Custer Battles
Encyclopedia
Custer Battles, LLC was a defense contractor
headquartered in Newport, Rhode Island
, with offices in McLean
, Virginia
. The company now appears to be out of business. At one time the company offered services that include security services, litigation support, global risk consulting, training and business intelligence, but had no background or track record in offering any of these services.
In June 2003, Custer Battles took its services to Iraq and became a minor contractor supporting the Coalition Provisional Authority
and the U.S. government. In October 2004, the company was sued under the False Claims Act
. As this was the first lawsuit concerning contractors in Iraq, the company received significant attention throughout the media. In March 2006, a jury ruled against Custer Battles, but the verdict was set aside by a District Court judge. That decision was appealed, and, in April 2009, the Fourth Circuit reversed the district court judge and reinstated the fine.
According to Iraq War documents leak
, a Custer Battles convoy went on a shooting spree in Umm Qasr
in 2004, shooting out the tire of a civilian car that came close, and firing five shots into a crowded civilian minibus. The shooting stopped only after the Iraqi police, port security and a British military unit finally caught up with the convoy. Custer Battles employees handed over cash to avoid disciplinary action.
and defense consultant, while Battles is a former Army officer and CIA intelligence officer
who ran unsuccessfully for the United States Congress
in Rhode Island
in 2002.
From 2001-2003, Custer Battles provided crisis management and security assistance to humanitarian organizations working in high-risk conflict areas throughout the world. They were one of the first companies to establish a presence in Kabul, Afghanistan in January 2002, working for various NGOs as well as the Afghan Ministry of Transportation. Domestically, they also provided critical infrastructure protection in the United States, with focus on water security. They had at least four state-wide contracts in 2002 (New Hampshire, Rhode Island, Maine, Nevada), as well as contracts with various municipalities along the eastern seaboard.
In May 2003, Custer Battles established a presence in Baghdad, Iraq. In June 2003, Custer Battles was competitively awarded a contract to secure the Baghdad International Airport. The 12-month contract with the Coalition Provisional Authority was worth $16.8 million. The company continued to expand its business in Iraq, and became a minor subcontractor operating in the country.
The company continued to expand its operations in Iraq through 2003 and 2004. Their clients included the Coalition Provisional Authority, Bearing Point, Washington Group International, Parsons, Halliburton and the U.S. Army. In early 2004, the Department of Defense initiated an investigation into one of Custer Battles' contracts with the CPA, resulting in the company being suspended from future contract considerations by the Department of the Air Force. In early 2005 Custer Battles ceased operations in Iraq.
lawsuit by Robert Isakson and William Baldwin was unsealed against Custer Battles. The suit, brought under the False Claims Act, alleged massive overbilling on two contracts with the Coalition Provisional Authority
in Iraq in 2003.
In July 2005, Judge T.S. Ellis III ruled that allegations of false claims in Custer Battles' contracts with the CPA were actionable under the False Claims Act, denying Custer Battles' lawyers claims that the company had no contract with the US government. The Judge also ruled that money paid for by the Development Funds for Iraq (DFI) could not be prosecuted under the False Claims Act, as the US government was not involved in administering these funds.
In March 2006, a jury
found Custer Battles liable for the submission of 5 false claims, each one of which is subject to a US$5,000 -11,000 civil fine, as well as 26 false statements supporting the 5 false claims. However, in August 2006, Judge Ellis, of the Federal District Court in Alexandria, Va overturned the verdict as a matter of law. Judge Ellis's ruling was, in turn, reversed by the Fourth Circuit in April 2009, in effect reinstating the jury verdict. The Fourth Circuit also ruled that Judge Ellis had erred in limiting the scope of the damages on the dinar exchange contract, and gave the plaintiffs the option of seeking a new trial for additional damages., but reinstated the claims relating to the dinar-exchange contract and reversed the order limiting them to $30 million in damages.
