Blackwatergate

"More than in most criminal law areas, prosecution of corporate criminals has a
significant element of general deterrence," the Department of Justice's new strategic plan for 2007-2012 suggests.

Yet everyday we see more evidence that the Bush administration's Department of Justice has no interest in deterring the ongoing epidemic of corporate crime.

During yesterday's House Oversight and Government Reform Committee hearing on Blackwater, for instance, we heard about how a drunk Blackwater employee killed one of Iraqi Vice President Abdul-Mahdi's bodyguards in the Green Zone on December 24.

Not only was the unnamed Blackwater employee almost immediately flown out of Iraq to avoid prosecution under the Iraqi legal system, but 10 months after the case was referred to the Department of Justice, he apparently has yet to face any charges. In fact, not one Blackwater or other private military contract employee has been charged for crimes committed in Iraq.

It's obvious that problems like that are the inevitable result of the use of private contractors. And rather than try to regulate them (as Rep. Price has proposed in his bill -- an approach that I previously endorsed but now do not because, as Jeremy Scahill has pointed out, the law would be virtually unenforceable), we need to push for a reversal of the privatization of war. More on that soon.

But what escapes this discussion so far, is how the Blackwater case fits the broader pattern of the Bush administration's almost total failure to enforce the law against corporations.

Take the many False Claims Act cases filed by whistleblowers against the U.S. companies contracted in Iraq. As attorney Alan Grayson has testified numerous times before Congress:

"the administration has not actively litigated one single case of fraud, or even breach of contract, against any contractor in Iraq. Iraqis have looked on in disbelief, and then in anger, as one botched Iraq reconstruction job after another has been paid in full, and they see that this Administration won't even protect our own troops from cheating and overcharging. Many Americans feel the same anger."

Indeed, David Rose reports in the November issue of Vanity Fair that whistleblowers have filed dozens upon dozens of lawsuits, trying to prod the Bush administration to fight contractor fraud. The response: The administration has obtained court order after court order barring the filers and their attorneys from even discussing the cases - i.e. to keep the American people from knowing how bad the cronyism and corruption really is.

Grayson, who has handled many of the cases says "the Defense Department itself has been vigorous in its efforts to protect its troops from war profiteering. ... The problem has been that the Bush administration Justice Department won't do anything to recover the stolen money, much less punish the wrongdoers."

Grayson cited the role of Peter Keisler, Assistant Attorney General of the Civil Division, who not only stifled the cases, but was also responsible for reducing settlement payments with the tobacco industry from $130 billion to $10 billion.

The point is that when it comes to corporate crime, the Department of Justice has become a major sinkhole, where cases of alleged fraud and corruption are routinely referred, and where they often disappear or are "settled" for pennies on the dollar, ending any chance of bringing the war profiteers to justice. (After four years, the Bush administration recovered just $14 million through settlements of whistleblower cases -- which will pay for about half an hour's cost of the war).

The problem goes well beyond the war profiteers. Other corporate crime cases that have been tossed into the prosecutorial blackhole include:

* The Department still has not cleared Halliburton of any charges resulting from a grand jury investigation into the company's decision to conduct business in Iran in violation of Treasury Department regulations.

* The Department has failed to complete an investigation into one of the biggest cases of corporate bribery in history -- the Halliburton Nigeria case -- which extends back to Dick Cheney's tenure as CEO of the criminogenic company.

* According to the Corporate Crime Reporter, the House Judiciary Committee has begun to ask why the Justice Department abruptly dropped a federal criminal probe into allegations of insurance fraud at Berkshire Hathaway's General Reinsurance (Gen Re) unit.

Meanwhile, the Justice Department is rolling over as leading business groups push legislation that would weaken key enforcement tools against corporate crime. A campaign orchestrated by the Chamber of Commerce, the Business Roundtable, the Association of Corporate Counsel and their allies at the ABA and ACLU seeks to pass the so-called "Attorney-Client Privilege Protection Act," which would limit the government's power to pursue corporate fraud by prohibiting federal agencies (including the Department of Justice and the SEC) from demanding that companies cut off legal support for employees under investigation - a policy established by the Justice Department's guidelines for corporate cases, a policy that was key to the prosecution of prominent corporate criminals such as WorldCom's Bernie Ebbers. The Department of Justice has gone on record in opposition to this policy, but has done little to stop the legislation, which members of both parties are supporting.

