Wednesday, September 26, 2007

House Oversight Committee Chair: State Department blocking investigations of Blackwater, Iraqi corruption

Above: Iraqis load Iraqi Dinar into trucks at the Central Bank in Baghdad on August 28, 2007, part of the movement of 105 billion Iraqi Dinar from the Rasheed and Rafidayn Central Banks to banks in Haditha, Fallujah, and Ramadi.

State Dept: Corruption in Iraq is Classified

Corruption in the Iraqi government--it's classified information. So says the State Department.

In preparation for a September 27 hearing on corruption within the government of Prime Minister Nouri al-Maliki, Representative Henry Waxman, who chairs the House government oversight and reform committee, sent a request--and then a subpoeana--to Secretary of State Condoleezza Rice for documents and witnesses. He wanted the State Department to turn over various documents, including a copy of a secret report prepared by the Baghdad embassy that details rampant corruption within the Iraqi government. He also demanded that the State Department make available to his investigators three officials in the department's Office of Accountability and Transparency who have worked on the issue of Iraqi corruption.

The State Department refused to turn over the documents and said no to the interview requests. Then it slightly changed its tune. Joel Starr, the deputy assistant secretary of state for legislative affairs, notified Waxman that his committee could interview the State Department officials, but anything they had to say about corruption within the Iraqi government would be classified--meaning Waxman could not disclose that information to the public.

Read the rest at Yahoo News

State Dept. intercedes in Blackwater probe

The State Department has interceded in a congressional investigation of Blackwater USA, the private security firm accused of killing Iraqi civilians last week, ordering the company not to disclose information about its Iraq operations without approval from the Bush administration, according to documents revealed Tuesday.

In a letter sent to a senior Blackwater executive Thursday, a State Department contracting official ordered the company "to make no disclosure of the documents or information" about its work in Iraq without permission.

The letter and other documents were released Tuesday by Rep. Henry A. Waxman (D-Los Angeles), whose House committee has launched wide-ranging investigations into contractor abuses and corruption in Iraq.

The State Department order and other steps it has taken to limit congressional access to information have set up a confrontation between Secretary of State Condoleezza Rice and Waxman, who has repeatedly accused the State Department of impeding his inquiries.

Read the rest at the LA Times

Blackwater Inquiry Blocked by State Dept., Official Says

In response, a State Department statement late Tuesday said: “There seems to be some misunderstanding with regard to this matter. All information requested by the committee has been or is in the process of being provided.”

The statement added: “Blackwater has been informed that the State Department has no objection to it providing information to the committee. We have offered to make available for testimony those officials in the best position to respond to the specific issues the committee has raised.”

Read the rest at the NY Times

Text of the Letter of the State Department to Blackwater

Septemer 20, 2007

Fred Roitz
Blackwater USA
1650 Tysons Boulevard Suite 800
McLean, VA 22102

Dear Mr. Roitz:

This letter serves to advise Black-water that the U.S. Department of State (Department) requires strict adherence to the provisions of Contract No. S-AQMPD-05-D-1098 pertaining to contract records and the disclosure of information.

Specifically, Sec. H.7 H-020 SAFEGUARDING OF INFORMATION (05195) provides:

The Contractor and its employees shall exercise the utmost discretion in regard to all matters relating to their duties and functions. They shall not communicate to any person any information known to them by reason of their performance of services under this contract which has not been made public, except in the necessary performance of their duties or upon written authorization of the Contracting Officer. All documents and records (including photographs) generated during the performance of work under this contract shall be for the sole use of and become the exclusive property of the U.S. Government. Furthermore, no article, book, pamphlet, recording, broadcast, speech, television appearance, film or photograph concerning any aspect of work performed under this contract shall be published or disseminated through any media without the prior written authorization of the Contracting Officer. These obligations do not cease upon the expiration or termination of this contract. The Contractor shall include dic substance of this provision in all contracts of employment and in all subcontracts hereunder.

The Department's position on this matter has been further reinforced via phone conversations between Acting Assistant Secretary for Administration and Chief Acquisition Officer for the Department, William Moser, and you September 20, and separately between Mr. Moser and Blackwater's Project Manager Mr. Victor Esposito September 19.

