by David Phinney
Sunday October 21st 2018

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Baghdad Embassy Contractor Aims for More Business

Sloppy construction, safety problems, bribes, slave-like labor practices, missed deadlines, internal disputes and inflated costs — the new $600-million US embassy compound in Baghdad is swamped in a rising deluge of allegations from lawmakers and the news media.

Meanwhile, the former Washington representative for the Kuwait-headquartered contractor now building Baghdad embassy project is actively negotiating to buy the contractor’s US partner company — along with contracts for classified embassy work around the world that the US State Department awarded the two companies.

Alexandria, Va., real estate agent and businessman Robert Farah has repeatedly represented the Baghdad embassy contractor First Kuwaiti General Trading and Contracting at State Department meetings in Washington. Riding on the success of winning the Baghdad deal for the largest diplomatic compound in the world, First Kuwaiti then partnered up last year with Grunley Walsh of Rockville, Md., to win other US embassy and consulate contracts in other countries worth more than a $100 million dollars.

The wedding with a US firm appears to be a key strategy for First Kuwaiti’s efforts to winning more State Department business because only US-owned and headquartered companies may perform classified embassy work.

And soon after the Grunley Walsh won three new contracts in Africa, India and Indonesia in September 2006 as the lead partner, Farah began making moves to purchase Grunley Walsh’s newly-formed Grunley Walsh International for an undisclosed sum along with the new embassy work.

Nothing precludes Farah from purchasing the company, although the Lebanese national and naturalized US citizen (and a former information officer and secretary-general for political affairs of the Lebanese Forces political party from 1986 until at least 2001), could be prevented from taking on classified embassy work if he used other than US-sourced financing.

Nevertheless, Farah’s timing and his affiliations with First Kuwaiti as well as First Kuwaiti’s apparent muscle in the ongoing management of Grunley Walsh does raise eyebrows. As one State Department career officer noted: “It’s a bit strange for a newly-formed firm to win three contracts worth $150 to $200 million and then sell the company.”

But that is exactly what appears to be going on according to a draft letter laying out the terms for Farah’s proposed buyout. The three-page, Dec.22, 2006, document stresses that Grunley Walsh holds “secret-level security clearances issued by the U.S. Government,” which are deemed essential to a potential deal. “Given that the State Department contracts require the renamed Grunley Walsh International LLC to hold a security clearance, the acquisition can occur only if the (US State Department) doesn’t rescind the current security clearance based upon the name change or the change in ownership.”

Attorney Robert Nichols, who drafted the letter for Farah, also had recently represented First Kuwaiti, as did Miller Chevalier law partner Angela Styles, President Bush’s former procurement policy director. Both Nichols and Styles have since moved to a new Washington law firm, Crowell & Moring, where the two continue to represent First Kuwaiti.

One February 12, 2007, Grunley Walsh also began working with staff from a Lebanese firm closely associated with First Kuwaiti, according to a document provided by a source familiar with the companies.

One document seeks approval from the State Department for 19 senior GMD employees working with Grunley Walsh for clearance on the newly-awarded embassy contracts. GMD, also known as Global Management and Development and based in Lebanon, took part in designing and building the Baghdad embassy project as well as First Kuwaiti headquarters in Kuwait, according to the document.

In addition to representing First Kuwaiti at State Department meetings, Farah represents and is president of the Global Management and Development Group. Farah said it is only a coincidence in the similarity of names and that Global Management and Development Group is based in Virginia.

Update 6/19/13: Adding to confusion is the Global Management in Lebanon claims involvement in the building of U.S. embassies in Baghdad, Indonesia and Gabon.

“It can be very confusing. Everyone uses the words ‘Global Management,'” Farah said in a telephone interview.

Meanwhile, the marriage of Grunley Walsh and First Kuwaiti continues to be promising. First Kuwaiti and Grunley Walsh International are thought to be poised for building a State Department project in Saudi Arabia. They also were believed to have been at the top of the list for building a new US embassy in Beirut, Lebanon, that the US State Department nixed this summer after protests from the U.S. ambassador there who said the area was unsafe.

Canceling the project caused a stir within the State Department because the department’s Overseas Building Operations division, known as OBO, had already purchased land for the project for more than $22 million, according to ABCnews.com.

Friction became so great that the U.S. Embassy refused to allow a State Department official managing the project, James Golden to enter Lebanon by denying normally standard “country clearance.”

Golden is an independent contractor hired by OBO to lead the independent contractor who plays an influential hand in the award of embassy construction in trouble spots around the world, including the Baghdad embassy. Multiple sources say he has spent much of his time in Kuwait and Baghdad where he played a guiding role in awarding contracts to First Kuwaiti and its subcontractors

Asked about his affiliation with First Kuwaiti, Farah said he had not worked the company for “six or seven” months, but that he was still actively negotiating a purchase of Grunley Walsh International. “Money is not a problem.”

