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The GAO Transcripts: Part 2, Second Blackwater Interview

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Here is the second installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report "Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers."

Like the first transcript I wrote about this transcript is again an interview with an official from the private security contractor Blackwater. This is obvious not only because of the comments in the interview, but because the handwritten word "Blackwater" appears at the top of the first page, with double underlining for emphasis.

As with all transcripts the identity of the interviewee is not known, but it seems likely it is or was a senior company official.

This interview is likely to raise a few eyebrows for the following reasons. The Blackwater official states:

First, the U.S. military forces in Iraq did not provide sufficient backup to private security contractors. Notably, the official says that the Marines were present during the March 2004 attack on Blackwater contractors in Fallujah and knew that they were being attacked but they refused to help because they were unsure about their responsibility for PSCs.

Second, the transfer of power between the old Coalition Provisional Authority (CPA) and the Department of State was poorly handled.

Third, communication between PSCs and the military depended as much on informal, if not more so, than formal communications

Fourth, the process for obtaining body armor for PSC operatives was cumbersome, potentially endangering their safety.

Fifth, convoys traveled precariously in Iraq. The US government only ran convoy security on trucks. Many non-military convoys moved unprotected and the military had unrealistic expectations about the quantity and quality of security that is appropriate for safe movement.

Sixth, the US army was devoting more resources on manning its equipment rather than focusing on managing and training its men.

Seventh, the military was not proactive and, in Afghanistan, was too slow.

Eighth, the government contracting process use of cost-plus contracts "incentivize waste because companies make a profit based on how much the government spends. The more money a company charges, the more money they make."

Ninth, recruiting was getting tougher. Blackwater found that "they have been getting more resumes, but they also have a higher demand and have fewer resumes that meet DOS standards."

Bear in mind this interview as conducted in September 2004, nearly six years ago. Many things, though certainly not all, concerning PSC have changed since then. Also, these are the view of one Blackwater official and not necessarily reflective of everything that happened. Other transcripts in this series will include the views of various U.S. military officials, whose views will likely differ.

As information was redacted in the transcript I have put in ( _____ ) to reflect those words of phrases which have been blacked out. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is.

Prepared by: Kate Walker Index:
Date Prepared: September 1, 2004 DOC Library:. Goal 2
Reviewed by: Type reviewer name here Job Code: 350544

Record of Interview
Title _______ Interview and Site Visit
Purpose To gain on-the-ground insight from PSCs
Contact Method Face-to-face
Contact Place ___________
Contact Date August 30, 2004

Participants Kate Hudson, DCM, Analyst
Carole Coffey, DCM, AIC
Steve Sternlieb, DCM, AD


Founded in ___________ is a _________________________________
US federal, state, and local government. ___________ provides ___________
contains ___________ ___________ ___________ ___________ ___________
___________ ___________ ___________ ___________ ___________ ___________'
___________ ___________ ___________ ___________ ___________ ___________
___________ ___________ ___________ ___________ ___________ ___________
___________ s multiple contracts with a number of US government agencies, including the DOD and DOS. These contracts expire in March 2004.

___________ currently at 90% working capacity and has employees in a number of countries, including Iraq, Jordan, Israel, Afghanistan and seven US states. On any given day, ___________ employs between 700 to 1000 personnel with approximately 500 men working specifically for ___________ curity Consulting. While ___________ employs mostly expatriate ___________ also uses third country nationals from ___________ or static site security. Even though their contracts do not require it ___________ does not use Iraqis for security.

only provides security in medium- to high-risk environments. Medium- to high-
___________ includes guarding emhassies in Afghanistan and Liberia ___________ ___________ not perform "rent-a-cop stuff." ___________ fers cargo, personnel, and federal packages. They currently support ___________ are working on DOD contracts. ___________ leadership is mostly former Special Operations officers, Chief Warrant officers, SNCOs/NCOs. ___________ s been very successful the past several years and are now afforded the "luxury of saying no to potential jobs

