[B][SIZE="4"]Waxman Committee Urges Scrutiny of Blackwater's Employment Practices[/SIZE][/B]
Rep. Henry Waxman (D-Calif.) and the House Committee on Oversight and Government Reform are after Blackwater again, this time in relation to the private security firm's compliance with federal tax, small business, and labor laws. Blackwater's controversial practice of treating its employees as "independent contractors" first surfaced last October, [B]shortly after company founder and CEO Erik Prince testified before Waxman's committee to account for a Blackwater team's involvement in an unauthorized shooting in a Baghdad traffic circle that killed 17 and wounded 24 others. [/B]Since then, Waxman's staff has been looking into the applicable federal laws and has apparently concluded that Blackwater may be in violation.
Today, Waxman sent letters to Labor Secretary Elaine Chao (.pdf), IRS Acting Commissioner Linda Stiff (.pdf), and Small Business Administration Administrator Steven Preston (.pdf), urging the officials to probe Blackwater's compliance with their respective agencies' rules and regulations.
Waxman's staff also released a memorandum (.pdf), outlining the Committees' concerns. An excerpt:
The evidence received by the Committee shows that Blackwater has taken inconsistent positions regarding whether its guards are employees or independent contractors. When the issue is whether Blackwater can be held liable for wrongful death of Blackwater guards, Blackwater argues that the guards are "employees" and can recover only through the workers' compensation system. But when the issue is whether Blackwater must pay or withhold Social Security, Medicaid, and other taxes for the guards, whether Blackwater is eligible for small business preferences in contracting, or whether Blackwater must comply with anti-discrimination rules, Blackwater calls these same guards "independent contractors."
The implications of Blackwater's actions are significant. Committee staff have estimated that Blackwater has avoided paying or withholding up to $50 million in federal taxes by treating its guards as independent contractors rather than employees. It also appears that Blackwater has received more than $144 million in small business contracts that may not be justified and has evaded oversight by the Department of Labor.
For these reasons, I am sending letters today to the Internal Revenue Service, the Small Business Administration, and the Department of Labor. These letters ask the agencies to investigate whether Blackwater has complied with federal tax and other laws and to initiate enforcement action where appropriate.
Last edited by intelligentjetsfan; 03-11-2008 at 09:09 AM.
Blackwater Worldwide has played a substantial role during the Iraq War, as a contractor for the United States government. In 2003, Blackwater attained its first high-profile contract when it received a [B]$21 million no-bid contract [/B]for guarding the head of the Coalition Provisional Authority, L. Paul Bremer Since June 2004, Blackwater has been paid more than $320 million out of a $1 billion, five-year State Department budget for the Worldwide Personal Protective Service, which protects U.S. officials and some foreign officials in conflict zones.
[B]Blackwater's license to operate in Iraq was revoked by the Iraqi Government on September 17, 2007, resulting from a highly contentious incident that occurred the previous day during which seventeen (initially reported as eleven) Iraqis were killed. The fatalities occurred while a Blackwater Private Security Detail (PSD) was escorting a convoy of U.S. State Department vehicles en route to a meeting in western Baghdad with United States Agency for International Development officials. The US State Department has said that "innocent life was lost. "An anonymous U.S. military official was quoted as saying that[B] Blackwater's guards opened fire without provocation and used excessive force. The incident has sparked at least 5 investigations, with the FBI now saying it will begin a probe. On October 11, 2007, the Center for Constitutional Rights filed suit against Blackwater under the Alien Tort Claims Act on behalf of an injured Iraqi and the families of three of the 17 Iraqis killed by Blackwater employees during the September 16, 2007 Blackwater Baghdad shootings.[/B]
A variety of ongoing controversies involved Blackwater Worldwide, not in direct relation to their specific and individual operations for the U.S. government. Their role, in their work, is a factor of some controversies. Critics consider Blackwater's self-description as a private military company to be a euphemism for mercenary activities. Jeremy Scahill points out that Chilean nationals, mostly former soldiers, whose country of origin does not participate in hostilities in Iraq, work for Blackwater in that country, thus those Chileans meet the definition of a "mercenary." At least 60 Chilean Blackwater employees were trained during dictator Augusto Pinochet's regime. [B]Author Chris Hedges wrote about the establishment of mercenary armies, referring to Blackwater as an example of such a force, asserting its existence as a threat to democracy and a step towards the creation of a modern day Praetorian Guard in a June 3, 2007 article in the Philadelphia Inquirer.[/B]
J. Cofer Black, vice chairman of BlackwaterIn March 2006, Cofer Black, vice chairman of Blackwater USA, allegedly suggested at an international conference in Amman, Jordan, that the company was ready to move towards providing security professionals up to brigade size (3,000–5,000) for humanitarian efforts and low-intensity conflicts. Critics have suggested this may be going too far in putting political decisions in the hands of privately owned corporations. The company denies this was ever said.