, with the same set of whistleblowers, concerned a separate $16.8 million contract awarded to Custer Battles to provide security at Baghdad International Airport
. As this contract was paid for by seized Iraqi funds, Judge Ellis ruled that the entire contract was susceptible to the False Claims Act, and not just part of it in the previous case. The basic allegations were that Custer Battles had failed to provide adequate security staffing under its Firm-Fixed Price contract of $16.8 million. In January 2007, Judge Ellis granted Custer Battles' motion for summary judgment, finding that there was no evidence of the submission of false claims in this case. In April 2009, the 4th Circuit appeals court affirmed summary judgment for Custer Battles on the Baghdad airport contract.
lawsuits against Robert Isakson and William Baldwin, the same individuals who had previously accused Custer Battles of submitting false claims. The lawsuit also included Isakson and Baldwin's companies, DRC Inc and American Iraqi Solutions Group, both of Alabama. According to court documents filed in the U.S. District Court for the Eastern District of Virginia, Mr. Isakson breached his contract with Custer Battles when he brought his 12-year old son to Iraq with $9,000 in cash strapped to his chest.
Custer Battles also alleged that Isakson and Baldwin conspired to start a new company, American Iraqi Solutions Group (AISG) and stole Custer Battles clients. This case was eventually moved from the US District court in Virginia to the US District Court for the Southern District of Alabama. Before going to trial, a settlement was reached and Custer Battles dismissed the charges. The amount of money paid by DRC, Isakson and Baldwin has been kept confidential.
of MSNBC
News reported a story concerning allegations of unrestrained force on the part of Custer Battles security operators in Iraq. In the story, four former Custer Battles employees are quoted as witnessing an incident where a Custer Battles vehicle rolled over a civilian vehicle and injured the occupants inside. The employees also detail an incident where Kurdish guards shot indiscriminately towards Iraqi civilians. According to one of the employees, Bill Craun, "what we saw the American public wouldn't stand for."
In response to the allegations, Ms. Myers interviewed the country director and convoy leader for Custer Battles. The convoy leader, Shawn Greene, adamantly denied that any of these incidents occurred, and detailed the exact incident in which he ordered the Custer Battles truck to hit and forcibly move a civilian vehicle. According to Greene, while his vehicle did damage the civilian car, there were no injuries. Paul Christopher, the Custer Battles country director, provided NBC News access to the company's mission logs, which detailed the event of hitting a civilian vehicle, the subsequent investigation with photos, and the documentation from the driver and witnesses that no one was injured. Both Greene and Christopher did detail accounts of actual combat situation of Custer Battles personnel where their vehicles were attacked by insurgents and Custer Battles personnel were forced to defend themselves through the use of deadly force.
Defense contractor
A defense contractor is a business organization or individual that provides products or services to a military department of a government. Products typically include military aircraft, ships, vehicles, weaponry, and electronic systems...
headquartered in Newport, Rhode Island
Newport, Rhode Island
Newport is a city on Aquidneck Island in Newport County, Rhode Island, United States, about south of Providence. Known as a New England summer resort and for the famous Newport Mansions, it is the home of Salve Regina University and Naval Station Newport which houses the United States Naval War...
, with offices in McLean
McLean, Virginia
McLean is an unincorporated community and census-designated place in Fairfax County in Northern Virginia. The community had a total population of 48,115 as of the 2010 census....
, Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
. The company now appears to be out of business. At one time the company offered services that include security services, litigation support, global risk consulting, training and business intelligence, but had no background or track record in offering any of these services.
In June 2003, Custer Battles took its services to Iraq and became a minor contractor supporting the Coalition Provisional Authority
Coalition Provisional Authority
The Coalition Provisional Authority was established as a transitional government following the invasion of Iraq by the United States and its allies, members of the Multi-National Force – Iraq which was formed to oust the government of Saddam Hussein in 2003...
and the U.S. government. In October 2004, the company was sued under the False Claims Act
False Claims Act
The False Claims Act is an American federal law that imposes liability on persons and companies who defraud governmental programs. The law includes a "qui tam" provision that allows people who are not affiliated with the government to file actions on behalf of the government...
. As this was the first lawsuit concerning contractors in Iraq, the company received significant attention throughout the media. In March 2006, a jury ruled against Custer Battles, but the verdict was set aside by a District Court judge. That decision was appealed, and, in April 2009, the Fourth Circuit reversed the district court judge and reinstated the fine.
