Those who blow whistle on contractor fraud in Iraq
BY DEBORAH HASTINGS
AP National Writer
-- --One after another, the men and women who
have stepped forward to report corruption in the
massive effort to rebuild Iraq have been vilified,
fired and demoted.
For daring to report illegal arms sales, Navy
veteran Donald Vance says he was imprisoned by the
American military in a security compound outside
Baghdad and subjected to harsh interrogation
There were times, huddled on the floor in solitary
confinement with that head-banging music blaring
dawn to dusk and interrogators yelling the same
questions over and over, that Vance began to wish he
had just kept his mouth shut.
He had thought he was doing a good and noble thing
when he started telling the FBI about the guns and
the land mines and the rocket-launchers - all of
them being sold for cash, no receipts necessary, he
said. He told a federal agent the buyers were Iraqi
insurgents, American soldiers, State Department
workers, and Iraqi embassy and ministry employees.
The seller, he claimed, was the Iraqi-owned company
he worked for, Shield Group Security Co.
''It was a Wal-Mart for guns,'' he says. ''It was
all illegal and everyone knew it.''
So Vance says he blew the whistle, supplying photos
and documents and other intelligence to an FBI agent
in his hometown of Chicago because he didn't know
whom to trust in Iraq.
For his trouble, he says, he got 97 days in Camp
Cropper, an American military prison outside Baghdad
that once held Saddam Hussein, and he was classified
a security detainee.
Also held was colleague Nathan Ertel, who helped
Vance gather evidence documenting the sales,
according to a federal lawsuit both have filed in
Chicago, alleging they were illegally imprisoned and
subjected to physical and mental interrogation
tactics ''reserved for terrorists and so-called
Corruption has long plagued Iraq reconstruction.
Hundreds of projects may never be finished,
including repairs to the country's oil pipelines and
electricity system. Congress gave more than $30
billion to rebuild Iraq, and at least $8.8 billion
of it has disappeared, according to a government
Despite this staggering mess, there are no noble
outcomes for those who have blown the whistle,
according to a review of such cases by The
''If you do it, you will be destroyed,'' said
William Weaver, professor of political science at
the University of Texas-El Paso and senior advisor
to the National Security Whistleblowers Coalition.
''Reconstruction is so rife with corruption.
Sometimes people ask me, 'Should I do this?' And my
answer is no. If they're married, they'll lose their
family. They will lose their jobs. They will lose
everything,'' Weaver said.
They have been fired or demoted, shunned by
colleagues, and denied government support in
whistleblower lawsuits filed against contracting
''The only way we can find out what is going on is
for someone to come forward and let us know,'' said
Beth Daley of the Project on Government Oversight,
an independent, nonprofit group that investigates
corruption. ''But when they do, the weight of the
government comes down on them. The message is,
'Don't blow the whistle or we'll make your life
''It's heartbreaking,'' Daley said. ''There is an
even greater need for whistleblowers now. But they
are made into public martyrs. It's a disgrace. Their
lives get ruined.''
Bunnatine ''Bunny'' Greenhouse knows this only too
well. As the highest-ranking civilian contracting
officer in the U.S. Army Corps of Engineers, she
testified before a congressional committee in 2005
that she found widespread fraud in
multibillion-dollar rebuilding contracts awarded to
former Halliburton subsidiary KBR.
Soon after, Greenhouse was demoted. She now sits in
a tiny cubicle in a different department with very
little to do and no decision-making authority, at
the end of an otherwise exemplary 20-year career.
People she has known for years no longer speak to
''It's just amazing how we say we want to remove
fraud from our government, then we gag people who
are just trying to stand up and do the right
thing,'' she says.
In her demotion, her supervisors said she was
performing poorly. ''They just wanted to get rid of
me,'' she says softly. The Army Corps of Engineers
denies her claims.
''You just don't have happy endings,'' said Weaver.
''She was a wonderful example of a federal employee.
They just completely creamed her. In the end, no one
followed up, no one cared.''
But Greenhouse regrets nothing. ''I have the courage
to say what needs to be said. I paid the price,''
Then there is Robert Isakson, who filed a
whistleblower suit against contractor Custer Battles
in 2004, alleging the company - with which he was
briefly associated - bilked the U.S. government out
of tens of millions of dollars by filing fake
invoices and padding other bills for reconstruction
He and his co-plaintiff, William Baldwin, a former
employee fired by the firm, doggedly pursued the
suit for two years, gathering evidence on their own
and flying overseas to obtain more information from
witnesses. Eventually, a federal jury agreed with
them and awarded a $10 million judgment against the
now-defunct firm, which had denied all wrongdoing.
