Report: Blackwater created shell companies to win contracts
The private security firm Blackwater Worldwide created more than 30 shell companies in an attempt to secure millions of dollars in US government contracts, The New York Times reported Saturday.
Blackwater, which is now known as XE Services, formed these companies after coming under harsh scrutiny for its conduct in Iraq, the report said, citing investigators and former company officials. Many of these companies were located in offshore tax havens, DPA reported.
While it was unclear how many of those companies received government contracts, at least three of them struck deals with the US military or the Central Intelligence Agency (CIA), the Times reported. A government official said the CIA has awarded close to 600 million dollars in classified contracts to Blackwater and its affiliates since 2001.
The North Carolina-based firm is contracted by the US State Department to provide private security to US personnel and diplomatic convoys in dangerous parts of the world.
The company was sharply criticized after a September 2007 shooting by its contractors in Iraq that killed 17 civilians. It lost its contract there because of the incident.
This week, the Senate Armed Services Committee, which is investigating government contracting, released a chart that identified 31 affiliates of Blackwater, the report said. The investigation revealed the steps Blackwater took to continue winning contracts after September 2007.
Michigan Democrat Carl Levin, the chairman of the Armed Services Committee, said in a statement quoted by the Times that it was worth "looking into why Blackwater would need to create the dozens of other names." He has requested the Justice Department investigate whether Blackwater misled the government when using these subsidiaries to obtain contracts.
The CIA recently awarded the company a 100-million-dollar contract to provide security in Afghanistan, a move that has been severely criticized by some members of Congress.
The Times cited former Blackwater employees as saying that at least two of the affiliated companies, XPG and Greystone, obtained secret contracts from the CIA.