It also appears that some U.S. attorneys who have tried to do their job and pursue corporate criminals have been subject to political retaliation. According to the Washington Post, for example, John Brownlee, the U.S. attorney responsible for handling the OxyContin case was called by Michael Elston, chief of staff to deputy attorney general McNulty (the person supposedly responsible for leading the Department's efforts to crack down on corporate crime), the night before he secured a guilty plea from Purdue Pharma. Eight days later, Brownlee's name appeared on a list compiled by Elston of prosecutors that officials suggested be fired.

It could be said that a few anecdotes don't paint a complete picture, and I don't doubt that there are still some sincere, adept people laboring long hours within the federal government to crack down on corporate crime. But their numbers are clearly dwinding and there has been little evidence that they have received much support, or that in the aggregate, the Department's efforts are adequate to the scale of the problem.

Moreover, the few reports where the enforcement data has been crunched suggest that things are getting worse.

Experts at the Transactional Records Access Clearinghouse at Syracuse University track federal enforcement data, and say that white collar crime prosecutions credited to the FBI (the nation's lead agency for cracking down on white collar crime) have dropped from 5,031 in FY 2001 to an estimated 2,693 for FY 2006.

And government employee watchdogs at Public Employees for Environmental Responsibility crunched the data and recently reported that EPA's pursuit of criminal cases against polluters has dropped off sharply during the Bush administration, with the number of prosecutions, new investigations and total convictions all down by more than a third.

The same story has been told about occupational safety (OSHA), mine safety (MSHA), product safety (CPSC) and so forth. The cops are not only off the corporate crime beat. They're at the bar getting wasted.

And those who follow the issue closely say weakened enforcement efforts have emboldened corporate criminals such as major polluters, who have begun to flout U.S. environmental laws, threatening progress in cleaning the air, protecting wildlife, eliminating hazardous materials, and countless other endeavors overseen by the EPA.

"You don't get cleanup, and you don't get deterrence," says Eric Schaeffer, who resigned as director of the EPA's Office of Civil Enforcement in 2002 to protest the administration's approach to enforcement and now heads the Environmental Integrity Project, a watchdog group. "I don't think this is a problem with agents in the field. They're capable of doing the work. They lack the political support they used to be able to count on, especially in the White House."

They say that "fish rot from the head" just like corporations and governments. The problem is that when the corruption becomes systemic as it has in recent years, simple decapitations are not enough.

A major overhaul is needed. Until we get that, Congress should be pressed to investigate the Department's handling of the worst corporate crime cases, including Blackwater, and use his nomination process as an opportunity to grill Judge Michael MuKasey about what he will do to make corporate crime the priority it should be.

Comments

[dadw5boys]

Hard for the DEPARTMENT OF JUSTICE to get any charges when the State Department Personnel in Iraq handed out contracts full of holes.
Like the $5 million dollar building that was contracted for $72 million dollars without any provisions that the building have a warranty for 1 year or that the building be hooked up to a sewer or even a spetic tank.
The building is now full of human waste and unihabital. To quote Rolling Stone who reported it, "A $72 Million Dollar PILE OF SHIT".
One State Department Employee had never worked on a job higher than ICE CREAM SALESMAN.

[startrekchess]

We have to fight Blackwater in Iraq so we don't have to fight them here, in America.

I believe Scahill pointed out Blackwater was in New Orleans after the levees broke, when the city's own citizens weren't allowed to be. The next national catastrophe to strike a major American city will see the same thing, if not worse; New Orleans was just a testing ground for how to use the mercenary army, guaranteed. Those men had no right to be here. They weren't "protecting diplomats".

[martinspringfield]

Not just NOLA; they're looking at these guys and others like them for border guards. Wonderful.

This is the absolute turning point on the USA becoming a full-blown fascist (Christofascist if Erik Prince has any say) state. We DO Have to fight them here or we will become the Soviet Union circa 1960.

[research]

Hey you loyal American CIA MIA FBI Soldiers and Vets! We need you! It's time.

[pamelalyn]

It has become clear that Blackwater USA has become a threat to any hope for peace in Iraq. How can Iraqi citizens possibly feel safe when a paramilitary organization, which seems to answer to no one, is running lose on their streets.

There is enough documented evidence to prove that Blackwater's tactics as well as their attitude toward the Iraqi people and culture are inappropriate, to say the very least.

The recent incident involving Blackwater contractors opening fire in a predominantly Sunni neighbourhood, killing eight and wounding 13 civilians is the straw that breaks the camels back.

Does the US Government really want to run the risk of Blackwater USA starting WW III?

It's time for the US Congress to demand that the Department of State and the Department of Defense cancel all contracts with Blackwater USA and order them to depart Iraq immediately.

