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Banned
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<b>If you jump down and read the last quote box in this post, and my comments after it, would you not be inclined to want to impeach the creators of the CPA for fraud against US taxpayers, or for stupidity....can anyone make a case for an alternate reaction to the August court ruling?</b>
The Iraqi government is about to sign contracts with big oil companies that will allow the companies to keep as much as 75 percent of the profits from the sale of Iraqi oil, in the first few years of contracts that will last as long as 30 years:
<b>Because the Bush administration created the CPA and funded much of the contracts awarded to private companies in the first few years of the US occupation of Iraq, a federal judge, in August, overturned the fraud convictions and the $10 million judgments against contract "Custer Battle", because, under the provisions of the US Fair Claims Act, the US government was not technically defrauded, because the CPA, headed by Bush crony, "Jerry" Bremer, until June 28, 2004, was not an agency of the US government. This is explained in the last quote box. Apparently, no provision for accountability by a US agency was "built" into the fraud scheme that was the US created CPA !!!!!!!</b>
Quote:
http://www.csmonitor.com/2005/0317/p06s01-wogi.html
from the March 17, 2005 edition
Why graft thrives in postconflict zones
A report issued Wednesday said Iraq could become 'the biggest corruption scandal in history.'
.....A January report by special inspector Stuart Bowen found that $8.8 billion dollars had been disbursed from Iraqi oil revenue by US administrators to Iraqi ministries without proper accounting.
And earlier this week, it emerged that the Pentagon's auditing agency found that Halliburton, the Houston oil services giant formerly run by Vice President Dick Cheney, overcharged by more than $108 million on a contract....
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Quote:
http://www.msnbc.msn.com/id/7306162/site/newsweek/
Follow the Money
Watchdogs are warning that corruption in Iraq is out of control. But will the United States join efforts to clamp down on it?
April 4 issue [2005]
.......The administration's reluctance to prosecute has turned the Iraq occupation into a "free-fraud zone," says former CPA senior adviser Franklin Willis. After the fall of Baghdad, there was no Iraqi law because Saddam Hussein's regime was dead. But if no U.S. law applied either, then everything was permissible, says Willis. The former CPA official compares Iraq to the "Wild West," saying he delivered one $2 million payment to Custer Battles in bricks of cash. ("We called Mike Battles in and said, 'Bring a bag'," Willis told Congress in February.) Willis and other critics worry that with just $4.1 billion of the $18.7 billion spent so far, the U.S. legal stance will open the door to much more fraud in the future. "If urgent steps are not taken, Iraq ... will become the biggest corruption scandal in history," warned the anti-corruption group Transparency International in a recent report. Grassley adds that if the government decides the False Claims Act doesn't apply to Iraq, "any recovery for fraud, waste and abuse of taxpayer dollars ... would be prohibited."....
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Quote:
http://seattletimes.nwsource.com/htm...ontract09.html
Saturday, October 09, 2004, 12:00 a.m. Pacific
Contractor accused of fraud in Iraq
By T. Christian Miller
Los Angeles Times
WASHINGTON — One of the U.S. security companies operating in Iraq has been suspended from doing business with the U.S. government after being accused of overbilling millions of dollars through a series of sham companies.
Security company Custer Battles sent fake bills to the U.S.-financed Coalition Provisional Authority, which ran Iraq under American occupation, according to a U.S. Air Force memo obtained by the Los Angeles Times.
The company, which provided security at the Baghdad airport, is also the target of a suit unsealed yesterday accusing it of systematically bilking U.S. taxpayers and threatening a worker and his 14-year-old son at gunpoint.
The Air Force suspension is believed to be one of the first leveled by the federal government against a company for problems with its operations in Iraq, contracting experts said.
The company is also under investigation by the FBI and the Pentagon Inspector General's Defense Criminal Investigative Services, the memo said. It could not be immediately determined yesterday whether those investigations were ongoing.
Richard Sauber, a lawyer representing Custer Battles, denied the charges. He blamed a competitor and a disgruntled former employer for making false accusations.
The company's founders are Scott Custer, a former Army Ranger and defense consultant, and former CIA officer Michael Battles, who ran for Congress in Rhode Island in 2002 and was defeated in the Republican primary. The Federal Election Commission fined Battles for misrepresenting campaign contributions.