According to Iraq War documents leak
Iraq War documents leak
The Iraq War documents leak is the unsanctioned disclosure of a collection of 391,832 United States Army field reports, also called the Iraq War Logs, of the Iraq War from 2004 to 2009 to several international media organizations and published on the Internet by WikiLeaks on 2010. The files record...
, a Custer Battles convoy went on a shooting spree in Umm Qasr
Umm Qasr
Umm Qasr , is a port city in southern Iraq. It stands on the canalised Khawr az-Zubayr, part of the Khawr Abd Allah estuary which leads to the Persian Gulf. It is separated from the border of Kuwait by a small inlet...
in 2004, shooting out the tire of a civilian car that came close, and firing five shots into a crowded civilian minibus. The shooting stopped only after the Iraqi police, port security and a British military unit finally caught up with the convoy. Custer Battles employees handed over cash to avoid disciplinary action.
Background
Custer Battles was founded in October 2001. The company was named after its founders, Scott Custer and Michael Battles. Custer is a former Army RangerArmy Ranger
Army Ranger can refer to:* Canadian Rangers, a component of the army of the Canadian Forces* Irish Army Rangers* Pakistan Army Rangers* United States Army Rangers* Vietnamese Rangers, part of the Army of the Republic of Vietnam...
and defense consultant, while Battles is a former Army officer and CIA intelligence officer
Espionage
Espionage or spying involves an individual obtaining information that is considered secret or confidential without the permission of the holder of the information. Espionage is inherently clandestine, lest the legitimate holder of the information change plans or take other countermeasures once it...
who ran unsuccessfully for the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
in Rhode Island
Rhode Island
The state of Rhode Island and Providence Plantations, more commonly referred to as Rhode Island , is a state in the New England region of the United States. It is the smallest U.S. state by area...
in 2002.
From 2001-2003, Custer Battles provided crisis management and security assistance to humanitarian organizations working in high-risk conflict areas throughout the world. They were one of the first companies to establish a presence in Kabul, Afghanistan in January 2002, working for various NGOs as well as the Afghan Ministry of Transportation. Domestically, they also provided critical infrastructure protection in the United States, with focus on water security. They had at least four state-wide contracts in 2002 (New Hampshire, Rhode Island, Maine, Nevada), as well as contracts with various municipalities along the eastern seaboard.
In May 2003, Custer Battles established a presence in Baghdad, Iraq. In June 2003, Custer Battles was competitively awarded a contract to secure the Baghdad International Airport. The 12-month contract with the Coalition Provisional Authority was worth $16.8 million. The company continued to expand its business in Iraq, and became a minor subcontractor operating in the country.
The company continued to expand its operations in Iraq through 2003 and 2004. Their clients included the Coalition Provisional Authority, Bearing Point, Washington Group International, Parsons, Halliburton and the U.S. Army. In early 2004, the Department of Defense initiated an investigation into one of Custer Battles' contracts with the CPA, resulting in the company being suspended from future contract considerations by the Department of the Air Force. In early 2005 Custer Battles ceased operations in Iraq.
CPA case
In October 2004, a qui tamQui tam
In common law, a writ of qui tam is a writ whereby a private individual who assists a prosecution can receive all or part of any penalty imposed...
lawsuit by Robert Isakson and William Baldwin was unsealed against Custer Battles. The suit, brought under the False Claims Act, alleged massive overbilling on two contracts with the Coalition Provisional Authority
Coalition Provisional Authority
The Coalition Provisional Authority was established as a transitional government following the invasion of Iraq by the United States and its allies, members of the Multi-National Force – Iraq which was formed to oust the government of Saddam Hussein in 2003...
in Iraq in 2003.
In July 2005, Judge T.S. Ellis III ruled that allegations of false claims in Custer Battles' contracts with the CPA were actionable under the False Claims Act, denying Custer Battles' lawyers claims that the company had no contract with the US government. The Judge also ruled that money paid for by the Development Funds for Iraq (DFI) could not be prosecuted under the False Claims Act, as the US government was not involved in administering these funds.
