The Bush Administration sent a 24-year-old who had never worked a day in finance in his life over to Iraq to manage the reopening of the Iraqi stock exchange. It also sent over Scott Custer and Mike Battles, a pair of ex-Army officers. Then it all hit the fan.
Custer Battles, LLC is a defense contractor headquartered in Newport, Rhode Island, with offices in McLean, Virginia. The firm was founded in October 2001. The company was named after its founders, Scott Custer and Michael Battles. Custer is a former Army Ranger and defense consultant, while Battles is a former Army officer and CIA intelligence officer who ran unsuccessfully for the United States Congress in Rhode Island in 2002. Battles had run for Congress and lost in Rhode Island and had been a Fox News commentator.
The company offers services that include security, litigation support, global risk consulting, training, crisis management training, and consulting to humanitarian organizations, as well as "critical infrastructure protection and training for high-value infrastructure in the United States".
For critics of the Bush administration's handling of postwar Iraq, Custer Battles had become a symbol of contractor excess during the 14-month period that the Coalition Provisional Authority (CPA) governed Iraq. Custer Battles 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. Before coming to Iraq, Custer Battles hadn't done even one million dollars in business. The company's own Web site brags that Battles had to borrow cab fare from Jordan to Iraq and arrived in Baghdad with less than $500 in his pocket.
In June 2003, Custer Battles was "competitively awarded" a contract to secure the Baghdad International Airport. The 12-month contract with the Coalition Provisional Authority was worth $16.8 million. Custer Battles received a downpayment on their contract of $2 million in cash, and they never did any work securing the Baghdad International Airport, because at the time the airport was closed to civilian air traffic. There were in fact never any civilian flights into Baghdad's airport during the life of their contract. But they did get to keep the money.
The More You Spend The More You Make
Custer Battles was later awarded more contracts. It was hired on a "cost-plus" basis, meaning it would be reimbursed for its actual expenses, plus 25% to cover overhead and profit. Problems with the quality of its services prompted a meeting between co-owners Michael Battles and Scott Custer, and coalition representatives and the U.S. military. Before leaving Mr. Battles accidentally left behind a briefcase. Inside the breidcase was a spreadsheet that listed the actual cost and amounts billed for many of its services. For example, Custer Battles provided two flatbed trucks for which it paid $18,000, but charged $80,000. It also billed the coalition authority $400,000 for life-support generators that cost $74,000, and invoiced $12,000 for laundry services that cost $4,000.
According to testimony by officials and former employees, the partners also charged the government millions by making out phony invoices to shell companies they controlled. In another stroke of genius, they found a bunch of abandoned Iraqi Airways forklifts on airport property, repainted them to disguise the company markings and billed them to U.S. tax payers as new equipment. There was so much money around for contractors, officials literally used $100,000 wads of cash as toys. "Yes — $100 bills in plastic wrap," Frank Willis, a former CPA official, acknowledged in Senate testimony about Custer Battles. "We played football with the plastic-wrapped bricks for a little while."
The company's own documents reveal that Custer Battles forged invoices, but the Bush administration not only refused to prosecute the pair - it actually tried to stop a lawsuit filed against them by whistle-blowers hoping to recover the stolen money. The administration argued that Custer Battles could not be found guilty of defrauding the U.S. government because the CPA was not part of the U.S. government. Although a jury found Custer Battles liable for fraud, the judge in the case ruled for the defendant on the grounds that there wasn't enough evidence showing that Custer Battles had presented fraudulent invoices to an officer or employee of the U.S. government or military, as required by the Act.
Operation Iraqi Freedom, as it turns out, was never a war against Saddam Hussein's Iraq. It was an invasion of the U.S. Treasury, and no occupying force in history has ever been this efficient. when Mr. L. Paul Bremer was installed as head of the CPA, one of his first brilliant ideas for managing the country was to have $12 billion in cash flown into Baghdad on huge wooden pallets and stored in palaces and government buildings. Later when the auditors tried to trace the the money, one agent could account for only $6,306,836 of some $23 million that he was responsible for. "Who in their right mind would send 360 tons of cash into a war zone?" asked Rep. Henry Waxman, chairman of the House Oversight Committee. "But that's exactly what our government did."
In perhaps the ultimate example of military capitalism, the war contractor firm KBR reportedly ran convoys of empty trucks back and forth across the insurgent-laden desert, pointlessly risking the lives of soldiers and drivers so the company could charge the taxpayer for its phantom deliveries. Truckers for KBR, knowing full well that the trips were meaningless derisively referred to their cargo as "sailboat fuel."
One of the most dependable ways of burning taxpayer funds is simply to do nothing. After securing a contract in Iraq, companies would mobilize their teams, rush them into the war zone and then wait, citing the security situation or delayed paperwork -- all the while charging the government for housing, meals and other expenses.
So, the wind up is, If you defraud American taxpayers through the Coalition Provisional Authority, and just about everyone did - you're off the hook. Because although the CPA paid you with money provided by the American government, and was almost entirely staffed by the American government, and acted at the behest of the American government, technically speaking it wasn't the American government. So those bricks of taxpayer cash are yours to keep!
About The Author:
|
This article
was written by J. Mark Soveign who writes for |
| Make more money: Cash
In On The Current Wave Of Piracy Did you like this story? If so, vote for it on your favorite bookmarks site: |
|
|