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___________ biggest contract is under the blank purchase agreement (BPA) with the CPA. ___________ of seven companies providing services under the BPA and was awarde___________ of the 18 task orders issued by the CPA. ___________ won the other task orders. DoD funds these task orders, but oversight of the contracts is a DOS responsibility. ___________ however, is unsure about the relationship between the DoD and the DoS For the ___________ ders it has won, ________________________________ The task orders are funded through November 30, 2004. In addition to these contracts, ___________ also subcontracts. For example, ___________ s a contract with election board run under USAID. ___________ provides convoy security for ___________ for ___________ part of a four deep subcontract in Kuwait___________ as the prime contractor. ___________ also has several contracts protecting USG American officials and high visibility USG facilities (such as consulates).

___________ reports that the security situation in Iraq has gotten worse over the past year The road to Baghdad is very unsafe and is seeing the same hits at the same sites every day. ___________ believes that the USG reeds to be more proactive and that the DOS in particular needs to improve the infrastructure for dealing with PSCs. ___________ has found interactions with the military to be tense and that, in general the military does not understand who the contractors are. To quote one ___________ employee (they think we're cowboys.) ___________ believes that much of the tension exists because the enlisted military are envious of the PSCs freer ability to move around and higher wages. ___________ has had to supply their own guns, body armor, etc.

The transfer of power between the CPA and the DOS reallocated everything that fell under the CPA's purview to the CPA. ___________ believes that the transfer of power was poorly handled. For example, the chain of command between the CPA and MNF during the handover was never delineated and no guidelines were given regarding how the military should respond if PSC required help. ___________ has seen big changes in the handover from CPA to DOS. They find DOS to be more bureaucratic and less accessible. For example, ___________ found that common access cards (CACs) are hard to get now that DOS in charge. DOS won't issue CACs to companies unless the company has been vetted, but since DOS hasn't defined what being "vetted" requires everything has been at a standstill. Not having a CAC card severely complicates the process for PSC. Without a CAC card, companies are treated like as if they were indigenous, making it more difficult to access weapons. Since the changeover, ___________ has not seen any improvement

___________ notes a serious lack of cooperation among federal agencies with regard to security clearances. Agencies will not respect security clearances given by different agencies. This poses a number of problems for PSCs as many of their employees have security clearances issued by different agencies, but are unable to utilize their cleared status because agencies refuse to recognize each other's clearances. ___________ reports that there has been a Presidential Executive Order requiring agencies to cooperate, but agencies have not complied

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with this order on the ground. It is very expensive for companies to get their employees private security clearances as clearance costs range from $20,000 to $80,000. Redundant clearances for multiple agencies are a drain upon company resources.

___________ also encountered inconsistency in the security clearance required by different agencies. For example, while DSS tactical requires security clearances, the CPA does not. ___________ PSD did not require security clearances and, thus, the group working ___________ couldn't gain access to DSS intelligence. In situations such as this, ___________ d that unclassified people would just tap into their informal network and find someone who did have a clearance who get them the logistical information that he/she needed.

___________ also found that the encountered problems vetting home country nationals (HCN). There is no good apparatus available for performing HCN background checks because the Iraqi Police (IP) has no criminal information or records.

___________ indicated that the there was no official cooperation or formal communication arrangements with the military, but there was unofficial cooperation. ___________ report that ___________ provided some informal communication, but said his role was not comprehensive enough. ___________ found that the best way to communicate with the military was to utilize their informal relationships. For example, ___________ had no formal means of requesting military backup for some of their operations. They would instead talk to their personal liaisons at the company level, most typically the Army captain level and below. Level 03s and below were the best people that ___________ found to deal with the military. Level 03 and up were found to be unhelpful

___________ cited their Najaf [Blackwater] experience as an example of the lack of military buildup. (Analyst note" _____________________________________________________________________________ requested aid from the US military on April 4, 2003 after they came under attack of Iraqi insurgen___________ went 14 hours without US military response. When ___________ did report, he was not happy to find out that a ___________ operative had been leading the counterattack. ___________ er issued an after-action report delineating the event. (Analyst note: ______________________

___________ also indicated that the Marines were present during the March 2004 convoy attack in Fallujah. ___________ believes that the Marines knew that they were being attacked but they refused to help ___________ because they were unsure about their responsibility for PSCs.