It is plain from the cited clause that all documents and information generated in the course of performance of Contract No. S-AQMPD-05-D-1098 arc fully subject to the control of the Department. I hereby direct Blackwater to make no disclosure of documents or information generated under Contract No. S-AQMPD-05-D-1098 unless such disclosure has been authorized in writing by the Contracting Officer.

Please let know if further clarification of this direction is required at this present time.

Sincerely yours,

Kiazan Moneypenny
Contracting Officer
Security Branch

From the House Oversight Committee

Text of the Letter from Blackwater to the House Oversight Committee

September 24, 2007

The Honorable Henry A. Waxman, Chairman
The Honorable Tom Davis, Ranking Minority Member
House Committee on Oversight and Government Reform
2157 Rayburn House Office Building
Washington, D.C. 20515

Re: Blackwater Hearing/Department of State Instructions/Operational Security/Documents

Dear Mr. Chairman and Congressman Davis:

I am writing in response to the Committee's letter of September 21, 2007, regarding the Committee's intention to hold a hearing on Tuesday, October 2, 2007, regarding the mission and performance of Blackwater USA in Iraq and Afghanistan.

At the outset, it is important for the Committee to understand the nature of the relationship between Blackwater USA and a number of other entities. Erik Prince is Chairman of The Prince Group, LLC. Blackwater is a trade name used by Blackwater Lodge and Training Center, Inc., a Delaware corporation of which The Prince Group, LLC is a corporate parent. Presidential Airways, Inc. also has The Prince Group, LLC as a parent, but is not a subsidiary of Blackwater USA. We arc lead hearing counsel for Mr. Prince, The Prince Group, Blackwater USA, and Presidential Airways, Inc. We are also litigation counsel for Blackwater USA and Presidential Airways, Inc. in matters related to the October 2, 2007, hearing.

As we prepare our testimony for the October 2, 2007, hearing, I want to advise the Chairman and Ranking Member that Blackwater has received a letter from the U.S. Department of State ("DOS") dated September 20, 2007. That letter is appended. In summary, it directs Blackwater USA not to disclose any information concerning the contract without DOS pre-authorization in writing. In the fluid setting of a Congressional hearing it may become difficult, if not impossible, for Blackwater personnel to meet the terms of this letter, unless the Chairman or Ranking Member take action both in advance of the hearing and at the hearing to obtain DOS approval for disclosures that Blackwater would need to make for its testimony to be complete. We recognize that a separate and coordinate branch of government has an independent need for information, but this contractual direction from the DOS is unambiguous.

We also write today to ask that the Committee and its Members refrain from asking questions during the hearing that might reveal sensitive operational and technical information that could be utilized by our country's implacable enemies in Iraq. Examples of the type of detail that should be avoided in order to safeguard lives of Blackwater personnel and Department of State protectees include: how large a particular security contingent was; the specific identities of Blackwater personnel involved in an incident; how many weapons Blackwater could deploy at the incident the nature of the weapons that we had at our disposal; the structure of how such convoys operate; and what response force is ready to move to their aid.

It is vital that documents produced by Blackwater and information provided be handled with the utmost care and highest level of confidentiality in order to protect the well-being of Blackwater's protectees, employees, independent contractors, and their respective families. Operational details and individual identities could be of use to enemy insurgents in Iraq and to other terrorists. The federal courts have recently recognized the sensitivity of information identical to what Blackwater is being asked to supply the Committee. &e Los Angeles Times Cominc'n, LLC v. Dep't of the Army, 442 F. Supp. 2d 880, 899 (C.D. Cal. 2006) (holding that the government properly withheld the names of private security contractors because "information about separate successful insurgent attacks together with the names of (private security contractors] affected by those attacks could enable the insurgents to conduct battle damage assessments and vulnerability assessments.") (internal quotation marks omitted); Los Angeles Times Conimc'n, LLC v. U.S. Dep't of Labor, No. 06-1864, 2007 WI. 1107257, at *5 (C.D. Cal. Mu. 31, 2007) (finding same because "individuals working with the U.S. or Allied forces, and by extension their families, are targets of terrorist groups in Iraq and Afghanistan ...... ).

