ttp://www.thenation.com/doc/20071203/scahill
The Nation
Blackwater's Brothers
by JEREMY SCAHILL
[posted online on November 15, 2007]
Every day, new revelations emerge in the mounting scandal rocking the Bush Administration and the mercenary company Blackwater Worldwide. Much of the attention focuses on the now infamous shooting spree in
Baghdad's Nisour Square on September 16, in which seventeen Iraqi
civilians were killed and twenty-four wounded. FBI investigators are
now alleging that fourteen were victims of unjustified and unprovoked
shooting--some were shot while they were fleeing. Investigators also
say they found nothing to substantiate Blackwater's claims of being
fired on by Iraqis. This comes a month after a US Army investigation
determined there was "no enemy activity involved" and labeled the
shootings a "criminal event." But while Blackwater gets hammered in the
press, the behind-the-scenes actions of the company's paymaster, the
State Department, grow more scandalous by the minute.
Almost from the moment the Nisour Square shootings happened, the State
Department has taken actions that give the impression of trying to
cover up the incident. The department's initial report on the shooting
was drafted by a Blackwater contractor on official US government
stationery. The FBI was not dispatched to investigate the case until
two weeks after the shootings, meaning that the initial investigation
was in the hands of a non-law enforcement agency, the State Department,
that just happens to be Blackwater's employer. In late October it
emerged that the department had actually granted some Blackwater
operatives "limited use immunity" in return for their statements on the
shooting. Some Blackwater agents have reportedly refused to answer FBI
questions, citing their State Department-granted "immunity." This means
that their statements, and information gleaned from them, cannot be
used to bring criminal charges against them. The State Department also
offered to facilitate the payment of what amounted to hush money to
victims of the shooting, which it has done on numerous occasions for
Blackwater and other companies when they kill Iraqis.
Now this story has taken yet another dramatic twist. On Wednesday the
State Department Inspector General, Howard "Cookie" Krongard, was in
the hot seat on Capitol Hill, where he found himself being grilled by
Representative Henry Waxman's Oversight and Government Affairs
Committee. Krongard is the top State Department official charged with
investigating allegations of waste, fraud and abuse. In addition to all
of the questionable actions by the State Department in the Blackwater
investigation, Krongard has faced charges that he impeded a Justice
Department investigation into Blackwater over allegations the company
was illegally smuggling weapons into Iraq. But the bombshell at the
hearing was the revelation that Krongard's brother, Alvin "Buzzy"
Krongard, recently accepted a position as a paid consultant for
Blackwater, where he serves on the company's advisory board. Until his
resignation in 2004, Buzzy was the number-three man at the Central
Intelligence Agency (more on that later). Waxman's committee broke the
news of Buzzy's Blackwater position as part of what can only be
described as a masterful ambush of the Inspector General.
When Waxman revealed the conflict of interest with the brothers
Krongard and Blackwater, alleging that Cookie Krongard had "concealed"
his brother's relationship with Blackwater, the Inspector General told
Waxman:
"I can tell you very frankly, I am not aware of any financial interest
or position [my brother] has with respect to Blackwater. It couldn't
possibly have affected anything I've done, because I don't believe it.
And when these ugly rumors started recently, I specifically asked him.
I do not believe it is true that he is a member of the advisory board,
as you stated, and that is something I think I need to say."
This statement would quickly thrust Cookie Krongard, who was testifying
under oath, in front of a firing line that would ultimately produce his
recusal from the Blackwater investigation. Moments after Cookie
Krongard denied that his brother had any involvement with Blackwater,
the committee produced a letter from Blackwater CEO Erik Prince to
Buzzy Krongard, dated July 26, inviting him to join the board and
offering him a $3,500 honorarium per meeting attended plus all expenses
paid. "Your experience and insight would be ideal to help our team
determine where we are and where we are going," Prince wrote.
