AMY GOODMAN: Can you talk about what the former employees are charging?
ALAN GRAYSON: Certainly. The allegations are that this company committed any kind of fraud that they could imagine over the course of working for the Coalition Provisional Authority and as subcontractors under U.S. contract. For instance, they set up Cayman Islands subsidiaries and subsidiaries of subsidiaries in the Cayman Islands. Then they manufactured out of thin air invoices from these subsidiaries and handed them in under their prime and materials contracts, which basically operated like expense accounts, and they handed in these vouchers that they had created themselves, said that they were from their independent companies which were, in fact, subsidiaries, and they received millions and millions of dollars of reimbursement from the government.
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PRATAP CHATTERJEE: Well, basically, Custer Battles – and maybe Alan can even explain, although this is the case made by the company, so maybe I’ll represent the company for a moment if I may, Alan, and then you can tell me what’s wrong with this – but Custer Battles is saying, well, the False Claims Act does not apply. The U.S. government has no jurisdiction over this money, because, a) this is Iraqi money, and b) the C.P.A., they didn’t even really exist, and therefore, it is not a legitimate U.S. agency that should be giving out this money. And so, in fact, I think Judge Ellis has asked the U.S. government to tell him whether or not this agency existed, and there’s some dispute. The Congressional Research Service, there’s a woman by the name of Elaine Halchin who’s an expert there who has been unable to decide whether or not the C.P.A., whether Paul Bremer’s organization actually existed. It does not appear to have been created under 1483, the resolution of the United Nations Security Council – or I can’t remember the Security Council or the General Assembly – on May 22, 2003, or if it was created by this thing called National Presidential – I forget what it’s called exactly. It’s a special directive of the President. It’s National Security Presidential Directive. However, this is a Presidential Directive that’s never been published, so we don’t know. And Alan, in fact, aren’t you waiting to hear as to whether, from the federal government, as to whether or not the C.P.A. even existed?
ALAN GRAYSON: Well, in fact, the one thing the federal government has agreed to do grudgingly in our case is to file a brief on April 1, April Fool’s Day, about whether, in fact, the False Claims Act applies to C.P.A.-type contracts. But in our mind, it’s not a realistic argument that the Senates are making here. This company was doing security work in a war zone under U.S. Military supervision. In fact, they were doing the same kind of work that the U.S. Military was doing in the same place at the same time. They were paid entirely, entirely with U.S. Treasury funds. The first $4 million they received was in cash, in bricks of $100,000, that’s 1,000 $100 bills that came directly from the U.S. Mint. And after that, they were paid with U.S. Treasury checks with a Statue of Liberty on them, and with wire transfers from Federal Reserve accounts in New York that were U.S. Treasury accounts.
AMY GOODMAN: Now, Alan Grayson, why isn’t the U.S. government helping in this? I mean, it’s about getting money back. It’s about fraud against the U.S. government.
ALAN GRAYSON: Well, there’s no good explanation. There’s no good answer to that question. In fact, the U.S. government should be helping, and they’re not. The Bush Administration has done nothing up to this point to get this money back. In fact, it was almost a year before they even cut off the flow of new contracts to this contractor. And to this day, Custer Battles is still performing security work in Iraq. In fact, they’re responsible for the security involved in the training of Iraqi army personnel right now. In fact, this corrupt contractor, who the government knew on October 18 of 2003, had already stolen $6 million from the government. Right to this day, the U.S. government is still stuffing money in their pockets.
AMY GOODMAN: Pratap Chatterjee.
PRATAP CHATTERJEE: Amy, it’s amazing. There’s an employee of Custer Battles who took $12 million in cash of the company, put it on a plane – I kid you not, it’s called the Flying Carpet – and took it to Beirut for safe keeping. So we’re talking – we have pictures, you know, of and testimony from the people who paid them at the C.P.A. There’s a man by the name of Frank Willis, worked for the U.S. government – well, for the Coalition Provisional Authority, really – and he has provided us with a picture of $2 million in cash that he was handing over. He said there was so much money, they were playing football with it.
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AMY GOODMAN: So what is this going to come to now? The U.S. government has been putting off saying whether, in fact, the Coalition Provisional Authority that they set up exists at all? Is this one of the stumbling blocks right now, Alan Grayson?
ALAN GRAYSON: Well, in fact, you have to understand how reluctant the government has been to do this. It’s only as a result of the hearing, as a result of the fact that Senator Grassley, a republican, the number three republican in the Senate, sent a letter to the Attorney General saying, ‘What the heck is going on here?’ And a result of 325 newspaper articles they saw from the hearing, and perhaps the result of the fact that four former Custer Battles employees were featured on NBC the day after the hearing, and one of them is quoted as saying, “I don’t want any part of an organization that deliberately murders children and innocent civilians.” As a result of all that, on the last possible day that they could do so, the government grudgingly agreed to submit a brief to the court explaining not why this money could be recovered, but whether it could be recovered, and doing so on the last possible day, April 1.
Eh? Do you mean the Dems have “weakened themselves” by losing control of both houses of Congress, or that they have somehow forfeited their own credibility WRT fraud?