From Law.com:
Daphne Eviatar
The American Lawyer
June 20, 2007
When the House Judiciary Committee held a hearing on what it calls "War Profiteering and Other Contractor Crimes Committed Overseas" Tuesday, David Hammond, the lead partner handling Iraq liability issues at Crowell & Moring, was there.
As a lawyer for some of the top private security companies operating alongside U.S. troops in Iraq -- Blackwater USA, Triple Canopy Inc., DynCorp International Inc. and Erinys Llc -- a big part of his job is monitoring the growing outrage over those companies' alleged abuses.
Hammond was there in February, too, when the House Oversight Committee held its own hearing on the role of military contractors and Blackwater, the North Carolina-based private military company, was on the hot seat for the gruesome deaths of four men it had sent to Iraq. The men were independent contractors hired by Blackwater, on a security mission near Fallujah, when they were ambushed by insurgents and shot, dismembered and hung from a bridge that spans the Euphrates River.
The grisly incident raised several critical questions: What were these men doing in Iraq? Why weren't soldiers doing the job? Who was responsible for their deaths?
For years, Hammond has been offering answers. His clients include some of the top private security companies now operating in Iraq. These companies take on roles once played exclusively by soldiers in the U.S. military. Some call them mercenaries.
As the war in Iraq drags on, these companies face a growing list of legal troubles. At least 15 personal injury, wrongful death and product liability cases have been filed. And federal investigators have estimated that some $10 billion of U.S. taxpayer money has been squandered or gone unaccounted for by private companies providing military services and supplies.
Hammond not only does much of the contracting and contract-related litigation for these companies, but he also provides the political and legal justification for the growing reliance on their services. He is chair of the general counsel committee of the Orwellian-named International Peace Operations Association, or IPOA, the leading industry group for private military contractors. He has published papers with organizations such as the conservative Washington Legal Foundation, given speeches at defense industry conferences and offered seminars to private military companies. His major theme: how to avoid liability despite the risks of battlefield operations.
Hammond's practice has grown, along with the number of private contractors serving in Iraq. There are almost as many men and women in Iraq working for private military contractors as official American troops. In the Gulf War, by contrast, the ratio was about 1-to-6.
The outsourcing of military operations is just one piece of a larger federal outsourcing effort, an effort that Crowell lawyers have helped to create and now profit from. The firm's prominence in the field dates back to 1979, when 53 Washington lawyers left Jones, Day, Reavis & Pogue to start their own firm. Though it's since expanded to a full-service 350-lawyer firm, one of Crowell's calling cards is its roster of some of the most experienced and well-connected federal contracts attorneys in the country.
Partner Angela Styles is one. A Texan who worked on President George W. Bush's first presidential campaign, she was administrator for procurement policy in the White House Office of Management and Budget from 2001 to 2003. Her job was to develop procedures for outsourcing as much of the government's work as possible.
"If a federal employee was performing a job that you could find in the yellow pages, we would look at whether the private sector could be doing it more effectively and cheaply," says Styles.
Richard Bednar, a former brigadier general, is another key player in the practice at Crowell. In the Army he decided whether companies found guilty of defrauding the military would remain eligible for government contracts. Now he defends those companies before the Army official who has his old job. He also touts the industry as coordinator of the Defense Industry Initiative on Business Ethics and Conduct, a group of defense and security contractors formed in the 1980s to boost the industry's image. Most of its 80 members are traditional defense contractors, such as Lockheed Martin Corp. and United Technologies Corp. Contractors of the new breed -- the providers of private armies, such as Blackwater and DynCorp -- have not signed on to its code of conduct. All four companies are Crowell clients.
The traditional practice of defending defense contractors' cost overruns is one thing; claiming immunity for wrongdoing by private security forces in Iraq is quite another. Recent congressional hearings have called attention to the fact that no one in the government seems to be holding these companies -- whether for failure to protect their own hires or for inflated charges to the federal government.
Although agencies such as the Office of the Special Inspector General for Iraq Reconstruction and the Government Accountability Office have conducted audits and issued reports that highlight vast overcharges and unauthorized spending by private military companies, the government frequently doesn't penalize the companies for it.
"There's a war going on," explains Crowell partner Terry Albertson, who represents private military contractors in cost accounting disputes. "You get these stories that come out of Iraq that sound in some ways like terrible problems, but if you were really on the ground there, doing what these contractors are doing, you'd see it differently." By and large, says Albertson, the U.S. Department of Defense understands the difficulties that private military companies face and rejects the auditors' recommendations.
Hammond also tries to insulate his clients from judgment. One way is to thwart the extension of rules that burden the regular Army to private companies. He has opposed a proposal to make military contractors subject to the Uniform Code of Military Justice, among other rules. The proposal "could have an unintended negative impact on the mission of our armed forces and the government and contractor personnel serving overseas, including possibly compromising their physical safety," he wrote in a letter to a Defense Department official.
But at other times, Hammond has argued that his clients are essentially indistinguishable from the U.S. military. When they are sued, for instance, Hammond argues that private military companies are part of the "U.S. total force," and that they should enjoy the same immunity from suit as U.S. soldiers. To help make that happen, Hammond advises his clients to make the company's close connection to the military explicit. "All those things should be put into the contract, so the court can see the scope of government control," he says.
Several companies have failed to spell out that connection and are in legal trouble as a result. For example, Blackwater has been sued by the families of the dead men, who claim that the company failed to provide essential safety equipment and that the failure led to their deaths. Blackwater is represented by Michael Socarras of McDermott Will & Emery. Socarras and Hammond both declined to comment on the case.
Almost every aspect of the case has been blanketed with secrecy. Who wrote the employment contracts? Hammond won't say. What about the contract between Blackwater and the U.S. government? Turns out, there wasn't any. Only after the lawsuit and congressional hearings was it revealed that Blackwater was a subcontractor of a Kuwaiti hotel services company, which in turn was a subcontractor of a Cyprus-based food service company, which itself was a subcontractor of Kellogg Brown & Root, which at the time was a subsidiary of Halliburton Co.
In May a federal district court sent the case to confidential arbitration. So the proceedings will remain a secret. In the end, the U.S. taxpayer, who can be considered the ultimate client of Blackwater, may never know the outcome. And that would be just fine with David Hammond.
