By now most Americans are all too used to the dispiriting reports of the security situation in Afghanistan. But the graphic images of U.S. embassy guards engaged in all manner of obscene, drunken behavior that emerged last week were still shocking. The revelations were presented in detail by the nonprofit Project on Government Oversight (POGO), which sent a letter on Sept. 1 to Secretary of State Hillary Clinton exposing an alleged atmosphere of fear and coercion among guards at the embassy in Kabul, which involved bacchanalian parties, hazing, prostitution and drunkenness. "The lewd and deviant behavior of approximately 30 supervisors and guards has resulted in complete distrust of the leadership and a breakdown in the chain of command, compromising security," the letter concluded. But while the embassy scandal may have come as a rude surprise to many Americans, Congress and the State Department have been fielding troubling complaints and reports about the contractor overseeing security for more than two years.
And no one was likely less shocked by the embassy scandal than James Sauer, a 22-year veteran of the U.S. Marines from Massachusetts who was hired in December of 2006 to prepare to take over responsibility for the safety of 1,000 employees at the Kabul embassy. Virtually from the moment he arrived in Afghanistan as an employee of a unit of the private security contractor ArmorGroup, which had a contract to manage embassy security starting in July of 2007, Sauer knew there were problems. According to a 46-page complaint Sauer filed in federal court in Washington, D.C., at almost every step of the way he ran into interference from senior company executives. They allegedly told him he just had to put a "good face" on the project, acknowledging that the company had put in an unrealistically low bid in order to win the coveted $187 million contract. Sauer said he was told he would just have to "make do" so that ArmorGroup International, based in London, could still manage to squeeze a profit from the operation.
That meant Sauer would have to buy substandard vehicles, replace American employees with cheaper South Africans and pay what Sauer thought were slave wages to the Nepalese Gurkhas, who make up nearly two-thirds of the embassy's 450 guards. The situation would eventually get so bad, the POGO documents said, that it would prompt two threats of mass walkouts by the Gurkhas. Guards would end up suffering chronic sleep deprivation because the staff was 20% shorthanded.
An exasperated Sauer declared in the complaint that he repeatedly tried to draw the line. "There needs to be a clear understanding, acknowledgment, and willingness to correct the financial deficiencies built into this thing by the business development people," he wrote in one e-mail to top executives, according to the court document. "You are going to have to go into the margin — either commit to spending the money, or pull the plug on this now before ArmorGroup looks more stupid than a box of rocks."
In June 2007, one month before he was to officially start managing security for the embassy, Sauer found himself fired, along with his deputy, another retired Marine, Peter Martino of New Hampshire. Their case — which had the support of the Government Accountability Project, a nonprofit public-interest group that promotes government and corporate accountability — was settled out of court; its terms bar the parties from speaking about the case, and Sauer's attorney says neither she nor her client can speak to TIME. Sauer, however, isn't the only former ArmorGroup employee to make similar allegations about the embassy contract. On Sept. 9, James Gordon, the former operations director at the embassy, filed a suit against his former employer, claiming it forced him out after he blew the whistle on its misconduct. "Their goal was to maximize their profits, provide a fig leaf of security at the embassy and pray to God that nobody got killed," he told reporters Sept. 10 in a press conference by phone from Kabul, where he is working for another security firm he refused to name. Gordon added that employees and managers were allowed to "frequent brothels notorious for housing trafficked women," activity about which the company allegedly misled the State Department and Congress. Wackenhut Services Inc., the Palm Beach Gardens, Fla., company that is now the parent of ArmorGroup International, said that Gordon "voluntarily resigned" and that his "factual allegations and legal claims were overstated, ill-founded, not based on any personal knowledge, or otherwise lacking in legal merit." It also said it was cooperating fully with State Department investigations and referred all questions there.
Taken together, the complaints help explain how such a high-profile contract, flawed from the outset, could have led to the current scandal. ArmorGroup's record at the embassy has not been impressive; according to the POGO letter, nearly 90% of the Americans and other Western expats quit in the first six months of its contract, which meant there had to be constant training of new staff and a dissolution of any semblance of team cohesion. At one point, 18 guards were not at their posts, requiring embassy personnel to be redeployed to fill critical gaps. The State Department said it docked the company $2.4 million for this. The poor English skills of many of the Gurkhas required cross-cultural pantomiming.
ArmorGroup's employees did not even appear to be fully aware of the ground rules of their contract. In one incident, according to POGO, guards set out from the embassy at night, armed and dressed in turbans, equipped with the embassy's night-vision equipment, to secure portions of the road between the embassy and the guard base in Camp Sullivan several miles off. But this action violated ArmorGroup's contract, which is only for static security — that is, guards at specified posts. (The role of traveling bodyguards for embassy personnel is contracted out to another firm, Xe, the company formerly known as Blackwater.) What's more, the mission left remaining embassy security personnel without any night-vision equipment, or "largely night blind," as the POGO letter put it.
Even before the POGO letter to Secretary Clinton, the ArmorGroup contract was under scrutiny. The State Department issued the first of eight "deficiency letters" in July 2007, the same month ArmorGroup took over embassy security. But after each complaint, the company somehow persuaded the State Department that the problems were being addressed. In April 2008 the State Department's contracting officer warned this was the company's "final opportunity" to correct shortcomings, and a September 2008 letter declared termination was being considered. In the end, however, the department renewed the contract until July 2010.
"The Kabul embassy contract can be viewed as a case study of how mismanagement and lack of oversight can result in poor performance," concluded a Senate committee investigation published in June. POGO has said it has lost confidence in the State Department and called for the Pentagon, which has a mixed but improving record at handling contractors, to "immediately" take over supervision of the guards. The State Department, which has launched a number of investigations, continues to insist that, as appalling as the guards' behavior was, embassy safety was never actually jeopardized.
One central problem, explains Doug Brooks, president of the International Peace Operations Association, a trade association, is "the tendency of the U.S. government to go for the lowest bidder no matter what, and the result is that even the better companies end up cutting their contracts to the bones, and as a result these problems are more frequent than you'd like." Although currently there is no law requiring the government to take the lowest bidder — though there is draft legislation to make it so — bureaucrats tend to favor the low bids so as to avoid being called up to Capitol Hill to justify their decisions.
The problems have been exacerbated by the global consolidation of the security industry. In 2008, ArmorGroup was bought by G4S, the largest security company in the world. G4S also bought ArmorGroup's rival, Wackenhut, which now runs ArmorGroup in the new conglomerate. Before they found themselves under the same big tent, Wackenhut and ArmorGroup had competed for the U.S. embassy contract, which ArmorGroup won with a substantially lower bid. Now, Wackenhut has found itself managing the Kabul embassy contract anyway. In June, Wackenhut vice president Samuel Brinkley admitted to Congress, "We feel we can safely say that adequate guard services for the Kabul embassy cannot be provided for the contract price." Instead of making a profit, he said, the firm was losing $1 million a month. "We would welcome any help that the [Senate] Subcommittee [on Contracting Oversight, of the Committee on Homeland Security and Governmental Affairs] might be able to provide to enable the government to pay a more reasonable price for security for the embassy."