In March 2006, a jury
Jury
A jury is a sworn body of people convened to render an impartial verdict officially submitted to them by a court, or to set a penalty or judgment. Modern juries tend to be found in courts to ascertain the guilt, or lack thereof, in a crime. In Anglophone jurisdictions, the verdict may be guilty,...
found Custer Battles liable for the submission of 5 false claims, each one of which is subject to a US$5,000 -11,000 civil fine, as well as 26 false statements supporting the 5 false claims. However, in August 2006, Judge Ellis, of the Federal District Court in Alexandria, Va overturned the verdict as a matter of law. Judge Ellis's ruling was, in turn, reversed by the Fourth Circuit in April 2009, in effect reinstating the jury verdict. The Fourth Circuit also ruled that Judge Ellis had erred in limiting the scope of the damages on the dinar exchange contract, and gave the plaintiffs the option of seeking a new trial for additional damages., but reinstated the claims relating to the dinar-exchange contract and reversed the order limiting them to $30 million in damages.
Baghdad Airport case
Another trialTrial
A trial is, in the most general sense, a test, usually a test to see whether something does or does not meet a given standard.It may refer to:*Trial , the presentation of information in a formal setting, usually a court...
, with the same set of whistleblowers, concerned a separate $16.8 million contract awarded to Custer Battles to provide security at Baghdad International Airport
Baghdad International Airport
Baghdad International Airport, originally Saddam International Airport, , BIAP is Iraq's largest airport, located in a suburb about west of downtown Baghdad in the Baghdad Governorate...
. As this contract was paid for by seized Iraqi funds, Judge Ellis ruled that the entire contract was susceptible to the False Claims Act, and not just part of it in the previous case. The basic allegations were that Custer Battles had failed to provide adequate security staffing under its Firm-Fixed Price contract of $16.8 million. In January 2007, Judge Ellis granted Custer Battles' motion for summary judgment, finding that there was no evidence of the submission of false claims in this case. In April 2009, the 4th Circuit appeals court affirmed summary judgment for Custer Battles on the Baghdad airport contract.
Custer Battles files conspiracy lawsuit
In April 2005, Custer Battles filed conspiracy and breach of contractBreach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
lawsuits against Robert Isakson and William Baldwin, the same individuals who had previously accused Custer Battles of submitting false claims. The lawsuit also included Isakson and Baldwin's companies, DRC Inc and American Iraqi Solutions Group, both of Alabama. According to court documents filed in the U.S. District Court for the Eastern District of Virginia, Mr. Isakson breached his contract with Custer Battles when he brought his 12-year old son to Iraq with $9,000 in cash strapped to his chest.
Custer Battles also alleged that Isakson and Baldwin conspired to start a new company, American Iraqi Solutions Group (AISG) and stole Custer Battles clients. This case was eventually moved from the US District court in Virginia to the US District Court for the Southern District of Alabama. Before going to trial, a settlement was reached and Custer Battles dismissed the charges. The amount of money paid by DRC, Isakson and Baldwin has been kept confidential.
Allegations of unrestrained force
In February 2005, Lisa MyersLisa Myers
Lisa Myers is the senior investigative correspondent for NBC Nightly News.A 1973 graduate of the University of Missouri's Missouri School of Journalism in Columbia, Missouri, she joined NBC in 1981. From 1979 to 1981, Myers was White House correspondent for The Washington Star...
of MSNBC
MSNBC
MSNBC is a cable news channel based in the United States available in the US, Germany , South Africa, the Middle East and Canada...
News reported a story concerning allegations of unrestrained force on the part of Custer Battles security operators in Iraq. In the story, four former Custer Battles employees are quoted as witnessing an incident where a Custer Battles vehicle rolled over a civilian vehicle and injured the occupants inside. The employees also detail an incident where Kurdish guards shot indiscriminately towards Iraqi civilians. According to one of the employees, Bill Craun, "what we saw the American public wouldn't stand for."
