No, American Taxpayers Should Not Be Forced To Fund Misconduct Overseas

No, American Taxpayers Should Not Be Forced To Fund Misconduct Overseas

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Drew Johnson
Senior Fellow, National Center for Public Policy Research

As the State Department faces intensifying scrutiny over cuts to staff, high turnover and low morale, a troubling new report shows the effects of a lack of financial prioritization at Foggy Bottom. In particular, it appears the Department is failing to properly vet incumbent private contractors for billion dollar projects, despite their histories of misconduct. Even with staffing shortages and other deficits, there is no excuse for irresponsible spending — Americans taxpayers shouldn’t be forced to fund misconduct overseas.

According to a report, two recent beneficiaries of State Department largesse are contractors Aegis and Triple Canopy. This year alone, these two companies have been awarded nearly $3 billion of $10 billion allocated for a new worldwide diplomatic security program.

These awards come from a State Department described as “listless” with key posts left vacant, a hiring freeze and budget uncertainty, and few officials empowered to make decisions. If the choice of these two contractors is any indication, it seems the Department is not doing the proper diligence in vetting and reviewing contract awards. Instead, the Department seems to be favoring those it has previously worked with, like Triple Canopy and Aegis, even though these contractors have had trouble fulfilling their contracts in the past.

Triple Canopy, which won $1.7 billion in task orders, is affiliated with Blackwater, a firm that’s the poster child for outrageous and out-of-control contractors. The two operate under joint ownership and control by Constellis, a private security company.

Criticized by lawmakers for its “reckless, ‘shoot first’ culture,” Blackwater’s most galling incident was in 2007 when Blackwater guards ambushed and killed 17 Iraqi civilians and injured 24 others. Through a series of corporate maneuvers, Blackwater has re-invented itself without fully shedding its past and now operates as Academi, the company with which Triple Canopy is now affiliated.

Aegis, the recipient of $1.3 billion, has also displayed a disturbing history of conduct abroad. Tasked with protecting the U.S. embassy in Kabul, contractors reported in 2013 that management did not understand the environment, calling the situation “dangerous” and citing “tactical incompetence.” Trouble continued in Kabul, and earlier this year, the Wall Street Journal reported that several Aegis contractors and others were fired for dealing drugs at the embassy.

Given these track records, it’s unclear why the Department thinks Aegis or Triple Canopy are the best choice for the important task of providing diplomatic security in some of the world’s most dangerous places. And with their histories, there certainly should be a more careful review before spending billions of taxpayer dollars on these companies.

The Department’s favoritism for incumbent contractors isn’t just limited to diplomatic security contracts. Take for example, a company called Pacific Architects and Engineers Government Services Inc. (PAE). This firm won $65 million in contracts in September of this year just days after it settled a false claims case with the Department of Justice. As part of the settlement, PAE paid $5 million over allegations that it failed to adequately vet its security staff and submitted fake invoices to cover its tracks.

This isn’t the first fine that PAE has been fined for defrauding the government. In 2015, it paid $1.45 million for false claims it submitted under a U.S. Army contract in Afghanistan. This firm has demonstrated that it can’t be trusted to honestly fulfill government contracts, yet the State Department continues to send money its way.

The State Department has the power to disburse billions for its security and diplomatic efforts around the globe and it needs to be judicious with its spending, even as it faces cutbacks and staff reorganizations. The Department can’t just rely on the status quo — this is not the way it should be spending tax dollars or doing business.

Drew Johnson is a Senior Scholar at the Taxpayer Protection Alliance.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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