The Mix

Justice without the DoJ?

Whistleblowers win landmark contractor corruption case -- despite the government's refusal to get involved.
The transgressions were by no means unique. But the fact that the case of Custer Battles' contracting fraud was made public set it apart from the many other allegations of fraud that have remained out of the public eye. Three years into the Iraq war, the other 50 corruption cases remain sealed by the Department of Justice.

Attorney Alan Grayson brought forth the whistleblower case, representing two former Custer Battles employees. Grayson's clients alleged that the company defrauded the Coalition Provisional Authority (CPA) of millions of dollars during its time in Iraq. Robert Isakson and William Baldwin also accused Custer Battles of "war profiteering" that resulted in the serious injury of four employees due to faulty trucks.

This past week, some two years after the legal battle began, the jury in the case finally ruled in favor of Grayson's clients. While Isakson and Baldwin are eligible for up to 30 percent of the monies, the bulk of the funds that Custer Battles took from the government, with the government's knowledge, will now be returned -- to the government.

The body of evidence against Custer Battles is phenomenal. The company's documents revealed that Custer Battles forged invoices and overpriced the U.S. government by millions. Grayson told AlterNet that according to sworn testimony of the court, both his clients face incredible intimidation -- including death threats. Said Grayson, "One had a $50,000 bounty on his head from one of the defendants."

The defendants Grayson speaks of are the company cofounders Scott Custer and Mike Battles -- no strangers to Republican circles. Mike Battles ran for Congress back in 2002 (where he managed to get fined by the FEC three times for "misstatement of financial activities"). His partner, Scott Custer once stated, in an interview with two federal agents, "Battles is very active in the Republican Party and speaks to individuals he knows at the White House almost daily."

This may help explain the refusal on the part of the Department of Justice to take a role in the proceedings despite the clear fraud. It's likely that the case Grayson took on was unsealed in the hopes that it could set a precedent that would make the other 50-odd, still sealed cases moot. Those bigger cases would be against defendants tied even more closely to the Administration, like Halliburton/KBR.

The three and a half weeks of testimony, laying out the specifics of Custer Battles corruption leads to an unsettling conclusion: contracting companies are undermining the war effort in Iraq on a scale that the Bush administration would be loathe to have the public aware of. The FBI and the Defense Criminal Investigative Service still have two fill time investigators assigned to the case -- but with the DoJ refusing to get involved, there is little they can do with what they have uncovered.

Grayson recalled the testimony of Hugh B. Tant III, a retired general: "34 out of 36 trucks that Custer Battles delivered were inoperative. Materials deliveries came so late that rooms designed for one or two had six or seven sleeping on the floors. This was in Mosul in December -- in the mountains. Americans soldiers were sleeping in tents on the dirt in the cold. The general said that the plumbing and sewage in the camps was so poor that he couldn't stand to be in them because the smell was so bad."
Onnesha Roychoudhuri is the assistant editor at AlterNet.