___________ thinks that the military does not know whether they are required to provide protection for PSC ___________ believes that there are too many layers of bureaucracy within DOD. It takes too long for requests to be processed through multiple layers of bureaucracy within DOD. It takes too long for requests to be processed through multiple layers of bureaucracy when PSC s need immediate aid. ___________ thinks that much of the reluctance on the part of the military has to do with "the blame game." The military doesn't want to help PSCs if it is not explicitly stated to be within their AOR because they do not want to carry the

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blame of losing one of their soldiers during battle. Different commanders have different attitudes towards PSCs. Some commanders are wilting to cooperate and help PSCs out;
others think that PSCs should take care of themselves.

___________ also does not know the chain of command to request US military aid. They don't know who to contact and do not have a dedicated "go to person." Additionally, their contract does not indicate whom they should contact in case of an emergency situation. ___________ does not believe that there is a formal MOA delineated in their contract regarding the responsibility of the military for providing support to PSCs in times of need. Due to the lack of formal protocols for requesting military aid ___________ s resorted to "working through the back door." For example, if ___________ back up in a certain area or is taking a convoy through a certain section of town and they want some additional back up they will utilize their "informal relationships" by suggesting to their former colleagues and connections in the military that they "might was to conduct a training issue" in a certain part of town where ___________ anning their mission.
___________ found that they have to seek out informal ways of getting backup/help from the US military. ___________ els that they are basically on their own. They do not have any means of communication with the military; they do not have the frequencies or numbers of persons they should call in the military should they need assistance or even to report an IED attack.

Conversely ___________ rovides assistance to the military whenever necessary. ___________ provided us with a letter from Henry Ensher, CPA Governorate Coordinator in Iraq detailing the exception service that ___________ provided. (Analyst note: we have a copy of this letter, but are missing the first page of the second letter ___________

___________ is noted that the Army and Marines have different responses to PSCs. ___________ s found that the Marines are more proactive and that they foster a counter-insurgency mentality. ___________ also said that the Marines are better about returning PSC phone calls and offering PSCs aid ___________ loes does not necessarily believe that coordination with the Marines is better than with the Army, but does hold that many of the differences between the two is more of a reflection of local commanders' attitudes.

___________ unaware of a movement control cell that serves both the military and private security contractors. ___________ as found that the conventional mindset of the general and staff fails to include PSCs into any movement calculations. Because of this mindset, ___________ and other PSCs have suffered dislocations. Because they cannot rely on the military to help coordinate their movement with other convoys, ___________ as an in-house team in the Green Zone that keeps track of employee movement and any other military or private security movement they can discern through their contacts or observation.
employees call in via cell phone when they are moving ___________ not understand why the military is not taking advantage of the prototype technology available for tracking movement in Iraq. For example, Thuria is a commercial tracking system that the military could implement to track convoy movement. At the urging of a number of USG

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agency personnel, ___________ submitted an unsolicited proposal to the DOD for a fusion cell. (Analyst note: we have copies of both submitted proposals.)

Crisis action teams (CATS) handle U.S. Administrator of Iraq, L. Paul Bremer's movements. ___________ reported that the military was not coordinating these movements. The military provides at best limited support for CAT teams.

Convoys are traveling precariously in Iraq. Currently, USG is only running convoy security on trucks. Many non-military convoys are moving unprotected ___________ as heard ___________ is losing approximately $1M/week in convoys. The DOS just lost $1.1 million in Suburbans because they didn't have enough security on the OST convoy. ___________ says that because convoy security is so risky, insurance for gear in Iraq has skyrocketed. For example, ___________ recently had to insure $3,000 gear with $10,000.

