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US: Contentious Close in Private Security Contractor Whistleblower Case

by Andrew MigaAssociated Press
March 7th, 2006

ALEXANDRIA, Va. --Rhode Island-based defense contractors Custer Battles were "war profiteers" and "war whores" who filed phony claims for some of the millions of dollars they made in Iraq, an attorney for two whistleblowers told a federal jury during final arguments in a civil lawsuit Tuesday.

"It's not like stealing from a bank, because people's lives are at stake," said attorney Alan Grayson. "They let you down. They let down America. You should do something about that."

Defense attorney David Douglass countered that his clients, company co-founders Michael Battles and Scott Custer, were "honorable men doing a hard job at a hard time."

Both sides were making their final pitch to jurors who must decide whether Custer Battles, which had offices in Middletown, R.I., and Virginia, defrauded the government.

The heart of the civil suit is a $3 million advance Custer Battles received as part of a contract to build three camps for the Iraq currency exchange program run by the Coalition Provisional Authority in 2003.

Grayson cited a long list of what he alleged were bogus invoices and forged signatures in pressing his case.

He zeroed in on three invoices for work on a helicopter pad in Mosul. One was for $175,000, a second was for $157,000 and a third was $96.000.

He claimed Custer Battles and its subsidiaries submitted "repetitious invoices billing for the same thing over and over again."

Douglass denied the charge, saying there was no evidence any of those invoices were submitted for billing purposes.

He said Custer and Battles hired accountants and others to handle such billing transactions.

"They weren't involved in that process," he said.

Iraq was a chaotic, confusing and dangerous place, Douglass said. He said his clients were performing a vital service under "unbelievably difficult circumstances" for the CPA's crash program to get a new currency in place for the war-torn country.

"Ladies and gentlemen, we understand the big picture after three weeks of testimony," said Grayson. "The big picture is greed."

Whistleblowers Robert Isakson and William Baldwin, former business associates of Custer Battles, sued on behalf of the government. The government could collect triple the amount of the alleged fraud. Whistleblowers can receive a portion of the money.

But Douglass said Baldwin had an axe to grind with his former employers, who had demoted him.

"He set up a competing company and they sue Custer Battles, a great way to compete," said Douglass in sarcastic tones.

Custer was solemn-faced as the attorneys wrapped up their cases. Battles was not in the courtroom.

Battles and Custer are former Army Rangers in their mid-30s who co-founded the company, which provided security and other services in Iraq after the U.S.-led invasion. Battles, a West Point graduate, ran unsuccessfully for Congress in Rhode Island in 2002. 





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