Reply #12: How a Contractor Cashed In on Iraq

[illflem]

Jason McLure, Legal Times


A $33,000 food order in Mosul was billed to the U.S.-led interim government of Iraq at $432,000. Electricity that cost $74,000 was invoiced at $400,000. Even $10 kettles got a 400 percent markup.
Documents unearthed as part of a whistleblower suit against Fairfax, Va.'s Custer Battles reveal for the first time the extent to which the defense contractor is accused of gouging the Coalition Provisional Authority, which governed Iraq following the U.S. invasion of the country in 2003.

Among those documents is a spreadsheet that appears to show the company billing the government nearly $10 million for dozens of items, including food, vehicles, and cooking pots. The total cost to Custer Battles, according to the spreadsheet, was less than $4 million -- a profit margin of 150 percent, far higher than the 25 percent margin allowed under its contract.

For critics of the Bush administration's handling of postwar Iraq, Custer Battles has become something of a symbol of contractor excess during the 14-month period that the Coalition Provisional Authority governed Iraq. The company was able to secure tens of millions of dollars' worth of security and logistical contracts from the CPA -- despite the fact that it didn't even exist until just months before the invasion of Iraq.

Now, much of that evidence is coming to light through the whistleblower suit in the U.S. District Court for the Eastern District of Virginia. Legal Times obtained access to the spreadsheet and hundreds of other previously confidential documents from the government's investigation of Custer Battles. The spreadsheet and other documents were provided to Legal Times by the whistleblowers' lawyers, who obtained the material from Custer Battles as part of the discovery process.


http://biz.yahoo.com/law/050304/a9b875664d6d13df15d108085092e6f9_1.html