___________ that the military has unrealistic expectations about the quantity and quality of security that is appropriate for safe movement. For example, the BPA allotted each task order $5M each year for convoy security. This contract would cover approximately 14,000 trucks/month with an armed convoy. ___________ onded to the RFP with $7M/mo proposal. After receiving several responses to their RIP that were significantly above the original $5M, the BPA realized that the original proposal was too small.

While ___________ its own internal incident reporting system, it is neither voluminous nor comprehensive. To date, reports that they have had 9 causalities resulting from 1 car accident and 2 ambushes. These causalities were shipped to Dover, DE and any medical treatment given by the Army was free of charge. ___________required to report these incidents to the Army. ___________ also has an internal intelligence gathering mechanism. ___________ has not been asked to file reports with local commanders regarding any convoy attacks or intelligence they have gathered.

Currently there is a lack of intelligence sharing in Iraq. PSCs do not have an official formal source of information from the military. Currently, there is no grand central database of IEDs or mortar attack on convoys. There is no one in the military that ___________ go to clear the road with if transporting officials. (Analyst note: _______________________________________________________

___________ reported that there used to be a daily 0900 brief at the CPA, but believes that no one attends it anymore because the information provided was not any more than the PSCs could derive themselves. Part of the reason for the lack of intelligence sharing is that much of the information is classified and not all PSC require that their men have security clearances.

PSCs have resorted to gathering their own intelligence informally ___________ that the OSCA used to issue daily briefings through a secure website. These reports were inconsistent, however, and therefore unreliable. A company on the US west coast, SOCSMG also used to pull together intelligence reports on Iraq. Similar to the OSCA reports, the

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SOC-SMG reports were not systematic and sent directly to PSCs working in Iraq. Several PSCs pooled their resources in an attempt to hire - ___________ to represent the PSCs
inside the MOI. PSCs hoped that in this position, ___________ could represent the
interests of the PSCs to the MOI and would distribute situation reports to PSCs daily. Several companies, such as ___________withdrew their support from this unit and the plan never came to fruition.

Prior to Memorandum 17, the CPA did not require weapons to be licensed. ___________
reported that while the CPA had intended to issue weapons cards, these cards were now "being used as post-it notes." CPA issued weapons cards "never came to be."

Access to weapons in Iraq is limited. Private companies are having a hard time buying weapons and have taken to buying many of their weapons overseas. While DOS purportedly requires export licenses to get guns into Iraq, reports that they never saw any
limits as to what they could bring into Iraq. ___________ id remark, however, that weapons fell into a gray area. If they have the money, companies can buy anything they need in Iraq. ___________ remarked that Iraq had a free market for guns. They found Afghanistan to be the same way. Conversely, ___________ said that they could not get the weapons that they wanted with the appropriate range. Under the provisions of their contract, ___________ employees providing security are not allowed to have offensive weapons. Likewise, in accordance with their contract, ___________helicopters could arm door gunners, etc. with hand-held guns, but they were unable to have mounted weapons.

___________ also found that the process for requesting permission for body armor was laborious. While working on a DOS contract protection DOS officials, ___________ad to prepared seven duplicate request orders and then would wait approximately 3 days to receive the body armor.

Under Memorandum 17, there are repercussions for contractor actions. ___________ thinks that Memorandum 17 is an incident waiting to happen, but notes that nothing has happened yet. Currently, ___________ little faith that the Iraqi Police (IP) has the capability of enforcing regulations, conducting investigations, or prosecuting criminals. ___________ has not sent any employees home for misdemeanors. ___________ , however, sent less than ten employees home for performance related issues.

