically diminished, if not eliminated, and further steps have been taken to improve transparency in the oil sector. All of this is to the credit of an Iraqi Government trying to deal with a very significant problem that affects all of us of that country's society.

Now, what have we done (inaudible) the U.S. Government? Our response has been to progressively build institutions to combat corruptions and to build into all the governing institutions controls and procedures that limit the possibilities for corruption: a slow, steady process. We have made clear to Prime Minister Maliki, to all of his ministers, to the Presidency Council, our serious concern for corruption in Iraq even as we have worked on key legislation and other elements that improve governance in that country.

We have worked with judicial reforms and technical training capacity building, not just on budget execution but also on the ability of the Commission of Public Integrity, the CPI, to conduct the work. We have funded Department of Justice resident legal advisors, U.S. prosecutors, who have worked with Central Criminal Court of Iraq judges on serious cases, including anti-corruption cases. And finally, we have advisors working with the embassy's own office of accountability and transparency to provide support across the board to Iraqi anti-corruption entities.

We support a variety of PVOs and NGOs both in Baghdad and outside to focus on this issue and we have also supported work by international institutions, including the OECD, to help deal with this problem. That's what we've been doing.

Now, inevitably, any discussion of corruption has to turn today to the issue of the embassy working papers or reports that were requested by the Hill. There has been much exchanged in public on whether the Department of State was/was not responsible on this issue, did or did not, has or has not provided documents, whether there was inappropriate redaction of documents or inappropriate reclassification of documents provided. And I want to try to take you through the process part of this relatively briefly, but it is something that we feel stands up to scrutiny.

We have to have concern as a U.S. Government entity about the unauthorized disclosure of controlled internal working papers that were never intended to make public. These are papers that contain sensitive information. It relates to our efforts to work in partnership with Iraqi officials to combat corruption.

When these papers were initially produced, they were improperly classified by those who were unfamiliar with classified procedures. We have repeatedly offered classified briefings and hearings to the committee, Chairman Waxman's committee, on these documents and the material in them. And to date, the committee has declined those offers.

When we provided individuals for interview by the committee, they were provided as a means to help the committee exercise their judgment. It was not an effort to keep people from answering questions. It was quite the opposite. It was to provide information. We have provided everything requested of us by the Congress on this subject and we will continue to do so.

But you have to understand what these documents are. They're not just internal working papers. They are not just documents which contain sensitive information, sources and methods or the individuals who could stand to be persecuted or prosecuted in return for their provision of information. There's something else, too. These are pieces of information. They are anecdotal accounts of an individual's views of what they believe may be going on with respect to corruption. They are provided to individuals within our embassy community. In many cases, this information is completely uncorroborated by us or by other Iraqis. The standing of the information, the accuracy, the comprehensiveness of the information is open to significant challenge. And that's fully appropriate for an internal document.

But these documents have been construed as complete, polished embassy reports and assessments which contain judgments which are actionable. And in fact, they're not. It's our concern for the ability to continue to effectively work the anti-corruption issue to preserve the sources who provide us information on this to allow us the opportunity to deliberate and work through whether there is corroboration or not. And we must exercise control in how these documents are handled.

But none of that means under the rubric of control -- withholding. It simply means there are appropriate fora in which this information can be discussed, in a closed vice open setting, and appropriate controls that need to be applied to the physical custody of the document itself. But it is not in any case a question of withholding or refusal to provide information.

We believe there's a very positive record if one looks at the last several years in terms of what the U.S. Government has attempted to do with respect to the corruption issue. We have not been shy and we are not shy now in addressing bluntly the magnitude of this problem. We will continue to make clear to all Iraqi officials, from the president of the republic to the prime minister on down, the criticality of moving against what is in reality a theft of Iraq's resources from Iraq's people.

But we do not believe that accusations that the Department of State has been concealing information, preventing information from being disclosed to the Congress, which has every right to inquire about these subjects, is accurate.

Thank you.

MR. CASEY: Okay, thank you, David. If we could now turn things over to questions, open things up, we'll see what is on people's minds.

OPERATOR: Thank you. At this time, if you'd like to ask a question, please press *1 on the touchpad of your phone. You'll be asked to record your name prior to asking your question. Again, that's *1. One moment for our first question, please.

Thank you. Our first question today comes from Anne Gearan, Associated Press. You may ask your question, ma'am.

QUESTION: Mr. Ambassador, you probably answered this, but the question of what was and was not reclassified in the one report that Chairman Waxman has written to Secretary Rice about, can you tell us a little bit about that decision -- when it was retroactively classified, how much of it was retroactively classified, and why?

AMBASSADOR SATTERFIELD: Anne, there are several reports here, I think, that are in question and I would prefer to get back to you in a more specific and detailed fashion to the whats and whys here. But I can make a general comment to you.

Where information would thwart our ability to continue to collect information on this subject or where allegations which are personal as opposed to institutional in scope are included, we believe the classification is appropriate here. It is a relatively minor redaction, and in terms of, you know, what would be taken out. But it really does strike to the ability to continue to prosecute the anti-corruption campaign that we need to offer some protections here.

QUESTION: Can you quantify that any more than relatively minor redaction?

AMBASSADOR SATTERFIELD: I really can't in terms of telling you it's 20 words out of 10,000 words or, you know, a sentence out of 48. I can't give you that. But it is a very minor redaction taken as a whole. But it is designed to protect the ability to continue to collect and to deal with this issue effectively and the specific question of personal allegations, because that's what these are, allegations, not proven facts.

OPERATOR: Thank you. Our next question comes from John Donnelly with Congressional Quarterly. You may ask your question.

QUESTION: Hi, it's John Donnelly with Congressional Quarterly. You said that you haven't been shy about addressing the magnitude of the problem and that the -- your concerns were about the personal information, not institutional information, in that particular report. But at the hearing, I guess it was the week before last in the Oversight and Government Reform Committee, Ambassador Butler was asked questions about, for example, whether the Government of Iraq has the political will or capability to root out corruption, whether the Maliki Government is working hard to improve the corruption situation, whether the Prime Minister obstructed any anti-corruption investigations. These were pretty broadbrush questions. Why is it that you can't even address that kind of issue in an open forum?

