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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Blackwater USA
Blackwater USA (renamed Xe in February 2009 and Academi in December 2011) is a North Carolina-based professional military, law enforcement, security and peacekeeping operations company. Blackwater was founded in 1997 by Erik Prince, a former U. S. Navy SEAL. The Blackwater family of businesses includes Blackwater Training Center (the largest private firearms and tactical training center in the U. S., according to Blackwater's Web site), Blackwater Target Systems, Blackwater Security Consulting, Blackwater Canine, and Raven Development Group.
Federal Contract $: $ 202.4m
Total Number of Instances: 9
Total Misconduct dollar amount: $ 49.5m
Instances of Misconduct
1. Firearms Violations – Deferred Prosecution Agreement
Academi LLC (formerly known as Blackwater Worldwide and Xe Services) entered into a deferred prosecution agreement with the federal government to settle 17 criminal charges. The charged violations included illegally exporting various weapons, equipment, and services to Sudan, Sweden, Denmark, Iraq, and Afghanistan; providing military training to Canadian military and law enforcement personnel without a required U.S. license; possessing unregistered automatic weapons at its North Carolina training facility; and making false statements to the government about weapons provided to the king of Jordan. Under the terms of the deferred prosecution agreement, the company accepted responsibility for the facts as alleged by the government and paid a $7.5 million fine (subject to a credit of up to $2.5 million for compliance-related costs). See related Blackwater USA instances, “Firearms Violations – Employee Prosecutions” and “Firearms Violations – State Department Settlement”.... more»
2. Firearms Violations – State Department Settlement
Xe Services LLC (formerly known as Blackwater) entered into a civil settlement with the U.S. State Department in which it agreed to pay a $42 million penalty ($12 million of which was suspended on the condition that it be applied toward remedial measures) for 288 alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) between 2003 and 2009. The alleged violations included illegal weapon exports to Afghanistan, making unauthorized business proposals to the government of Southern Sudan, and providing unauthorized services to various foreign countries. See related Blackwater USA instances, “Firearms Violations – Employee Prosecutions” and “Firearms Violations – Deferred Prosecution Agreement”.... more»
3. August 2007 Hilla, Iraq Shooting
Ali Kareem Fakhri and the family of Husain Salih Rabea sued Blackwater founder Erik Prince and several of the corporate entities he allegedly owns or manages (including Blackwater Worldwide, Xe, The Prince Group, EP Investments, and Greystone, Ltd.) for a shooting that took place on August 13, 2007 in Hilla, Iraq, in which Rabea was killed. The plaintiffs’ claims included war crimes and various torts, including assault and battery and wrongful death. This and six other lawsuits alleging abuses by Blackwater in Iraq were settled in January 2010. The terms of the settlement are confidential.... more»
4. Kabul Shooting Prosecutions
Justin Cannon and Chris Drotleff were charged with the killing of two Afghans and the wounding of a third after a traffic accident in Kabul in May 2009. Cannon and Drotleff, who at the time of the incident were working for Blackwater subsidiary Paravant LLC, were each charged with two counts of second-degree murder, one count of attempted murder, six counts of using and discharging a firearm during a violent crime, and four counts of murder resulting from the use of a firearm during a violent crime. A trial in September 2010 resulted in a mistrial after jurors were unable to reach a verdict. In March 2011, a federal jury convicted both men of imvoluntary manslaughter. In June 2011, Drotleff was sentenced to 37 months in prison and 3 years of supervised release, and Cannon was sentenced to 30 months in prison and 2 years of supervised release.... more»
5. Firearms Violations – Employee Prosecutions
