Billions Wasted In Iraq?

U.S. Official Says Oversight Was "Nonexistent"


Complaints about Custer Battles performance at the airport began almost immediately. Col. Richard Ballard, the top inspector general for the Army in Iraq, was assigned to see if the company was living up to its contract, such as it was.

"And the contract looked to me like something that you and I would write over a bottle of vodka," Ballard says. "Complete with all the spelling and syntax errors and annexes, to be filled in later. They presented it the next day, and they got awarded a — about a $15 million contract."
Custer Battles was supposed to provide security for commercial aviation at Baghdad airport, including personnel, machinery and canine teams to screen passengers and cargo. But the airport never re-opened for commercial traffic.

Instead of canceling the contract or requiring Custer Battles to return the money, the Coalition Authority instead assigned them to operate a checkpoint outside the airport.

Asked how they did on that job, Ballard says, "They failed miserably."

Was anybody paying attention to this money and where it was going?

"There was significant concern," Ballard says. "But there just were not the people in theatre to monitor that kind of thing on a day-to-day basis."

The basic answer to the question, Ballard acknowledges, is "no."

As for the bomb sniffing canine teams, Ballard says, "I eventually saw one dog. The dog did not appear to be a certified, trained dog. And the dog was incapable of operating in that environment."

Asked what he meant by "incapable of operating in that environment," Ballard says: "He would be brought to the checkpoint, and he would lie down. And he would refuse to sniff the vehicles."

The handler, Ballard says, "had no certificate and no evidence."

"So neither the dog nor the handler were qualified?" Kroft asked.

"I think it was a guy with his pet, to be honest with you," he replied, laughing.

In a memo obtained by 60 Minutes, the airport's director of security wrote to the Coalition Authority: "Custer Battles has shown themselves to be unresponsive, uncooperative, incompetent, deceitful, manipulative and war profiteers. Other than that they are swell fellows."

"I would agree with most of that," says Frank Willis.

"Even the 'war profiteers?' " Kroft asks.

"I think that what they were doing was of the nature of what I understand war-profiteering to be about — which is to get into a chaotic situation and milk every penny out of it you can, as fast as you can, before the opportunity goes away," Willis says.

The Coalition Authority not only refused to throw Custer Battles off the airport job, it wrote them a glowing review and continued to give them contracts including one to supply logistical support for a massive program to replace Iraq's currency.

How did Custer Battles perform that contract?

"Absolutely abysmally. I mean, it was beyond a joke," says British Col. Philip Wilkinson.

Wilkinson was a colonel in the British Army and was assigned to the Coalition Authority's Ministry of Finance and charged with providing security to convoys that traveled all over Iraq, loaded with $3 billion in cash. The trucks were supplied by Custer Battles.

"And you can imagine, open trucks with that sort of money on the back, was just a red hot target for not only terrorists, but criminals," Wilkinson says. "And, therefore, we needed trucks that were going to work. When those trucks were delivered to us, some of them were physically dragged into our compound."

Wilkinson says some of the trucks "were towed into the camp."

And Custer Battle's response?

"When questioned as to the serviceability of the trucks was, 'We were only told we had to deliver the trucks.' The contract doesn't say they had to work," Wilkinson says. "Which, I mean, when you're given that sort of answer, what can you do?"

How did they get away with it?

"Oh," says Wilkinson laughing, "I really don't know. I mean it was just a joke. The assumption that we had was that they had to have high political top cover to be able to get away with it. Because it was just outrageous: their failure to deliver that which they were contracted to do."