New Twist in Air Force Tanker Saga: Russia Enters Bid

A Russian company has announced it will enter a bid to build a new aerial refueling tanker for the U.S. Air Force.  The company, United Aircraft, is a holding company for several Russian aerospace firms.

The announcement comes as the latest in what has become a dramatic process to find a builder for the new tanker.  It comes 11 days after Northrop Grumman dropped its bid, leaving Boeing the sole bidder with a modified version of its 767 aircraft.  Northrop Grumman had teamed up with Europe-based EADS to bid on the competition.  Since the Russian bidder’s announcement, EADS has requested an extension of the original bidding deadline and is considering re-entering the competition.

The Air Force tanker replacement program has a long, complicated history.  Boeing lost a bid in 2004 to build the tanker after an ethics scandal.  In 2008, EADS won the contract, but Boeing fought back and the Pentagon re-started the process.  EADS winning bid in 2008 had drawn controversy over having a critical military aircraft built by a foreign contractor.

The Russian bid is sure to draw criticism from congressional leaders and defense industry officials.  Some have pointed to the numerous practical problems with the use of Russian equipment for this purpose, noting that spare parts and mechanical expertise  (common in the West with Boeing-built equipment) would be virtually nonexistent for a Russian aircraft.

Read more at The Washington Post and The Wall Street Journal.

Former Employees Say Blackwater Defrauded Government

Two former employees of Blackwater Worldwide have accused the private security contractor of defrauding the US government. The false billing allegedly includes charging taxpayers for alcohol, parties, spa trips and a prostitute.

In court records unsealed this week, a husband and wife who worked for Blackwater said they witnessed the company fabricating invoices, double-billing federal agencies and charging the government for personal expenses. They allege that they observed “systematic” fraud in the company’s security contracts with the State Department in Iraq and Afghanistan, and with the Department of Homeland Security and the Federal Emergency Management Agency in Louisiana after Hurricane Katrina. Blackwater is the State Department’s largest security contractor.

The couple filed the lawsuit under the False Claims Act, which allows whistle-blowers to win a portion of any money the government recovers as a result of the information. However, the Justice Department has decided not to join them in their lawsuit.

Blackwater changed its name to Xe Services LLC last year. The company became a major source of anti-American sentiment in Iraq because of repeated deadly shootings involving its guards. Xe spokeswoman Stacy DeLuke said Thursday that the couple’s allegations are false.

In their suit, the couple asserts that Blackwater officials kept a Filipino prostitute on the company payroll for a State Department contract in Afghanistan, and billed the government for her time working for male Blackwater employees in Kabul. They alleged the prostitute’s salary was labeled as part of the company’s “Morale Welfare Recreation” expenses.

The wife, Melan Davis, worked in Blackwater’s finance department. She questioned how the company could bill the government for its employees’ travel expenses to and from Iraq when it lacked the documentation for those trips. She said corporate officers instructed her and co-workers to create many false invoices for travel, so her bosses could overcharge the government.

Melan Davis argues that Blackwater fired her in February 2008 because she questioned fraudulent billing. Her husband, Brad Davis resigned.

See NYTimes for more.

US Prosecutors Request Charges Be Dropped Against Blackwater Guard

United States prosecutors dropped charges today against one of the six guards charged in the killing of Iraqi civilians in 2007, the BBC reported today. No reason was given for dropping the charges, although the prosecutors reportedly preserved the option to reinstate proceedings. One of the six charged has plead guilty and is co-operating with prosecutors. The other four guards are scheduled to begin trial in February.

The employees of Blackwater, now called Xe Services, strained American-Iraqi relations in the aftermath of the shooting, which reportedly killed between fourteen and seventeen people in Baghdad, including children. Motivation for opening fire is disputed; the guards claim self defense while witnesses maintain the shooting was unprovoked. Shortly after the incident, Iraq revoked Blackwater’s license to operate in the country. After Blackwater’s contract recession, the US stopped using the firm to guard its diplomats in Iraq. The incident and subsequent reporting put the spotlight on private military contracting as a popular issue of contention in the debate surrounding the wars in Iraq and Afghanistan.