How a Contractor Cashed In on Iraq

Briefly, these are some of the highlights of what we know: Custer Battles was a small and utterly undistinguished domestic security firm, on the verge of bankruptcy, when in May 2003 co-founder Michael Battles borrowed money to fly to Iraq in a desperate search for any kind of business. Battles had made a failed run for Congress in RI as a Republican in 2002, and as far as I can figure out he also had just incorporated some kind of real estate firm in RI in May. Custer Battles had no background that prepared it for any of the reconstruction or security work in Iraq.

With no real plans once in Baghdad, he hung out in the hallways of the Occupational Authority handing out business cards, until he heard that the Baghdad airport's security contract was going up for bid. Having no experience with the difficulty of managing such an operation, Battles submitted a hail-mary bid promising to get a security force in place weeks before any experienced contractor thought practical. That was enough to get awarded the contract! Custer Battles had no money and little infrastructure, could not even get a loan from a bank to start hiring people, so Bremer's people decided to cancel the contract--no wait, they called Battles into their offices and piled two million dollars in cash into his duffel bag. On that basis, CB hired a ragtag security force, set themselves up like potentates in the airport, and began a career in corruption.

They seized material from Iraqis, and then charged the CAP obscene fees for 'renting' it. The airport went out of use for the most part (there's a story), so CB shifted personnel to other activities but continued to charge for airport security as if all their employees were still doing that job. They created front companies, and subcontracted goods and services back and forth to inflate the charges billed to the CAP. The Coalition Provisional Authority accidently stumbled across one of CB's records where they bragged about their success in overbilling the US. Yet they got plenty of other contracts. One contract in particular became notorious back in DC. CB was awarded $12,000,000 to guard high-voltage towers under repair. The company pocketed $8,000,000 and did nothing, while subcontracting the actual work to an Iraqi company for only $4,000,000. Many of the contracts CB obtained were awarded with little or no competition. Battles reportedly has claimed to have contacts in the White House with whom he speaks regularly.

http://www.dailykos.com/story/2005/2/16/1628/08340

Holy shit....how can this country afford these massive rip-offs?
When will it end? I would like to see all the offending parties in jail for life. I never, ever thought I'd see this un-contested corruption in my
lifetime. This is not the country I grew up with. I am scared, really scared. It's a 'friggin "run-a-way train" and the brakes are in flames.

I believe it was an aged British Marxist who, as described in George Monbiot's excellent Guardian column prior to the US invasion, argued that US markets are tapped out and that the Middle East was being sized up as a means to prevent economic stagnation and decline.

Watching the boondoggle for contractors--only one facet of the massive investment in making Iraq a US colony--one can only agree. Btw, Harper's Magazine ran an excellent piece last year on a conference for these sleazy opportunists held by the Pentagon. Like Custer Battles, some of those featured in the piece were down on their luck; Iraq was their last hope.

What a shame that 100,000 people are dead so that these scum might prosper.

Welcome to DU!! :toast:

voted down. The amendment, I can only remember Durbin & Byrd as co-signers, I cannot (ok, I'm ashamed) remember the author of the amendment, would have created a committee to oversee spending in Iraq & other war zones. The Senator who spoke gave example after example of the theft of American tax-payer dollars by companies (Halliburtin), and 'contractors' whose business practices would land them in jail here ( well, maybe not, considering the behavior of corporate Amerika). The Amendment was overruled along party lines, with the exception of Bye-Bye-Biden----not even joementum had the pinche' nerve to vote against this.:hurts:

Can you imagine a little creativity, cutting Medicare, Medicaid, & SS while not only allowing the pillaging of our treasury, but defiantly saying that they do not want anyone to oversee the theft being perpetrated on the American tax-payer!

Start now, scream loud, these bastards are supporting the looting of our treasury at the expense of our troops, tax-payers, and anyone else who will lose services due to the financial irresponsibility of this administration!!!

for wars that haven't started yet. Convenient.

I'm shocked. Shocked, I tell you. :eyes:

Jason McLure, Legal Times


A $33,000 food order in Mosul was billed to the U.S.-led interim government of Iraq at $432,000. Electricity that cost $74,000 was invoiced at $400,000. Even $10 kettles got a 400 percent markup.
Documents unearthed as part of a whistleblower suit against Fairfax, Va.'s Custer Battles reveal for the first time the extent to which the defense contractor is accused of gouging the Coalition Provisional Authority, which governed Iraq following the U.S. invasion of the country in 2003.

Among those documents is a spreadsheet that appears to show the company billing the government nearly $10 million for dozens of items, including food, vehicles, and cooking pots. The total cost to Custer Battles, according to the spreadsheet, was less than $4 million -- a profit margin of 150 percent, far higher than the 25 percent margin allowed under its contract.

For critics of the Bush administration's handling of postwar Iraq, Custer Battles has become something of a symbol of contractor excess during the 14-month period that the Coalition Provisional Authority governed Iraq. The company was able to secure tens of millions of dollars' worth of security and logistical contracts from the CPA -- despite the fact that it didn't even exist until just months before the invasion of Iraq.

Now, much of that evidence is coming to light through the whistleblower suit in the U.S. District Court for the Eastern District of Virginia. Legal Times obtained access to the spreadsheet and hundreds of other previously confidential documents from the government's investigation of Custer Battles. The spreadsheet and other documents were provided to Legal Times by the whistleblowers' lawyers, who obtained the material from Custer Battles as part of the discovery process.


http://biz.yahoo.com/law/050304/a9b875664d6d13df15d108085092e6f9_1.html

"gave up" manufacturing body armor after the military's belated request for same.

Taxpayers are going to love how their money was spent!!

My favorite part:
Custer is a former Army Ranger who had worked for Arlington, Va.-based defense contractor Science Applications International Corp. Battles ran unsuccessfully for Congress as a Republican in Rhode Island in 2002 and, according to the record of Custer's interview with the Defense Criminal Investigative Service, is a former Central Intelligence Agency case officer who was -- according to Custer -- "very active in the Republican Party and speaks to individuals he knows at the White House almost daily."

In the fall of 2002, the two founded Custer Battles as a security firm. Within months, President George W. Bush would order U.S. troops into Iraq. Custer Battles was among the first contractors into Baghdad after the fall of Saddam Hussein and, by the end of June 2003, had managed to win the contract to provide security for Baghdad's airport, a contract Custer told investigators was the first time the company had provided actual security for a site.


It's good to have friends in high places. Now who were these people in the White House he was speakin to on a daily basis?? Can't wait to hear....

I can say that I would rather be poor (as I am) than have that dirty money.

It's a pity the the American press corpse is in such a bad state.