___________ inds the Iraqi Police (IP) to be highly ineffective. IP are not yet doing typical law enforcement--such as criminal prosecution or investigations. ___________ reports that before the Fallujah convoy incident, IP did not have a presence in Iraq. ___________ the IP to be insufficiently supplied; IP get four rounds per magazine. When working with the IP, gives them full rounds. ___________ believes that the IP are afraid of the insurgents and not confident in their work. The IP is largely ineffective, '___________ point of view. For example, ten days ago (approximately August 20, 2004) there was an accident in which an Army vehicle collided with ___________ vehicle in the Green Zone. Two Americans

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were injured. When the Army Military Police (MP) showed up, they refused to write up a report because they said that the accident was under purview of IP. The IP never came. Ultimately, the MP showed ___________ how to write up a report to submit to the DBA.

___________ okes that the Green Zone has "self-service accident investigation." Theoretically, the local Iraqi police are supposed to investigate and HC police department would deal with the POS since there is no apparatus in Iraq to do investigation. The MP does, however, conduct investigations for causalities. ___________ does not know where these records are kept and have never heard about any follow-ups.

In our discussion with ___________, several areas of concern regarding the military were raised. In particular, ___________ finds that the US military is overburdened with tactical operations centers., communication centers, etc., and that there are too many electronic leashes. From ___________ ; perspective, the US army is resorting more resources on manning its equipment rather than focusing on managing and training its men ___________ believes that US Army reservists do not have the proper experience and training to prepare them for combat in Iraq. ___________ also finds the military to be inexperienced and unequipped to handle the current situation in Iraq.

___________ is also concerned that the military is not being proactive. For example; ___________ observed ___________ ng repeatedly bombed. The military responded by shooting in retaliation. A PSC working at the base figured out where the shots were coming from and suggested directly mortaring the perpetrators to the Army commander in charge. The commander said that proactive responses were not in their purview. ___________ believes that the Army isn't displaying enough "moral courage" and that Army officials aren't willing to risk lives to save lives. ___________ believes that officers are too afraid of the blame game to act proactively. ___________ provided another example of the military not being proactive: ___________running out of supplies in Najaf and was trying to put together a operation via air or ground to get more ammunition. ___________ approval from DOS authority. When the regional security officer (RSO) at the site found out abou. ___________ plans, he was displeased. The RSO perceived ___________ as an offensive rather than defensive action and, thus, not under the purview of a private security contractor. The RSO threatened Iraqi government persecution if anyone died during the operation. In addition to these examples, ___________ questioned why the Biop highway is repeatedly hit in the same places every day. He believes that a more proactive army would seek to prevent the attacks rather than react to their effects.

___________ finds the military to be too slow. They said that ___________ccomplished
more in Afghanistan during the first three weeks than after when the military commander flew in; finds the military to be inefficient Only after the military commander arrived did things start to get backed up.

___________ very concerned the current government contracting process believes that cost-plus contracts incentivize waste because companies make a profit based on how much the government spends. The more money a company charges, the more money

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they make. All___________ contracts are firm-fixed price. With firm-fixed price contracts, contractors take all of the risk. ___________ also found that they have had to float the government money without interest for the first 90 days. Because they are bearing much of the risk of working for the government themselves and providing the government with good service, ___________, els that the current contracting process is unfair. Under the current system, prior performance doesn't count in procurement. Low cost is the deciding factor. A number of "one-off, inexperienced companies win bids" because they have low overhead and however, give the USG a cheaper price. Cheaper prices, however, do not necessarily equate quality service. Because low cost is the winning denomination, ___________ found that in order to win a contract they must give the USG what they want rather than what the job truly requires. ___________ believes that the contracting process is faulty because there are no fines or follow-up contracts to assess whether or not the contractors are competent and compliant.

___________ thinks that ___________ contract is an example of waste and the ill-constructed award process. The ___________ contract is supposed to formalize the informal communications that have been occurring between PSCs and the military by, ___________ intelligence. According to ___________ PSCs in Iraq and CENTCOM's AOR are to be included in this project. ___________ wary of ___________ility to successfully fulfill this contract ___________ believes that ___________ has overextended itself as ___________ currently doing 78 personal protection details. In addition, th ___________tract is using a number HCNs an ___________ does not believe that HCNs should be ensured with secure information.