If you agree please sign this petition. It's time to end Blackwater's terror for profit.

http://www.thepetitionsite.com/2/its-time-to-fire-blackwater

[carioca]

Here's the information on Blackwater. Give them a call/email/letter today.

Blackwater USA North
P.O. Box 33
Mount Carroll, Illinois, 61053
815-244-2900

Blackwater USA
P.O. Box 1029
Moyock, NC 27958
252-435-2488

Company Spokeswoman:
Anne Tyrrell
Phone number 703-852-4320

[RnR]

"Not only was the unnamed Blackwater employee almost immediately flown out of Iraq to avoid prosecution under the Iraqi legal system, ..."

For you and me it's referred to as "aiding and abetting" :)

[RnR]

I only saw the parts of Erik Princes' testimony played on Democracy Now. One thing though; I think he made a statement to the effect that "we're Americans fighting for America" or some such b.s.

Blackwater had, at the least, Chileans working for them. Another area for investigation might be how many graduates of the School of the Americas (in Georgia) are on their payroll?

The AMA might be interested in a documentary I watched last night (Father Roy...)wherein a graduate (disguised for fear of his life) reported that medical doctors (although military) were there showing exactly how to torture; how far to go before death would occur, and how to revive the "subject".

This is majory serious and must be stopped, Pelosi or no Pelosi. To have thousands of armed conscienceless mercenaries available with a phone call is unacceptable.

[cheshyre]

It's a time of war! Everything the government does is OK! Remember how we all rallied together in WWII? Let's stand as one like in the good ol' days! Support your President and the boys on the front! Who wants to believe we could EVER be the bad guys? All those who say yes - that's the same number of people who want justice now.

[avahome]

I discovered something yesterday after I had read the AP latest and greatest on Mukasey and the DOJ..Leahy/Fielding banter.

Mukasey had ruled on a case in 2004 involving a lady dubbed "Symbol Susan". Mukasey followed the law ruling against Bushco. Now in my mind, this takes some backbone...probably big backbone. Give this story a read and maybe you will come away with a little better feeling about this former judge and how he handled his cases. It sure surprised me!

http://scoop.epluribusmedia.org/story/2007/10/4/63614/4095

With Liberty and Justice for All: Justice, Jurisprudence and Judge Michael Mukasey

[Neuromancer13]

The mafia metaphor is becoming increasingly accurate as we learn more about how this administration and their supporters work. The code of silence. The willingness to do anything, no matter how outrageous, for profit and power. The public face of honor and dignity hiding the private face of rapacious evil.

There is a tool for dealing with mafias: RICO, the Racketeer Influenced - Corrupt Organization statute.

http://www.ricoact.com/

This law has a bad reputation, and justifiably so, because of its abuse to go after individuals or to make criminal cases out of what should be civil cases. Nevertheless, it was created for a purpose, and can be rededicated to that purpose. Surely there are some enterprising defense attorneys out there that could be tempted by all those billions and billions of dollars looted from the US taxpayers by Bush cronies, abetted by the Bush administration's criminal coverups and quashing of prosecutions?

[dadw5boys]

When Iraq held their Frist Government Meeting they became a Sovereign Country.
Paul Bremmer who has a Private Security Company of his own in Iraq voids anything on paper that allow contractor to operate outside the law because he has a vested interest in allowing these activities.
He in fact has broken the law by issuing that paper if he holds an Active Directors position in the Operation of a Private Security Firm working in Iraq.

[midtown]

Blackwater has 160,000 mercenaries in Iraq. One of them boasted that he makes $300Gs a year, which sounds right for isolation and war pay added onto a states-side salary.

That $48 BILLION. Is this why our costs are so high? Doesn't take into consideration what Blackwater pays for equipment, transportation, and the CEO salary.

What do we pay our soldiers? 20-25Gs/yr? The brass gets more, but why are we paying more for a mercenary army than we are for our own troops?

Blackwater and every mercenary soldier over there has a deep financial interest in seeing this war continue.

[drkazmd65]

We are paying more for the Mercinaries than we are for the real Soldiers because of two things:

1) It is easier to launder money and cover fraud if there is more money moving through the system.

2) The mercinaries do not answer to the American people - just their corporate masters.

Nothing else needs be said.

We are paying for Bush's, and the Neo-Con's Brownshirts. That's all.

[SolarPowerGuy]

I'm sure that Blackwater is ripping off the U.S. taxpayer roundly. Still, I doubt that the bill for contractors is as high as the $48 billion you suggest.