AMBASSADOR SATTERFIELD: Well, I can certainly tell you that the ability of any government of Iraq, this or any other, to address this issue in the midst of the current circumstances at play in Iraq and given the widespread character of this problem, it's certainly going to affect their ability to act. Do they as a government acknowledge the magnitude of the corruption problem and the fact that they should be acting? Yes, they do. Do we see political will on the part of the government to act against corruption? Broadly speaking, yes. Would we like to see more? Absolutely. Those are very clear responses.

When you get into more specific allegations regarding individual cases and individual actions, frankly, those are topics we were fully prepared to discuss more fully with the Congress, but they should be done in something other than a public setting. And we've offered that.

QUESTION: Your answer there was a lot more forthcoming than Ambassador Butler's was before the committee on (inaudible) very same issue.

AMBASSADOR SATTERFIELD: Well, I'm providing you a U.S. Government response.

QUESTION: Okay.

OPERATOR: Thank you. Our next question comes from Farah Stockman with Boston Globe. You may ask your question.

QUESTION: Hi, thanks for speaking with us today. You talked about the desire on the part of Prime Minister Maliki to change his cabinet. He has talked a lot about bringing on technocrats. You talk about this as an anti-corruption measure. Do you see that that that might actually -- that he might ever be able to do this? Or is this just sort of a dream in the future?

AMBASSADOR SATTERFIELD: Well, clearly, we believe the Government of Iraq, the cabinet of Iraq, should be as effective as possible. And that is the not the case right now. That is not our judgment. It's the judgment of the Prime Minister. I think it would be the judgment of many in senior political positions in Iraq. But the Council of Ministers, the Iraqi cabinet, is in its specific composition a product of the innate political circumstances that attended the formation of this government. They, in turn, reflect the diverse ethnic, sectarian, intrasectarian political makeup of Iraq's body politic today. We very much support the Prime Minister's efforts and desire to see a more efficient, effective cabinet constructed, certainly one committed to, in terms of its personalities and their agendas, the fight against corruption.

Whether or not that outcome will come sooner vice later, that I cannot tell you. But as a goal, it is a goal which is an important one and one that we would support seeing put forward as rapidly as possible. And in that, we fully share the Prime Minister's views.

OPERATOR: Thank you. Our next question comes from Sue Pleming with Reuters. You may ask your question.

QUESTION: Is there a concern that if details emerge of corruption within the government of Maliki that there'll be even sort of less faith in him and his capacity to (a) fight corruption and (b) encourage the reconciliation that is so badly needed in Iraq?

AMBASSADOR SATTERFIELD: Well, Sue, there's no question for any government in the world, including the current government of Iraq or indeed officials at any level in governance or authority in Iraq, whether in Baghdad or elsewhere, corruption is a violation of a public trust. And that concept very much does exist in Iraq. Certainly, it does not enhance the stature or the responsibilities that ought to be conducted by those officials if they are seen to be either protective of those engaged in corruption or engaged in corrupt practices themselves. And to the extent that the credibility of those in authority at any level in Iraq is diminished, that does affect broader national issues. But I'm not going to draw a point as broadbrush a conclusion as I think you were seeking in your comment -- in your question.

QUESTION: In my question, yeah. Because the feeling in Congress is that you are or the State Department is somehow sort of hiding information about corruption because you need to protect the Maliki government and sort of strengthen its hand.

AMBASSADOR SATTERFIELD: Look, I would reject that wholeheartedly. We are protecting no one in Iraq. We have made clear this is a pernicious, endemic problem at all levels of authority in Iraq, not just a question of governance but individuals in a position to have access to resources, funds and power. Not unique to Iraq by any means, but particularly damaging in Iraq given the circumstances of that country and particularly sensitive to the U.S. Government because of our own investment in terms of human lives and treasure in that country.

What we wish though is to preserve the ability to continue to effectively combat this issue, not to hide but to fight it. And there are certain protections that must be granted, not withholding of information but protections on information, if we are to be allowed to move forward effectively. But to believe that the U.S. Government is concealing vital information, some smoking gun for the sake of either the present prime minister or his government or broader aspects of the Iraq venture is simply not correct.

QUESTION: Okay, thanks.

OPERATOR: Thank you. Again, if you'd like to ask a question, press *1 on the touchpad of your phone. You will be asked to record your name prior to asking your question. That's *1 on the touchpad of your phone. One moment, please.

Sir, at this time I show no further questions. Thank you.

AMBASSADOR SATTERFIELD: Thank you.

MR. CASEY: Okay, well, thank you, everybody. Appreciate you taking the opportunity to join us, David. Thank you very much.

AMBASSADOR SATTERFIELD: Thanks, Tom.

2007/886

Released on October 16, 2007

USAID's Laughable Webpage on Iraq Corruption "Success"

USAID is the "subsidiary" of the US State Dept. that implements "foreign aid" for the US in foreign countries. No other government agency has authority to do that without State Dept or USAID approval.

Below is the article USAID posted on their website about successful anti-corruption programs in Iraq. These efforts are entirely different from the Iraq Reconstruction Program Office (IRMO) establishment of the Iraqi Commission on Public Integrity that I helped set up. USAID did not date this page, but I think I originally saw it in 2005.

While I was there in 2004-2006, USAID used the term "anti-corruption" in several programs to ensure funding support, but I could never find details exactly what they did. In early 2004, they were caught by the CPI founder trying to use the CPI plan from IRMO as the basis for justifying their own programs. The reason is that USAID has no "subject matter experts" in technical areas like corruption, rule of law, agriculture, etc. Instead, they have generalist former Peacecorp and State Dept. workers who have no technical background, thus they circulate requests for spending program proposals with generic terms like "anti-corruption" and ask vendors to submit programs. Then they choose a program, typically from a favored vendor who probably doesn't have any better technical skills. Just like that, they get $50-million programs or more and then try to figure out how to spend it after the program starts of specific programs THEY want to accomplish, not necessarily what the approved program objectives said.

