When Did U.S. Know about Embassy Problems?

In a update to a CBS News exclusive, new allegations have surfaced about the shocking behavior of guards and supervisors at the U.S. Embassy in Kabul.
New allegations portray stunning disarray among the guard force at the U.S. Embassy in Kabul - guards tasked with protecting a thousand diplomats and staff in one of the most dangerous places in the world. What's worse, there's evidence the problems have been well-known for years inside the U.S. government and the private company that provides the Embassy security, ArmorGroup North America.

The charges are outlined in a new lawsuit against ArmorGroup filed by former executive James Gordon. Gordon is the former Director of Operations for ArmorGroup and reported directly to the president of the company. He's one of four ArmorGroup employees who say they were forced out after they exposed a frightening list of illegal activities and violations in ArmorGuard's contract with the State Department. CBS News spoke to him by phone from Afghanistan.

Listen: James Gordon On Compromised Security

Gordon reports a wide range of shocking conditions: storing of illegal weapons, a guard force that is severely understaffed and overworked, guards and supervisors frequenting brothels on duty. There are even . According to the State Department, Afghanistan is known as a center of trafficking of women and girls for sex.

Gordon says one recruit was overheard discussing his contacts in the human trafficking business in Afghanistan. He allegedly wanted to purchase a girl for $20,000 and believed he could begin earning profits on her within a month. Gordon says the recruit was terminated and the incident reported to the State Department and ArmorGuard senior management. But he says the issue of human trafficking, and possible guard involvement in it, was never fully investigated. He calls the company's attempt to look into it, "pathetic."

Gordon and other whistleblowers say the root of ArmorGroup's problems lie in the fact that it severely underbid to win the $189 million dollar security contract for the Kabul embassy. To fill the 400 man guard force on the cheap, they say the company hired miscreants, unqualified mercenaries with dubious pasts, even recruits who'd committed perverse acts in training that made them unfit for deployment under terms of the contract.

One recruit was allegedly hired even though he had no identification, not even a driver's license, to prove who he was. Another was hired to guard the Kabul embassy after allegedly being fired by a different contractor for pulling a weapon on a co-worker while intoxicated.

Former ArmorGroup Manager John Gorman On Security At The Embassy

Once in Kabul, some of the recruits allegedly forced sexual hazing on others, demonstrated in photos shown in our CBS News report last week, most of them too lewd to show even in edited form.

Photos: Shocking Hazing In Kabul

ArmorGroup's financial records show its operating profits were falling as it was trying to cut corners on the U.S. Embassy security contract in Kabul. AmeriGuard's financial statement for 2007 reports: "Operating profits before head office costs fell to $16.8 million (from $20.3 million)" due in part to "the losses on the U.S. Embassy contract in Kabul."

On September 6th, 2007, Gordon notified a State Department official, whose employees work at the Embassy, about the strain on guard staffing.

"If one person gets sick or slips on a banana peel, the whole thing falls apart like a cheap suit," Gordon emailed. The State Department's reply: "Lock up the banana supply."

Retired marine John Gorman is another ArmorGroup manager-turned-whistleblower. He managed the camp where the 400 Embassy guards were housed.

Watch: John Gorman On Vetting Guards

Gorman says the company operated under a strict profit-over-safety mentality and seemed unconcerned when he brought dire understaffing to the attention of an ArmorGuard superior.

Watch: John Gorman On Response From Superiors

On June 12, 2007 Gorman and two colleagues reported their "grave concerns" verbally and in writing to a State Department official at the embassy, Nick Piertrowicz. They say Piertrowicz was very concerned about the allegations and about them, and offered to let them spend the night in his Embassy apartment, which they declined. They say he also promised to notify ArmorGroup superiors immediately. The next day, ArmorGroup allegedly forced out all three whistleblowers.

Watch: John Gorman On Congressional Reaction

Gorman says he got no response at that time from the members of Congress. Several months later, on November 7, 2007, Gorman and two colleagues arranged meetings with Senator Joe Lieberman and several other members of Congress to once again detail their concerns. The whistleblowers say they did not receive any follow-up information on what, if anything was done.

CBS News has contacted the named members of Congress, AmeriGuard's President and the State Department for their response. Senator Lieberman's office has provided this statement:

"Senator Lieberman's staff met with Mr. Gorman and others on November 7, 2007, regarding problems with a contract to provide security at the U.S. embassy in Kabul. Concerns about this contract had been raised long before the meeting, and the State Department was communicating its concerns to the contractor. The concerns dealt with issues such as the inadequate number of guards at the embassy, high turnover among guards, and the guards' inadequate English-speaking abilities. None of the concerns involved the sexual malfeasance and other inappropriate behavior that has most recently been reported. The Senator's staff verbally conveyed the information it received from Mr. Gorman to the State Department Inspector's General staff.

Early in 2008, the Senator chaired a Committee hearing on the role of contract security guards in war zones and subsequently asked witnesses for additional information regarding the specific contract to provide security to the embassy. Senator McCaskill, who chairs the Contracting Oversight Subcommittee of the Homeland Security Committee, held a hearing on this particular contract on June 10, 2009. Although steps were taken to address problems with this contract as early as the summer of 2007, Senator Lieberman is frustrated the problems have dragged on so long."

Senator Dodd's office provided CBS News with this response: "We have no record of receiving this letter from Mr. Gorman. However, Senator Dodd believes that contract abuse in Afghanistan is a very serious issue and is pleased to see that it is being investigated by the appropriate authorities."

Rep. Courtney's office said this: "The State Department, two Congressional Committees, and now an independent wartime contracting commission have taken concerns like his seriously and continue to actively investigate the company's improprieties."

State Department spokesman P.J. Crowley wouldn't comment about issues raised in the lawsuit but had this comment: "We have had concerns about this contract over time, both related to performance and conduct. We have aggressively overseen this contract beginning in day one. In a number of cases, because of improper behavior by contract personnel we have asked that they be removed and that has happened."

Now, two years after the former ArmorGuard employees first blew the whistle, there's a new State Department investigation into the ArmorGuard contract and conditions and behavior of the guard force at the US Embassy in Kabul.

Listen To Sharyl Attkisson's Full Interview With James Gordon

Watch The Full Interview With John Gorman

Editor's Note: This story was updated on Sept. 11, 2009 with additional comment from Sen. Lieberman's office.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.