Editor's Note - 9/23/07 Allegations of Corrupt and Out-of-Control Blackwater Security Guards

Just over two years after this FRONTLINE report, "Private Warriors," was broadcast, Blackwater, a North Carolina-based private security contracting company that was covered in the program, has become the focus of two major U.S. government inquiries.

One deals with the shooting and killing in mid-September of 11 Iraqi civilians by Blackwater contractors hired by the State Department to protect a U.S. diplomatic convoy in Baghdad. Prior to this incident, there had been many allegations of similar incidents involving Blackwater guards over the past three years. Also,federal prosecutors have begun a probe into whether Blackwater employees illegally smuggled into Iraq weapons sold on the black market that ultimately ended up in the hands of a U.S.-designated terrorist organization. And Defense Secretary Robert Gates has dispatched a fact-finding team to Iraq to look into problems with private contractors who are working for the Pentagon. He told Congress he was concerned about whether there's sufficient oversight and accountability.

Editor's Note - 2/12/07: The Deaths of Four Blackwater Guards in Fallujah, March 2004

The new Democratic House Government Oversight Committee began hearings in February 2007 into the work of large private contractors in Iraq and questions surrounding oversight, accountability and corruption. It's expected that these hearings will continue on and off over the next few years.

On Feb. 7th, the committee heard emotional testimony from the families of the four Blackwater USA-contracted guards killed and mutilated in an ambush in Fallujah in March 2004 while providing security for trucks belonging to a food caterer, ESS. For three years, the committee has been investigating what company had ultimate accountability for what happened.

During the hearing, the Army announced it would withhold $19.6 million from the Halliburton Company after recently discovering that Halliburton/KBR had hired the company Blackwater USA to provide armed security guards in Iraq -- a potential breach of its government contract.

As The New York Times reports: "Halliburton has a five-year, $16 billion deal to support American military operations in Iraq, but the Army has said that its contracts generally barred Halliburton and its subcontractors from using private armed guards. But a day after the hearings Halliburton, in a statement, disagreed with the Army's interpretation and suggested that there was nothing to prohibit Halliburton's subcontractors from hiring such guards."

However, as the Financial Times reported, "Henry Waxman, the Democratic chairman of the oversight committee, said that after three years of investigating the ambush, it was still unclear whether the men, who were working for ESS, were ultimately working under a contract held by KBR -- which would have violated contracting rules-- or Fluor, another contractor, because ESS had offered conflicting information on the issue. Fluor yesterday denied ever working with Blackwater." [2/8/07]

In its reporting for the June 2005 PBS/FRONTLINE program "Private Warriors," FRONTLINE's producers tried to disentangle the chain of contracts behind the mission. Below are email exchanges between FRONTLINE producer Marcela Gaviria and Halliburton/KBR (Halliburton's engineering and construction subsidiary) that explicitly deny that Halliburton had hired Blackwater on that day.

Dear Ms. Gaviria:

Your below email to KBR's Public Relations Supervisor Melissa Norcross indicates that you are either not understanding the facts regarding KBR's lack of involvement in the March 31, 2004 Blackwater incident, or you are simply choosing to ignore the facts that have been repeatedly presented to you.

As Vice President of Legal for KBR's Government & Infrastructure division, I will make an effort to clarify this situation for you yet again. Per multiple e-mails, as well as telephone conversations with Ms. Norcross, you have been provided with the following information:

KBR RESPONSE TO PBS #1:

ESS is indeed a KBR subcontractor; however, it also contracts directly with the U.S. government and with other companies working in Iraq. Although we can't speak for ESS or Blackwater, we can tell you that it is KBR's position that any efforts being undertaken by either company when the March 31, 2004 attack occurred were not in support of KBR or its work in Iraq. Again, since this was not a KBR-directed mission, it would be inappropriate for us to speculate about what happened.

You replied and requested additional information. Therefore, KBR responded with the following:

KBR RESPONSE TO PBS #2:

Your supposition that dining facility (DFAC) services for the 82nd Airborne would necessarily be part of the LOGCAP contract is incorrect. Although KBR does handle a large portion of the logistics and life support services for the Army in Iraq, KBR was not responsible for operating the DFAC at Camp Ridgeway during this period.