<b>Battles is a Fox News Channel commentator.</b>
"We believe that the allegations are baseless," Sauber said. "We have every expectation that we can demonstrate they are meritless."
Several other former Republican officials have come under investigation in connection with other Iraq contracts. The Pentagon's inspector general has asked the FBI to look into a deputy undersecretary of defense in connection with a police radio contract. A former top Republican official in the Transportation Department was investigated in connection with an airport contract, U.S. officials have said.
Custer Battles was a newly formed company with no experience in the security industry when it landed one of the first contracts issued in Iraq in the spring of 2003 to secure the airport. The no-bid contract was worth $16 million when it was awarded in the chaos after the fall of Saddam Hussein.
Using Nepalese Ghurkas hired from abroad to fill out its limited staff, the company quickly expanded its presence, winning a contract in August 2003 to supply logistical support for a massive currency exchange in which Iraqis turned in their old dinars for new currency.
That contract committed the Coalition Provisional Authority to paying for all the company's costs for setting up centers where the exchanges would take place, plus a 25 percent markup for overhead and profit, according to the Air Force memo. Custer Battles then created a series of "sham companies" registered in foreign countries, the memo said. The companies were then used to create false invoices making it appear they were leasing trucks and other equipment back to Custer Battles. The scheme had the effect of inflating the 25 percent markup allowed under the contract, the memo said.
<b>In October, company representatives accidentally left a spreadsheet in a meeting that was later discovered by CPA employees. The spreadsheet showed that the currency-exchange operation had cost the company $3,738,592, but the CPA was billed $9,801,550, a markup of 162 percent.
</b>
In another case, a Custer Battles employee wrote a report that a $2.7 million invoice was based on "forged leases, inflated invoices and duplication," the Air Force memo said. In yet another case cited by the memo, Custer Battles billed $157,000 to build a helicopter pad that cost the company $95,000.
The suspension means that no government agency can issue further contracts to Custer Battles. However, the company can still continue to work on its existing contracts. The company recently ceased operations at the airport after deciding not to bid on a new security contract.
In the lawsuit, known as a false-claims action, former employee William Baldwin and a Custer Battles subcontractor named Robert Isakson repeated some of the accusations found in the Air Force memo. The false-claims action allows citizens to sue contractors on behalf of the federal government to seek damages for fraud.
The lawsuit says Custer Battles billed the CPA for work that was never done, employees who were never hired and equipment that never arrived. It says Custer Battles took at least one and as many as eight forklifts from Iraqi Airways at the airport, covered their former markings and billed the CPA for leasing them at thousands of dollars per month.
The suit said that after Isakson complained about Custer Battles practices, he was held at gunpoint by company employees along with his 14-year-old son. The employees then kicked Isakson and his son off the airport base.
Alan Grayman, a lawyer for the two whistle-blowers, said Justice Department officials told him that because the CPA was an international organization, the government could not join in the suit.
Justice Department spokesman Mark Corallo said the department does not comment on why it declines to join such suits.
When the government joins such suits, the whistle-blowers win or settle about 95 percent of the time, but only 25 percent of the time when the government passes. Whistle-blowers are entitled to a percentage of the money recovered or paid in fines.
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Quote:
http://209.85.165.104/search?q=cache...s&ct=clnk&cd=5
M E M O R A N D U M
To:
Reporters and Editors
Re:
False Claims Act case in Iraq
Da:
Thursday, March 9, 2006
A juryhas foundcontractor CusterBattlesand itsowners, Scott Custer and MichaelBattles,
liable for fraud in the first Iraq contracting case under the False Claims Act. The jury found that all
of the U.S. funds spent under thecontract were fraudulentlybilled. In addition, the juryfound more
than 30 separate fraudulent acts, each one of which is subject to an $11,000 penalty. The jury also
awarded Pete Baldwin $230,000 for being demoted and constructively discharged. The total
settlement in this case is in excess of $10 million. This is the first Iraq contract caselitigated using
the False Claims Act and sets a precedent for other cases involving contractors operating in Iraq.
