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Former Iraq Security Contractors Say Firm Bought Black Market Weapons, Swapped Booze for Rockets

Newly released documents provide a glimpse into the messy business of creating a private army on the fly in the middle of a war zone.

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Within three months, the company got its first break: The U.S. awarded Triple Canopy a contract to protect more than a dozen sites across Iraq. At the time, the company had only a handful of employees. More serious, it didn't have licenses to import the hundreds of weapons needed to guard sites across Iraq.

The company immediately applied for licenses after winning the contract, according to documents provided by Triple Canopy. Yet the government took months to approve the deal, not authorizing the company to collect the weapons until June 2004. In essence, the U.S. had awarded the company a lucrative contract, but then provided it little ability to arm for the job.

To get the firepower it needed in the meantime, the company turned to the unregulated and unlicensed Iraqi market, purchasing AK-47s and other weapons from local dealers, according to company officials and court records.

The transactions concerned some company officials, according to previously undisclosed records. One midlevel manager told federal investigators that Triple Canopy had purchased weapons "off the street." He "wondered if the proceeds of those sales was funding the insurgency," an investigator wrote.

Former managers also told investigators that the company obtained U.S. military equipment from troops at little or no cost. One man told investigators in an October 2008 interview that the company sometimes obtained Army supplies “for liquor,” and that Triple Canopy employees routinely made “deals with Army units that were rotating in and out of Iraq, to obtain medical supplies, water, MRE’s and vehicle tires, to name a few.”

Boline, the former manager, said the company bought Cuban cigars and liquor to trade for U.S. military equipment. He spoke to investigators in 2007, according to records and officials, and his testimony became public later that year, when he provided a sworn statement as part of the employees’ lawsuit.

"The whole mind-set at the time was, whatever it takes to get the job done we're going to do it,"[4] said Boline, who had been fired from the company after disagreements with supervisors. He provided the deposition several months after his termination.

Van Arsdale acknowledged that importing U.S. weapons was "problematic" as the company began operations in Iraq. But he said the company took steps to make sure that it purchased weapons legally.

"There were a few months in there that, ‘all right, now what do we do?,’" Van Arsdale said. "The answer to that was that we establish … a procedure to procure weapons on the local market to mitigate the possibility of that fungible money getting into the wrong hands."

Van Arsdale said Triple Canopy turned to a trusted local buyer recommended by the U.S. government. Triple Canopy produced documents showing that the man it said purchased the weapons, an Iraqi businessman, had been vetted by Defense Department officials.

The company also produced several letters of recommendation from military officials praising the man, who also acted as a translator for U.S. military units.

Van Arsdale said the company had not swapped goods with soldiers for equipment. He said Triple Canopy fully investigated Boline's charges and found no evidence to support them.

He questioned Boline’s motives, noting that Boline waited until 2007 to make his accusations. In his deposition, Boline acknowledged threatening to go public with his charges if Triple Canopy officials blocked his attempts to receive a security clearance in order to obtain a new job.

Reached by e-mail, Boline declined to comment, citing a nondisclosure agreement that he signed when he took his job with Triple Canopy.