I also found out that USAID is very skilled at knowing how funding works, so immediately after they get a program authorized by Congress or authorizers, they "commit" the entire amount, such as $50-million in a signed contract so that the funds cannot be cut. Although the funds have not been spent, or even a plan written in detail how to spend it, they have locked in the entire amount legally with a master contract with a vendor. I found that out because we knew they had a $250-million program that included about $50-million for "capacity development" which means training programs. The IRMO Director said it had not been spent yet, so I should ask them for a chunk for a $10-million management training program for senior officials in the 28 Iraqi Ministries who had no training in basic management, supervision, budgeting, etc. However, USAID refused to "share" the funds, saying it was all contracted for. 6-months later I sat in a meeting where the new program manager for that $50-million was asking us for ideas on where to spend it. However, they had specified the funds could only be spent on local government entities like towns, etc. and not the central government. Thus they spent it using favored vendors to give courses on "transparency" and "democracy building" and "women's rights" to local groups far outside the ruling central government. Because of the decentralized approach, and the risks from terrorists, they "took the word" of training providers, and had NO DOCUMENTATION to show who got the training, testing results, etc. That is how USAID spends taxpayer funds.

Finally, I have to comment on their statements below:

1) USAID's statement they launched a "national anti-corruption campaign" - that is the one I discussed above - it was very basic training in local cities and was NOT National because they completely avoided providing any training, etc. to the central government, including all the Ministries. USAID shoud NOT be allowed to claim credit for "anti-corruption" programs because they were very generic, and they would/could not provide me any evidence when I asked on behalf of the IRMO End State Task Force for evidence of what the program accomplished for some $50-million.

2) USAID's sponsorship of a "National conference on transparency and accountability...". I remember reading this when I was in Iraq, so I asked the USAID group to furnish me with the details of the "15 recommendations..." and got a list of very generic topics to be included in the Constitution... it was something I could have written at the dinner table and was very sophmoric.

It is my opinion, verified with discussions with others in Iraq, that USAID's liberal mind bent was focused on their own liberal causes like women's rights, democracy building, etc. and would use any buzz word they could, like "anti-corruption" to obtain approval for programs they wanted, but had little relation to the buzz words used.

They reacted in the same way regarding other programs run by IRMO, including mini-loan programs, agriculture, etc. where they had a large public relations effort to claim credit for programs initiated and implemented by the IRMO people with separate Iraq Reconstruction programs.
vj
======================================

from
http://www.usaid.gov/stories/iraq/ss_iraq_anti-corruption.html

Anti-corruption campaign promotes transparency in Iraq
Iraqi Communities Fight Corruption

Recognizing that transparency and accountability are critical to democratic governance, USAID launched a national anti-corruption campaign in collaboration with civil society organizations. The campaign included training for officials, survey polls, legislative advocacy, educational posters, and mobile theaters. So far, the results have been very positive.

First, USAID sponsored a national conference on transparency and accountability during the drafting of Iraq’s constitution. The conference yielded 15 recommendations that were incorporated into the constitution, including an article that holds ministers accountable for their actions and another that creates an independent auditing body.

Second, the program sponsored surveys to understand the needs and priorities of Iraqi citizens. One USAID-funded survey by the al Rafhaa Organization found that 33 percent of Iraqis consider transparency and accountability the most important attributes in a political candidate. Regarding national priorities, 25 percent of Iraqis considered stopping corruption a high priority, second only to the 38 percent who listed security as their top priority. Other surveys have helped monitor corruption within organizations and government bodies, revealing areas where accountability needs to be improved.

Finally, the program’s efforts in voter education, community dialogue, and constitutional development helped expand public awareness and participation in the January 2005 election and the October 2005 constitutional referendum.

USAID’s civil society programs focus on civic education, anti-corruption, and human rights. USAID has established resource centers to deliver training and technical assistance to Iraqi civil society organizations and provided small grants to support advocacy and public awareness campaigns. Through focused training and technical assistance, USAID is helping to build an informed, sustainable, and active civil society that will be key to routing out corruption, holding the government accountable, and building a prosperous and democratic Iraq.

Today's House Hearing on Blackwater Security Firm in Iraq

CSPAN Channel 3 had the hearing today about the Blackwater Security firm in Iraq, which was held by the House Oversight Committee run by Congressman Henry Waxman, a Democrat who has usually used this committee to bash President Bush. Below are my comments, and at the bottom are yesterday's articles on Blackwater. Ignore the typos - I will fix them this weekend.

Here is an excerpt from the Committee notification email on the purpose of the hearing:

...the Oversight Committee is holding a hearing to examine the mission and performance of private military contractor Blackwater USA in Iraq and Afghanistan. Erik Prince, the owner of Blackwater, will testify as well as three State Department officials.

The hearing will provide members the opportunity to address three key questions: (1) Is Blackwater’s presence advancing or undermining U.S. efforts? (2) Has State Department responded appropriately to the shooting incidents involving Blackwater forces? (3) What are the costs to U.S. taxpayers for the reliance on Blackwater and other private military contractors?

When in Iraq, I periodically saw the Blackwater teams in the Presidential Palace, sometimes walking the resident 2004/2005 Ambassador John Negroponte (now Deputy Secretary of State) or Ambassador Khalizhad in or out of the building. We also could always tell when a high profile person was leaving or arriving in the Embassy area because Blackwater always flew a small helicopter over the route of the convoy. Once I was outside the compound of the Commission of Public Integrity carrying an AK-47 and found they don't like that as the helicopter immediately swooped down on me to inspect who I was.

I remember sitting at a lunch table with Blackwater guys once talking about their security runs on "Route Irish" which was the highway from the Greenzone to the Baghdad Airport, and one burly, tattoed gunfighter type said he loved it... "it is a target rich environment..." he said. Later, daytime trips for Coalition staff to the airport were stopped, and we had to go in nightime convoys in armored buses late at night. Other security firms included DynCorp, Triple Canopy, Erinys and UK's Aegis. During 2004-2005 there also was a firm that managed the British Gurkha's which manned the doorways and Embassy entrances. However, the State Dept. went to bid in 2005 and went for a lower bidder, Triple Canopy, who brought in all new, inexperienced Latin men from Peru, Columbia and other South Latin America countries. None of them spoke english, and I may write an entire separate article just about the fiasco that followed.

Blackwater guys used to come back from security runs in the afternoon, and put on skimpy swimsuits, arrange the chairs by Saddam's Palace Pool, and ogle the women who had to walk by to get to their trailers. That bachelor attitude changed after the State Dept. took over control of Iraq in 2004, and the late night parties by the pool had to close down at a 10pm curfew. Soon, most security firms moved into their own compounds in the Green Zone to escape State Dept. rules.