Sen. Chuck Grassley, chairman of the Senate Committee on Finance, is an ardent supporter
of the False Claims Act. He was author of the 1986 amendments to the False Claims Act that
substantially increased the ability of private citizens to seek recoveries on behalf of the federal
governmentfor fraud, waste, or abuse. Each Congress, Grassleyintroduces legislation requiring the
Justice Department to disclose why it did not intervene in a False Claims Act case. Grassley sent
a letter to Attorney General Gonzales regarding the Iraq case in February 2005, the text of which
follows here. Grassley issued the following comment on the verdict:
“Today’s verdict is yet another win for the American taxpayer brought to us by the False
ClaimsAct, and sadly, anotherreminder that fraud knowsno bounds.The jurors in thiscase listened
to the arguments and sent back a strong statement of intolerance for fraud, waste, and abuse of
taxpayer dollars. I remain concerned as to why the Justice Department chose not to join this case,
and if the legislation I’ve introduced is taken up and passed, we’d have some insight into why the
Justice Department decided not to intervene. War profiteering is what led President Lincoln to
supportthe original FalseClaims Act. With this verdict, Lincoln’s vision remainsas useful as ever.”
February 17, 2005
The Honorable Alberto Gonzales
Attorney General
United States Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, DC 20535
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Quote:
http://www.boston.com/news/nation/ar...ews+%2F+Nation
$10M verdict overturned in fraud case
By Matthew Barakat, Associated Press Writer | August 18, 2006
ALEXANDRIA, Va. --A federal judge has overturned on a technicality a $10 million jury verdict against a military contractor accused of defrauding the U.S. government in the first months of the Iraq war.
The award, levied in March against Fairfax-based Custer Battles LLC, had been the first civil fraud verdict arising from the Iraq war.
A former Custer Battles employee had sued under a whistle-blower statute, alleging that the company used shell companies and false invoices to vastly overstate its expenses on a $3 million contract to assist in establishing a currency to replace the Iraqi dinar used during Saddam Hussein's regime.
The verdict reached $10 million because the law calls for triple damages, plus penalties, fines and legal costs.
<b>But U.S. District Judge T.S. Ellis III, in a ruling made public Friday, ruled that Custer Battles' accusers failed to prove that the U.S. government was ever defrauded. Any fraud that occurred was perpetrated instead against the Coalition Provisional Authority, formed to run Iraq until a government was established.
<h3>Ellis ruled that the trial evidence failed to show that the U.S. government was the victim, even though U.S. taxpayers ultimately footed the bill.</h3>
Alan Grayson, lawyer for whistle-blowers Robert Isakson and William Baldwin, said he would appeal. He faulted the Bush administration for creating the CPA in a manner that essentially allowed it to act as a money launderer for unscrupulous military contractors.
"The Bush administration incompetently created this Frankenstein monster called Coalition Provisional Authority. They did it without thinking about it. They blundered into it," Grayson said.
In pretrial motions, Custer Battles' lawyers had advanced a similar argument about CPA's status. Ellis allowed the trial to go forward and said a case could be made to show that defrauding the CPA was tantamount to defrauding the United States.</b>
Ellis had prodded the Justice Department to weigh in on the CPA's status. Government lawyers argued that the CPA should be considered a U.S. entity, but only for the purpose of the whistle-blower law.
The judge said in his ruling that the plaintiffs failed to establish the CPA as a U.S. entity during the three-week trial this year.
Custer Battles' attorneys portrayed Ellis' ruling as a broad vindication of their clients' actions.
"The fact of the matter is that (Custer Battles founders) Scott Custer and Mike Battles did what they were contracted to do under unimaginably difficult circumstances," defense lawyer Robert Rhoad said in a statement.
Ellis left intact the jury's $165,000 wrongful termination verdict in favor of Baldwin, one of the whistle-blowers.
A lawsuit involving an even larger Custer Battles contract to provide security at the Baghdad airport has not yet gone to trial. That lawsuit will face similar obstacles, Grayson said.
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The ruling above indicates that the CPA was nothing more than a money launderer that had the effect of dispersing US taxpayer funds to private parties that would be immune for claims of fraud brought later by those representing the interests of US taxpayers. Wouldn't those who created the CPA and appointed it's management, be candidates for impeachment, as conspirators in a scheme to defraud US taxpayers??
Last edited by host; 01-08-2007 at 12:32 PM..
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