Privatization Leads to Fraud, Mismanagement, and Employee Abuse at Wackenhut

The three words that best describe the private security business these days are “racism”, “corruption”, and “profits”. Wackenhut, the largest private security provider to the Federal govt and the military outside of Iraq, would appear to be awash in all three.

Wackenhut, which has ties to the GOP and the Bush Administration that go almost as deep as Halliburton’s, is currently under investigation:

• in Alaska by the GAO for “inadequate training and incomplete background checks that led to employment of officers with criminal records”, “poor” record-keeping that included falsified training records, and a near-total lack of any kind of monitoring or oversight on the program, as well as for illegally obtaining security contracts that were supposed to go to minority businesses;
• in Miami (scroll to bottom) by Dade County for fraud – overbilling, billing for services not provided, falsifying records of guards’ hours, and violations of labor laws for working guards in some cases 20 hrs/day, 7 days/week;
• by the Homeland Security Committee for “problems at Wackenhut-guarded facilities nationwide that lead to high employee turnover, low morale and ineffective security” at US nuclear sites;
• by the House Govt Reform Committee “to examine charges of racism, discrimination and poor performance;
• at a Tennessee Army ammunition plant where inspectors found holes in the perimeter fences, and where “two teenage runaways were found wandering around the 6,000-acre property after getting dangerously close to explosives” after the number of guards had been cut “in response to higher gas prices”;
• by the Nuclear Regulatory Commission for security violations “at Wackenhut-guarded Three Mile Island, Seabrook Station, St. Lucie, and Turkey Point nuclear power plants”;
• and by the Dept of Energy for “shorting the protective force on combat training; excessive overtime; caught cheating during one security drill and involved in a near-friendly fire incident in another” at its Y-12 (Oak Ridge) nuclear weapons plant.

And that’s only a partial list of domestic investigations.

In Britain, Wackenhut’s parent company, Group 4 Securicor, is the subject of an undercover BBC investigation into its handling of a contract to monitor sex offenders “revealing rapists, killers, and pedophiles left unmonitored as a result of faulty equipment and poor work practices.” In South Africa, Wackenhut – the largest employer on the continent with 65,000 employees – “has been investigated and sued for things like reserving ‘white only’ toilets; advising employees to consider lesser positions because of pregnancy; perpetuating hostile work environments, and overall poor pay and working conditions.”

None of this has kept either the Bush DOE or the Army from handing new contracts to Wackenhut and G4S, most of which are no-bid give-aways. As when Halliburton is involved, Wackenhut’s long history of human rights violations, violations of labor laws, incompetence, graft, fraud, and witness/whistleblower intimidation means nothing because it has ties to Bush.

The SEIU is trying to help guards form a union to protect them from the corporation’s misuse and abuse of its employees and to bring minimum standards of accountability to a company that hasn’t yet had to learn the meaning of the word. According to SEIU’s Kawana Lloyd (via email), despite all this skullduggery, Wackenhut is still guarding Army bases, nuclear weapons facilities, and nuclear plants.

Last year, the Army re-solicited contracts to provide security at several U.S. Army bases after the U.S. Government Accountability Office reported numerous problems plaguing the contracts, including inadequate training and incomplete background checks that led to employment of officers with criminal records.

­One phase of the Army’s contract competition was open only to minority and small businesses, known as “8(a)” companies. Three contracts, worth more than $150 million over their potential 5 year life, were awarded to an 8(a) company, TW & Co of Lanham, Maryland and two Alaska Native Corporations, Chenega Security and Protection and Doyon Limited. Unlike other 8(a) companies, ANCs are exempted from dollar limitations on sole-sourcing, can own unlimited subsidiaries and are not even required to be headed by Alaska Natives.

In turn, TW is subcontracting to Chenega, while on their contracts Chenega and Doyon are subcontracting to Wackenhut Services, Inc. and to Coastal International Security, respectively, neither of which is an 8(a) firm.

Chenega, Wackenhut, and Coastal were incumbents on the old Army contracts which were the subject of the GAO’s critical investigation, raising doubts on whether the Army’s acquisition authorities paid proper attention to the bidders’ past performance at Army bases. Despite the GAO’s findings, the Army rated Chenega’s and – in a separate, full and open competition for a portion of the Army base work – Wackenhut’s performance records very highly.

It’s all part of the Bush Administration’s privatization initiative.

The controversy began in 2003, when the United States Congress authorized the Department of Defense to hire private security officers to replace Military Police and other uniformed personnel at more than 40 U.S. Army installations to compensate for the manpower demands of the Afghan and Iraq wars. The first round of these contracts—worth nearly $200 million per year—was awarded on a “sole-source” (no-bid) basis to two Alaska Native Corporations (ANCs), Alutiiq Security and Technology and Chenega, both with limited previous security experience. Alutiiq subcontracted work to Wackenhut, for which Wackenhut was eligible to receive an estimated $47 million per year.(emphasis added)

It’s a standard corporate shell-game undermining the laws requiring minority participation in Federal contracts by using dummy fronts and subsidiaries masquerading as the “prime” contractors.

This sort of corruption is precisely what we’ve come to expect from Bush’s privatization mania as corporations use their political influence in place of merit to rip off the taxpayers, abuse employees, violate labor laws and human rights laws with impunity, and rake in massive unearned profits as its reward for cheating, stealing, and law-breaking. You will note that with the single exception of the GAO, NONE of the many investigations are emanating from the DOE, Labor, the Army or Homeland Security, all of which continue to hand out contracts to Wackenhut without bidding, oversight, or accountability. What Halliburton and KBR and Parsons are doing in Iraq, Wackenhut is doing right here under our very noses, and yet so far the mainstream press has taken little or no notice of them because there hasn’t been an Abramoff-type central figure to hang it all on.

The guards angry at shitty working conditions, low pay, inadequate training, substandard equipment, and lax, management-ordered security policies are the only ones trying to put a stop to Wackenhut’s executives’ criminal mismanagement and outright theft.

Figures. The top is stealing us blind while the Bush Administration aids and abets them. The impetus for accountability nowadays comes from the bottom up.