Feral Jundi

Thursday, December 9, 2010

Industry Talk: US Drops The Hammer On AED, Watan Group, And EODT

   In October I posted the Senate Armed Services Committee report that slammed a couple of companies in Afghanistan. The thing is like a hit list now, and the US government is doing a follow up by banning or investigating these companies further. I am sure there will be more to come. –Matt

Edit: 12/10/2010 Found some more stuff, and this is dealing with the raid on EODT. Check it out.

Monitor reveals reason for EOD Technology raid

By Josh FloryDecember 9, 2010

A federal watchdog indicated Thursday that this week’s raid on a local defense contractor is aimed at bringing accountability to those who have tried to take advantage of the situation in Iraq.

Stuart Bowen is the special inspector general for Iraq reconstruction, a position created by Congress in 2004 to provide accountability for the use of funds for Iraq relief and reconstruction. In an interview Thursday, Bowen said his office has more than 100 ongoing cases, including a case related to Wednesday’s raid on Lenoir City contractor EOD Technology.

The IG said most of the cases are executed through task forces, such as the one that participated in the Wednesday raid. He added that the U.S. Army’s criminal investigation division ‘played a major role’ in getting that case put together. Bowen, a graduate of the University of the South, said his agency also works closely with the Defense Criminal Investigative Service, which is an arm of the Defense Department’s Office of Inspector General.

‘This is not the first, and it won’t be the last, time that we work with those agencies … as well as (Immigration and Customs Enforcement) to hold accountable those who have taken advantage of the chaotic situation in Iraq for their criminal, personal benefit,’ said Bowen.

Asked if that’s what he believes happened in the case of EODT, Bowen replied, ‘Yes, that is why the search was carried out.’

In a statement issued Wednesday, EODT officials said they didn’t know of anything that could have triggered the raid. ‘We obviously would not have been selected for some of the sensitive and important projects we handle for our country around the world had we not been thoroughly investigated before and found to be trustworthy,’ the statement said……

Read the rest here.

U.S. bans contractor from further aid programs

US blacklists Afghan security firm tied to Karzai

Homeland Security, ICE agents raid EOD Technology in Lenoir City

U.S. bans contractor from further aid programs

By Ken Dilanian

December 8, 2010

The U.S. government Wednesday took the unusual step of banning an American firm from being awarded new federal contracts due to evidence of “serious corporate misconduct” uncovered in an investigation of the company’s work on aid programs in Pakistan and Afghanistan.The move by the U.S. Agency for International Development, or USAID, to suspend the Academy for Educational Development, or AED, a Washington-based nonprofit corporation that does extensive federal contracting, highlights longstanding concerns about the way the United States delivers foreign aid through a network of American contractors that some critics deride as “Beltway Bandits.”AED has 65 contracts and grant agreements with USAID worth $640 million, according to agency spokesman Lars Anderson.The suspension prevents AED from winning new contracts with any federal agency, Anderson said. USAID is now examining whether to seek debarment of the company, a step which would mean the loss of all its federal contracts.USAID’s inspector general declined to release details of the alleged wrongdoing by AED, citing an ongoing investigation. But in a recently published report to Congress, the office noted that USAID “terminated a 5-year, $150 million cooperative agreement after [investigators] found evidence of fraud” relating to the purchase of household kits obtained by AED in Pakistan’s tribal areas.The investigation revealed evidence of collusion between vendors and AED, resulting in overpayment for certain goods, the report said. The investigation also discovered that AED had inappropriately hired relatives of a person hired by USAID to oversee the program.

