The military's battle against contracting corruption in war zones is coming under scrutiny from lawmakers troubled by a Pentagon decision not to ban an Afghan-owned company from doing business with the U.S. after the firm was accused of operating an illicit protection racket.
Rep. John Tierney, D-Mass., told Defense Secretary Leon Panetta in a Sept. 13 letter of his "deep concern" after the Defense Department elected not to bar the Watan Group and one of the company's former assistant managers, Haji Ruhullah, despite ample evidence of wrongdoing. The failure to hold Watan and Ruhullah accountable "for gross violations of U.S. and Afghan law is a troubling example of the lack of effective enforcement that has exacerbated rampant contracting corruption in Afghanistan," Tierney wrote.
In the letter, Tierney summarizes the findings of "Warlord Inc.," an investigation he led last year which concluded that Watan's owners, Ahmad and Rashid Popal, and Ruhullah bribed local Afghan officials and used heavy weapons prohibited by the Army transportation contract they were working under. They all denied funneling money to the Taliban, Tierney said, but evidence gathered by his staff "raised doubts about those claims."
A panel of Pentagon officials will testify Thursday before the House Oversight and Government Reform national security subcommittee. Tierney is the panel's top Democrat. Rep. Jason Chaffetz, R-Utah, is the subcommittee's chairman.
Based on the findings of Warlord Inc., Army officials in December proposed barring Watan's security arm, Watan Risk Management, and Ruhullah from doing business with the U.S. government. Armed with American attorneys, the Popals and Ruhullah separately challenged the actions. Ruhullah won his case. The Army cited his status as a subordinate at Watan and said his inability to speak English meant he could not understand the terms of the contract or the investigators from Tierney's staff who interviewed him.
Gerald Posner, Ruhullah's lawyer, responded by sending a 14-page letter to Panetta on Wednesday in which he calls the congressman's letter "factually inaccurate." Posner said Ruhullah cooperated fully with Army officials. Ruhullah told them he never personally paid a bribe or a payoff to anyone and never knowingly violated weapons restrictions.
Posner also said Tierney's investigative staff did not provide a professional and unbiased translator when they met with Ruhullah and the Popals in Dubai in May 2010. During one session, Rashid Popal did the translating. But relations between Ruhullah and the Popals were strained at the time due to Ruhullah's plans to leave the company, he said. As a result, Ruhullah's statements were "erroneously translated" and then became "the basis for flawed conclusions" in Tierney's investigation, Posner wrote.
Watan did not respond to a request for comment on Tierney's letter. But the company, represented by the Washington law firm Venable, challenged its proposed debarment in federal court. A judge dismissed the suit. In court filings, Watan said the Army was well aware of the steps the company needed to take to ensure trucking convoys bound for U.S. bases arrived without being attacked.
In a separate document submitted to the Army in January, Watan's attorneys said the "so-called bribes" referred to in Warlord Inc. were actually legal "facilitation payments" necessary for police protection and security when transporting cargo throughout Afghanistan.
The Army decided not to debar Watan, opting instead for an administrative agreement that says the company may not bid on any convoy security contracts paid for with U.S. tax dollars for the next three years. However, the ban does not affect the other companies owned by the Popals, which include oil, gas, steel, construction and telecom businesses, according to the terms of the agreement signed in early August.
Tierney said Watan had already made a decision to exit the mobile security business in Afghanistan, making the penalty insignificant. He added that the proposed debarment of Watan and Ruhullah was initially hailed by U.S. officials as a sign of how serious they were about stemming corruption in U.S. contracting.
"This summer, in a stunning reversal of course, Army officials inexplicably stopped the debarment proceedings and settled with Watan Risk Management and Commander Ruhullah for nothing more than a slap on the wrist," he told Panetta.
But Uldric Fiore, the Army official who decided to end debarment proceedings against Watan and Ruhullah, defended the moves. In an interview, Fiore said the suspension and debarment actions are intended to protect U.S. interests, not to punish contractors. Agreements such as the one Watan signed require companies to make specific improvements so they become assets to the government, he said.