By NICK SCHWELLENBACH
Private security contractor ArmorGroup North America Inc. (AGNA) agreed to pay $7.5 million to settle whistleblower allegations that it violated procurement rules that put the security of the U.S. Embassy in Kabul, Afghanistan at risk. AGNA's parent company said the settlement was made solely "to avoid costly and disruptive litigation—and that there has been no finding or admission of liability."
This is the same company whose employees are depicted in lewd pictures POGO made available in fall 2009—which demonstrated a serious breakdown in discipline among the security personnel defending the U.S. Embassy in Afghanistan. POGO Executive Director Danielle Brian called it a 'Lord of the Flies' environment.
Former AGNA director of operations James Gordon was the whistleblower who filed the lawsuit—he will receive $1.35 million from the $7.5 million AGNA has agreed to pay. According to a Department of Justice (DOJ) press release, these are the whistleblower allegations that were resolved by the settlement:
- "AGNA submitted false claims for payment on a State Department contract to provide armed guard services at the U.S. Embassy in Kabul, Afghanistan";
- "[I]n 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA’s management knew about the guards’ activities";
- "AGNA misrepresented the prior work experience of 38 third country national guards it had hired to guard the Embassy"; and
- "AGNA failed to comply with certain Foreign Ownership, Control and Influence mitigation requirements on the embassy contract, and on a separate contract to provide guard services at a Naval Support Facility in Bahrain."
Gordon’s lawsuit was filed in September 2009. Nearly a year and a half later, DOJ joined Gordon’s whistleblower lawsuit on April 29, 2011. Slightly more than two months later, AGNA settled. According to DOJ statistics, whistleblower lawsuits (or qui tam lawsuits) that allow insiders to sue on behalf of the federal government have a much higher success rate when the government intervenes and joins the whistleblower, known as a relator, in their lawsuit (or parts of their lawsuit).
In 2009, Gordon stated that he filed his lawsuit “to hold ArmorGroup accountable for the blatant disregard of its obligations to ensure the safety and security of the U.S. Embassy in Kabul. In an industry where good people are required to face extreme risk on a daily basis it is essential that those companies who disregard the rules be removed as they not only endanger their own staff but also endanger the mission, all in order to increase profit.”
On September 14, 2009, POGO’s Executive Director Danielle Brian provided testimony on the breakdown of discipline among many of AGNA’s employees in Kabul before the Commission on Wartime Contracting in Iraq and Afghanistan. Shortly after the Commission hearing, Brian was contacted by Samuel Brinkley, Wackenhut Services, Inc. (WSI)’s Vice President of Homeland and International Security Services, who offered to work with POGO on behalf of WSI and AGNA to identify and remedy mistreatment of victims of this hazing, retaliation against some of the whistleblowers who had come to POGO, and other matters raised in POGO’s disclosures. WSI is AGNA’s parent company.
During the intervening months, Brinkley and Brian had many discussions regarding the fair and appropriate treatment for POGO’s whistleblowers and others not involved in the wrongdoing. As a result, POGO was pleased that WSI/AGNA resolved the employment concerns of those five personnel at issue.
WSI issued a statement yesterday as well in response to the DOJ press release announcing the settlement. WSI disputed the DOJ’s assertion that there was a violation of the False Claims Act, that it did not have an anti-trafficking policy in place, and that it violated rules regarding third country nationals, and foreign mitigation requirements. It also said “the sole individual confirmed to have frequented prostitutes was fired by AGNA in normal course when his conduct became known.” WSI noted that the period of AGNA’s alleged behavior predated WSI’s acquisition of AGNA.
Regarding the violation of the Trafficking Victims Protection Act, Gordon’s allegations are more serious than they sound in the DOJ press release. Last year, the Washington Post/Center for Public Integrity wrote about Gordon’s case in the context of a perceived lack of U.S. enforcement regarding alleged sex trafficking by U.S. contractors and subcontractors:
In Afghanistan, evidence of trafficking came to light when 90 Chinese women were freed after brothel raids in 2006 and 2007. The women told the International Organization on Migration that they had been taken to Afghanistan for sexual exploitation, according to a 2008 report.
Nigina Mamadjonova, head of IOM's counter-human trafficking unit in Afghanistan, said the women alleged in interviews that their clients were mostly Western men.
In late 2007, officials at ArmorGroup, which provides U.S. Embassy security in Kabul, learned that some employees frequented brothels that were disguised as Chinese restaurants and that the employees might be engaged in sex trafficking. A company whistleblower has alleged in an ongoing lawsuit that the firm withheld the information from the U.S. government.
James Gordon, then an ArmorGroup supervisor, alleged that a manager "boasted openly about owning prostitutes in Kabul" and that a company trainee boasted that he hoped to make some "real money" in brothels and planned to buy a woman for $20,000.
The settlement is a victory for accountability, but ultimately may be unsatisfying for critics of the government's less-than-robust oversight of contractors. Can we really expect other contractors to see this settlement as a wake-up call? The State Department fell asleep at the switch with AGNA and still has yet to prove that it's serious about contract oversight and enforcement of trafficking in persons regulations.
Nick Schwellenbach is POGO's Director of Investigations