AED’s interim CEO, George Ingram, confirmed in a statement “an active, ongoing investigation” of the firm related to programs in Pakistan and Afghanistan.The firm “has made significant steps toward strengthening its project-oversight processes … and is undertaking a full scale structural and procedural review to institute further organizational oversight and internal controls,” the statement said.Ingram is a former deputy assistant administrator of USAID.USAID once sent thousands of government employees abroad but now distributes aid mainly through American companies. Following two decades of staff cuts, it has become a “check writing agency,” in the words of Sen. Patrick J. Leahy (D-Vt.), who chairs a committee that oversees its work.In Afghanistan and Pakistan, where aid is considered an important factor in battling the Taliban insurgencies, the Obama administration has been pushing to distribute funds directly through the governments and local organizations.Contractors and their political allies in Washington have opposed that approach, warning, among other things, that money would be lost to corruption.The money at stake is significant: The U.S. has pledged $7.5 billion in civilian aid to Pakistan, while the U.S. awarded $17.7 billion in contracts for Afghanistan reconstruction from 2007 to 2009, a recent audit found.AED is among a group of large USAID contractors that are organized as tax-exempt public charities. A 2007 report, by a commission appointed by the president and Congress to examine foreign aid, concluded that some nonprofit USAID grant recipients “are so dependent on the agency that their private character is in doubt.”Story here.

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US blacklists Afghan security firm tied to Karzai

By HEIDI VOGT

Dec 9, 2010

KABUL, Afghanistan – The U.S. military is cutting ties with an Afghan security firm run by relatives of President Hamid Karzai that has been accused of bribing both government officials and Taliban commanders, according to documents obtained Thursday.

The move is part of U.S. efforts to clean up a contracting process in Afghanistan that has been riddled with corruption and allowed U.S. funds to pass to insurgents.

It follows a Congressional report in June that said the Watan Group bribed Afghan officials to get exclusive control over a key NATO supply route in southern Afghanistan and paid Taliban commanders to avoid attacks along the highway.

As of Dec. 6, Watan has been given a “proposed debarment status” — which prevents it from signing new contracts with the U.S. government or renewing existing contracts — according to U.S. military letters sent to the company’s top officers and obtained by The Associated Press. The action was first reported by the Wall Street Journal.

Watan’s subsidiary Watan Risk Management is headed by two of Karzai’s cousins — Ahmed Rateb Popal and Rashid Popal. According to the U.S military letters, the two acknowledged to the bribes in the Congressional report and also told Congressional staffers that company guards regularly use illegal weapons, according to the letters.

A Watan representative confirmed the company received the letters but stressed it had not violated any rules.

“The Watan Group takes the accusations of the army and its actions seriously,” said Simon Hilliard, the managing director. “The Watan Group believes it has been in full compliance and that it can demonstrate this to the Army once it is given its chance.”

Watan has 30 days from the receipt of the letters to submit its argument against the debarment. Hilliard said they planned to reply. If their appeal is rejected, the temporary ban will be extended for up to three years, according to the letters.

If a full ban goes into effect, Watan will be the seventh Afghan company or individual to be blocked from future U.S. contracts this year, according to a senior U.S. military official. The official spoke on condition of anonymity because the information was not officially released.

The Congressional report described a man known as Commander Ruhullah — whose Kandahar security company is affiliated with Watan — as a warlord with about 600 men. Ruhullah, known as “the Butcher,” uses his guards to control Highway 1, the main route for transporting supplies between Kabul and Kandahar, the report says.

“He readily admits to bribing governors, police chiefs and army generals,” the report said.

Despite regulations that ban U.S.-hired security companies from using more powerful arms than an AK-47 assault rifle, the reports aid Ruhullah’s guards use heavy machine guns and rocket-propelled grenades and regularly fight with insurgents.

Afghan law bars any security firm from operating if it has direct ties to government officials but many such firms have indirect ties to those in power, as Watan does.

It’s difficult to know how much U.S. money Watan receives because many of its deals are subcontracted and are not thoroughly tracked by the military. Hilliard declined to disclose the value of Watan’s contracts with the U.S. government.

The ban on Watan also applies to its affiliated companies, including firms working in construction, communications, gas and mining.

The measure against Watan comes as Afghanistan is taking steps to disband all private security companies working in the country and replace them with Afghan police officers.

Karzai had originally set a deadline of Dec. 17 for the security firms to shut down but a shortage of qualified police officers has led him to extend the deadline in several cases, saying the shutdown would be gradual.

Seven security firms will continue to work for U.S. military convoys past the deadline until there are enough police to take over the role, according to Gen. Abdul Manan Farahi, who is overseeing the process. He predicted it could take up to six months.