The mercenary with the $300K salary is exceptional, a gunslinger in a high-risk job. Gun-toting contractors number in the hundreds to low thousands.

Most of the 160,000 contractors that we pay to have in Iraq are support staff -- cooks, auto mechanics, etc. The contractors are doing jobs that regular Army personnel used to do, freeing the GI's up to go on patrol.

[lthuedk]

The essence of militant corporatism.

http://www.light-to-dark.com/blackwater_jesus_at_republican_mecca.html

[mikeodd]

Unfortunately Blackwater proved itself a necessary,if odious force when they were shut down following the massacre. All movement outside of the Green Zone immediately ceased as Condi went into spin control.
They are simply better-equipped for a counter-insurgency than the good folks in National Guard units, who simply weren't trained for whats now happening in Iraq.

[GreatFutureForAll]

"Unfortunately Blackwater proved itself a necessary, if odious force...."

What do you mean by "odious force?" I'm asking this question honestly as I do not know just how far this organization has gone to maintain order for it's clients.

By odious, do you mean killing Iraqis by mistake? Is there a shoot first, ask questions later approach within Blackwater? Are we to ignore Iraq's request to have this organization removed from the country?

If, as some have claimed, the Iraq effort can only be won diplomatically, is Blackwater's presence helping the United States in it's negotiations with the warring factions? Or, is it providing an additional hurdle for diplomats to overcome in their unlikely quest for a stable government inside Iraq?

[Herrington]

There it is at last. Thanks Mr. Cray. I had been wondering, after seeing laundry lists of Iraq reconstruction corruption, where were the stories on the prosecutions? And having been a corporate citizen for a career, I had never a doubt that given a free of government interference environment, business would start committing crimes as fast as they possibly could. No surprise there, just a curiosity as to whether the American public is up to the task of caring whether they live or die for the profit of a corporation.

The outrage of gagging the whistleblowers is towering though. As many whistleblower protections as have been erected in the last decades, it seems they need to incorporate yet another tier of awareness. But how can the Justice Department be invested with enforcing new protections when they have been shown to be complicit in evading those that already exist?

The Bush infiltrations of government must be purged in the Soviet style. As apocalyptic as it seems, Bush appointees to government must be hunted down and fired regardless of rank or presumed qualifications. This is the only way to restore public confidence in the system that Bush has so completely corrupted in his megalomaniacal plan of a permanent Republican America.

My God man, can you imagine the IRS persecuting a political enemy of the government? Does it matter whether an FBI agent"s supervisor tells him to drop a Lindbergh case on a political ally of the administration? Can a Blackwater agent be given a walk for gunning down a school teacher protesting her labor contract?

Ignoring fraud on the war, criminality in commerce and industry is just the tip of an iceberg of criminality. If there is no consensus as to what justice is, if there is no dependable application of law, the scales of justice are of no use, and neither is civility.

[zizyphus]

What people don't understand is, that this Bush administration has turned these all these federal departments into veritable mafias. Our government is now run by thugs, for thugs.

That is why prosecuting these criminals should be the first order of the day.

[Guitarsandmore]

Yes, thugs with a capital T. Blackwater recruits soldiers from third world countries such as Chile, where the former boss was a brutal dictator and a strong advocate of extreme behavior. Then these former Nazi/junta type soldiers are given American security clearance to move in and about in Iraq.

Blackwater also recruits Serbian Nationals who used to work for Milosovitch and gets them U.S. security clearance to guard check points.

Blackwater is the same company that wants to work inside the United States on the borders using these third world converted former storm troopers spelled T-H-U-G-S.

So, next time you plan a visit to Mexico you might get to meet some of these charming individuals personally if you are very unlucky.

Is it any wonder we are having difficulty winning the hearts and minds of the Iraqi people when we hire brutal madmen to do the work that American Soldiers should be doing?

http://www.amazon.com/Blackwater-Rise-Worlds-Powerful-Mercenary/dp/1560259795/ref=pd_bbs_sr_1/102-0948852-8680947?ie=UTF8&s=books&qid=1191460609&sr=8-1



http://www.c-span.org/

If Henry Waxman can criticize Rush Limbaugh why can"t he call Blackwater on the recent shootings? These hearings leave the important questions out.

[research]

I cant believe it! Blackwater is doing security for our elected officials! Paramilitary group! Paid for by business friends of BushCo. Blackwater could kill them all at once assuming true believers assigned to each Congressman "for security". This is a classic coup setup!