Each security firm had their own philosophy on how to conduct convoy security. Some, like the British firm Kroll, went low profile, wearing Iraqi type clothes and using British Range Rovers of various colors, rather than the standard black Suburban you seen in the movies. I went with them once on a run to see the head of the Board of Supreme Audit (like the GAO in the US) and they made me wear a scarf to cover up my army green armored vest.

In contrast, Blackwater believed in high profile, fast, aggressive driving, and were known for firing on Iraqis if their cars got to close to a convoy. Those signs (and a T-shirt I have) that say "Stay at least 100m away or you will be shot" in both english and arabic were true. It was not uncommon to hear racing noises and see two Blackwater suburbans careening around a corner side by side as part of their high profile method of "protection"

You can go to the Committee website and watch archived videos of all their hearings at:
www.oversight.house.gov

View this photo

Below are my comments as the hearing progresses.

Henry Waxman is reading his opening statement.

The committee also wants to know how much contractors make. My experience in auditing large construction firms is that profits are HIDDEN in many different places, rather than a publicly embarrassing number. For instance, a contract might say they get 3% of the total for small tools, but there is not requirement that those funds be actually spent, or the tools be accounted for, or that they be used for the next contract. Additionally, I once found at Bechtel that the contract would say they get to claim expenses for the amounts specified by their personnel manual for retirement. But, when I asked (this was in the 1970's for an oil company), I found that they got the amount the manual said (about 11% of wages) but there was no requirement to actually have a retirement plan with actual expenses. It turned out that Bechtel was an employee owned company and instead of retirement funds, the employees received bonuses. So, what if the bonuses were only 7% and the firm kept the other 4% of wages for "profit". We weren't allowed to find out since the contract did not specify the 11% actually be paid out. The process was used because project managers (this was at ARCO) could make themselves look good by agreeing to contracts with low stated profits like 6%, but the contractor was getting much bigger internal profits by hiding them in various accounts.

Opening statements continue - Congressman Darrell Issa, R, from San Diego, is saying that the meeting should focus on finding how Blackwater should be monitored, and not as a platform to attack the War in Iraq. He did make a good point, saying that there were more than 1500 private security workers in Iraq (I assume that is just Blackwater), and that once we wind down in Iraq, we don't need them, thus we shouldn't replace temporary contractors with permanent security forces when they won't be needed in a few months or years.

My comment: The State Dept. doesn't pay well, so they get young, inexperienced RSO (Regional Security Officers) staff who can't compare to the Blackwater types in experience. Additionally, the RSO and the State Dept. are not warriors, and are not used to being in conflict areas, so they don't have the battle experience, and are VERY risk averse. For instance, when State took over from Paul Bremer in 2004, they mandated that all existing staff turn in any guns and weapons (we all had captured AK-47's, etc.) which was not viewed favorably by the staff. Some people quit because they didn't trust the State Dept. to protect them. To illustrate how risk averse the State Dept. is, they mandated that no one could use the high diving board at the Palace Pool because the water depth in the pool did not meet US safety standards. So, the diving board was wrapped in yellow "crime scene" tape and no one could use it. State also mandated that no one could carry guns and be drinking on the Palace grounds - another reason why the security firms moved off the Palace premises.

State also doesn't want military to protect embassies, so as not to appear "warlike", thus plain clothes contractors are the only solution.

Democrat Dennis Kucinich from Ohio is now ranting with statistics, and then saying "this illustrates why the War in Iraq is a disaster..." and doesn't provide any Blackwater specific questions. - just what Issa was warning about.

While I was working at the Commission on Public Integrity in Baghdad in 2005, one of the Iraqis I worked with had his car's radiator shot out by a US security firm, and could never get compensation for it. He said he was behind a convoy and apparently, without warning, they fired on him.

The founder of Blackwater, Erik Prince, is now talking. "No individual protected by Blackwater has ever been killed" he says. While Prince is reading his statement, one of the Congressmen is flipping through a newspaper and reading it. Another is sitting and reading email on his Blackberry. "Weapons were discharged in less than 3% of security missions", Prince says.

Waxman starts with questions, talking about the issue of using the US military for security rather than contractors like Blackwater. My comment is that the military and State are like oil and water - they hate each other. They wouldn't cooperate in policy meetings that I saw, and many military officers had higher level education and training than the average State Dept. person, so the military didn't respect them at all.

Waxman continues, talking about a Blackwater plane crash in Afghanistan and whether they act like "cowboys". Prince dissents. Waxman goes on, reading details from a crash report which has nothing to do with Blackwater in Iraq. Prince says that the main clients in Iraq were the US State Dept. officials, officials from the Iraq Reconstruction program (where I worked) and "Codels" which are Congressional trips to Iraq. It was not uncommon for me to be walking in the Embassy halls and encounter a swarm of security guys with a Congressman or Senator, including both Kerry and Lieberman who I saw.

Prince is asked by North Carolina Republican Congressman McHenry(Blackwater is based in NC) how many missions in 2007 and how many "incidents" occurred, and said that there were 1873 missions (or trips) and 56 incidents where weapons were involved. In 2006, they had 6256 missions, and only 38 return fire incidents. Blackwater started under the Coalition Provisional Authority (CPA under Paul Bremer) in 2004 (or maybe '03) and continued with the State Dept. when they took over responsibility for Iraq in July, 2004.

Ranking congressman Tom Davis (R) continued with questions:
Blackwater earns their fees by billing on a "man day" basis. The contract is on a firm fixed price for most components (i.e. a specific amount per day per position, I assume) and some are cost plus like insurance. There are many penalty clauses in the contract related to being fully manned, etc. "We are very responsive to how the State Dept. wants things...if our person doesn't work out for the State Dept. there are only two decisions - Window or Aisle", says Prince, referring to seat selections on the plane leaving Baghdad.

I can agree with that. State wasn't very tolerant if you didn't follow their rules. One contractor got drunk and fell asleep on a bench by the pool. A passing State Dept. official had him sent home the next day. Another drunk contractor was driving a girl home after a party and hit a divider - they also sent him home the next day. I would bet that more than 50% of any security contractors sent home were sent because they got caught drunk in a public area by the State Dept. RSO or military. (They had many late night parties).

Prince said they have fired 122 employees for cause, including poor discipline, etc.