Cookie Krongard said his brother "has been involved in a lot of
activities involving security. So it's no surprise that someone like
Erik Prince would invite him to continue to support 'security, peace,
and freedom.'" But Cookie Krongard insisted his brother had not
accepted the position, saying, "I dispute that." Representative Elijah
Cummings then produced a September 5 e-mail from Prince to Buzzy
saying, "Welcome and thank you for accepting the invitation to be a
member of the board." Cummings told Cookie, "Prince invited your
brother to be at a board meeting to discuss strategic planning. And
this meeting is taking place right now, in Williamsburg, Virginia, this
week as we speak. Staff contacted the hotel to speak to your brother
and the hotel confirmed that he was scheduled to be there."
Cookie replied that he was not aware of this, adding, "By the nature of
my brother's work, you should understand that we have never discussed
his work or my work, so I had no reason to even think that he had any
involvement with Blackwater. But when these things surfaced, I called
him and I asked him directly, he has told me he does not have any
involvement, he does not have any financial interest. If you're telling
me he does absolutely I would recuse myself" from the Blackwater
investigation.
During a recess of the hearing, Cookie later said, he called his
brother, who confirmed for him that he had indeed accepted a position
on the Blackwater advisory board. Cookie abruptly announced he was
recusing himself from all matters relating to Blackwater. But this is
unlikely to be the end of Cookie's problems stemming from this scandal.
He may actually have perjured himself. After the hearing, Buzzy
Krongard told reporter Spencer Ackerman of TPM Muckraker that he had
informed Cookie weeks ago of his position with Blackwater. "I had told
my brother I was going on the advisory board," Buzzy said. "My brother
says that is not the case. I stand by what I told my brother." When
Ackerman asked Buzzy if Blackwater knew who his brother was when Prince
offered him the advisory board position, Buzzy said, "You think I had
to tell them? That they didn't know?" He added, "If [Cookie's] got
integrity it's not gonna matter one way or other.... If he doesn't have
integrity it's not gonna matter."
While Buzzy's new position on Blackwater's advisory board is indeed a
salacious development, it is just the tip of the iceberg. In my book
Blackwater: The Rise of the World's Most Powerful Mercenary Army, I
explore in depth the relationship between Buzzy Krongard and Blackwater
founder Erik Prince. The two men go back at least to 2002, when Buzzy
helped jump-start Blackwater's ultra-profitable role as a provider of
soldiers-for-hire in the "war on terror."
Though Blackwater was founded in 1997, Blackwater Security
Consulting--its mercenary division--was incorporated in Delaware on
January 22, 2002. Within months, as the United States occupied
Afghanistan and began planning the Iraq invasion, Blackwater Security
was already turning a profit, pulling in hundreds of thousands a month
from a valuable CIA contract.
One of the players in forging that first Blackwater Security contract
was Buzzy Krongard, at the time executive director of the CIA, the
agency's number-three position. Krongard, who was named to that post in
March 2001, had an unusual background for a spook, having spent most of
his adult life as an investment banker. He had built up Alex.Brown, the
country's oldest investment banking firm, into one of the most
successful, and eventually sold it to Bankers Trust, from which he
resigned in 1998. There have been some insinuations that Krongard was
working undercover for the CIA years before he officially joined the
agency in 1998 as a special adviser to George Tenet. But he won't
reveal how he met the CIA director, except to say that it was through
"mutual friends." The Princeton alum, Hall of Fame lacrosse player and
former Marine boasts of having once punched a great white shark in the
jaw; and he keeps one of its teeth on a chain and pictures of the
animal in his office. Despite his bravado, some at the agency thought
of Krongard as a wanna-be, according to a 2001 Newsweek story published
shortly after his ascension to the number-three spot. "A wanna-be?
Maybe I am. Maybe I'm not. That's as much as you're going to get,"
Krongard responded.
While working under Tenet at the CIA, Krongard acted internally,
reorganizing divisions and pushing for projects like an intelligence
venture capital firm, but he did on occasion speak publicly. In October
2001, he declared, "The war will be won in large measure by forces you
do not know about, in actions you will not see and in ways you may not
want to know about, but we will prevail."