In December 2006, an allegedly corrupt Iraqi politician, Ayham al-Samarie, was in a prison in Iraq, awaiting trial for 12 criminal corruption cases. On December 17, 2006, he escaped from custody allegedly with help from Blackwater, which he had hired to protect him before his arrest, and an American plane carried him out of Iraq to Jordan. He said from Dubai he would return to the United States as he hadn't broken any U.S. laws and had fled Iraq because he feared he would be killed or kidnapped. He arrived in Chicago on January 9, claiming that an Iraqi judge had ordered his release, he feared being killed if he stayed in jail, and U.S. officials had assured him he would not be extradited to Iraq.
On September 22, 2007, U.S. federal prosecutors announced an investigation into allegations that Blackwater employees may have smuggled weapons into Iraq, and that these weapons may have been later transferred to the Kurdistan Workers Party (PKK), a Kurdish nationalist group designated a terrorist organization by the United States, NATO and the EU. The U.S. government was investigating Blackwater for these alleged crimes. On October 4, 2007, the FBI took over the investigation.
According to Prince, he stated in September 2007 that there was a “rush to judgment” about Blackwater, due to "inaccurate information". 
In January 2008 Marshall Adame, a Democrat running for Congress in North Carolina's 3rd District, took part in a live question-and-answer forum where he was asked a question about Blackwater. Adame who had served as a State Department official in Iraq recounted; "I saw them shoot people, I saw them crash into cars while I was their passenger. There was absolutely no reason, no provocation whatsoever." He then stated "There is no place in the American force structure, or in American culture for mercenaries, they are guns for hire; No more, no less." This led to Blackwater executive vice president Bill Mathews sending an internal corporate email to staff:
There is a man named Marshall Adame who is running for congress in our district. He just put a quote online which says he wants this company and all of us to cease to exist. Do you like your jobs? Are you sick and tired of the slanderous bull**** going on in DC? If so, would you all mind joining me in reminding Mr. Adame that he is running for office in our backyard. Tell all your friends and family too. We welcome their assistance in making this point very clear to Mr. Adame.
Anyone who wants to send a letter may do so at the following address…....
His email is ....
He was too cowardly to put a phone number on the web. I ask that you keep your comments to Mr. Adame professional (well, mostly professional). We help him if our comments get threatening or too crass. Let’s run this goof out of Dodge….!
As a result of the letter writing campaign Adame stated; "I feel very strongly about how extensively organized Blackwater has become, and I will do everything I can as a congressman to look into that, to find out whether or not the things they're doing are even legal."
[QUOTE=intelligentjetsfan;2425516]Blackwater's controversial practice of treating its employees as "independent contractors"[/QUOTE]
This practice is common among any company that think it can get away with it under the law. This is hardly the first time, or the only scenario, where a company or individual has tried to skirt the contractor vs. employee border. Happens all the time matter of fact (I know, I worked a while back in a company who did the exact same thing for exactly the same reasons of less liabillity, less taxation, etc.)
I.e. This isn't new. This isn't unique. I'm willing to bet most of the companies we (the forumites in here) work or have worked for in the past, have and do the exact same thing.
[QUOTE=Jetfan_Johnny;2426243]Absolutely not. What i was trying to say is that reading the same stories over and over again is tired.[/QUOTE]
They keep having to print the same stories because nothing is ever done to make these people accountable. It's easy to stop the stories...
I think some basic accounting practices isn't too much to ask for. I mean, why not? It's not like we're asking them to do everything on the cheap...we just don't want to be raked over the coals. It would be nice to have some money left over to do other sh*t...like to invade Madagascar or something.
[QUOTE=PlumberKhan;2426460]They keep having to print the same stories because nothing is ever done to make these people accountable. It's easy to stop the stories...
I think some basic accounting practices isn't too much to ask for. I mean, why not? It's not like we're asking them to do everything on the cheap...we just don't want to be raked over the coals. It would be nice to have some money left over to do other sh*t...like to invade Madagascar or something.[/QUOTE]
You are aboslutely right, since the democrats took over control of congress how much of this has been addressed?
You would think now that the republicans don't control everything and just cant give money away hand over fist to their big business buddies the democrats would have used their control to fix this by now right?
[QUOTE=Jetfan_Johnny;2426470]You are aboslutely right, since the democrats took over control of congress how much of this has been addressed?
You would think now that the republicans don't control everything and just cant give money away hand over fist to their big business buddies the democrats would have used their control to fix this by now right?[/QUOTE]
Isn't that why all those democrats were elected in Nov. of 2006?