In was reported in September 2007 that the U.S. Attorney's Office in Raleigh, N.C., with help from Pentagon and State Department auditors, was investigating Blackwater's domestic and overseas firearm practices. Two former Blackwater employees — Kenneth Wayne Cashwell and William Ellsworth "Max" Grumiaux — pleaded guilty in early 2008 to possession of stolen firearms. According to Blackwater, the company reported the two former employees to the federal Bureau of Alcohol, Tobacco and Firearms (ATF) for their misconduct and requested that ATF visit its site and conduct a thorough review. In April 2010, five former Blackwater employees – former president Gary Jackson, former general counsel Andrew Howell, former executive vice president William Wheeler Mathews, Jr., former vice president of logistics and procurement Ana Bundy, and former armorer Ronald Slezak – were indicted on charges including conspiring to violate federal firearm laws, filing false forms, unlawful possession of automatic firearms, possession of unregistered firearms, and obstruction of justice. In February 2013, Jackson and Mathews pleaded guilty to one misdemeanor count of failing to make and maintain records related to firearms. They were sentenced to 3 years probation and 4 months house arrest and fined $5,000. The court and prosecutors dropped all charges against Howell, Bundy, and Slezak. See related Blackwater USA instances, “Firearms Violations – Deferred Prosecution Agreement” and “Firearms Violations – State Department Settlement”.... more»
6. Abtan v. Blackwater (Sept. 16, 2007 Baghdad Shooting)
Talib Mutlaq Deewan and the estates of Himoud Saed Abtan, Usama Fadil Abbass and Oday Ismail Ibraheem sued Blackwater for its alleged culpability in the September 16, 2007 firefight in Nisoor Square in Baghdad in which as many as 17 civilians, including Abtan, Abbass and Ibraheem, were killed and as many as 22, including Deewan, were injured. The lawsuit alleged Blackwater violated the federal Alien Tort Statute in committing extrajudicial killing and war crimes, and that the company was liable for assault and battery, wrongful death, intentional and negligent infliction of emotional distress, and negligent hiring, training and supervision. This and six other lawsuits alleging abuses by Blackwater in Iraq were settled in January 2010. The terms of the settlement are confidential.... more»
7. Employee Misclassification
In March 2007, the IRS issued a letter to Blackwater Security Consulting LLC ruling that the company misclassified one of its guards as an independent contractor and therefore would be responsible for withholding and paying employment taxes for the guard as required by federal law. Later in the year, after Blackwater personnel were involved in a fatal shooting in Iraq, Blackwater's owner, Erik Prince, testified before the United States House of Representatives Committee on Oversight and Government Reform. Committee Chairman Rep. Henry Waxman's subsequent discovery of the IRS letter and a nondisclosure agreement Blackwater allegedly used to keep the IRS matter secret led Waxman to issue a letter to Prince warning that his committee would investigate Blackwater for possible large-scale tax evasion and a corresponding cover-up. In March 2008, Rep. Waxman requested the IRS, the Small Business Administration, and the Department of Labor investigate Blackwater's compliance with federal tax, small business and labor laws vis-a-vis its classification of security guards as independent contractors rather than employees.... more»
8. Albazzaz v. Blackwater (Sept. 9, 2007 Baghdad Shooting)
The families of Ali Hussamaldeen Albazzaz, Kadhum Kayiz Aziz, and Sa’ad Raheem Jarallah, who were killed when Blackwater personnel fired on bystanders in and around Al Watahba Square in Baghdad on Sept. 9, 2007, filed a lawsuit against the company. The lawsuit, which was later joined by four other Iraqis who were injured in the incident, alleged Blackwater employees fired without justification, violating the federal Alien Tort Statute and the Racketeer Influenced and Corrupt Organizations Act (RICO), and were liable for assault and battery, wrongful death, intentional and negligent infliction of emotional distress, negligent hiring, training and supervision and and tortious spoliation of evidence. This and six other lawsuits alleging abuses by Blackwater in Iraq were settled in January 2010. The terms of the settlement are confidential.... more»
9. USA v. Ridgeway (Sept. 16, 2007 Baghdad Shooting)
In December 2008, former Blackwater Worldwide security guard Jeremy Ridgeway pleaded guilty to charges of voluntary manslaughter and attempt to commit manslaughter for his involvement in the deaths of 14 civilians and the wounding of 20 others in a firefight Baghdad on September 16, 2007.... more»
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