U.S. Examines Whether Blackwater Tried Bribery

U.S. Examines Whether Blackwater Tried Bribery
By MARK MAZZETTI and JAMES RISEN
Copyright by The New York Times
Published: January 31, 2010
http://www.nytimes.com/2010/02/01/world/middleeast/01blackwater.html?th&emc=th


WASHINGTON — The Justice Department is investigating whether officials of Blackwater Worldwide tried to bribe Iraqi government officials in hopes of retaining the firm’s security work in Iraq after a deadly shooting episode in 2007, according to current and former government officials.

The lawyer Jaafar al-Mousawi said he worked with Blackwater to compensate Iraqis.

The officials said that the Justice Department’s fraud section opened the inquiry late last year to determine whether Blackwater employees violated a federal law banning American corporations from paying bribes to foreign officials.

The inquiry is the latest fallout from the shooting in Nisour Square in Baghdad, which left 17 Iraqis dead and stoked bitter resentment against the United States.

A federal judge in December dismissed criminal charges against five former Blackwater guards implicated in the episode, but Vice President Joseph R. Biden Jr. recently announced that the Obama administration would appeal that decision.

The investigation, which was confirmed by three current and former officials speaking on condition of anonymity, follows a report in The New York Times in November that top executives at Blackwater had authorized secret payments of about $1 million to Iraqi officials to buy their support after the shooting. The newspaper account said it could not determine whether any bribes were actually paid or identify Iraqi officials who might have received the money.

The Justice Department has obtained two documents from the State Department, which had security contracts with the company, that have raised questions about Blackwater’s efforts to influence Iraqi government officials after the Nisour Square shootings, according to two American officials familiar with the inquiry.

One document, a handwritten note, shows that a Blackwater representative told a senior official at the American Embassy in Baghdad that the company had hired a prominent Iraqi lawyer to help the firm make compensation payments to Iraqi victims of the shootings, a practice encouraged by the State Department.

According to the document, as described by the two government officials, the Blackwater official said the firm had hired the lawyer hoping that the lawyer’s close ties to top Iraqi officials, including Prime Minister Nuri Kamal al-Maliki, would help Blackwater obtain a license to continue operating in Iraq.

Several officials identified the Iraqi lawyer as Jaafar al-Mousawi, who had earlier served as the chief prosecutor in the trial of Saddam Hussein.

The second document is a response from a senior Embassy official, an e-mail message warning Blackwater officials not to bribe the Iraqi government, the officials said. In an interview in Baghdad on Friday, Mr. Mousawi said that in February 2008 he worked with top Blackwater officials to spend up to $1 million to compensate the families of the Nisour Square victims. He said he consulted with Mr. Maliki about the payments.

“He said, ‘Go ahead and help because these are poor people,’ ” Mr. Mousawi said.

Saying that 40 families received a total of about $800,000, he added that he believed that Blackwater hoped the compensation would help “moisten the situation with the Iraqi government to get the license.”

But he said that he was unaware of any efforts by Blackwater executives to bribe Iraqi officials, and that news reports misinterpreted the purpose of the victims’ fund as intended bribes.

Several former Blackwater employees, however, had told The Times that Blackwater’s president at the time, Gary Jackson, authorized about $1 million for payments to Iraqi officials, with only a small portion intended for victims. While the documents apparently do not offer proof that Blackwater paid off any Iraqi officials, the American officials who have reviewed them say they suggest that officials at the United States Embassy in Baghdad were concerned enough about Blackwater’s plans to issue the warning to the company.

A Justice Department spokeswoman declined to comment. Stacey DeLuke, a spokeswoman for Blackwater, now called Xe Services, which is based in Moyock, N.C., did not respond to a request for comment.

The bribery investigation is still in its early stages, according to officials familiar with the inquiry. They said that lawyers in the fraud section at the Justice Department’s Washington headquarters were working with federal prosecutors in North Carolina, where a federal grand jury has been examining Blackwater’s activities for several years. The State Department is also cooperating with the bribery investigation, several officials said.

Securing convictions under the federal antibribery statute, called the Foreign Corrupt Practices Act, is often difficult. Steven Tyrrell, who until December ran the Justice Department’s fraud section, said that there was seldom a paper trail of the illegal transactions and that prosecutors usually had to rely on whistle-blowers inside a company to testify about bribery payments.

Under the statute, the prosecutors must prove the “corrupt intent” of those making payments to the foreign officials, and the payment “must be intended to induce the recipient to misuse his official position” according to a statement on the Justice Department Web site. The statement notes that the mere offer or promise of a bribe can violate the statute.
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Over the past year, the Justice Department has dramatically expanded its bribery investigations, placing a new emphasis on prosecuting individual executives rather than merely getting companies to pay large fines for paying off foreign officials.

“The fear of jail is more of a deterrent than the fear of having to pay a monetary fine, which many companies might see as the cost of doing business,” Mr. Tyrrell said. He declined to speak about the Justice Department’s inquiry into Blackwater or confirm its existence.

The Nisour Square shooting incited intense anger among Iraqis, and officials in Baghdad threatened to kick Blackwater out of the country. At the time, the security company had contracts in Iraq with the State Department and the Central Intelligence Agency worth hundreds of millions of dollars annually.

Families of the Nisour Square victims have said in interviews that Mr. Mousawi met with them and arranged compensation payments on behalf of Blackwater. The Iraqis said an American described as “Mr. Rich” sometimes joined Mr. Mousawi.

Several American officials have identified the man as Rich Garner, then Blackwater’s Iraq country manager. Former employees have previously said the money authorized for secret payments of Iraqi officials was sent to Mr. Garner in Baghdad from the firm’s office in Amman, Jordan.

Blackwater was able to keep its State Department contract in Iraq for nearly two years without obtaining the operating license Iraqi officials had said would be required.

In May 2009, Blackwater finally lost the deal. The firm still provides diplomatic security for the State Department in Afghanistan.

While the Justice Department’s investigation appears to focus on specific allegations of bribery after the Nisour Square shooting, several former Blackwater officials have said that questionable transfers of cash were frequent at Blackwater.

In interviews, former Blackwater officials described how the company over the years sent millions of dollars in cash into Iraq, usually carried by hand in paper bags, and kept few records of the transfers.

Some of the former employees told the prosecutors that they could not identify the recipients of the money, while others have said the money went to bribe Iraqi officials, according to current and former government officials and outside lawyers familiar with the matter.

The Justice Department’s decision to open an investigation of Blackwater came weeks before the judge in Washington dismissed criminal charges against five Blackwater guards.

They had been charged with manslaughter and related weapons violations in the Nisour Square shootings, but United States District Judge Ricardo M. Urbina threw out the case and harshly criticized prosecutors for relying on statements made by the guards under grants of immunity.

Separately, some Nisour Square victims have dropped a civil lawsuit against Blackwater after reaching a financial settlement with the company.

But the company’s legal troubles persist. Two former guards for a Blackwater subsidiary were charged in January in the deaths of two Afghans and the wounding of another in Afghanistan last year.


Steven Lee Myers contributed reporting from Baghdad.