Wednesday, December 27, 2006

Bush Administration Helping Defraud Taxpayers in Iraq?

In 2003 a small, private military contracting company opened its doors just in time to feel the boon that would be the war in Iraq. Custer Battles, run by Mike Battles, a former CIA agent and failed Republican Congressional candidate, along with his partner Scott Custer, had zero experience in the security industry when it received one of the very first contracts issued in Iraq.

In the spring of 2003, after the fall of Saddam Hussein and around the time that President Bush declared “Mission Accomplished”, Custer Battles was presented with a whopping $16 million no-bid contract to secure the airport in Baghdad. This contract was the first of many.

During Custer Battles’ tenure in Iraq, the company was flooded with allegations of unrestrained force, fraud and over billing of the Coalition Provisional Authority (CPA). Retired Brigadier General Hugh Tant III said Custer Battles’ fraud, "was probably the worst I've ever seen in my 30 years in the Army.”

Custer Battles was eventually kicked out of Iraq and forced to face fraud charges back in the United States, despite objections from the Bush Administration.

According to Newsweek, the Bush Administration "...has argued privately that the occupation government, known as the Coalition Provisional Authority, was a multinational institution, not an arm of the U.S. government. So the U.S. government was not technically defrauded. Lawyers for the whistle-blowers point out, however, that President George W. Bush signed a 2003 law authorizing $18.7 billion to go to U.S. authorities in Iraq, including the CPA, 'as an entity of the United States government.' And several contracts with Custer Battles refer to the other party as 'the United States of America.'"

In March of 2006 a jury found Custer Battles guilty, but that verdict was overturned shortly thereafter due to the supposed ambiguous nature of the structure of the CPA. The judge that overturned the verdict did admit however, that “U.S. taxpayers ultimately footed the bill.” In the end, the Bush Administration's argument shielded Custer Battles from refunding stolen U.S. taxpayer dollars.

According to Custer Battles’ owners, the company was sold to a Romanian firm, Danubia Global Inc. At the time of the sale, Danubia was owned by Security Ventures International Ltd, a British Virgin Islands firm.

“Battles and Custer, through a spokesman, said they sold the remaining Iraqi assets of Custer Battles - including vehicles, computers and intellectual properties - to Danubia early this year. Several former Custer Battles employees have joined the Romanian firm. But the contractors refused to name the employees, or to identify Danubia's owners.”

PR Newswire reported in May 2005 that Danubia had been bought out.

“Windmill International Limited, the American company, has a 15-year presence in Romania and recently acquired a major shareholding in Danubia Global Inc. (DGI), a global logistics and security provider headquartered in Bucharest which is currently providing security and logistics services in Iraq.”

The Board of Directors of Windmill include a wide variety of who’s who in the Republican party, including:

James Gilmore *: former RNC chair and Governor of VA

Hansford Johnson *: Acting Secretary of the Navy under George W. Bush – 2/03 – 10/03

Michael Ussery *: former State Department official and Ambassador to Morocco

Douglas Combs *: "Combs was acting undersecretary of the Navy from 1999 to 2003 and made frequent trips to Iraq during that period and worked with contractors and military advisers there. He also was a special assistant to Johnson, who was acting secretary of the Navy, the service's top civilian position, in 2003."

Ronald Dwight *: An assistant attorney general in Rhode Island, who later worked on Mike Battles failed congressional campaign.

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(John Warner, Douglas Combs and Dick Cheney)

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(Douglas Combs and George H.W. Bush) *.

Ronald Dwight, a personal friend and former co-worker of Mike Battles', was on the board of directors of the company that purchased a controlling share in Danubia Global, which had shortly before purchased much of Custer Battles' assets.

Also, Dwight briefly served as a legal adviser in the Iraqi Transportation Ministry around the time in which Custer Battles was receiving contracts throughout Iraq.

Recently, members of Windmill International's board of directors were accused "of scheming with a banned American contractor to get lucrative rebuilding contracts in Iraq."

According to the AP, "The current suit names former acting Navy Secretary Hansford Johnson, former acting Navy Undersecretary Douglas Combs and Custer Battles LLC officials including founders Scott Custer and Mike Battles, who were barred in 2004 after billing the government for work that was never done and for padding invoices by much as 100 percent.

Also named were six companies connected to the contracting firm, including Windmill International Ltd., a worldwide contractor run by Combs and Johnson, and a Romanian company, Danubia Global, which bought Custer Battles in 2005.

The new lawsuit contends Custer and Battles, both Army veterans with Washington political connections, tried to get around the suspension order by plotting with Johnson and Combs 'to set up sham companies (thereby) concealing their ownership and control of those entities.'"

A lawyer for Windmill International does acknowledge that Combs partook in a business meeting with Scott Custer in 2004.

Most of the players in this suit are in some way tied to the Bush Administration, either as a personal friend or having served at some level in the Administration itself. With the Administration's Justice Department arguing so vehemently in favor of Custer Battles', could Bush/Cheney, etc. actually be involved in assisting these contracting companies in defrauding the U.S. taxpayers?

*All photos and information on Board Members were originally hosted on Windmill International's website, which is no longer in operation.