Some three years later, in January 2005, Krongard made news when he
became the most senior Administration figure to articulate the benefits
of having not killed or captured Osama bin Laden. "You can make the
argument that we're better off with him [at large]," he said. "Because
if something happens to bin Laden, you might find a lot of people vying
for his position and demonstrating how macho they are by unleashing a
stream of terror.... He's turning into more of a charismatic leader
than a terrorist mastermind." Krongard also characterized bin Laden
"not as a chief executive but more like a venture capitalist," saying,
"Let's say you and I want to blow up Trafalgar Square. So we go to bin
Laden. And he'll say, 'Well, here's some money and some passports and
if you need weapons, see this guy.'"
It's not clear exactly what the original connection was between Prince
and Krongard. Some have alleged that Krongard knew Prince's father. In
a brief telephone interview conducted for my book, Krongard would only
say he was "familiar" with Prince and Blackwater. A former Blackwater
executive, however, asserted, "I know that Erik and Krongard were good
buddies." Whatever Krongard's involvement, it was during his tenure at
the CIA that Blackwater landed its first security contract, in April
2002. Krongard visited Kabul and said he realized the agency's new
station there was sorely lacking security. Blackwater received a $5.4
million six-month no-bid contract to provide twenty security guards for
the Kabul CIA station. Krongard said it was Blackwater's offering and
not his connection to Prince that led to the company landing the
contract, and that he talked to Prince about the contract but wasn't
certain who called whom, that he was "not sure which came first, the
chicken or the egg." He said that someone else was responsible for
actually signing off on the CIA contract. "Blackwater got a contract
because they were the first people that could get people on the
ground," Krongard said in the interview. "We were under the gun, we did
whatever it took when I came back from Kabul.... The only concern we
had was getting the best security for our people. If we thought
Martians could provide it, I guess we would have gone after them."
The relationship between Krongard and Prince apparently got chummier
after the contract was signed. "Krongard came down and visited
Blackwater, and I had to take his kids around and let them shoot on the
firing range a number of times," said a former Blackwater executive in
an interview for my book. "That was after the contract was signed, and
he may have come down just to see the company that he had just hired."
Prince apparently became consumed with the prospect of being involved
with secretive operations in the "war on terror"--so much so that he
personally deployed on the front lines. Prince joined Jamie Smith, a
former CIA operative who originally headed up Blackwater Security
Consulting, as part of the original twenty-man contingent Blackwater
sent to fulfill its first CIA contract, which began in May 2002,
according to Robert Young Pelton's book Licensed to Kill.
Since CIA and other intelligence and security contracts are "black"
contracts, it's difficult to pin down exactly how much Blackwater began
pulling in after that first Afghanistan contract, but Smith described
it as a rapid period of growth for Blackwater. The company's work for
the CIA and the military and Prince's political and military
connections would provide Blackwater with important leverage in wooing
what would become its largest confirmed client, the US State
Department. "After that first contract went off, there was a lot of
romancing with the State Department where they were just up the road,
so we traveled up there a lot in Kabul and tried to sweet-talk them
into letting us on board with them," Smith said in an interview. "Once
the State Department came on and there was a contract there, that
opened up some different doors. Once you get your foot in the door with
a government outfit that has offices in countries all over the world,
it's like--and this is probably a horrible analogy--but it's something
maybe like the metastasis of a cancer. You know, once you get into the
bloodstream you're going to be all over the body in just a couple of
days, you know what I mean? So if you get in that pipeline, then
everywhere that they've got a problem and an office, there's an
opportunity."
A year later, Prince's mercenary operations would get the boost of a
lifetime when Blackwater was handed a $27 million no-bid contract to
serve as the elite bodyguards of the US occupation of Iraq. To date
that arrangement has brought Blackwater about $1 billion in federal
"security" contracts. Is it just a coincidence that one of the key
players in securing Blackwater's role as the leading mercenary company
of the Bush Administration has a brother whose job it was to oversee
Blackwater? Or that the Inspector General stands accused of failing to
do his duty and actually impeding federal investigations into the
company's potentially criminal activities? Is there a connection
between the Krongards and the State Department's systematic cover-up
campaign for Blackwater? Unsurprisingly, Blackwater's spokesperson,
Anne Tyrrell, said, "We do not see a conflict of interest." But these
aren't questions for the company's PR people. These are questions that
must be answered by the brothers Krongard under oath.
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