On Thursday, a federal jury in Alexandria, Va., determined that Custer Battles engaged in massive contract fraud in Iraq and ruled that the defendants must shell out more than $10 million in penalties and damages.
Run by Michael Battles and Scott Custer, the firm was swimming in contracts worth tens of millions of dollars just months after the Iraq invasion. One was a $16 million deal to guard Baghdad’s airport. A second $21 million contract called for protecing the multi-billion program that issued new Iraqi dinars to replace money printed with Saddam Hussein’s profile.
The verdict raises some interesting questions:
1. Why didn’t the US Justice Department join in the lawsuit? The plaintiffs invited them. After investigating under closed seal, the department decided against it. BUT, I did notice a Justice official sitting in the courtroom quietly taking copious notes on the trial proceedings.
2. Will there be criminal prosecution of Michael Battles and Scott Custer now that they have been found guilty of fraud in a federal civil case?
The plaintiff’s attorney Alan Grayson thinks not: “This is a huge embarrassment for the Bush administration and they don’t want to do anything to publicize it,” Grayson said. “It’s just another example of corruption and fraud that the administration does nothing about and willingly participates in. The Bush administration had people running around lining up contractors who turned out to be people who stole millions upon millions from the taxpayer.”
3. Because Custer Battles was largely paid with seized Iraqi assets, will Iraq be entitled to any of the damages? No, I am told. It is considered property of the invading forces. I think that is known as “War Booty.”