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Blackwater illegally paid millions in taxpayer money

Published time: July 16, 2012 16:37
Edited time: July 17, 2012 15:00
Blackwater

Blackwater

For half a decade, American taxpayers unknowingly spent millions of dollars a year to fund the so-called “democracy building” missions in Iraq carried out by Blackwater, the private security firm which regularly changes it name to hide its sins.

A new report completed by the US State Department and the Broadcasting Board of Governors Office of Inspector General shines light on a travesty involving the massive misuse of public funds.

Between 2004 and 2009, millions of taxpayer dollars could have been saved had the International Republican Institute — a bipartisan, nonprofit organization chaired by Sen. John McCain (R-AZ) — used their federal funding more efficiently. Instead, however, the IRI handed over massive sums of money to the Blackwater security group so that they could send armed guards to Iraq.

While Blackwater’s presence overseas has not gone unnoticed, the latest report shows that contract were made without the IRI considering any competitors’ bids and in the end cost millions of extra dollars, all the while funding the same agency proved responsible for the massacre of Iraqi civilians.

The unclassified report, dated June 2012, describes how the IRI used $103.7 million in federal grants during fiscal years 2004-2010 to conduct democracy-building programs throughout Iraq. In only a few pages, CPA Clarke Leiper, PLLC, explains — along with the guidance of the Office of Inspector General — how millions of dollars was mismanaged by making payments to Blackwater without seeking outside bids.

We found that the direct costs charged to the grants were reasonable for the purpose of conducting the programs. All costs were supported by invoices and other appropriate support documentation,” the report explains. “However, for the majority of the stated period, the allocation of security contract costs between the grants was not supported by a method that could be verified.”

“We determined that costs for four of the eight grants exceeded their respective award budgets by a total of $4,589,952,” the report adds. “We also noted that security costs of $64,285,818 exceeded the $49,472,461 in direct costs to carry out the Iraqi democracy-building programs.”

The report’s authors write that they believe “other qualified security firms were available for contract competition,” yet the IRI did not extend offers to anyone outside of Blackwater. In addition to the overspending and poor oversight, the report also alleges that Blackwater — who today operates under the name Academi — was unable to produce documentation relating to some of the federal contracts, did not get obtain approval for some spending allocations and, at one point in the span, ordered $26,600 worth of gym equipment that was never received.

“IRI agreed that additional controls could be implemented to enhance property management policies and procedures,” the report reads, continuing that, since 2010, the IRI has changed some policies related to how they manage spending such as this. For five years before that, though, the Office of the Special Inspector General for Iraq Reconstruction agrees that the Institute lacked a “methodology of allocating security costs that ensures a reasonable distribution of costs,” among other faults.

“While we acknowledge the volatile security circumstances in Iraq from 2004–2009, IRI should have periodically reassessed and documented the need to continue procurement of noncompetitive services from Blackwater. Overall, security costs of $64,285,818 exceeded the $49,472,461 in direct costs used to carry out the Iraqi democracy-building programs,” the audit continues.

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