Iraq: How the US financed the 'alleged' crooks at Custer Battles
Battles turned to a lender that had lots of cash and few questions about how it would be spent: the U.S.-led coalition in charge of Iraq.
As Battles later told criminal investigators, he descended into a vault in the basement of one of Saddam Hussein's former palaces, where a U.S. government employee handed him $2 million in $100 bills and a handwritten receipt.
Battles "was informed that the contracting process would catch up" later to account for the money, according to a statement he gave
By the time it did, the adventures of his fledgling security company, Custer Battles, had become a case study in what had gone wrong in the early days of the U.S. effort to rebuild Iraq, not least the haphazard and often ineffective U.S. oversight of the projects.
Today, Battles and his partner, Scott Custer, are facing a criminal investigation, lawsuits by former employees and a federal order suspending them from new government business because of allegations of fraud.
Neither Custer nor Battles responded to requests for interviews made through their attorney. However, in court records and interviews with criminal investigators, the two men have denied any wrongdoing.
They have blamed the accusations on disgruntled employees who were fired; on former employees who now compete with Custer Battles for security work in Iraq; and on government officials who harbor grudges against the company.
Court records, internal company memos, interviews with current and former employees and government investigators, and confidential documents from a Pentagon criminal investigation reviewed by The Times depict a company that ran into trouble almost from the moment it hit the ground in Iraq.
Company employees allegedly forged invoices, clashed with government officials and tried to dodge taxes. The company is accused of missing deadlines, providing shoddy equipment, failing to deliver services and botching routine security inspections, the records and interviews show.
Along the way, two of its guards allegedly moved to attack some Iraqi teenagers. And U.S. officials were startled to discover that Custer Battles was also operating a dog kennel and a catering service on airport grounds, according to interviews.
Just as worrisome as the allegations, perhaps, has been the U.S. government's response.
Beginning shortly after Custer Battles won its Baghdad airport contract, at least five senior U.S. government officials or consultants came to suspect wrongdoing by the firm or its employees, records show. Yet over the next 14 months, the company continued to win new government business, and even today holds a key contract in the U.S. program to equip and arm Iraq's new security forces. Link to full article [then shower]