The Cowboys of Kabul
How a pair of bankrupt Texas grandparents cashed in on Afghanistan's contracting bonanza.
It was March 2002, and Del and Barbara Spier were flat broke. The Texas couple, grandparents of five and owners of a small, Houston-based private investigations firm, were more than $260,000 in debt. They carried balances as high as $18,600 on more than a dozen credit cards and were saddled with $80,000 in outstanding bank loans and a $95,000 mortgage. In their bankruptcy filing, the Spiers' company, which they founded in 1987 and named the Agency for Investigation and Protective Services, was deemed of "no marketable value."
Although their circumstances looked dire, the Spiers were about to become millionaires. By May, Barbara Spier had filed the paperwork to form a new corporation called US Protection and Investigations. Soon, thanks to the contracting sweepstakes that was the war in Afghanistan, she was signing an $8.4 million deal with the Louis Berger Group. The multinational construction and engineering company had landed a $214 million contract to rebuild Afghanistan's infrastructure—roads, water and sanitation, power and dams—from the United States Agency for International Development (USAID). USPI's job was to provide security for contractors repairing a 300-mile road stretching from Kabul to Kandahar.
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Obama's Afghanistan
Can Afghanistan be fixed?
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Contractors Gone Wild
Theft, hookers, melting down Iraqi gold to make cowboy spurs? All in a day's work for private military contractors in Iraq?
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Afghan Oversight AWOL?
The effort to monitor billions of dollars in reconstruction contracts is understaffed and underfunded. So says the guy in charge.
Much of the work was to be done in remote and dangerous territory, prone to sporadic Taliban assaults and blighted with unexploded Soviet-era ordnance and land mines. "Sections of the Road are subject to hijackings, robberies, and killings," Berger acknowledged in its contract with USPI. "Organized terrorist groups are operating within the Road corridor environs, and expatriates have been intentionally targeted in recent incidents." Safeguarding the hundreds of contractors working on the road, the construction conglomerate warned, would be "challenging."
Given the stakes of the project—key to the effort to stabilize Afghanistan—USPI was a strange choice. Berger could have turned to a well-established security outfit with deep experience in conflict zones. Instead, it handed a noncompete contract to a firm with no reputation to speak of and a freshly bankrupted management team.
For the Spiers, the Berger windfall engineered a life-changing turnaround. And they might have lived happily ever after, too, except for one thing: They were defrauding the government, according to the Justice Department, filing phony receipts and billing for ghost employees to bilk millions of dollars from programs aimed at rebuilding the country's war-ravaged infrastructure. (The case will go to trial in September.) Their alleged exploits, many of which have not previously been reported, offer one of the most vivid pictures yet to emerge from Afghanistan's Wild West contracting bonanza.
Tales of epic fraud—of double billing and bid rigging, of kickbacks and theft—have dogged the reconstruction efforts in Iraq and Afghanistan. Not only are taxpayers unwittingly enriching fly-by-night contractors, corrupt officials, and local power brokers, but unscrupulous operators are undermining the prospects for progress that US troops have given their lives to make possible.
And it's proven very tough to stop them. In Iraq, despite great efforts to improve accountability, investigations and audits have barely scratched the surface, Stuart Bowen, the special inspector general for Iraq reconstruction, has acknowledged. Afghanistan has received even less scrutiny. In conflict zones, it's always difficult to weed out fraudulent invoices from legitimate expenses, to discern patronage contracts from necessary ones. Afghanistan's cash-based economy, primitive infrastructure, corrupt government, and deteriorating security situation make it exponentially harder. With oversight woefully thin and auditors scarce, the bombed-out country has been a Disneyland for profiteers. "It's just a shame," says a former Louis Berger official. "That money should have gone towards the development of Afghanistan rather than into people's pockets."
Page 1 of 6 
re: The Cowboys of Kabul
" . . . unscrupulous operators are undermining the prospects for progress that US troops have given their lives to make possible."
Comment: This is a bit disingenuous, is it not? What "progress" are we talking about here? Using Afghanistan as a thoroughfare for transporting (stealing?) oil and natural gas?
progress
rmenec: Operative word here is "prospects"--as in "prospects for progress." Certainly see your point that Afghanistan, at present, can't be called a success story.
DS
To me this is not only
To me this is not only fraudulent activity but treason against the US. This couple should be executed for aiding a foreign force in a time of war against US interests.
