No Comment — September 26, 2007, 2:04 pm

A Protection Racket

“The core of the relationship is simple,” a U.S. diplomat described the State Department’s dealings with Blackwater USA. “They protect us, and we protect them.” In fact, incidents involving security contractors in Iraq occur regularly—firearms are discharged every day, and a few times a week lethal force is used in questionable circumstances. The total number of security contractors is officially acknowledged to be 30,000, and may be a bit more than that. And there are a dozen significant players in the game, companies from the United States, Britain, South Africa—even Russia. But until last weekend the issue had not really captured the imagination of the American media. At present there is a strong focus on Blackwater, which has drawn more attention than its competitors.

I was invited to give a briefing on Capitol Hill this morning to a group of congressmen who are studying contractor issues. The level of interest was very high and most of the questions focused on just one contractor, namely Blackwater.

In the October issue, Daphne Eviatar (disclosure: my colleague at The American Lawyer and well as at Harper’s) takes us on a tour of Blackwater and some of the issues surrounding it. She uses a fascinating vehicle—one of Blackwater’s employment contracts. You don’t have to be a lawyer to know that the crafting of contracts is a high art in our society. Much depends upon it. And the Blackwater contract-drafters are high practitioners of this art. In what I have seen of Blackwater’s contracts—both with its employees and its dealings with the U.S. Government, Blackwater consistently extracts a very good deal for itself. An astonishingly good deal for itself. Indeed, sometimes a deal that’s simply too good to be believed.

And that’s fueling a lot of questions from lawmakers on Capitol Hill about the first modern private army to be raised on American soil. Some of the questions are pretty pointed. “Are these contracts really done at arm’s length?”

The State Department’s reaction to the September 16 incidents in Baghdad is adding fuel to the fire. It hardly is the reaction of a consumer of services with quality concerns about its service provider. Rather, the State Department appears to see its own interests tightly tied up with Blackwater’s.

But uniformed military have frequently bristled over Blackwater’s high-handed conduct, which has been a constant source of friction with the Iraqi Government. The Washington Post offers an interesting glimpse today into the U.S. military’s issues with Blackwater:

In high-level meetings over the past several days, U.S. military officials have pressed State Department officials to assert more control over Blackwater, which operates under the department’s authority, said a U.S. government official with knowledge of the discussions. “The military is very sensitive to its relationship that they’ve built with the Iraqis being altered or even severely degraded by actions such as this event,” the official said.

This is a nightmare,” said a senior U.S. military official. “We had guys who saw the aftermath, and it was very bad. This is going to hurt us badly. It may be worse than Abu Ghraib, and it comes at a time when we’re trying to have an impact for the long term.” The official was referring to the prison scandal that emerged in 2004 in which U.S. soldiers tortured and abused Iraqis. In last week’s incident, Blackwater guards shot into a crush of cars, killing at least 11 Iraqis and wounding 12. Blackwater officials insist their guards were ambushed, but witnesses have described the shooting as unprovoked. Iraq’s Interior Ministry has concluded that Blackwater was at fault.

These descriptions reminded me of accounts I heard in Baghdad last spring. A number of officers described the security contractors as a group, and Blackwater in particular, as “cowboys,” and “trigger-happy jackasses.” An account published over the weekend by London’s Independent which drew on interviews with Iraqi eye-witnesses, sharply contradicts Blackwater’s claims and the characterizations put out by the State Department. The Iraqi Interior Ministry has also claimed that it has a video which will conclusively demonstrate that the shootings by Blackwater personnel were unprovoked.

The State Department has moved to resolve the matter by proposing creation of a bilateral commission of inquiry. A similar approach was used to look in the fatal attack on a car carrying Italian journalist Giuliana Sgrena which left Sgrena wounded and killed Nicola Calipari, a senior member of SISMI, the Italian Secret Service. The commission approach broke down when the American members pushed a set of conclusions of fact which the Italians denounced as rank falsehood. An Italian magistrate who had looked at the investigation told me this summer that he had “lost all confidence” in the interest of the American participants to establish the facts. “They were interested in covering up what happened, not getting to the truth.”

Congressman Henry Waxman, chair of the House Oversight Committee, has announced hearings looking at Blackwater to be convened next week. His staff have been moving to secure documentation relating to the September 16 incident and are running into a stone wall. Today Waxman charges that Secretary Rice is responsible for the limitations. The McClatchy Washington Bureau reports:

Rep. Henry Waxman, D-Cal., charged Tuesday that Secretary of State Condoleezza Rice and her aides are trying to impede congressional probes into corruption in Iraq and the activities of controversial private military contractor Blackwater USA.

He cited specific efforts by the State Department to block the Oversight Committee’s investigation of the September 16 Blackwater incident:

But in a letter to Blackwater dated September 20-the same day as the panel’s request-a State Department contract officer ordered Blackwater not to disclose information about the contract. “I hereby direct Blackwater to make no disclosure of documents or information generated under” the State Department contract “unless such disclosure has been authorized in writing,” wrote the contract officer, Kiazan Moneypenny.

She also wrote that State Department and Blackwater officials discussed the matter by phone on September 19 and 20, and that, as a result, “the department’s position on this matter has been further reinforced.”

I was told this morning that some investigators are questioning whether the State Department letter instructing Blackwater not to cooperate was issued on a request from Blackwater–looking for a pretext to refuse cooperation with formal inquiries.

The positions staked out by Blackwater and the State Department are generating anger among lawmakers who sense an atmosphere of lawlessness and evasion. Next week could see a further escalation of this dispute as the Oversight Committee picks up the questions.

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