Whistleblowers Unveil More ArmorGroup Allegations
Former Company Officials Say State Department Contractor Involved in Myriad Fraudulent Schemes
Former employees of ArmorGroup, the private security company that holds a State Department contract to protect the U.S. Embassy in Kabul, unveiled new allegations against the besieged contractor a week after photographic evidence emerged of its guards engaged in physical and sexual harassment. In a press conference revolving around an unlawful-termination lawsuit filed against ArmorGroup, former senior company officials said ArmorGroup was aware of widespread fraud; intentional use of non-English speaking guards to save money at the expense of embassy security; operations of a shell corporation in order to win contracts intended only for American companies; and even involvement in prostitution — and that the State Department knew about at least some of the company’s illicit practices.
The allegations came from John Gorman, a former manager of ArmorGroup’s Kabul contract, and James Gordon, the former director of operation’s at ArmorGroup’s North American branch, headquartered in McLean, Va. Gordon, who yesterday sued the company for wrongful firing in federal court, spoke by teleconference from Kabul, where he said he was employed by an unspecified security company. Gorman and Gordon’s revelations come after the Project on Government Oversight wrote to Secretary of State Hillary Rodham Clinton last week detailing accusations of fraud in ArmorGroup’s $189 million contract; and a year after their former colleagues and fellow whistleblowers, James Sauer and Peter Martino, filed a similar lawsuit.
Both Gorman and Gordon said ArmorGroup intentionally misrepresented its cost requirements to the State Department’s Bureau of Diplomatic Security in order to win the contract to protect the embassy when it was initially put up for bid in 2006. Gordon’s lawsuit alleges that Michael O’Connell, ArmorGroup North America’s vice president of operations, emailed Sauer on March 11, 2007, “AGNA bid this at a very low price and a very low margin,” adding the next day that the timelines and resources given to State in its proposal “don’t match up,” but it wasn’t “a big deal unless” the State Department contracting officer’s representative “calls us on it.”
One immediate consequence of the emphasis on hiding fraud, Gordon said, was hiring Nepalese guards, known as Gurkhas, who did not speak adequate English to guard the embassy. “It was impossible to safeguard the embassy with a guard force that couldn’t communicate with one another,” he said. “I was told that no language test had ever been given. I immediately reported this violation to the Department of State. To this day, AGNA has not corrected the problem.”
The Washington Independent reported on Friday that ArmorGroup’s predecessor on the embassy security contract, MVM Inc., lost its contract in 2007 precisely because the Gurkhas it hired spoke inadequate English. Gordon said it was “common knowledge” within ArmorGroup why MVM had lost its contract, but persisted with the inadequate guards anyway. Gorman added that ArmorGroup also misled the State Department about hiring male and female interpreters familiar with all Afghan and coalition languages, but “no such people existed.”
Gorman, a retired Marine who now works as an addiction counselor in Connecticut, was fired from ArmorGroup’s Kabul office on June 13, 2007, after he, Sauer and Martino prepared a formal report for the Regional Security Officer of the embassy, Nick Pietrowicz, detailing numerous breaches of contract that he said compromised the security of the embassy. Among them: recruiting people who had inadequate military records and other identification, and “one individual who had been fired from a previous project for pulling a pistol on another employee while drunk.” Gorman said that he felt personally endangered, as he was jeopardizing a $187 million contract in Afghanistan and another security contract with State worth $500 million in Iraq. “Not popular” was how he described himself with his ArmorGroup colleagues. Pietrowicz, a State Department officer, found the prospect of violent retaliation against the whistleblowers so acute that he “asked if we wanted to stay in his apartment on the embassy compound,” Gorman said.
Gordon, a citizen of New Zealand and a military veteran, issued a variety of new allegations against ArmorGroup. He said ArmorGroup’s logistics manager spent contract funds to purchase “counterfeit North Face jackets and Altama boots” for the guards from his wife’s company in Lebanon, which “could never keep the men warm during the cold winters in Afghanistan,” and the company ignored a State Department order to fire the manager after Gordon informed State of the abuse. Similarly, ArmorGroup succeeded in getting money released from the State Department to uphold a fleet of beat-up vehicles used to transport guards that were colloquially known as “white coffins.” But “the money was immediately transformed to ArmorGroup International [and] the escort vehicles were never bought,” Gordon said.
Perhaps most seriously, Gordon said that he found out that both guards and even ArmorGroup program manager Nick Du Plessis were regularly frequenting brothels in Kabul. “Many of the prostitutes in Kabul are young Chinese girls who were taken against their will to Kabul for sexual exploitation,” Gordon said. Federal contracting regulations designed to support the Trafficking in Victims Protection Act prevents contractors from “procuring commercial sex acts during the period of performance of the contract,” meaning that ArmorGroup could lose its contract if State learned of the violation. Yet Gordon’s lawsuit alleges he was shut out of an investigation into the solicitation of prostitutes at the behest of Armor Group’s London-based parent company, despite recurring evidence that ArmorGroup employees continued to solicit prostitutes and perhaps even run their own prostitution services. A trainee boasted to Gordon “that he could purchase a girl for $20,000 and turn a profit after a month.”
Gordon said that he “immediately notified the State Department” and ArmorGroup North America’s president, but “to my knowledge, neither AGNA nor the State Department conducted a follow up investigation.” In July 2008, despite repeated formal warnings from the State Department about inadequate fulfillment of contract responsibilities, the State Department re-awarded the embassy security contract to ArmorGroup. The State Department’s inspector general, Howard Geisel, opened an investigation into the ArmorGroup contract last week.
Neither ArmorGroup nor the State Department responded to requests for comment on the lawsuit or the allegations made by Gordon and Gorman by press time, but The Washington Independent will print whatever responses it eventually receives.
A lawyer for Gordon, Janet Goldstein, said the pattern of ArmorGroup International squelching inquiries from employees of ArmorGroup North America, alleged in the lawsuit, suggested that ArmorGroup North America is “essentially a shell company” existing to “acquire, bid on and award contracts that have to be awarded to a U.S. company.”
Gordon alleges in the lawsuit that while he was not formally fired, he was pushed out of the company in February 2008 after leaving him “with nothing to do but sit in my office and play solitaire.” He is not suing for any specific dollar figure, and his lawyers said his lawsuit was an attempt to get the State Department to redress concerns about ArmorGroup’s embassy security contract that still exist.
Gorman said that he disbelieves that ArmorGroup is adequately protecting the Kabul embassy today, despite both company and State Department assurances that it is in no danger. “They need to say that because if they say the embassy is insecure, they give a green light to the Taliban,” he said.