It was the first civil verdict for Iraq
But in 2006, U.S. District Judge T.S. Ellis III
overturned the jury award. He said Isakson and
Baldwin failed to prove that the Coalition
Provisional Authority, the U.S.-backed occupier of
Iraq for 14 months, was part of the U.S. government.
Not a single Iraq whistleblower suit has gone to
''It's a sad, heartbreaking comment on the system,''
said Isakson, a former FBI agent who owns an
international contracting company based in Alabama.
''I tried to help the government, and the government
didn't seem to care.''
One way to blow the whistle is to file a ''qui tam''
lawsuit (taken from the Latin phrase ''he who sues
for the king, as well as for himself'') under the
federal False Claims Act.
Signed by Abraham Lincoln in response to military
contractors selling defective products to the Union
Army, the act allows private citizens to sue on the
The government has the option to sign on, with all
plaintiffs receiving a percentage of monetary
damages, which are tripled in these suits.
It can be a straightforward and effective way to
recoup federal funds lost to fraud. In the past, the
Justice Department has joined several such cases and
won. They included instances of Medicare and
Medicaid overbilling, and padded invoices from
But the government has not joined a single quit tam
suit alleging Iraq reconstruction abuse, estimated
in the tens of millions. At least a dozen have been
filed since 2004.
''It taints these cases,'' said attorney Alan
Grayson, who filed the Custer Battles suit and
several others like it. ''If the government won't
sign on, then it can't be a very good case - that's
the effect it has on judges.''
The Justice Department declined comment.
Most of the lawsuits are brought by former employees
of giant firms. Some plaintiffs have testified
before members of Congress, providing examples of
fraud they say they witnessed and the retaliation
they experienced after speaking up.
Julie McBride testified last year that as a
''morale, welfare and recreation coordinator'' at
Camp Fallujah, she saw KBR exaggerate costs by
double- and triple-counting the number of soldiers
who used recreational facilities.
She also said the company took supplies destined for
a Super Bowl party for U.S. troops and instead used
them to stage a celebration for themselves.
''After I voiced my concerns about what I believed
to be accounting fraud, Halliburton placed me under
guard and kept me in seclusion,'' she told the
committee. ''My property was searched, and I was
specifically told that I was not allowed to speak to
any member of the U.S. military. I remained under
guard until I was flown out of the country.''
Halliburton and KBR denied her testimony.
She also has filed a whistleblower suit. The Justice
Department has said it would not join the action.
But last month, a federal judge refused a motion by
KBR to dismiss the lawsuit.
Donald Vance, the contractor and Navy veteran
detained in Iraq after he blew the whistle on his
company's weapons sales, says he has stopped talking
to the federal government.
Navy Capt. John Fleming, a spokesman for U.S.
detention operations in Iraq, confirmed the
detentions but said he could provide no further
details because of the lawsuit.
According to their suit, Vance and Ertel gathered
photographs and documents, which Vance fed to
Chicago FBI agent Travis Carlisle for six months
beginning in October 2005. Carlisle, reached by
phone at Chicago's FBI field office, declined
comment. An agency spokesman also would not comment.
The Iraqi company has since disbanded, according the
Vance said things went terribly wrong in April 2006,
when he and Ertel were stripped of their security
passes and confined to the company compound.
Panicking, Vance said, he called the U.S. Embassy in
Baghdad, where hostage experts got on the phone and
told him ''you're about to be kidnapped. Lock
yourself in a room with all the weapons you can get
your hands on.'''
The military sent a Special Forces team to rescue
them, Vance said, and the two men showed the
soldiers where the weapons caches were stored. At
the embassy, the men were debriefed and allowed to
sleep for a few hours. ''I thought I was among
friends,'' Vance said.
The men said they were cuffed and hooded and driven
to Camp Cropper, where Vance was held for nearly
three months and his colleague for a little more
than a month. Eventually, their jailers said they
were being held as security internees because their
employer was suspected of selling weapons to
terrorists and insurgents, the lawsuit said.
The prisoners said they repeatedly told
interrogators to contact Carlisle in Chicago. ''One
set of interrogators told us that Travis Carlisle
doesn't exist. Then some others would say, 'He says
he doesn't know who you are,''' Vance said.
Released first was Ertel, who has returned to work
in Iraq for a different company. Vance said he has
never learned why he was held longer. His own
interrogations, he said, seemed focused on why he
reported his information to someone outside Iraq.
And then one day, without explanation, he was
''They drove me to Baghdad International Airport and
dumped me,'' he said.
When he got home, he decided to never call the FBI
again. He called a lawyer, instead.
''There's an unspoken rule in Baghdad,'' he said.
''Don't snitch on people and don't burn bridges.''
For doing both, Vance said, he paid with 97 days of
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