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Context of 'March 30, 2004: CPA Report: Private Security Forces Becoming Largest ‘Private Army’ in History'

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US military Central Command (CENTCOM) commander General Tommy Franks issues an order formally recognizing the creation of the Coalition Provisional Authority (CPA - see January 2003), an ad hoc, improvised organization to be headed by former diplomat and business executive L. Paul Bremer. A 2006 report by the Special Inspector General for Iraq Reconstruction will call the CPA the “de facto government of Iraq.” But for all its power, its legal status will remain unclear throughout its existence. A 2005 Congressional report will note: “Whether the CPA was a federal agency was unclear. Competing explanations for how it was established contribute to the uncertainty.… Some executive branch documents supported the notion that it was created by the president, possibly as a result of a National Security Presidential Directive. This document, if it exists, has not been made available.” Whether the legal ambiguity is deliberate is unclear, but it will be exploited. The Defense Department will not allow federal auditors to investigate CPA spending because, the department says, it is not a federal agency. Contractors are warned that if the CPA breaks contracts, they might not have recourse in federal courts. Employees who suspect contractor fraud are told they cannot pursue any possible criminal actions under American law. [Roberts, 2008, pp. 127]

Entity Tags: Office of the Special Inspector General for Iraq Reconstruction, Coalition Provisional Authority, US Central Command, US Department of Defense, Thomas Franks, L. Paul Bremer

Timeline Tags: Iraq under US Occupation

Administrator for Iraq Paul Bremer issues Regulation Number 2, which governs how the Coalition Provisional Authority (CPA) will manage the Development Fund for Iraq. The regulation states that the funds will be “managed in a transparent manner for and on behalf of the Iraqi people, consistent with [UN Security Council] Resolution 1483 (see May 22, 2003), and that all disbursements from the Fund are for purposes benefiting the people of Iraq.” It also says that the CPA will “obtain the services of an independent, certified public accounting firm” to audit the fund’s management. [Coalition Provisional Authority, 6/10/2003 pdf file]

Entity Tags: L. Paul Bremer, Coalition Provisional Authority

Timeline Tags: Iraq under US Occupation

CPA Officials Posing with $2 Million in CashCPA Officials Posing with $2 Million in Cash [Source: US Congress. House Committee on Government Reform] (click image to enlarge)The Coalition Provisional Authority (CPA) awards a $16.84 million sole-source contract to a small McLean, VA -based firm called Custer Battles to provide security at Baghdad International Airport (BIAP). It will later be alleged by former employees of the firm that Custer Battles bilked the CPA by diverting airport personnel to other jobs. An investigation by the Washington Monthly will later discover that the company had very few qualifications for the job and managed the contract in an extremely disorganized manner. One witness describes how the CPA paid the company with a wheelbarrow filled with $2 million in cash. Colonel Richard Ballard, an inspector general for the coalition forces, becomes extremely dismayed with the company’s conduct after examining its performance. His investigation is continuously obstructed by the company which argues that it has no legal obligation to cooperate because it is being paid with Iraqi assets and not money from the Pentagon. He discovers that employees often possess inadequate equipment and training. He is especially appalled by the employees’ “refusal to open the cargo doors of lorries to inspect.” Ballard makes known his concern that the CPA has exercised inadequate oversight of the contract and writes that a “formal audit would likely conclude fraud and potentially gross negligence in the area of contract oversight.” [Special Inspector General for Iraq Reconstruction, 7/30/2004, pp. 50 pdf file; Washington Monthly, 7/2006]

Entity Tags: Coalition Provisional Authority, Custer Battles, LLC

Timeline Tags: Iraq under US Occupation

San Diego Business Address of North Star Consultants, Inc.San Diego Business Address of North Star Consultants, Inc. [Source: NBC News]North Star Consultants, Inc. wins a $1.4 million contract to review the Coalition Provisional Authority’s internal controls for managing Iraq’s funds and provide the CPA with a written evaluation. The small firm is not a certified public accounting firm as is required by both UN Security Council Resolution 1483 (see May 22, 2003) and the CPA’s Regulation Number 2 (see June 10, 2003). [US Congress, 2/6/2007 pdf file] The firm is so small that it operates out of a private home near San Diego. [MSNBC, 2/17/2005] A 2004 audit performed by the Special Inspector General for Iraq Reconstruction will find that “North Star Consultants did not perform a review of internal controls as required by the contract. Consequently, internal controls over DFI disbursements were not evaluated. In addition, the Comptroller verbally modified the contract and employed the contractor to primarily perform accounting tasks in the Comptroller’s officer.” [Special Inspector General for Iraq Reconstruction, 7/28/2006, pp. 7 pdf file] A single Northstar employee will reportedly use spreadsheets, not accounting software, to track the $20 billion that the CPA will spend on Iraq’s behalf between April 2003 and June 28, 2004. Of that amount, $12 billion is in cash (see June 25, 2004). [MSNBC, 2/17/2005]

Entity Tags: North Star Consultants, Coalition Provisional Authority

Timeline Tags: Iraq under US Occupation

The Coalition Provisional Authority (CPA)‘s Private Security Company Working Group, an internal agency within the CPA that handles the hiring and deployment of private security firms in Iraq, notes: “We are creating a private army on an unpricidented [sic] scale. This will be the largest private security force ever assembled. It will be larger than Coalition Forces and will represent a force for good or harm depending on our insistance [sic] on the rule of law.” [Roberts, 2008, pp. 128]

Entity Tags: Private Security Company Working Group, Coalition Provisional Authority

Timeline Tags: Iraq under US Occupation

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