Additionally, although ESS has indeed served as a KBR subcontractor under LOGCAP, I can tell you that on March 31, 2004, the convoy in question was not operating in support of a KBR mission. As I mentioned in my previous response to you, ESS also works directly with the military and other contractors in Iraq.

I would recommend that you speak directly with ESS to corroborate this information. Cathy Smith, ESS's spokesperson, will be able to clear this up. She can be reached at--

We were helpful in providing contact information for ESS, who provided you with the following statement:

ESS RESPONSE TO PBS (from Cathy Smith, ESS spokesperson):

ESS has multiple contracts for support to the Forces. We are bound by a confidentiality clause so will not make any further comment. We can however confirm that the mission in question on the 31st March was not providing support under the LOGCAP contract.

At this point in the process, you responded to KBR that "it is important to us to clarify this because multiple press reports state that these men were ultimately on a KBR mission. If that's not the case then we need to prove it to our audience, and so far both KBR's and ESS's response does not cut the mustard."

As I am sure you are well aware, it is not responsible journalism to rely on arbitrary, unsupported and obviously inaccurate, press reports for your research on the March 31, 2004 incident. So we are pleased that you contacted both KBR and ESS for a true account of the events to ensure that Frontline is presenting a fair and accurate report. Spokespersons for both KBR and ESS emphatically stated that KBR had NO involvement in the March 31, 2004 incident, so this is clearly all of the "proof" you need for your audience. If you instead choose to defer to a handful of erroneous media reports, as opposed to the statements from the actual companies who you are attempting to tie to this incident, then that is not only a misrepresentation of the facts, but a flagrant disregard for the truth. I believe that your counsel will provide you sound advice about ignoring the facts and proceeding with the publication of information that is knowingly false.

KBR has been very open in granting your crew unprecedented access to our operations in Iraq -- and many members of our team have spent a significant number of man hours to assist you during your visit, as well as with your numerous follow-up questions upon your return to the states. We have tried to be as helpful as possible in order to ensure that your report is an accurate account of KBR's 50,000 men and women who daily face danger to ensure that the troops have the best food, shelter and quality of life possible. KBR has presented you with the facts, and we urge you to present your audience with the same.

Regards,

Chris Heinrich

Vice President, Legal

KBR | Government & Infrastructure Division

Begin forwarded message:

From: "Melissa Norcross"

Date: June 8, 2005 12:39:07 PM EDT

To: "Marcela Gaviria"

Cc: "Jennifer Dellinger" "Stephanie Price"

Subject: RE: additional KBR information

Dear Marcela,

Thank you for giving us the opportunity to respond to these questions. You will find our answers below. In addition, we would like to offer the following information to give you an idea of the scale, scope and pace of the LOGCAP undertaking, as well as demonstrate how pleased our customer is with the support we have provided the troops.

KBR deployed to Kuwait in support of the troops there in October 2002. By March 2003, KBR had roughly 4,500 employees and subcontractors working at fewer than 10 sites in Kuwait; today we have more than 50,000 personnel at more than 70 sites throughout Kuwait, Iraq, Afghanistan, Uzbekistan and Djibouti. As part of the LOGCAP III contract, our Theater Transportation Mission was also kicking off in March 2003 with about 600 trucks on the road. Today, we operate a fleet of more than 3,000 trucks that moves vital military supplies and equipment throughout Iraq. In March 2003 we prepared and served 2 million meals to the military and civilian personnel deployed in the Middle East; last month, that number was 15 million.

We would also like to point out that, to date, KBR has received award fee scores from its customer, the Army Field Support Command, covering 23 LOGCAP task orders for work in Iraq, Kuwait, Afghanistan, Uzbekistan and Djibouti. Of these, 14 included performance ratings of ³Excellent,² the highest score possible, and the remaining nine were rated as ³Very Good,² the second highest rating possible. It is important to note that KBR's profit under the LOGCAP contract is based primarily on this award fee pool, a large component of which is determined by our demonstrated ability to control costs. If you would like additional information on these outstanding award fee scores, please let me know and I would be happy to forward you the Army's news releases on the subject.