While we recognize that FOIA does not apply to Congress, the underlying reasons for concern remain to be addressed.

We know you share our concern on these issues, but would appreciate some affirmative direction prior to and during the hearing should a Member of the Committee inadvertently seek the type of information that would be protected by either the DOS contractual requirements or the security and operational requirements just described. Blackwater can answer many questions without running afoul of either issue, and it is our intention to do so, but it would be equally possible that many questions that are asked could be structured in a way that would invade the contract requirements or the operational security requirement, and we would need your assistance in such instances.

We look forward to working with you to address such issues with protocols that, in other Committees, have included closing a portion of the hearing to protect such operational information from public disclosure, or permitting specific questions to be answered after DOS approval is obtained. If handled properly, these issues may not even come up at the hearing, but we wanted to write early in the week and raise these issues for your consideration.

Committee Document Request

Late Friday night, September 21, 2007, The Prince Group received a document request from the Committee that requests 18 or more categories of documents from The Prince Group, Blackwater USA, and any affiliated companies, and information concerning a dozen or more specific events or issues. We have begun to collect these materials and prepare them for production. We will provide materials to the Committee on a rolling basis as possible, including next weekend, but it will not be possible for this document production to be completed by the due date in the letter of September 27, 2007, four business days after receipt, nor is it likely to be completed by the hearing date. As discussed above, many of the documents that we collect cannot be produced without State Department permission. As we find such documents, they will be turned over to the State Department for approval to release to the Committee.

While The Prince Group will do everything possible to meet the terms of your request, the Committee staff may wish to contact me and Beth Nolan of Crowell & Meting to prioritize the incidents and categories of documents to ensure the matters of greatest importance to the Committee can be produced.

Thank you for your consideration of our requests.


Stephen M. Ryan

From the House Oversight Committee

Text of the Letter from the House Oversight Committee To Secretary Rice

September 25, 2007

The Honorable Condoleezza Rice
U.S. Department of State
2201 C Street, NW
Washington, DC 20520

Dear Madam Secretary:

I am writing about three extraordinary communications the Committee has received from the State Department regarding corr within the Iraqi government, the operations of Blackwater USA, and the status of political reconciliation in lraq.

First, Committee staff were informed yesterday that State Department officials with direct knowledge of corruption within the Maliki government would not be allowed to provide the Committee with "assessments which judge or characterize the quality of Iraqi governance or the ability/determination of the Iraqi government to deal with corruption" unless the Committee agreed to treat this information as classified and withhold it from the public.

Second, Blackwater has informed the Committee that a State Department official directed Blackwater not to provide documents relevant to the Committee's investigation into the company's activities in Iraq without the prior written approval of the State Department.

Third, the Committee staff were informed that you have refused to testify at any hearing called by this Committee to examine the progress of political reconciliation in Iraq, the impact of corruption in Iraq, and the Blackwater incident.

I urge you to reconsider the unusual positions you are taking. Congress has a constitutional prerogative to examine the impacts that corruption within the Iraqi ministries and the activities of Blackwater may have on the prospects for political reconciliation in lraq. You are wrong to interfere with the Committee's inquiry.

The Corruption Investigation

As part of the Committee's investigation into corruption in Iraq, I sent you a letter on September 10,2007, requesting interviews with State Department officials knowledgeable about reports of corruption within the Iraqi ministries and seeking copies of State Department reports on the status of anti-corruption efforts in Iraq.

Initially, the State Department refused to allow the Committee to speak with two officials, Vincent Foulk and Christopher Griffith, who worked in the State Department Office of Accountability and Transparency, which is responsible for monitoring corruption within the Iraqi ministries. As a result, the Committee issued subpoenas on September 20 for the deposition of these individuals.