Congresswoman Carolyn Maloney (D) discussed a situation in December, 2006 when a Blackwater contractor was drunk and shot and killed a guard to an Iraqi VP. She focused on the one incident and what happened to the contractor, whether he was prosecuted by the Iraqi justice system, etc. "In America," she says, "a similar crime would result in an arrest and prosecution by the local police", but that didn't happen in Iraq. The employee was sent home. Prince said they fired the man and fined him, but had no jurisdiction to hold him. The Justice department has been investigating, but nothing happened in the last 10 months. Maloney compared it also to the US Military, where a similar incident would result in a court martial.

I think she has a good point... but, that would be with a fair, quick justice system, and Iraq doesn't have one. Actually, being rather jaundiced, they probably could have let him be arrested in Iraq, pay a bribe and got a release by the Iraqi police in the same day. I wonder how Congresswoman Maloney would react if she had a staffer or relative arrested in Tijuana by the police for a crime - would she want to rely on the Mexican justice system and jails, or try to get the person sent back to the US????

Democrats criticized Blackwater for a standard of "not staying there" to assist wounded Iraqis after an incident. Republicans point out that the protection service priority is to protect the officials in the vehicles and get away from attackers, thus reducing the possibility of the officials being wounded in a second attack.

Another Democrat goes back to the 2006 drunk's incident.

The trend of the hearing seems to be that Republicans get details out about the success of Blackwater, and Democrats focus on a few, specific & isolated incidents to make them look bad (out of over 6000 missions in 2006). The hearing has been going for 2 over 2 hours and they still haven't mentioned the recent firing incident in Iraq.

Florida Congressman Mica asked Prince to discuss why security work should be done by the contractors vs the military. One good point from Prince was to encourage the Congress to do a "accurate activity based cost analysis of the true cost of providing a trained military person vs the costs for the security contractor". Basically, Blackwater only hires experienced and trained ex military and police forces, thus they have little training cost. But, the military has to provide the full initial training cost and equipment and transportation, feeding, etc. and all those costs should be compared to the manday rate for security firms.

Democrat Kucinich starts accusing Blackwater TWICE of getting a no-bid contract, and Prince replied that they got the contract "off the GSA schedule", and explains that GSA is considered a bid contract because they already had filed standard rates, etc. and the State Dept. had a choice of other GSA contractors but chose Blackwater. Kucinish keeps saying "you got a no bid contract" for later contracts, and each time, Prince said it came from the GSA pricing schedule. I agree with Prince - I had to look for supplies on the GSA schedules, and it basically is like an open catalog where each firm, including accounting firms, specified their rates in the open. A competitor could see those, and revise their rates down if they wanted. The selection from the GSA database was made by the customer (State Dept.), thus it WAS a competitive bidding process.

Congressman Chris Shays (R-CT) lambasted other Congressmen for criticizing Blackwater when they had never gone to Iraq or Afghanistan. Shays said he has been to Iraq 18 times, vs others in Congress who never have been there and had no idea of the risks, and went on and commended Blackwater for taking the risks to protect State Dept officials.

Prince said there are 170 security firms in Iraq, and Blackwater many times gets blamed for an incident caused by the others.

Waxman starts again, saying that maybe the military should be doing security, and others say they aren't trained to protect civilians.

Rep. John Tierney (R) quotes Ann Exline-Star saying that security firms are judged by their customers (i.e. State Dept.) by whether they arrive back from a trip without being harmed, and NOT judged by whether they are winning the hearts and minds of Iraqis. I knew Exline-Star when she was there in 2004 - she was a Sr. Advisor in the Reconstruction Office working to rebuild the Iraqi stockmarket. She went on many convoys into the Red Zone to visit the stock exchange and other Iraqi agencies.

Republican John Duncan started comparing the daily $1000 rate for Blackwater to that of military personnel, including a 4-star General who got paid "$455 per day in a 30 day month" or $13,650 per month. This same info was in the Orlando Sentinel yesterday from a NY Times article. I WAS AMAZED that neither one understood basic accounting and used these misleading figures. The problem is that the Blackwater rate is a "fully loaded" rate including transportation, food, etc. while the military figures were only for basic wages, not food, lodging, transportation, benefits, etc. I would guess that the rate only applied for days spent in Iraq, and not time back home, while US military go home, and get paid the same salary for non-conflict work. Additionally, the military wage "per day" was based upon dividing a monthly wage by 30 days, not normal work days, while the Blackwater rate was most likely for working days, and not weekends or days off. Prince said that security professionals only get paid for days in hot zones, thus the average is $500 per day, and the full $1000 rate includes uniforms, body armor, equipment, training, travel, insurance, sometimes food (I bet their contract included a provision that the State Dept. provide room and board, so those expenses aren't included in the quoted rates.

Duncan and the Orlando Sentinel and the NY Times should all be ashamed for using inaccurate comparison data.

In comparison, a local Lake County government agency pays their CPA firm $176 per HOUR ( or $1408 per day) for a partner's time, and over $85 per hour for a basic auditor's time (which is $680 per 8-hour day),and that doesn't include working in Iraq.

Rep Michael Turner from Ohio asked a very good question of Prince. He wanted to discuss comparing the military's limitations in purchasing equipment vs how Blackwater would do it. Prince said the DoD always wants to spend enough to solve a 120% solution of a problem, while Blackwater would purchase equipment off the street right away without delaying procurement and supplies while developing the ultimate solution four years down the road. Remember when the issue of armor for Humvees came up - I saw local military welding heavy steel into turrets for Humvee gunners while the DoD spent time researching the best way to armor a Humvee and it took over a year for armored Humvees to reach Iraq. Recently I read where there is a technology for detecting explosives like ied's, and the soldiers in the field want it, but DoD won't release it until "fully tested".

Rep Diane Watson starting railing at Rush Limbaugh and military critics, which had nothing to do with Blackwater or the hearings. She wanted Rush to "apologize" for a quote that had nothing to do with Blackwater. Then she rambled on about perhaps that the military should get better pay "so their families don't have to go on welfare...".

Issa asks "Is it reasonable to expect the State Dept. to buy attack helicopters and gunships to protect diplomats...". Issa also asked if the State Dept. did their own convoy security, would they have to hire experienced military personnel like Blackwater does, and Prince said "yes".

Issa brought out that Prince's sister is the wife of Rich DeVos, founder of the Amway company, and they are Republican's. She was past Chair of the Michigan Republican party and big contributors to recent election campaigns. However, Prince pointed out that his company is non-partisan, although he is a Republican.

