Cowboys of Kabul Plead Guilty, But the Ride Ain't Over

| Wed Sep. 16, 2009 7:37 AM PDT

Less than two weeks before they were scheduled to stand trial, Del and Barbara Spier pleaded guilty to charges of defrauding the US government in connection with their company's security operation in Afghanistan. In July, I detailed how the Texas grandparents, bankrupt as of 2002, cashed in on the contracting bonanza with a little help from their friends at the Louis Berger Group. The construction firm, selected by USAID to rebuild crucial parts of Afghanistan's bombed-out infrastructure, handed the Spiers' company, US Protection and Investigations (USPI), a noncompete contract to protect its employees and subcontractors in the field. In the years that followed, the Justice Department charged, the Spiers proceeded to systematically bilk the government, billing for nonexistent expenses from fictitious companies and inflating the number of Afghan guards on their payroll.

USPI's shady business practices extended beyond fraud. The company cut deals with local militia commanders (one of them accused of a range of wrongdoing, including the attempted kidnapping of Afghanistan's then-attorney general), paying their men a per diem in exchange for performing guard duties. Many of these ragtag soldiers were ill-trained, their loyalties shaky. Some apparently used their authority to engage in criminal activity, including drug trafficking and petty shakedowns. Ex-USPI supervisors I spoke with had no illusion that these guards would hold their ground if the going got tough. "If it came down to a firefight, they would have bailed on us," one told me. 

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After a lengthy investigation, which included raids on USPI's offices in Texas and Kabul, the Spiers, along with the company's Kabul operations manager, Bill Dupre, were arrested last fall. Up until last week, when the Spiers pleaded guilty, lawyers for the couple had vigorously defended them against the charges. Dupre, for his part, is maintaining his innocence and is scheduled to stand trial in December.

According to the Justice Department, Del pleaded to conspiracy, major fraud, and wire fraud. Barbara, who on paper was USPI's owner, pleaded solely to conspiracy, raising the possibility that she may have cut a deal with prosecutors. Under their plea agreement, the Spiers must forfeit $3 million that the government has traced to the fraud. In addition, Del, 73, and Barbara, 60, are facing significant jail time. "The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine," according to a release from the Justice Department. "The charge of wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. The charge of major fraud carries a maximum sentence of 10 years and a $1 million fine."

With Del and Barbara likely headed off to jail, and USPI on the government's excluded parties list, precluding federal agencies from contracting with the firm, that would seem to spell the end for the mom-and-pop security company, right? Nope. In July, control of the company was handed over to a USPI employee and longtime associate of Del's named Daniel Leitner, who promptly changed the company's name to SERVCOR. A person familiar with USPI's operations tells me that this plan of action had been in the works since USPI's offices were raided in 2007. "The game is change the name of the company, change the owner, and keep the contracts in A-stan," he said. He suggested that it may have been the Spiers' intention to act as "silent partners." (Both Servcor and USPI list nearly identical addresses.) An ex-USPI employee also told me he thought the idea might be to keep the company, at least partially, in the Spiers' family, while stripping the company of its scandal-tainted name in order to potentially win more federal contracts.

Whatever the case, the Spiers maintain close business ties with Leitner in other ways. In September 2007, shortly after the raids, the trio formed a company [PDF] in Texas called Blizzard Wizard. The firm markets a portable air conditioner—apparently invented by Leitner—called the "Big Chill." The units essentially look like Igloo coolers with a car jack plug, and are specifically intended for use by law enforcement  and security personnel, allowing them to "stay cool in surveillance vehicles where temperatures can soar to 170F." The company's web site also suggests that "security companies can reduce temperatures in remote guard shacks"—presumably like those USPI maintained in Afghanistan—using the Big Chill. (Read the glowing testimonials from "surveillance operatives" identified as "Mike" and "Randy.")

The case against the Spiers is the latest anti-corruption win for the Justice Department (not to mention the interagency National Procurement Fraud Task Force), which, in the past few months has successfully prosecuted a series of cases against unscrupulous contractors and military officials who've used Afghanistan's reconstruction as a blank check to enrich themselves at the expense of the Afghan people. "It's just a shame," a former Louis Berger official told me a few months back. "That money should have gone towards the development of Afghanistan rather than into people's pockets."

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