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President Obama, Why Did You Pay Blackwater $70 Million in February?

Obama may keep the company on the government payroll months after its Iraq contract expires. Not bad for a firm supposedly going down in flames.

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Blackwater recently renamed itself Xe and its owner Erik Prince " resigned" as CEO, though he remains its sole owner and chairman.

UPDATE: Could Arlen Specter's Logic on AIG Bonuses Be Applied to Blackwater?

Several people have written me asking what the Obama administration should do with Blackwater, following reports that the State Department paid the company some $70 million over a 72 hour period in February.

Many people take the position that Obama is dealing with remnants of the Bush administration's disastrous policies and that it will take time to unravel. Fair enough. But, with the U.S. economy in shambles, is it really a priority to make good on payments to a company like Blackwater?

I have long written that the Obama Iraq policy will necessitate using mercenary forces. This is true for a number of reasons, not the least of which is Obama's refusal to scrap that monstrous U.S. fortress they are calling an embassy. If it's not going to be Blackwater guarding Obama's occupation officials, it will be Triple Canopy and DynCorp (who will in turn hire a bunch of the "fired" Blackwater guys anyway). The point here is this: I disagree that the reality is simply that Obama needs time to phase out Blackwater and his hands are tied when it comes to paying them on existing contracts. I believe Obama needs them to sustain his bad Iraq policy, which will continue the occupation, albeit with a softer face. If Obama wanted to, he could outright fire Blackwater. Henry Waxman and others have called for that. He certainly would have the support of the American people, particularly given how much money Blackwater has milked from the U.S. treasury.

All of this brings me to Republican Sen. Arlen Specter, former chair of the Judiciary Committee. Yesterday, he was interviewed on MSNBC by Andrea Mitchell about the AIG bonuses. Read what he says about the AIG contracts not having to be honored and then apply the logic to Obama's Blackwater situation:

Mitchell: What say you when it comes to these bonuses? Should they be taxed back? Should the AIG executives who approved the bonuses have to commit hari-kari? With whom do you side?

Specter: Andrea, they're not enforceable under the law. They are against public policy. It is obviously against public policy to pay bonuses to people who caused the problem. If you have, for example, a contract for the sale of heroin, that's not enforceable. You take those cases to court, they won't be enforced. It's just that plain. It's set out very simply in the restatement of the law on contracts

(.....)

Mitchell: Well, you know, there's been a lot ventilating on all sides, but you're a former district attorney, a former prosecutor, experienced lawyer and we tend to trust your judgment on this, former Judiciary Chairman. So let me hear you out on when you say they're not enforceable, the top economic adviser and the Treasury Secretary said that these were contracts that if the government broke the contracts, there would be greater expense in going to court and suing to get the money back.

What would the next steps be in a practical way to get the money back and break the contracts?

Specter: The top economic adviser and the Secretary of the Treasury are wrong again. It happens too often to be excusable. I'd like to argue this as a legal matter. If you have a contract, which is against public policy, it is not enforceable. I gave you an extreme example. If you have a contract for the delivery of heroin, the use of heroin, the delivery of heroin is against the law, you can't enforce it.