As a side note, there was a detail of marines stationed in the basement of the Embassy - there were about 18 of them, and they rotated out about every six months. There job was to protect the embassy if attacked - they didn't work in the gates or door entrances, and practiced constantly to extract the Ambassador to a safe area. The joke was that about once a week the PA system would announce that the marines were practicing a security drill in the South wing, which is where the embassy staff were, and they never practiced in the North wing where all the civilians, Ministry Sr. Advisors and reconstruction staff worked. One group was specially trained in conflict area defense, and I have souvenir coins they sold to raise money for a charity. Occasionally, you would see them running through the hallway carrying a 50 caliber machine gun during a drill. When I left Iraq, I took all my left over stuff like power converters, coffee machine, etc. down to them in the basement because they were enlisted people without much income to buy those things, and they grabbed them right up.

NC Rep. Patrick McHenry (from Blackwater's home state) led a very good analysis of the true cost of providing military vs contractor security forces. McHenry and Prince both talked about the fact that for every soldier "in the field", there might be 8-10 support people back in the administrative areas or in the US> In contrast, Prince said his firm has only 50 administrators managing 1000 "operators" or field security personnel. Thus his ratio is like 1/20th of a person in support for every person in the field. That is an enormous spread, and indicates how really expensive it must be to support each soldier.

I know that the Special Inspector General for Iraq Reconstruction (see SIGIR.mil) had only about 25 auditors in Baghdad, and about 125 staff people back in the US, which gives you an idea of how lopsided support costs are in the government.

Rep. Betty McCullum (D) described CPA Order 17 which allowed immunity to US contractors from prosecution by Iraqi police and laws. (There were about 100 CPA orders - I have copies - they were new laws for Iraq issued by the CPA and Paul Bremer, and one of them established the anti-corruption commission, and another established an inspector general program in all the Iraqi Ministries.) She focused on the issue of either removing immunity (not good - Prince said " I doubt any US person would get a fair trial in the Iraqi Justice field."), but the other is to somehow provide a mechanism to try the individual (like the December , 2006 drunk who killed a guard) in the US, which did not happen in that case. I think that idea is reasonable and not let some drunk wacko get off without a trial.

Waxman spent time in a memo and in discussions talking about Blackwater being a Republican firm and was rather blatant. Issa took issue with that, and another Rep. asked when the first Blackwater federal contract was received, and it was in 1998 when CLINTON was still in office. Blackwaters early contracts were really small and were for training individual Navy Seal and other military small groups until the USS Cole was bombed in 2000, when he got a large contract to train Navy personnel how to protect ships from terrorists. It seems that this wasn't a company that got started and grew from favors from Republicans or networking with them - it was all based upon reputation in the security field. Waxman looked fairly foolish for making a big deal about Prince's connections to his Republican sister.

Another Democrat tried to imply that Blackwater could take their knowledge and work for enemy foreign countries. In each case he brought up, Prince responded that the contract was approved for and/or paid for by the US State Dept., and not the foreign country, so they were working for the US Government interests.

Another Democrat, Peter Welch, started on the issue of the annual salary of a military security sgt paid $45,000 a year vs an annualized cost of $440,000 for a Blackwater operator. I have no idea how he got that, but again, he is comparing a fully loaded Blackwater cost for providing a person in the field to only the salary of a military person without any overhead costs, benefits, room and board, etc. This to me is violating an accuracy ethics issue and inaccurate comparisons of apples to oranges shouldn't be allowed without challenge. Prince should have stopped him cold and not go on until he clarified the difference in comparisons each time they brought it up.

Later, Welch started comparing the $180k annual salary of General Petreaus to the salary of Prince, who said it was over a million dollars. Again, comparing apples to oranges, because military get free housing, cheap food, etc.

Welch was really obnoxious and aggressive. He focused on one contract where Blackwater made a profit of 10%, and tried to extend it to the entire group of contracts that BW had. Prince needed better counseling on stopping these guys with misleading math and clarifying the apples vs oranges.

After 5.5 hours, the grilling of Blackwater was over. Prince did a good job of answering issues, and I don't think the Democrats really scored any points.

Next, the committee started with witnesses from the State Dept. including Ambassador David Satterfield, who was Deputy Chief of Mission in the Baghdad Embassy when I was there. He was very sharp, businesslike and people didn't mess with him.

After Prince left, about 80% of the committee members left, while the others continued with questions for the three State Dept. reps. They were much more guarded in their answers, and repeated some of the facts stated by Prince earlier.

Both Waxman and another Congressman pressed Satterfield to say yes or no that State investigated a 2005 Blackwater shooting. Satterfield refused to answer, saying they would answer later in writing with accurate details. He stood up to them.

Later, one of the Congressmen returned, and repeated questions asked earlier, and we had to listen again to all the info regarding the original 2004 sole source $300-million contract to Blackwater for "urgent and compelling" reasons. That is because State Dept. took over Iraq after Paul Bremer left, and they only started arriving in June, 2004 (I was already there working under DoD and CPA), and I guess they immediately realized they didn't have staff to provide security and let the contract quickly to get security people there. The Congressman wouldn't let up, partially because I don't think State gave that background on the last minute arrival. Bremer and his staff all left BEFORE the end of June, and State was sitting there with full responsibility for Iraq. The State pre, Willaim Moser, explained pretty clearly that the next contract was competitively bid for 2005. It wasn't like they gave a three year contract (unlike DoD gave KBR for support services which I think was a 3-year contract).

I am done... fini - below are background articles on Blackwater
##

Here is a New York Times article from
http://www.usatoday.com/news/washington/2007-09-28-296300785_x.htm

Five Blackwater incidents in question
By Anne Gearan, AP Diplomatic Writer
WASHINGTON — Five cases this year in which private Blackwater USA security guards killed Iraqi civilians are at the core of a U.S. review of how the hired protection forces guard diplomats in Iraq, officials said Friday.

Iraqi authorities are also concerned about a sixth incident in which Blackwater guards allegedly threw frozen bottles of water at civilian cars, breaking windshields. No one was killed.

The United States has not made conclusive findings about the incidents, which include a Sept. 16 case in which at least 11 Iraqis died. A State Department official said investigators are not aware of others. The official spoke on condition of anonymity because the inquiries are in progress.

