The Blackwater Brothers: Conflict of Interest in State Department's IG Office

By Jeremy Scahill, The Nation. Posted November 16, 2007.

Every day, new revelations emerge in the mounting scandal rocking the Bush Administration and the mercenary company Blackwater Worldwide. Much of the attention focuses on the now infamous shooting spree in Baghdad's Nisour Square on September 16, in which seventeen Iraqi civilians were killed and twenty-four wounded. FBI investigators are now alleging that fourteen were victims of unjustified and unprovoked shooting--some were shot while they were fleeing. Investigators also say they found nothing to substantiate Blackwater's claims of being fired on by Iraqis. This comes a month after a US Army investigation determined there was "no enemy activity involved" and labeled the shootings a "criminal event." But while Blackwater gets hammered in the press, the behind-the-scenes actions of the company's paymaster, the State Department, grow more scandalous by the minute.

Almost from the moment the Nisour Square shootings happened, the State Department has taken actions that give the impression of trying to cover up the incident. The department's initial report on the shooting was drafted by a Blackwater contractor on official US government stationery. The FBI was not dispatched to investigate the case until two weeks after the shootings, meaning that the initial investigation was in the hands of a non-law enforcement agency, the State Department, that just happens to be Blackwater's employer. In late October it emerged that the department had actually granted some Blackwater operatives "limited use immunity" in return for their statements on the shooting. Some Blackwater agents have reportedly refused to answer FBI questions, citing their State Department-granted "immunity." This means that their statements, and information gleaned from them, cannot be used to bring criminal charges against them. The State Department also offered to facilitate the payment of what amounted to hush money to victims of the shooting, which it has done on numerous occasions for Blackwater and other companies when they kill Iraqis.

Now this story has taken yet another dramatic twist. On Wednesday the State Department Inspector General, Howard "Cookie" Krongard, was in the hot seat on Capitol Hill, where he found himself being grilled by Representative Henry Waxman's Oversight and Government Affairs Committee. Krongard is the top State Department official charged with investigating allegations of waste, fraud and abuse. In addition to all of the questionable actions by the State Department in the Blackwater investigation, Krongard has faced charges that he impeded a Justice Department investigation into Blackwater over allegations the company was illegally smuggling weapons into Iraq. But the bombshell at the hearing was the revelation that Krongard's brother, Alvin "Buzzy" Krongard, recently accepted a position as a paid consultant for Blackwater, where he serves on the company's advisory board. Until his resignation in 2004, Buzzy was the number-three man at the Central Intelligence Agency (more on that later). Waxman's committee broke the news of Buzzy's Blackwater position as part of what can only be described as a masterful ambush of the Inspector General.

When Waxman revealed the conflict of interest with the brothers Krongard and Blackwater, alleging that Cookie Krongard had "concealed" his brother's relationship with Blackwater, the Inspector General told Waxman:

"I can tell you very frankly, I am not aware of any financial interest or position [my brother] has with respect to Blackwater. It couldn't possibly have affected anything I've done, because I don't believe it. And when these ugly rumors started recently, I specifically asked him. I do not believe it is true that he is a member of the advisory board, as you stated, and that is something I think I need to say."

This statement would quickly thrust Cookie Krongard, who was testifying under oath, in front of a firing line that would ultimately produce his recusal from the Blackwater investigation. Moments after Cookie Krongard denied that his brother had any involvement with Blackwater, the committee produced a letter from Blackwater CEO Erik Prince to Buzzy Krongard, dated July 26, inviting him to join the board and offering him a $3,500 honorarium per meeting attended plus all expenses paid. "Your experience and insight would be ideal to help our team determine where we are and where we are going," Prince wrote.

Cookie Krongard said his brother "has been involved in a lot of activities involving security. So it's no surprise that someone like Erik Prince would invite him to continue to support 'security, peace, and freedom.'" But Cookie Krongard insisted his brother had not accepted the position, saying, "I dispute that." Representative Elijah Cummings then produced a September 5 e-mail from Prince to Buzzy saying, "Welcome and thank you for accepting the invitation to be a member of the board." Cummings told Cookie, "Prince invited your brother to be at a board meeting to discuss strategic planning. And this meeting is taking place right now, in Williamsburg, Virginia, this week as we speak. Staff contacted the hotel to speak to your brother and the hotel confirmed that he was scheduled to be there."

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Jeremy Scahill, an independent journalist who reports frequently for the national radio and TV program Democracy Now!, has spent extensive time reporting from Iraq and Yugoslavia. He is currently a Puffin Writing Fellow at The Nation Institute. Scahill is the author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.

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