Now the State Department is taking the position that investigators for the Committee may speak with these individuals, but that the investigators may not ask them questions that could embarrass the Maliki government unless the Committee agrees to refrain from any public discussion of their answers. State Department officials explained that any information about corruption within the Maliki government must be treated as classified because public discussions could undermine U.S. relations with the Maliki government.

This absurd position was confirmed in an e-mail sent to Committee staff last night at 6:55 p.m. In the e-mail, the State Department provided a description of the "redlines" that its employees may not cross in unclassified interviews scheduled for today. According to the State Department, the following information is now classified:

Broad statements/assessments which judge or characterize the quality of Iraqi governance or the ability/determination of the Iraqi government to deal with corruption, including allegations that investigations were thwarted/stifled for political reasons;

Statements/allegations concerning actions by specific individuals, such as the Prime Minister or other GOI officials, or regarding investigations of such officials.

The scope of this prohibition is breathtaking. On its face, it means that unless the Committee agrees to keep the information secret from the public, the Committee cannot obtain information from officials in the Office of Accountability and Transparency about whether there is corruption within the Iraqi ministries, how extensive the corruption is, or whether the corruption is funding the insurgency and undermining public confidence in the Iraqi government.

The Committee also cannot obtain information about whether Mr. Maliki himself has been involved in corruption or has intervened to block corruption investigations of Iraqi officials close to Mr. Maliki.

The scope of the restrictions is so broad that my staff inquired yesterday whether Ambassador Ryan Crocker violated these restrictions when he testified to Congress earlier this month about the functioning of the Iraqi ministries. State Department officials responded that those statements were not classified because they would not complicate the State Department's relationship with the Maliki government.

This morning, Committee staff conducted a transcribed telephone interview with Mr. Foulk. Because of the restrictions placed on Mr. Foulk by the State Department, the interview was virtually worthless. The State Department officials participating on the call would not let Mr. Foulk answer whether there is large-scale corruption in lraq, whether Iraqi ministers are blocking corruption probes, or whether corruption in Iraq is undermining U.S. efforts. Mr. Foulk stated that he was informed of these new restrictions just this morning and that he had never heard of them before.

At one point, Mr. Foulk was read a statement that you made in October 2006, in which you praised Prime Minister Maliki's efforts to combat corruption at the Interior Ministry. In this statement, you said:

I think he's a very good and strong prime minister. And you know, they're really starting to take actions. ... We've said many times that the Interior Ministry in the prior government before the permanent government was put in place was not active enough in really rooting out potential corruption and potential violence within the Ministry itself or of the Ministry forces. And so they are starting to really take some actions of that kind. So I think this is a strong prime minister.

Mr. Foulk was asked whether he agreed or disagreed with this public statement. He said he could not answer this question under the ground rules established by the State Department because his opinion would be considered classified.

In effect, your position seems to be that positive information about the Maliki government may be disseminated publicly, but any criticism of the government must be treated as a national security secret. I suppose this would be an effective way for the Bush Administration to control the facts and debate about Iraq, but it has no place in our democracy.

The State Department has also refused to turn over to the Committee official reports on corruption in Iraqi ministries. The Committee requested these reports after reading press , accounts that assert that the reports depict extensive corruption within the Iraqi ministries."

The State Department initially informed Committee staff that the reports were designated "sensitive but unclassified." After receiving the Committee's inquiry, however, the State Department retroactively classified the documents and refused to provide them voluntarily to the Committee.

The Committee subpoenaed the documents last week, but they still have not been provided to the Committee in either classified or unclassified form.

Obviously, the State Department's position on this matter is ludicrous. Over 3,790 American soldiers have been killed in the Iraq War and another 28,000 have been wounded. The American people have already spent $450 billion on the war. If there is widespread corruption within the Maliki government, this is information that both Congress and the public are entitled to know.

The Blackwater Investigation

The Committee is also investigating the recent incidents involving Blackwater-and as part of this investigation made a request to the company for relevant documents last week. This morning, however, the Committee received a letter from Blackwater stating that the company has received a letter from the State Department that "directs Blackwater USA not to disclose any information concerning the contract without DOS pre-authorization in writing."

