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House Oversight: Blackwater Liveblog Three

waxman.jpgIssa: So many inaccuracies, so little time. Military mission not to guard diplomats. Contractors have been used directly and indirectly, Beirut, Bosnia, isn’t there a historic time in which we use non-career RSO.

Prince: Since founding of Republic.

Issa; If State recruited for positions that you’re providing. They’d be recruiting current or prior military. Is it proper for State to use militarized helicopters?

Prince: Ours aren’t weaponized.

Issa; Do you know of State helicopters?

Prince: Crop eradication in Colombia.

[Issa’s pretending that he knew that.]

Issa: I wish we were bringing in DOD costs. Isn’t the cost of DOD far greater than what we pay men and women.

Prince: that would be a great fully burdened cost study.

Issa: Hopefully we will. Looking at cost-benefit should be done. I don’t want to use contractors if permanent employees are more appropriate. Be glad you don’t make a diabetes drug. They had their product destroyed by jury-rigged testimony.

Prince: Huh?

Issa: Is your sister Betsy DeVos?

Prince: Yup.

Issa: Was she a Pioneer for Bush? Raised a lot of money. Isn’t it true that your family are well-known Republicans. Wouldn’t it be fair to say your company is Republican-leaning and Amway company, bc of family members?

[Silence–this is great! Issa is about to destroy Amway’s consumer base!!]

Prince: Blackwater is a non-partisan company.

Issa; I think you’re exactly right, your company appears to have done what all companies do. Labeling something as Republican oriented.

Waxman: The only one who’s done it is you.

Yarmuth: Outside of a military setting, where could a Navy Seal make 4-500,000 for work?

Prince: they’re paid for every day they’re in a hot zone. Average pay $500/day. $1000 day huge misperception. Very sophisticated price models that we bid for. It is a competitively bid product.

Yarmuth: Looking at invoice that bills out at $1200 a day.

Prince: Can I see that?

Yarmuth: Subcontractor, in the Fallujah episode. In course of that, they had contracted at $600/day. By the time it got to taxpayer, it was $1100/day. Third sub under KBR. We asked the question, did anybody add value up the ladder? The answer was no. That’s not your profit.

Prince: With our work to State, there are no other intermediaries not adding cost or adding value.

Yarmuth: You’re talking about bidding for contractors. We’re bidding against ourselves. We’re not bidding against an external competitor.

Prince: the nature of this grew after the Cole was blown up. Much higher demand than in the late 1990s.

[Funny how the GWOT makes a market for contractors!]

Westmoreland: Just to make it clear who is calling Blackwater a Republican company. [Reads a letter from attorneys suing Blackwater. So what, Lyn? Others say that, so it’s not Issa who introduced it?] There are some in Congress who do not like profitable companies. They think businessmen should pay more taxes. Socialize medicine. They have hearings like this to bias lawsuits their crony lawyer friends may be having. What kind of background?

Prince: USM or law enforcement. A number of years, 5-8 up to 20 years, most are decorated. Gotten out of military to choose another career path. We are not a partisan organization. We affiliate with America. The idea that people call us mercenaries, we are Americans working for Americans. Defines mercenaries as professional soldiers working for a foreign govt. We have a handful of third country nationals. They’re static guards.

Braley: My best friend married g-daughter of founders of Hope College. Is it your testimony that all Blackwater are subject to UCMJ and Military Extraterritorial Jurisdiction Act and War Crimes act? You would agree that no declared war in Iraq. is it your understanding that a contingency would apply to Iraq. [Reading from doct] You would agree that based on your description, your employees are not accompanying or serving with armed forces in the field.

[Braley is pointing out that the UCMJ and MEJA and War Crimes don’t apply to Blackwater employees]

Prince: I’m not a lawyer. Again, I’m not a lawyer, I’m sorry.

[Braley now asking whether cash was satisfactory compensation for killed Iraqi.]

Prince: Your actuary calculations don’t make any sense to me, because $1200 charge includes aviation support. Gear, training, travel. I’d be happy to get back to you.

[Braley did a great job here–Prince had no idea how to answer him.]

McHenry: Let’s talk about Navy SEALs, how long are they in the service. Guys usually make decision at 12 years.

Prince describing the training and “psychological evaluation” and medical and dental cost.

McHenry: When Blackwater formed?

Prince: 1997, First contract was indiv Seal platoons, down to indiv team sergeant paying with credit card. First contract was USS Cole, in 2001. Two other competitors for State contract.

McHenry: 1000 Blackwater contractors. Roughly how much admin staff? Less than 50 people.

