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June 27, 2008

State Department auditing Blackwater contract

We were trolling about the other day in the very useful federal contracting database, known as the Federal Procurement Data System.

Lo and behold, we came upon a MOST interesting-looking contract that the State Department signed in March with Alexandria, Virginia-based Cotton & Company LLP, a leading auditing firm.

Turns out, State has asked the firm--and is paying it $264, 554--to audit Blackwater Worldwide's huge contract with State to provide personal protection services to U.S. diplomats in Iraq and elsewhere. Blackwater has earned hundreds of millions of dollars as one of three firms participating in the Worldwide Personal Protection Services contract.

It also, as N&S readers surely recall, has loads of problems, which erupted when Blackwater guards killed 17 Iraqi civilians in a Baghdad square on September 16, 2007. The FBI is still investigating the killings, while another Blackwater employee is facing charges in the Christmas Eve 2006 killing of a bodyguard to Iraq's vice president.

Just this week, federal agents raided Blackwater's Moyock, N.C., compound in an investigation of whether the company sidestepped federal firearms laws. Our colleagues at McClatchy's Raleigh News & Observer first reported on June 22 how Blackwater had purchased 17 Romanian AK-47 automatic weapons and 17 Bushmaster rifles, gave ownership of the guns to the sheriff of tiny Camden County (population 9,271), but kept most of the weapons on its own compound.

The audit of the State Department contract is apparently looking at issues such as whether Blackwater's reimbursement rates are proper.

Ambassador Patrick Kennedy,  the Undersecretary of State for Management, tells us the audit--requested by State's Office of Acquistion Management--is nothing out of the ordinary, and was not prompted by any suspicion of malfeasance. It's normal for such a large contract to be audited, he says.

"It's not a special audit that we're doing," he said.

For readers who really get into this stuff, the contract # for Cotton & Company's audit is S-AQM-MA-08-F3953.

The contract # for the Blackwater contract in question is S-AQM-PD-05-D1098.


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"Nukes & Spooks" is written by McClatchy correspondents Jonathan S. Landay (national security and intelligence), Warren P. Strobel (foreign affairs and the State Department), and Nancy Youssef (Pentagon).

jon, nancy & warren

Landay, Youssef and Strobel.

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