___________ ported that recruiting is getting tougher. They have found that they have been getting more resumes, but they also have a higher demand and have fewer resumes that meet DOS standards. The clearance process also creates a bottleneck in the hiring process, making it more difficult to meet staffing needs. While ___________ tially hired only ___________, they are now having to cull from the next "level" of employees, including: infantry soldiers, Marine Corps, Special Weapons with Tactics, Police Force. Employees from this lower tier get eight weeks of training to prepare them for the Iraqi environment. Former special operations receive two weeks of training, double the amount of training as last year.

___________ training involves shooting, driving, physical fitness, teamwork, and critical thinking skills. ___________ found that the laws of economics are pulling the pay scale
down. More people are willing to work and, thus, salaries have decreased. ___________ has also found, however, that some companies were initially paying higher salaries to build up their employee pool, but now that they have sufficient employees they are paying less. Pay scales have also decreased because DOS is pushing wages down. As the single largest private security client in Iraq, DOS has a large amount of influence on contracted employee wages. DOS also influences the type of employees that PSC can hire; DOS security requires that some positions have to be TCN or HCN. While a number of private security employees will migrate to companies that pay higher wages ___________ found that many of its employees are more concerned that their co-workers are skilled, quality people.

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There has been significant concern that PSCs providing mission critical services will quit in the battlefields during times of need. When asked whether they had ever had a problem with personnel quitting on the battlefield, ___________ reported that they had never known any of their men or any other contractors, for that matter, who had ever been driven off the battlefield. ___________ employees feel that they are in Iraq to do a mission and to support their troops ___________ reiterated ___________ dedication to service by stating, believes so strongly in what we doing that that we are willing to take the risk upon ourselves. For example, ___________ self-insured all of its own helicopters and is even funding some of its own contracts by floating the government money. Repeatedly, those we interviewed stated that they weren't in it for the money; they were doing something they believed in and as part of their love of the United States and the democratic society for which it stands.

___________ knows of two companies-- ___________ that have pulled out of Iraq ___________ pulled out because of frustration with the military. Most of the original 14 PSCs are still working in Iraq.

___________ has heard frankly said that the Army does not have the necessary force to fight the current battle in Iraq. Part of the reason for this lack of resources was the DOD and DOS's lack of appropriate planning and budgeting. DOS has no previous model of how to handle a huge diplomatic staff in an unstable war zone. Instead, DOS is more accustomed to using the law enforcement type of protection found in more benign environments rather than the more extensive protection found in military environments. ___________ also heard that DOS is frustrated with their counterparts in DC; they have a hard time explaining to the people in DC why they need certain things (for example why they need 12 rounds instead of 6). feels that they have become the muscle for the military.

___________ believes that the situation in Iraq could be improved in several ways.
o ___________thinks that the MNF have become top heavy resulting in slower response times. ___________ lieves that a more streamlined chain of command would improve response time.
o ___________ would also like a QRF and a way to communicate with them.
o Currently, communication is very unreliable in Iraq. Outside Baghdad, the best form of communication is email, followed by satellite phones. Regular telephone services are intermittent. Improved communication lines would help ameliorate some of the coordination and communication problems that PSCs face in Iraq.
o Currently, the best form of intelligence is word of mouth and from company to company. ___________ would like to see a formal intelligence communication center for both PSCs and the military, ___________ believes that Civil Military Operations Center (CMOC) is the ideal apparatus for PSC communications and could easily operate a fusion cell.
o Lastly, ___________ like some means of formal communication with the military.

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o Travel into Iraq: Currently, American airlines are not allowed to fly into Iraq. Many Americans and contractors are flying Jordanian air into Baghdad International Airport. o ___________ currently has three helicopters in Iraq.
o Canine Training: From their experience in canine training, ___________come to learn that patrol dogs are synonymous with attack dogs.
o Security at the Embassy: Embassy security is three-tiered. The Marines protect the innermost threshold of the embassy. ___________the mid-level and locals provide security for the outermost area.

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