The United States is conducting several inquiries spawned by the deadly Baghdad shooting this month involving the private security contractor that protects U.S. diplomats and others in Iraq.

The Sept. 16 killings outraged many Iraqis, who have long resented the presence of armed Western security contractors, considering them an arrogant mercenary force that abuses Iraqis in their own country.

Blackwater is the largest of three private companies contracted by the State Department to provide security for U.S. diplomats in Iraq.

The State Department has counted 56 shooting incidents involving Blackwater guards in Iraq this year. All will be reviewed as part of a comprehensive inquiry ordered by Secretary of State Condoleezza Rice, but the five fatal shootings involving Iraqi civilians are paramount, two officials said.

Rice announced Friday that she has brought in outside military, diplomatic and security advisers to help guide the inquiry.

"My instructions to the panel are simple," Rice said. "Their review should be serious, probing and comprehensive. Once they have established baseline facts, I look forward to hearing their recommendations on how to protect our people while furthering our foreign policy objectives."

The broad review ordered by Rice will begin in earnest this weekend. Retired Gen. George Joulwan, a former NATO commander in Europe, and Stapleton Roy, a retired veteran diplomat, will help lead the diplomatic review. Rice also brought in a former State Department and intelligence official, Eric Boswell.

Led by Patrick Kennedy, one of the most senior management experts in the U.S. foreign service, the panel will present an interim report by Oct. 5.

As of last week, Blackwater had protected U.S. diplomatic convoys 1,873 times this year, Deputy Secretary of State John D. Negroponte said Thursday. Guards fired 56 times.

The five incidents involving civilians were previously identified by Iraqi authorities, who are also looking into whether the shootings were out of bounds.

Separately, Defense Secretary Robert Gates has sent a fact-finding team to Baghdad to investigate conditions involving private contractors working for the Pentagon and to consult with military officers there.

Meanwhile, a top aide to Gates' No. 2 general in Iraq told reporters Friday that he has seen private security guards "overreact" but stressed that security contractors fill a vital role.

"Are they quicker with the trigger? Are they quicker to wave a weapon, brandish a weapon, other tactics, cutting people off?" asked Brig. Gen. Joseph Anderson, chief of staff for Iraq No. 2 commander Lt. Gen. Ray Odierno. That's a "tough assessment," he said.

"I have seen them, in my opinion, overreact but that does not mean it's consistently the case," Anderson said. He spoke to a Pentagon press conference by video from Baghdad.

"I can certainly say I've seen them do some tactics that I thought were over the top. But that's something we've got to keep working out, what their reason, what their rationale was for that, what kind of procedures are going to follow in this country to make sure we don't have incidents like occurred last week."

There are not enough uniformed military to perform all the jobs that the Iraq war requires, and several companies provide contract workers to wash clothes, drive trucks and a host of other tasks.

Witness accounts of the Sept. 16 incident vary widely.

American witnesses, including the Blackwater guards, insist the convoy was attacked before the protective detail opened fire while Iraqi witnesses say the gunshots were unprovoked.

A joint U.S.-Iraqi commission is working on a common set of facts about the incident and look at ways to clarify the regulations under which private security guards operate in Iraq.

Kennedy's review will look beyond the Sept. 16 incident to assess what general changes may be required in the State Department's security program, including rules of engagement that govern contractors.

On another investigative front, tension is growing between Rep. Henry Waxman's congressional oversight committee and Howard Krongard, the State Department inspector general.

On Friday, Waxman accused senior State Department staff of threatening employees attempting to cooperate with the committee's probe into allegations Krongard interfered with ongoing probes.

Ron Militana and Brian Rubendall, both special agents in Krongard's office, were informed there would be consequences if they spoke out.

"'Howard could retaliate and you would have no recourse,'" Militana was told, according to a letter from Waxman to Krongard.

Militana kept notes of the Sept. 25 meeting, which he gave to Waxman's staff.

Waxman, chairman of the House Oversight and Government Reform Committee, said it is not clear whether Krongard directed that the threats be made.

State Department spokesman Tom Casey said Krongard plans to testify before Waxman's committee "and clarify any concerns."

Casey said he had not read Waxman's letter, but the department would be concerned if individuals were being told not to assist a congressional inquiry.

___

Associated Press writers Pauline Jelinek and Richard Lardner contributed to this report.
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from:
http://www.mindfully.org/Reform/2007/Blackwater-Private-Security23sep07.htm

Blackwater
Risky Business
The Deadly Game of Private Security
JOHN F. BURNS / New York Times 23sep2007

Also see:
Private Contractors Now Outnumber U.S. Troops in Iraq: 180,000 to 160,000
Los Angeles Times 4jul2007

blackwater

CAMBRIDGE, England — On a stifling summer’s day in Baghdad a couple of years ago, a senior American officer bound for a visit to troops in the Iraqi hinterland was preparing to board an army Black Hawk at the helicopter landing zone in Baghdad’s Green Zone command compound.

With undisguised disdain, he fixed his gaze across the concrete toward two smaller helicopters taking off from a hangar operated by Blackwater USA — the private security company whose men, while guarding an American diplomatic convoy, were involved last week in a Baghdad shootout that killed at least eight people and, according to an Iraqi government report, as many as 20.

In a style now familiar to many living beneath Baghdad’s skies, a Blackwater sharpshooter in khaki pants, with matching T-shirt and flak jacket, sat sideways on the right side of each chopper, leaning well outside the craft. With their automatic weapons gripped for battle, their feet planted on the helicopter’s metal skids, and only a slim strap securing them to the craft, the men looked as if they were self-consciously re-creating the movies of Arnold Schwarzenegger and Jean-Claude Van Damme.

Blackwater defends its low-flying, ready-to-shoot posture as a powerful deterrent to attacks on American officials being moved through the capital’s streets. But that posture has become, to the company’s critics, a hallmark of its muscle-bound showiness.

As the Blackwater machines cleared the landing zone’s fence that day, the American officer leaned toward a companion and, over the thwump-thwump of the Black Hawk’s rotors, voiced his contempt. “If I’ve got one ambition left here,” he said, “it’s to see one of those showboats fall out.”

From the moment Blackwater arrived in Iraq in 2003, on the heels of the American invasion, much about its operations has seemed tinged with an aggressive machismo that has led its critics, including many in the American military, to dismiss its operatives — and counterparts from at least 25 other private security companies, with a combined manpower estimated between 20,000 and 30,000 — as “cowboys,” “hired guns,” and other, still harsher, terms.