Representatives of Grunley Walsh and First Kuwaiti have not responded to numerous inquiries about their association, although it appears First Kuwaiti does wield a hefty hand in Grunley Walsh’s management, according to emails and documents obtained from State Department sources.

First Kuwaiti’s general manager Wadih al Absi wrote in an email to Grunley Walsh president, Kenneth M. Grunley and Farah (using a First Kuwaiti email address), outlining the chain of decision making in their partnership:

“Since we care about our relation with GW (Grunley Walsh) whether it is sold out to Mr. Robert Farah or otherwise we need to set some policies and procedures in place as to avoid further complications and to continue a good and long working relationship” al Absi wrote in reference to embassy work supervised by the State Department’s Overseas Building Operations division, known as OBO.


Among al-Absi’s demands, he notes:
The following is related to FKTC’s scope i.e. areas which do not require security clearance.
1. Both parties are fully aware and reconfirm that the arrangement of Prime/Subcontractor is solely for the purpose of satisfying the requirements of OBO. Each Party will be fully responsible for its own scope of work as per the initial agreement.
2. Prior to any written communications with OBO, GW shall obtain FKTC’s approval in writing. Any verbal communications shall not be binding and no decision may be formalized other than in writing.
3. GW will forward any communication received from OBO immediately to FKTC. Further FKTC shall be informed instantly of any conversations in relation to their scope of works.
4. GW shall not enter into any contracts or agreements without prior written approval of FKTC. FKTC will undertake all negotiations and finalize any agreement. GW will bear any consequences to any agreements entered without prior written approval of FKTC.
5. GW will be responsible in regard to all requirements related to their scope of works including but not limited to design requirements and personnel.
6. FKTC is responsible for providing the bonding/LC’s for any of the awarded jobs and the charges thereof shall be shared by both parties pro-rata to their scope of works.
7. GW will forward to OBO or others any communications submitted by FKTC without questioning, provided that such communications would not negatively affect GW’s image and reputation. It is FKTC sole decision whether such communications are to be discussed with GW or not prior to submittal to OBO.
8. Each party will have full control over its scope of work including but not limited to execution, procurement, recruitment and subcontracting.
9. FKTC will keep GW informed about the progress of works as it goes and of any problem are being encountered.
10. GW will finalize and submit to the bank the letter of assignment of rights to FKTC in regard to their portion of the works.
11. GW and FKTC will agree on a liaison to communicate among GW, FKTC and OBO.
II. BIDDING FOR 2006 – 2007 – 2008
1. FKTC will decide which projects will be bid and as initially agreed each party will be responsible for the costs they incur in their own right.
2. In case GW are unable to participate within any of the bids then FKTC will arrange another cleared American firm as to participate within any such bids under GW supervision and GW fee will be agreed on.

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One Response to “Baghdad Embassy Contractor Aims for More Business”