Let us also reinforce, yet again, that the convoy operating on March 31, 2004, when four Blackwater employees were killed, was NOT on a mission for KBR. Both KBR and ESS have confirmed this ­ multiple times ­ so I am confused as to where the uncertainty lies. Your insistence on tying KBR to this event is puzzling at best, and we do not understand your motivation in continuing to attempt to base this claim on arbitrary language that might be included in a contract between two other companies.

You mentioned in your last e-mail that media reports have claimed otherwise, and I would like to challenge the soundness of those claims. After exhaustive research, we have found only a tiny smattering of unfounded reports (fewer than 5, and none from top-tier national publications) that mistakenly attempt to tie KBR to the convoy in question. I am happy to send you the more than 500 articles we searched, but to avoid clogging your inbox I would like to start by directing you to the attached piece from the Washington Post. Please note the highlighted section, which confirms what ESS and KBR have already stated.

Finally, we understand that during his interview, Paul Cerjan stated that he was not the appropriate person to address some of the questions you raised. And per your conversation with Stephanie, we are aware that you have spoken with former KBR employee Marie deYoung. Of course, since you are keen to provide your viewers with a fair and thorough account of KBR's operations in support of the troops in Iraq, we are confident that KBR will be given the opportunity to respond to any issues that may be left unaddressed following these conversations. Please do send these questions my way and we will be happy to address them.

As noted, our responses to your previously posed questions are below.

Thank you,

Melissa

How many employees do you have in Iraq? Please break it down by nationality.

KBR has more than 50,000 employees and subcontractors in Iraq. For security reasons, we will not break down this information by nationality.

How many KBR employees have died in Iraq since the war began?

We are saddened to report that KBR and its subcontractors have lost 68 employees, and one KBR employee remains unaccounted for.

Is the LOGCAP III contract the largest in Iraq in terms of $$?

The LOGCAP III contract, which was awarded through and open and competitive bidding process in November 2001, is the largest contract that KBR has in Iraq. We can't speak for other companies' work there.

To date, how much money has KBR billed the government for LOGCAP III?

KBR has been tasked by the Army to perform $11.84 billion in work under LOGCAP III. It is important to understand that KBR only invoices the government for actual costs and permissible overhead factors, which are agreed upon with the government during the definitization process.

Has there ever been an instance when KBR hasn't used military escort for their LOGCAP convoys?

The U.S. military has command and control of KBR's LOGCAP convoys in Iraq, supplying pre-trip threat assessments, determining routes and providing security for all of these convoys.

How many truckers have been killed in Iraq since the beginning of the war?

We are saddened to report that 16 truck drivers employed by KBR and its subcontractors have been killed in Iraq, and one remains unaccounted for.

What month did the first KBR employees arrive in Kuwait?

Under the LOGCAP III contract, KBR employees first arrived in Kuwait in October 2002.

Does KBR run all the army bases in iraq?

No. At the direction of the Army, KBR provides logistics and life support services for the troops at more than 70 sites in Iraq, Kuwait, Afghanistan, Uzbekistan and Djibouti, but this does not encompass all of the military's bases there.

How many KBR employees live at Camp Anaconda?

To ensure the safety and security of our personnel, we will not disclose the number of KBR employees and subcontractors working and living at a specific site.

How many meals a day do you serve at Camp Anaconda?

To avoid jeopardizing the security of the soldiers and contractors living at Camp Anaconda, KBR will not disclose this information.

As I mentioned previously, KBR has prepared more than 200 million meals since the beginning of the LOGCAP III mission, with more than 15 million meals served in May 2005 alone. Although the cost per meal varies from site to site, in most cases the figure would include the various costs associated with operating the entire dining facility, to include kitchen equipment, cooking supplies, labor and construction, among others. Therefore, any number presented as a ³cost per meal² would be misleading unless all of these factors were included in the explanation.

How many trucks were in the convoy that was ambushed on April 9th, 2004 and how many KBR employees died in that incident?

