The Private Sector’s Tramping in Iraq

New York Times (2008-03-24)

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More Info: Blackwater

Published: March 24, 2008

As the nonpareil war profiteer in Iraq, Blackwater Worldwide keeps outdoing its own mercenary record. Ranking Blackwater executives have used inside influence as administration fund-raisers to multiply their no-bid war contracts a thousandfold to more than $1 billion. Armed Blackwater guards redefined Ugly American for the Iraqi people last September in fatally shooting 17 civilians with impunity in a burst of “spray and pray” panic on the streets of Baghdad. Skip to next paragraph The Board Blog

And now Congressional investigators report dodgy bookkeeping by which Blackwater insists its 850 operatives in Iraq are separate contractors, not employees. That little device has allowed the company to avoid paying an estimated $50 million in American payroll taxes.

Tax and labor laws may have been violated by Blackwater’s being awarded $144 million in contracts that were supposed to go to small businesses. Henry Waxman, chairman of the House government oversight committee, is calling for a multiagency investigation.

The sooner the better for taxpayers. Blackwater officials insist that they are entitled by law to classify their hirelings as non-employees. But the Internal Revenue Service has concluded otherwise, finding Blackwater’s designation of a security guard as an independent contractor to be “without merit.”

More than 163,000 nonmilitary personnel are working under Pentagon contracts in Iraq, including 6,467 armed security personnel. A full accounting of this shadow force will take a generation of historians. But it can begin in the here and now in the Blackwater ledgers.