This is what we get for
This is what we get for sending a contractor to do a soldiers job.
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My question is...
When do we hear, as Paul Harvey would say, the Rest Of The Story? We hear much criticism of US companies and entities, and the military, but what about The Others, the ones shooting back or shooting first, in all likelihood? Where are the criticisms of the Taliban and their cohorts, the bombings, beheadings, and whatever else goes on in such lawless regions of the world where might makes right, and mightier makes rightier?
Someday, people will be smarter, more honest, and more civil, and more respectful of each other, but, by all appearances, not today.
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Ummm...
There's been plenty of criticism of the Taliban all over the place, both now and in the past. But this is NOT an article about the Taliban- it's an article about how those who fight them are being weakened by those who look upon the whole effort as a feeding trough. If you were any kind of REAL supporter of the war effort, you'd stop trying to throw up a smoke screen for greedy porkers who couldn't care less whether we win or not, just as long as they get paid. The Spiers are merely the spiritual descendants of the profiteers who sold uniforms made of 'shoddy', along with barrels of maggotty hardtack and putrid meat, to the Union troops who fought and died to keep this nation in one piece. Loosen up that Klaatu Marachas Necktie, dude- maybe if you got some blood into that brain, you'd say something that made sense...
Live--from the Graveyard of Empires...
Correct--war profiteering in these here U-nited States goes back 233-or-so years and bespeaks the corruption attendant upon the unbridled pursuit of Power and material gain.
However, Lord Acton's comment--"power corrupts, absolute power..."--helps to clarify the quote-unquote ethic informing Empire in toto: the war contractors trading in blood money, as well as the Founding Investors, i.e., the property holders at the Continental Congress who grandstanded for war once the French were out of commission and the Native Americans were in abeyance following the Seven Years War. They, too, betrayed their venality and hypocrisy by buying their way out of military service in a cause they touted to the hopelessly naive as ordained by the Good Lordy Lordy, later screwing those that were forced into battle--i.e., the "lower" classes--by defaulting on their back pay or jailing same for debts accrued while they were forced into battle! So much for this noble "experiment." 'Twas ever thus...
As far as the depraved, reprobate Taliban go--or, in an earlier, eerily similiar scenario, the depraved, reprobate Vietcong--Chomsky advises that to deal with terrorism--theirs, not ours--1) engage in dialogue with those holding grievances, and, 2) address the grievances. "Ah," you say, "but we of Empire do not need to engage in dialogue with inferior races--much less so with those who hold no WMD." Thus: the Graveyard of Empires...Or, as Milhous would have it, let's declare victory and just hightail it the hell out of here.
And now the Obama
-
tagged as:
- solution
And now the Obama administration is promoting the idea of even more contractors taking over 'front-line positions' in Afghanistan.
Xe/Blackwater will find it's way back into the picture.
The military should not be privatized. Pull out some of our military in the other 182
countries they are in and put them in Afghanistan.
Better yet, get the heck out. NOW !
Only the little guys
Wow, they're taking down a couple of grandparents. This is so reminiscent of the current debacle around torture (ie. only the little guys get caught).
The sooner the big guns (halliburton, bechtel, etc.) get called out for profiteering and war crimes the better. Oh yeah, I just remembered we have a two-tiered justice system and that just will never happen.
Roll out the scapegoat!
Fascinating article by the way.
And now the US army is
And now the US army is planning on offering a huge military contract for a "theater-wide" private security operation. I wrote about this article and the army's new plan here:
http://www.livecitizen.com/2009/07/newscast-private-contractors-in-afgha...
so when are we going to get serious about prosecuting
Now that a couple of Enron execs went to jail for a while (probably out by now), and the US Public's attention was focused on Madoff rather than the dozens of thieves running banks, car companies, war industries all laughing all the way to the bank...when will we actually get serious about punishing those who break the law?
Al Capone went to prison for tax evasion. The US Treasury Secretary openly admitted same, yet took this important position.
How can we win a war or turn an economic crisis into a recovery if we the people have lost confidence in those who should be, but are not locking criminals away? At least go after the money they stole!
You are right on
Unfortunately it is hard for the criminal justice system to keep up with ALL the ephemeral businesses. The problem emerged when the newly acquired riches changed their perception (theoretically).
Despite that, a fresh company with an opportunity to make a decent buck should look to make that buck in an honest fashion. I bet that if their contract ran out and their performance in Afghanistan was satisfactory that they may get a renewal.
