From The Associated Press, 6/12/05:
http://www.abcnews.go.com/International/wireStory?id=842180
Banned Contractor Soliciting Iraq Deals
Offshoots of Banned Contractor Soliciting More Contracts in Iraq, AP
Learns
By DEBORAH HASTINGS
The Associated Press
Former executives of Custer Battles an American firm accused of
stealing millions from Iraq reconstruction projects and banned from
further government contracts have continued doing contracting work and
have formed new companies to bid on such projects, The Associated
Press has learned.
This may or may not be illegal, military officials say; Custer Battles
officials deny any wrongdoing.
The new companies (there are at least three) are all headed by Rob Roy
Trumble, who previously was operations chief for Custer Battles,
according to state records.
The fledgling firms have different names but all are housed in the
same office as Custer Battles Suite 100 on Hammerlund Way in
Middletown, R.I., 3,000 square feet on the ground floor of a squat
building in an industrial park.
Meanwhile, Custer Battles' former chief financial officer Joseph
Morris, accused of submitting fake invoices to the government, has
been working for another American contractor in Iraq, according to
interviews.
The military was not aware of either the new companies or Morris' new
employment, a Pentagon official said, speaking only on condition of
anonymity.
Military investigators would have to decide whether these actions
violate the suspension order.
Morris did not return phone messages or e-mail sent to his company and
private addresses.
By itself, Custer Battles is already in a great deal of trouble.
It is under investigation by the Pentagon for allegedly cheating the
U.S. government out of tens of millions during the chaotic months
following the Iraq invasion.
In September 2004, the military banned Custer Battles and 15 of its
subsidiaries and officials, including Morris, from obtaining
government contracts while the criminal probe proceeds.
Custer Battles employees have also been accused of firing on unarmed
Iraqi civilians, of using fake offshore companies to pad invoices by
as much as 400 percent, and of using forgery and fraud to bilk the
American government.
Two former associates have filed a federal whistle-blower suit,
accusing top managers of swindling at least $50 million.
Former Army Rangers Mike Battles and Scott Custer formed a limited
liability corporation before the Iraq invasion to seek rebuilding
contracts.
Battles, a GOP campaign contributor and a former CIA case worker, ran
unsuccessfully for Congress in 2002 as a Rhode Island Republican.
The actions of Morris, their chief financial officer, were among the
worst, according to the military's suspension order and the federal
lawsuit.
The order cites "serious improper conduct" by Morris which required
immediate suspension, so he could not be "awarded new public contracts
in Iraq and elsewhere."
But Morris has worked on subsequent reconstruction contracts, for an
American firm called Sallyport Global Holdings.
Executive John DeBlasio said Morris worked as a contracts consultant
"off and on," for the past six months.
"We employed him for that, for his expertise," DeBlasio said.
"He's got a lot of knowledge about Iraq."
He didn't know Morris had been suspended, DeBlasio said.
DeBlasio is a former adviser to the Coalition Provisional Authority,
which ran Iraq and awarded reconstruction contracts for 13 months
following the country's invasion.
Custer Battles was one of the first CPA contractors.
The suspension order, and the ongoing criminal investigation, have
been reported for months in the national and international media.
The government maintains a Web site that lists all parties banned from
contracting work.
After DeBlasio talked with the AP, a lawyer representing Sallyport
e-mailed the AP saying Morris had signed a one-year contract with
Sallyport in April 2004, before the suspension order was issued, and
that work already underway was exempt.
"All government contracts that Mr. Morris had any involvement in while
under contract with Sallyport were in effect prior to Mr. Morris being
placed on the (suspension) list," wrote Washington, D.C. attorney
David Cohen. Sallyport will not renew Morris' contract, Cohen said.
But a subcontractor now working in Iraq said Morris was a project
manager for Sallyport from May until October, when word got out about
his military suspension, and that Morris was involved with new
contracts after his suspension.
"I asked him about it because I saw his name on the (government) Web
site," said Nate Hill, a former Custer Battles midlevel manager who
says he quit more than a year ago after becoming exasperated with
management practices.
"He told me he was a federal witness and had been exonerated."
According to federal regulations, individuals suspended by the
military are banned from acting as principals on subsequent government
contracts.
Principals are defined as "officers, directors, owners, partners, and
persons having primary management or supervisory responsibilities."
Whether Morris' position was equivalent to those descriptions would
have to be determined by military investigators.
Rob Roy Trumble, the former Custer Battles executive who heads the new
companies, is not on the suspension list.
It is not a simple thing to track the ownership of two of his
businesses, Emergent Business Services and Tarheel Training LLC.
They are affiliated with a Romanian company called Danubia Global Inc.
Danubia, in turn, is owned by Security Ventures International Ltd., a
British Virgin Islands firm, according to Bucharest incorporation
records.
Trumble cut short an interview with the AP, after saying he had "no
idea" who owned Danubia.
The web sites of his new companies are linked to Danubia's.
Emergent's site says it is Danubia's employment recruiter and lists
several contracting jobs open in Iraq.
Battles and Custer, through a spokesman, said they sold the remaining
Iraqi assets of Custer Battles including vehicles, computers and
intellectual properties to Danubia early this year.
Several former Custer Battles employees have joined the Romanian firm.
But the contractors refused to name the employees, or to identify
Danubia's owners.
Trumble said his new companies "have nothing to do with Custer
Battles" though they share the same office.
A Custer Battles e-mail, obtained by the AP, shows the recipient was
instructed in January to send future Internet correspondence to
Emergent, though the phone number and street address remained the
same.
Emergent has bid on at least one government contract, according to
federal records.
Tarheel Training was the name of North Carolina business development
proposed by Custer Battles.
In January, the deal to build a security training facility fell
through amid growing controversy surrounding the contractor.
That same month, Tarheel Training LLC was incorporated in Delaware and
North Carolina with Trumble listed as manager.
Trumble denied he was the manager of Tarheel and said the 5-month-old
company was going out of business because "they haven't been able to
sign any contracts."
But the company's web site says the firm is more than a year old and
has attracted more than 100 customers.
"We've been working with the specialists in Emergent Business Services
for well over a year and they have provided comprehensive,
professional services," says the web site, quoting Tarheel Chief
Executive Officer Jack Donovan.
Donovan is a retired military colonel who told a North Carolina
newspaper in November that Scott Custer "was one of my best soldiers.
I got him a commission."
He also is a former Custer Battles official.
"They're like mushrooms, they just keep sprouting up," said Franklin
Willis, a former CPA official and Reagan administration member who
testified in Washington that Custer Battles had defied government
control and did what it wanted in Iraq.
"They are extremely clever. They are extremely brazen. They've never
let truth get in the way of their economic ambitions."
___________________________________________________________
Welcome to Bushworld.
Harry
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