The U.S. has not provided an exact number of how many guards are employed to provide convoy security, but military officials have said the majority of the 26,000 armed guards under U.S. government contracts are involved in convoy security.

Farahi did not name the seven companies that will be allowed to continue convoy security.

Story here.

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Homeland Security, ICE agents raid EOD Technology in Lenoir City

By Josh Flory

Thursday, December 9, 2010

LENOIR CITY – Federal agents from the Department of Homeland Security and Immigration and Customs Enforcement on Wednesday raided a defense contractor in Loudon County involved in security operations in Afghanistan and Iraq.

The agents, with assistance from the Lenoir City Police Department, descended on EOD Technology Inc. headquarters early Wednesday and spent the day poring through records. Employees were ushered from their workplace throughout the morning as federal agents entered the corporation’s three-building campus on Old Highway 95 with boxes and carts.

As many as a dozen agents, most wearing blue, Federal Agent windbreakers, were on site during the day, going in and out of the buildings. Agents were seen unloading equipment from unmarked vehicles and carrying paperwork between the various buildings on the EOD Technology campus. The agents also were seen escorting several occupants of the buildings to their vehicles.

Agents declined to comment, instead referring all questions to ICE media relations and the U.S. Attorney’s Office in Knoxville. A Homeland Security Department agent, however, did say the agencies were executing a federal search warrant on the company, and a Lenoir City dispatcher said police were providing support.

Temple Black, a spokesman with the Department of Homeland Security, confirmed the agency’s role in the EODT investigation. Black also referred questions about the raid to the U.S. Attorney’s Office in Knoxville.

“I can confirm that Homeland Security Investigations is involved in a law enforcement investigation in Lenoir City, Tenn.,” Black said in a statement. “However, in order to preserve the integrity of the ongoing investigation, we are precluded from making any further comments at this time.”

EODT then released a comment on the raid Wednesday afternoon.

“This event came as a complete surprise to us,” the company said in a statement released by its Nashville public relations firm, McNeely Pigott & Fox.

“We are a very responsibly run company with a strong ethical standard, and do not know of anything that could have triggered this event. We are cooperating with the federal investigators to help clear up whatever concerns there are. We obviously would not have been selected for some of the sensitive and important projects we handle for our country around the world had we not been thoroughly investigated before and found to be trustworthy. We plan to continue serving our customers and keep our focus on our work. We hope this matter will be resolved swiftly.”

EOD Technology has taken active roles in U.S. military action in Iraq and has operations and employees supporting U.S. troops in Afghanistan.

The company was named in an October New York Times story about Afghan private security forces with ties to the Taliban, Iranian intelligence and criminal networks being hired to guard American military bases in Afghanistan.

The story cited a Senate Armed Services Committee report that some Afghans hired by EOD, which was awarded a U.S. Army contract to provide security at a training center for Afghan police officers, were also providing information to Iran.

In October, a Kuwaiti manufacturer of temporary housing was among several plaintiffs that sued the company in U.S. District Court in Knoxville, alleging that the company stole more than $1 million worth of prefabricated shelters.

The suit alleged that the manufacturer was paying EOD to guard a manufacturing compound in Kabul, Afghanistan, and that in October, 2009, EOD security personnel stormed the compound, loaded housing modules onto 15 flatbed trucks, and held employees of the manufacturer at gunpoint before leaving.

EOD Technology was founded in 1987 by two retired Marine sergeants, and was initially focused on the task of removing unexploded ordnance from former military sites in the U.S. and hot spots overseas. Since then it has grown significantly, and came in at No. 86 in Government Executive magazine’s ranking of the Top 100 defense contractors for 2008. For fiscal year 2009, a federal government listing of contractors at www.USAspending.gov found that EODT had received contracts worth $66.8 million. In 2009, the company received a $99.9 million contract to provide security services in eastern Afghanistan.

News Sentinel business writer Josh Flory contributed to this report. Hugh G. Willett is a freelance contributor to the News Sentinel.

Story here.

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