[Prince doesn’t realize where McHenry was trying to set him up.]

McHenry: Tooth to tail ratio. Active duty military:

Prince: as high as 8-10-12 to 1.

McHenry: the ratio, the expense of having that operator out in the field, it’s far more efficient to have a contractor, because their tooth to tail ratio is so much better than active duty military. Far less expense than active duty military. If you can explain in a minute or so expense of operations.

Prince: I’d encourage true activity-based cost. Unless you know what something costs.

McHenry: Is it your contention that you’re much more efficient than military?

Prince: yes, because it’s difficult to be all things to all people all the time.

Waxman: Do you have documentation on that?

McCollum: UCMJ is administered by DOD. Can State prosecute your men.

Prince; DOJ would do it.

McCollum: You’re immune from Iraqi law, right? You believe immunity under CPA order 17 should stand?

Prince: A contractor wouldn’t get a fair trial in Iraq.

McCollum: Is State accountable under UCMJ. You provided this. You told Braley that all your employees are under chart.

Prince: Ultimate for DOJ to decide.

McCollum: So this is just what you feel? You don’t know this for a fact.

Prince; legal opinions I respect.

McCollum: You cannot state for a fact that your employees can be held accountable under UCMJ. Do you operate in civilian or military capacity. You’re saying civilians can be held accountable to UCMJ. Have there been any military or civilian courts who have tried contractors.

Prince: One contractor in Afghanistan.

Sali: How many employees.

Prince 550 full time in US. 1000 in Iraq, hundreds more around the world. 300-400 in Afghanistan.

Sali: No higher exit rate.

Prince: GAO study, directed at private security industry.

Sali: several types of contracts. How do they work.

Prince: started as training facility.

Issa; Quoting from Waxman’s memo, “basically talks about everything I asked you, the Michigan party, the donations.” Waxman, you put it out a day before I brought it up. Is this the first time you’ve seen a bio like this.

Prince: it’s not often our buyers are put together.

Issa; A donor search found out how much money you gave to who? Do you think it’s germane to you? I heard a rumor someone in your company gave to green party, do you know about that?

[Um, Issa, any idea whether they were trying to get the Greens on the ballot to help Republicans??]

Prince; first contract under Clinton.

Cooper: Do your bylaws say they’ll only work for the US?

Prince: Anything we do is licensed by the State Department.

Cooper: if limitations are not in the by-laws, isn’t there the risk that different management would seek contracts with others?

Prince: it would violate law.

Cooper, I’m not talking about training police. They’re working for hire. What prevents you from hiring out those people to foreign govts.

Prince US Federal law does. Any equipment requires a license. This idea that we’ve got a private army in the wings. They bleed red white and blue, the idea they’ll switch.

Cooper: is your omission of this only due to redundancy. WHy not include that in by-laws?

Prince: That wouldn’t make any sense. There might be opptys to provide NATO allies with support in Afghanistan. More and more US G is doing FID missions, Foreign Intelligence DEfense. All of this licensed by State.

Cooper: On your website, you worked with Azerbaijan.

Prince: that was paid for by USG.

Cooper: wouldn’t it be nice that you only work for US approved entities. Redundancy is small objection to say that you’re a loyal company. What if a company hired you to break a strike? It would be permissible under current charter.

Prince: it’s not something we’re planning on doing it.

Hodes: Do you agree that it is not a partisan issue to examine whether using contractors is advantageous to American taxpayers. It is not a partisan issue to inquire whether failures to hold Blackwater personnel accountable undermine our efforts in Iraq.

Prince: It’s a fair enough issue to look into.

Hodes; Fired and fined employee for Christmas incident. Blackwater provided document that appears to include discussion, dated Jan 7, 2 weeks after instance. Regarding termination he has forfeited the following: [details 4 bonuses that the person forfeited] It appears the fine involved forfeiting bonus and paid his own trip home. HOw long had he worked for your company. How much had he been paid. Any idea what your profit was?

Prince: (10, 10.5%)

Hodes: Would you be willing to provide us with how much profit you made? You said you did all you could wrt this employee, and the rest was up to DOJ.  You took away his bonus. Is that your idea of corporate accountability.

Prince: Can you say the question again?

Hodes: is that your idea of corporate accountability?

Prince: I can apologize for this person. Beyond firing, and withholding fees. THat is sole reservation of US Justice department.

Hodes: Haven’t done anything so far. Potential murder?

Prince: A guy who put himself in a bad situation.

Hodes: Would you agree this was potentially a murder?

Prince: I can’t determine manslaughter, negligent homicide, I don’t know.

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