In response to the allegations, Ms. Myers interviewed the country director and convoy leader for Custer Battles. The convoy leader, Shawn Greene, adamantly denied that any of these incidents occurred, and detailed the exact incident in which he ordered the Custer Battles truck to hit and forcibly move a civilian vehicle. According to Greene, while his vehicle did damage the civilian car, there were no injuries. Paul Christopher, the Custer Battles country director, provided NBC News access to the company's mission logs, which detailed the event of hitting a civilian vehicle, the subsequent investigation with photos, and the documentation from the driver and witnesses that no one was injured. Both Greene and Christopher did detail accounts of actual combat situation of Custer Battles personnel where their vehicles were attacked by insurgents and Custer Battles personnel were forced to defend themselves through the use of deadly force.
Jacqueline Battles arrested trying to secret funds
In September 2006, Jacqueline Battles, the wife of Michael Battles, was arrested in Germany after a German bank informed authorities about "suspicious transactions" on her accounts. German investigators seized about US$1 million from her accounts. Ms. Battles was subsequently released and no charges were filed.Website
- Custer Battles, LLC, viewed April 9, 2004 and defunct as of 2009.
Articles
- "Court Revives Suit Over Iraq Work", Ellen Nakashima, Washington Post, April 11, 2009, viewed June 2, 2009
- "I'm From the Private Sector and I'm Here to Help", an episode of NPR's This American LifeThis American LifeThis American Life is a weekly hour-long radio program produced by WBEZ and hosted by Ira Glass. It is distributed by Public Radio International on PRI affiliate stations and is also available as a free weekly podcast. Primarily a journalistic non-fiction program, it has also featured essays,...
featuring Custer Battles - "Contractor Faces False Claims Act Liability for Payments Made by Iraq’s Coalition Provisional Authority", Laura Thomson, Construction Weblinks, April 20, 2009, viewed June 2, 2009
- "Cleared of war profiteering, he fights to restore honor", John Mulligan, Providence Journal, February 22, 2007, viewed February 22, 2007
- "Judge Clears Contractor of Fraud in Iraq", Dana Hedgepeth, Washington Post,viewed February 22, 2007
- "Military Contractor Exonerated", Washington Times, February 9, 2007, viewed February 10, 2007.
- "Judge Sets Aside Verdict of Corporate Fraud in Iraq", Eric Eckholm, New York Times, August 18, 2006, viewed February 10, 2007.
- "Memos Warned of Billing Fraud by Firm in Iraq", Eric Eckholm, The New York TimesThe New York TimesThe New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
. Late Edition - Final , Section A , Page 1 , Column 1. Oct 23, 2004. Retrieved May 2, 2005. - "Contractor accused of fraud in Iraq", T. Christian Miller, Los Angeles TimesLos Angeles TimesThe Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
. October 9, 2004, The Seattle TimesThe Seattle TimesThe Seattle Times is a newspaper serving Seattle, Washington, US. It is the largest daily newspaper in the state of Washington. It has been, since the demise in 2009 of the printed version of the rival Seattle Post-Intelligencer, Seattle's only major daily print newspaper.-History:The Seattle Times...
. Retrieved May 2, 2005. - "Small Business Succeeds Amid Chaos and Danger" , Neil King Jr., Wall Street Journal, August 2004, viewed February 10, 2007
- "Security worker killed in Iraq", BBC News, April 9, 2004, viewed April 9, 2004.
Television reports
- Daylight Robbery: fleecing Iraq and the USA. BBC Aired June 10, 2008.
- Billions Wasted In Iraq? By Jennifer MacDonald/Ira Rosen ©MMVI, CBS Broadcasting Inc. All Rights Reserved. Aired Feb 12, 2006
- "U.S. contractors in Iraq allege abuses: Four men say they witnessed brutality". By Lisa Myers & the NBC investigative unit. NBC Nightly News. Updated: 4:15 p.m. ET Feb. 17, 2005. Video available. Retrieved May 2, 2005.
Documents
- United States Ex Rel. Drc, Inc., Robert J. Isakson And William V. Custer Battles, Llc Et Alia. Case No.: CV-04-199-A Text of qui tam filing against Custer Battles.
- Senate Democratic Policy Committee Hearing - “An Oversight Hearing on Waste, Fraud and Abuse in U.S. Government Contracting in Iraq” Statement of Senator Byron L. Dorgan February 14, 2005
- Senate Democratic Policy Committee Hearing - Transcript
- http://www.corporatecrimereporter.com/documents/ellis.pdf