  1. Zane E. Lile says:

    Greetings
    President – Bush
    V.P. – Cheney
    S.O.S. – Rice
    S.O.L. – Chao
    OBO – Williams
    Elected officials, and other interested party’s.
    In reading an article by Glenn Kessler in the Washington Post, Construction Woes plague US Embassies.
    As an experienced, oversea us embassy worker / manager. This article only touches the surface of what we workers have known for a long time. Foreign workers can not produce an American style quality “construction” project!.
    I belong to an information site ( http://www.ratpackinternational.com ), we on that site are overseas construction workers, that use the site to communicate with each other world wide, at this time about 1050 strong. One (1) post just this week was from a man sent to repair a couple items on a recently completed ? Embassy site. He was sent to replace / repair one (1) door, and add a couple inch’s to a sprinkler drop. Upon arrival at the site he was presented a punch list with 4000 items on it.
    A couple years ago I was sent to a new embassy site in Kazakhstan, before leaving the US, I was informed they would sent me experienced us embassy workers from Turkey ? Out of the first 20 electricians I received only one could do the basic elec. Skill of bending and threading conduit, only one! They also showed up on the job with NO hand tools. The job was to be self performed, I had many a meeting with the staff, because they turned the project over to the Turks. I could not spend the time nor could the project afford the time, for me to stop the job and teach basic electricity to a group of supposed to be trained people. On this same project we had to hire a certain number of locals, they did not have a clue. The solution by the contractors on this and other projects, keep hiring until you get some one that can do the work!!! Think about it, if it takes 30 or 40 others twice the time, and it is installed wrong, then has to be done over again ! When 10 Americans to do the work correctly the first time, where, is the savings?
    Another project I was trying to do, in Angola, Out of 30 people between them was one tape measure and one pair of linesman pliers, each worker was to have a minimum
    Set of tools, none had it. They knew nothing of the electrical trade, this project was messed up from the start in the basement area where switchgear sets, some of the 3” etc conduit was ½ in the wall and ½ out, some completely in the wall and some out with part of the conduit as much as 2’ out in the room. I called the contractor to the carpet!!! He told me face to face, he was not putting anymore workers on the job and was not putting any more tools on the projects, and that it was none of my business because he did not work for me!!!! I very calmly started explaining to him he did work for me / when the Project Manager, called me down, saying I was unfair to the contractor. Some time later the contractor was replaced, so was the project manager, I would have saved thousands of dollars by heading it off to begin with. Well Construction work is not fair. It was a small project and it should have been perfect.
    Tirana, Albania, I went there for HIT after MICI left bankrupt. That project was in such bad shape I could not believe it!!! I could not even get into my office it was piled full of junk, it took 2 days to move and throw away before I could even set down. When I got a new crew there on site, we begin to tear out, conduit, wire ac ducts, etc. etc. the experienced guys I had were like me, how can you screw up a job this bad. At one time I had guys tear out 60,000’ of the wrong wire, we had to remove the fire water pipe it was wrong, The fire water pump the wrong unit had been installed twice.
    It had to be changed again. I had to have the guys cut out most all of the pipe welds. All the tools that were to be on the job were gone as well as all the material!!!!! Stealing on the job had been rampant to the tune of many thousands of dollars.
    Not long ago the Baghdad project was about to the point it need secure workers, I was contacted by “ Hardline Installations “, that was on site, my name was submitted and approved for the Manager of that work, I talked to ( Golden and others ) at OBO, and was told I was the man and would manage the construction regardless of the contractor. They told me what now seems to be a lot of untruths. They are still trying piece meal that project together! This is A major screw up not just by first Kuwaiti but by our own OBO, I see no reason for this firm getting this project, it is a black mark on America. I could do a better job just working part time, when bad decisions are made at the top, they magnify as they go along and get to the bottom workers.
    These are only small examples, but all oversea embassy projects have the same problems. I hear things like it is just a commercial office building, as would be built in Texas, New York, or other places, That is not true, and many contractors are finding out it takes a special person to manage and control, a multi million dollar overseas contract using local labor. There are so many things we do different in embassy work that you just have to do it to know it.
    So many older guys like myself, have a problem when we see all the waste, and tax dollars spent to correct mistakes made by inferior workers, we can control materials sent to the site from the good old USA. So that is a plus, a lot of bought locally, materials that would not work with our materials and specification’s, are buried all over the world because. Some one smarter then the world made big mistakes.
    Some one please listen, we are the heart & soul of this great nation and are very frustrated.
    The contractors cry we can not get the Americans we need to do this “”work”” not true I can get workers to man the projects. The contractor cry’s I can not get the secure Americans I need, “right”, so he hires a bunch of workers from other country’s that have no chance to get cleared.
    So here we are trying to build a quality job with nothing but a couple hundred workers standing around. I can get qualified American workers to do the work, to me I had rather have un cleared American workers instead of un cleared Russian’s, & other’s.
    If we are giving foreign aid to country’s by hiring their workers, let us proceed by using a realist figure of 1 un cleared American to 2 un cleared foreign worker’s. In some cases we could work 3 helpers to 1 American. Of course we would need, secure Americans for the secure areas. In some places I have seen un cleared workers all over the project.
    I am myself, an older American an close to being out of the work force, however I would like to work with some one to help correct, a lot of the problems.
    Let us not forget the American workers, a lot of overseas post are hardship, we as experienced guys understand this. But when the contractor refuses to pay bonus money they have promised the workers that is not right. A lot of management at our contractors have gotten away with, hiring massive amounts of others workers they have forgotten, the Americans have to make the system work.
    We are not trying to install a union of international workers, but just asking for help to solve many problems with the system as it is now. D.O.S. and D.O.L. can help us a lot and help to save the US public millions of dollars. With 50 years in the construction industry and my first overseas contract in 1966, I have seen the conditions deteriorate.
    I have been told a US Embassy overseas is an extension of the US borders??? And US laws are in charge, not true not even close, on overseas Embassy’s, we can not even get A non smoking office. What kind of deal is that? You folks in higher places can not relate to the trenches, our complaints of abuse and misuse are what come together and make up these multi million dollar problems.
    Some of you please pay attention and let us help solve the major problems.
    With respect, A loyal and concerned citizen
    Zane E. Lile
    Russ, Ar. USA

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