WASHINGTON, Feb 12 Two former Blackwater employees have accused the private security contractor of defrauding the government for years through phony billing.
The accusations come in a lawsuit filed by Brad and Melan Davis who said the company also charged the government for prostitutes and strippers and kept incompetent personnel for financial reasons.
They two claimed they had discovered a systematic pattern to defraud authorities in the Blackwater Worldwide security firm now known as Xe Services LLC.
The fraudulent activities — such as double billing and submitting false invoices — occurred while the security firm carried out its work in Iraq, Afghanistan and in Louisiana during Hurricane Katrina's aftermath.
The accusers — a husband and wife who worked for Blackwater — said they had first-hand knowledge of these activities.
Blackwater is the US State Department's largest security contractor, and the Pakistani media believe that it also has agents in Pakistan.
Since Sept 11, 2001, Blackwater has received billions of dollars from the US government to protect diplomatic employees in Iraq and Afghanistan and for other agencies' security missions.
Melan Davis, who was involved in record-keeping, said the company billed the government for prostitution services in Afghanistan from a Filipino female, whose name was on Blackwater's payroll roster under a category called “Morale Welfare Recreation”.
She said Blackwater billed the woman's plane tickets and monthly salary to the United States.
The lawsuit also said a vendor being paid for “cleaning services” in Louisiana was providing strippers.
Xe on Friday responded to the suit, saying the allegations were “without merit and the company will vigorously defend against this lawsuit”. Blackwater became the target of widespread Iraqi outrage after its contractors were involved in the September 2007 shooting in Baghdad's Nisoor Square that left 17 civilians dead. That outrage was renewed in December when a US judge dismissed manslaughter charges against five guards involved in the shootings on constitutional grounds.
In one instance, the Davises allege, the company was paying inflated prices to a vendor whose work was billed to the Department of Homeland Security for services related to security after Hurricane Katrina. They said the overpayments allowed the vendor to provide a barbecue pit for Blackwater staff parties.
Melan Davis argues that Blackwater terminated her in February 2008 because she questioned fraudulent billing. Brad Davis resigned.
Last year, the State Department received “very serious allegations” from the US Senate against Blackwater saying that its employees were involved in gun-running.
Senator John Kerry, who heads the Senate Foreign Relations Committee, sent a letter to the State Department in November claiming that Blackwater had engaged in “broad violations” of export laws and its unlicenced shipments “went beyond weapons for personal use”.