Blackwater attached a copy of the letter it received from the State Department. In this letter, the State Department contracting officer writes: "I hereby direct Blackwater to make no disclosure of the documents or information" sought by the Committee without written authorization from the State Department.

Earlier today, my staff contacted a member of your legislative affairs staff, who agreed to look into this matter and attempt to reverse the position taken by the contracting officer. This should happen without delay. Any interference with the Committee's documents request would be wholly inappropriate. Unless the President is prepared to make an assertion of executive privilege over the Blackwater documents, the State Department has no authority to prevent their transmission to Congress.

Testimony before the Committee

As Secretary of State, you have a preeminent role in fostering political reconciliation in Iraq. Although much attention has been paid to the role of the U.S. military in Iraq, most military leaders agree that the key to success in Iraq is political progress rather than military victories. As General Petraeus has stated:

There is no military solution to a problem like that in lraq, to the insurgency of Iraq. Military action is necessary to help improve security ... but it is not sufficient. There needs to be a political aspect.

Similarly, Defense Secretary Robert Gates has stated:

[T]his is not going to be solved by the military. It has to involve political reconciliation in Iraq among Iraqis. We're basically buying them time. That's the whole purpose of this strategy.

You have recognized the significance of your role. As you stated in October 2006:

I'm really here and more on the political side because obviously the political side and the security side are linked. The ability to get a national reconciliation plan, to get everybody to understand precisely how their interests are going to be represented and how their interests are going to be served in this political process, to pull more people into the political process and out of the insurgency, more people into the political process and out of connections with militias, that's why the political process is so central. So I'm really more focused on the political process.

Because of your responsibility for promoting political reconciliation, I asked my staff to work with your staff to arrange a mutually agreeable date for you to testify before the Committee regarding these matters. In numerous telephone calls and e-mails, my staff offered a host of possible dates to accommodate your schedule. Last night, however, your staff informed the Committee that you are "unavailable" for such a hearing. The only rationale offered by your staff was some unspecified "other interest" in having you testify elsewhere on Capitol Hill.

I appreciate that you may not want to answer questions about political reconciliation, corruption in Iraq, and Blackwater. But that is not a legitimate basis for refusing to appear before the principal oversight committee in the House about matters within your purview as Secretary of State.


I urge you to give these matters your immediate attention, to direct your staff to cooperate with the Committee's inquiry, to instruct Blackwater to comply with the Committee's document request, and to arrange a mutually convenient time in October for your testimony before the Committee.


Henry A. Waxman

From the House Oversight Committee

Text of the latest Letter from the State Department to Blackwater

September 25, 2007

Blackwater USA

Attn: Victor Esposito, WPPS Project Manager
1650 Tysons Boulevard, Suite 800
McLean, VA 22102

RE: Requests for Documents from House Committee on Oversight and Government Reform

Dear Mr. Esposito:

I understand that Blackwater Lodge and Training Center, Inc., and Blackwater Security Consulting, LLC (Blackwater) have received certain requests for documents and/or information from the House Committee on Oversight and Government Reform. The Department of State (DOS) has worked to fulfill similar requests from the Committee and will continue to do so. This letter confirms that the DOS position as set forth in the former Contracting Officer's (CO's) letter of May 11, 2007, remains the same.

To reiterate, DOS has no objection to Blackwater providing unclassified documents to the Committee in response to its requests. To the extent that any unclassified documents raise concerns about disclosure of privacy information, sensitive security/operational information, or proprietary data, we ask that you identify those concerns to the Committee when providing such documents to the Committee so that they can be properly handled and protected by Committee staff.

Any classified documents that Blackwater believes may be responsive to the Committee's requests should be forwarded to the DOS WPPS CO and/or COR for review prior to production. Following its review, DOS will return the documents to Blackwater and provide authorization, as appropriate, for disclosure to the Committee, consistent with Executive Branch responsibilities to safeguard national security information.

If you have any questions, please feel free to contact me at 703-875-5250 or via e-mail at

Kiazan Moneypenny
Contracting Officer
Office of Acquisition Management
U.S. Department of State

From the House Oversight Committee

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