Partly, the disparagement stems from the contempt with which professional military men have traditionally viewed mercenaries — especially those who earn, like some contractors in Baghdad, as much as $1,000 a day for skills and risks that bring about the lowest-paid American soldier a tenth of that. Not even four-star generals earn as much.

The security contractors’ advocates counter by pointing to the guards’ expertise. The highest-paid learned their skills in units like the Navy Seals, the Army’s Delta Force, and equivalent units in the British, Australian, South African and other militaries.

With rare exceptions, the men look and sound the part, with tattooed forearms, close-cropped hair or shaven heads, and a taciturn manner that discourages any but the most cryptic exchanges with outsiders. The value of their skills, their proponents say, is indicated by the Pentagon’s willingness to pay Special Forces’ re-enlistment bonuses of as much as $150,000. But that much and more can be a single year’s salary with companies like Blackwater.

There is no avoiding the fact that these bodyguards do work that is both extremely hazardous, and indispensable. Blackwater’s involves a State Department contract to protect American officials, including the ambassador.

Such officials are among the most endangered individuals in Iraq; nevertheless, no senior American officials have been assassinated, while the murder of senior Iraqi officials has become almost commonplace.

Together with other security contractors — notably the American companies DynCorp International and Triple Canopy, and the British-run Aegis Security and Erinys International — Blackwater operates in a nightmarish landscape.

No trip outside the Green Zone is remotely safe. The enemy lurks everywhere among the population. Attackers show no mercy for innocent bystanders, who commonly outnumber intended targets. Each mission carries the threat of roadside bombs, suicide attacks by explosives-packed cars and trucks, and ambushes by insurgents.

Reliable figures are elusive, but figures quoted by security industry insiders suggest that more than 100 contractors in Iraq have been killed, and scores of others wounded.

Against this, critics point to a pattern of recklessness in the use of deadly force, of a kind that the Iraqi government, and some Iraqi witnesses, have alleged — and Blackwater has denied — in the episode last Sunday in Baghdad’s Nisour Square. While Blackwater armored vehicles accompanying diplomats were sent to close off traffic into the square, a car entering it failed to heed an Iraqi policeman’s signal to stop, and it came under fire that killed the driver, a passenger and a baby in her arms. There is dispute over the ensuing gunfight, and whether Blackwater personnel, insurgents or nearby Iraqi troops caused the deaths.

An Iraqi government probe later found Blackwater “100 percent guilty” in the killings, and government leaders demanded an end to Blackwater activities. Blackwater responded that its contractors fired in self-defense. After a four-day suspension, a compromise on Friday allowed Blackwater to resume “essential missions” while an Iraqi-American commission investigates.

To those who have watched the private security companies’ operations for the past four years, the only real surprise was that the crisis was so long in coming. The seeds were sown in the first year of the American occupation, when a decree by the American administrator L. Paul Bremer III exempted security companies and their employees from accountability under Iraqi law for deaths and injuries caused in the execution of their duties. Although Congress in 2005 instructed the Pentagon to bring contractors under the Uniform Code of Military Justice, no action has been taken, leaving the contractors in a legal no-man’s land — in effect, at liberty to treat all Iraq as a free-fire zone.

No official records have been made public of how many innocent Iraqi civilians have been killed by contractors. But a glimpse at the scale was offered by one American general who kept his own tally, Brig. Gen. Karl R. Horst of the Third Infantry Division; he told The Washington Post in 2005 that he had tracked at least a dozen shootings of civilians in Baghdad between May and July that year, with six Iraqis killed.

“These guys run loose in this country and do stupid stuff,” the paper quoted the general as saying. “There’s no authority over them.”

But critics say the heart of the problem lies in an attitude that the security contractors share with the American military, one that elevates “force protection” to something approaching an absolute. This, the critics say, has the effect of valuing the saving of American lives above avoiding risk to innocent Iraqis. The attitude has its origins in Vietnam, where the appalling American combat losses left succeeding generations of American commanders with an instinct to apply rapid increments of firepower — what the military calls “escalation of force” — with the goal of sparing American casualties.

After some of the most damaging incidents in Iraq, especially the killing by marines of 24 Iraqi civilians in Haditha in November 2005, the American command ordered new restraints on force escalation that had the effect of sharply cutting incidents in which troops opened fire on civilians.

But the change appeared to have scant impact on security contractors, whose attitudes, unconstrained by concern at being held accountable under law, continued to cast a pall of fear and resentment among Iraqis.

This has had the effect — as officers like General Horst have said — of undermining Iraqi trust in the American forces, and in the wider American enterprise in Iraq, since many Iraqis who survive or witness negligent shootings make no distinction between an American in uniform and one in the paramilitary guise of a contractor.

Contractors say the high profile of their armored convoys, coupled with the covert nature of the insurgents, places a premium on high mobility and rapid response — driving at high speed and in a bullying manner through city traffic and driving on the wrong side of boulevards and expressways, always ready to resort instantly, at the first hint of threat, to heavy firepower.

It is a formula fraught with potential for error. To be overtaken on Baghdad’s airport road by a private security convoy driving at 120 miles an hour, with contractors leaning out of windows or part-opened doors with leveled weapons, waving their fists in a frantic pantomime, is a heart-stopping experience even for other Westerners in armored cars with guards of their own. For ordinary Iraqis, with no weapons and no armoring, it can be pure terror.

At their worst, some contractors have made Iraq into a grim playground for acting out tendencies that have gone beyond bullying. In a Virginia civil court case against Triple Canopy last month, two former employees claimed that their supervisor — like his accusers, a veteran of the United States military — shot randomly into two Iraqi civilian vehicles on the airport road in Baghdad last year, after telling them that he wanted to “kill somebody” before leaving the country on vacation. The supervisor denied it.

Just why some contractors resort to such extremes is a study in war and the ways in which it plumbs the darker sides of human nature. In the military units where they acquired their weapons and tactical skills, the men who cause mayhem on the streets and highways of Iraq were subject to tight constraints — as one former soldier who does security work in Iraq and did not want to be identified expressed it in a private note to this reporter:

“Being motivated, and also somehow restrained, by the trappings of history, and by being part of something large, collective, and, one

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