To protect the security of future convoys, we will not disclose the number of trucks that travel in any given convoy. What we can tell you is that on April 9, 2004, several of KBR's convoys were attacked on Iraqi roads, resulting in the deaths of six KBR employees and leaving one employee who remains unaccounted for. Nearly a year later, KBR remains deeply saddened by this tragedy.

After April 9th, we have reports that truck drivers refused to work. Is this accurate? When did operations resume?

This is a misleading characterization of the events that transpired.

Following the events of April 9, 2004, KBR and the Army jointly agreed to suspend convoy movements until the security requirements could be reassessed and additional security measures enacted to meet the new threat environment and provide for the protection of KBR's employees and convoys. To avoid jeopardizing future convoys, we will not detail the specific security measures that are currently in place. KBR continues to work closely with the military to ensure the safety and security of our employees in the region while delivering the essential support services required by the military.

Lives depend on our work, as does the military's ability to carry out its missions. KBR employees and subcontractors working in Iraq understand the dangers and difficult conditions involved in working in a war zone and have made courageous decisions to deliver the services necessary to support the troops.

We are proud to report that KBR's attrition rate for work in Iraq is less than 2 percent per month, with an overwhelming 75 percent of employees choosing to continue supporting the troops there even after their initial one-year employment agreements expire.

Melissa Norcross | Public Relations

KBR | Government & Infrastructure Division

From: Marcela Gaviria

Sent: Monday, June 06, 2005 7:45 PM

To: Melissa Norcross

Cc: Stephanie Price; Jennifer Dellinger

Subject: Re: additional KBR information

Melissa,

Thanks for this and for all your help. Your team has been incredibly helpful in the last few weeks and we very much appreciate it. We finally got a final response from ESS today. It was very curt. They refuse to tell us the simplest of questions about the events surrounding the March 31st death of four Blackwater contractors in Fallujah: Who was the prime contractor that day? What was the mission? Was this a US taxpayer financed mission? If this was not under LOGCAP, what umbrella did it fall under? Why is KBR in ESS's contract with Blackwater?

I could still very much use your help in understanding article 4 of the contract. It implies that the whole contract is contingent on KBR. ³REGENCY shall have the right to terminate this Agreement or any portion hereof, upon thirty (30) days prior written notice in the event that ESS is given written notice by Kellogg, Brown & Root of cancellation of ESS's contracts, for any reason, or in the event that ESS receives written notice from Kellogg, Brown & Root that ESS is no longer allowed to use any form of private security services² (Article 4, ŒContract Agreement Term', page 4). It is important to us to clarify this because multiple press reports state that these men were ultimately on a KBR mission. If that's not the case then we need to prove it to our audience, and so far both KBR's and ESS's response does not cut the mustard.

As for more specific questions, here are some that come to mind. We have fact checked against news reports, but would prefer if this came directly from you.

• How many employees do you have in Iraq? Please break it down by nationality.
• How many KBR employees have died in Iraq since the war began?
• Is the LOGCAP III contract the largest in Iraq in terms of $$?
• To date, how much money has KBR billed the government for LOGCAP III?
• Has there ever been an instance when KBR hasn't used military escort for their LOGCAP convoys?
• How many truckers have been killed in Iraq since the beginning of the war?
• How often do convoys get attacked? One estimate reports that one in three get fired on.
• What month did the first KBR employees arrive in Kuwait?
• Does KBR run all the army bases in iraq?
• How many KBR employees live at Camp Anaconda?
• How many meals a day do you serve at Camp Anaconda?
• How many trucks were in the convoy that was ambushed on April 9th, 2004 and how many KBR employees died in that incident?
• After April 9th, we have reports that truck drivers refused to work. Is this accurate? When did operations resume?

I'm sure you are eager to see the film. I think it does a very good job of showing the scope of your work, especially thanks to Garry Carter's interview at Camp Anaconda and the amazing tour we got of the place. Paul Cerjan was also incredibly helpful in describing the mission and addressing the larger issues about policy, etc.

Finally, I'd like to thank you for the access you've granted. I'll be curious for feedback once the program airs and hope you feel that we've been fair and thorough in our reporting.

Best wishes,

Marcela