The whole event is unfortunate.
Radek M. Gadek, MCJ
author of Criminal Justice Online Degree Guide.
Did I just read that this
Did I just read that this was all about $17 million? They want this guy in Afghanistan to PROVE he used 250 local guys a day @ $5 each? Cash-ola? They want to audit a guy who is paying warlords off so that a road gets built?
And...it sounds like the road is getting built, too!!
Why not audit the Dept. of Defense? Oh, that's right!!--they can't!!! It's "in-audit-able"! Congress has not had a definitive yearly summary of DOD expenditures since God was a little girl! The defense budget is a giant slush fund?
How about the Federal Reserve? Ron Paul's bill has copious co-sponsorship, but when's the freaking AUDIT? Huh? Any bets? Another giant slush fund?
Anybody got a handy copy of the latest CIA audit? Could that, too, be...another... giant slush fund?
I think this MUST be what the Bible means by "straining at a gnat and swallowing a camel"...
...and if you DO swallow a camel, I hate to think of it coming out...why, until it did, you'd be absolutely full of...camel!!!
Contractors providing law enforcment against other contractors?
I found it interesting that the government used one security contractor, Blackwater, to help raid the offices of another, USPI. For gosh sakes Uncle Sam, you've got contractors providing law enforcement on other contractors. And we all now how noble and honorable Blackwater is. WTF????
Did I just read that this
USPI is the last in the chain of coruption, Those LBG/B&V JV officals (mentioned in this article) have been engaged in the defraud, too,; especially Mr. Appleton. What is about LBG/B&V JV Security Manager from that time period... or a LBG official Franko Jordano....or some officials from US embassy....or......
Yes, they (USPI) did it, but they were not alone in it! This is The Big Game and there is more than one trophy.
Re: Did I just read that this
If you have info, Anonymous, I'm more than willing to listen. You can write me at dschulman (at) motherjones.com
Not sure how Col. Appleton comes into this, though. He tried to get USPI fired.
DS
Good
Very good investigative report. I wrote many reports of attacking on USPI personnel when I worked with a news agency, but I did not know about this corruption and other things.
Very good investigative
Very good investigative report. I wrote many reports of attacking on USPI personnel when I worked with a news agency, but I did not know about this corruption and other things.
Very good investigative
Very good investigative report. I wrote many reports of attacking on USPI personnel when I worked with a news agency, but I did not know about this corruption and other things.
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Sad
Sad what happens in Afghanistan. I really hope these things come to an end.
find a lawyer
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I remembering reading that the GAO could not account for or respond to a congressional inquiry as to how many contractors were under US employ and operating in Afganistan. The same question and the same answer came from the US Army and the Chairman of the Joint Chiefs. We had to get in there and do a big job fast in response to the 911 attacks but I think we may only now be scratching the surface on many counts of financial irresponsibility in regard to companies hired and services performed over there.
That article is so factual.
That article is so factual. But aside from that breaking report let me impart something new concern to you. Some people might be hearing the name Diandra Douglas lately, and might wonder if she has anything to do with Michael Douglas, the actor. She does – Diandra Douglas is his ex-wife, and together they had one child, Cameron Douglas. The two married in 1978, divorced in 2000 – conveniently right before he married Catherine Zeta Jones. Why is she in the news? Well, it's because Cameron Douglas did not pursue a career in acting, instead opting to get busted for being a dealer of methamphetamines. (You might call it a Felon Attraction!) The bust was for a large ring operation, so it might take a cash advance for a good lawyer to keep Michael and Diandra Douglas son out of jail.
excellent article. What I
excellent article. What I don't understand is why not hold Berger and his people accountable, as well as USAID. These guys have the flimsiest of excuses for having promoted corruption and war profiteering.
This stuff will go on until people start getting accountable. Getting two little fish is not enough.
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This is just the tip of the iceberg, you have the Afghanistan Infrastructure Rehabilitation Program (one billion plus dollar contract) yet to be investigated in which USPI was / is the security provider for prime contractor Louis Berger Group International. The fraud goes all the way to the top, someone had to approve the invoices for payment and that comes from the Louis Berger Group International Home Office in DC.
Take into consideration that in 2004 USAID insisted that Chemonics International use USPI as a security provider in which during the whole contractural period the invoicing was riddled with fraud or ghost guards, ghost vehicles and ghost services that were being billed for and PAID.
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