US blacklists Afghan security firm tied to Karzai

[December 09, 2010]  KABUL, Afghanistan (AP) -- The U.S. military is cutting ties with an Afghan security firm run by relatives of President Hamid Karzai that has been accused of bribing both government officials and Taliban commanders, according to documents obtained Thursday.

The move is part of U.S. efforts to clean up a contracting process in Afghanistan that has been riddled with corruption and allowed U.S. funds to pass to insurgents.

It follows a Congressional report in June that said the Watan Group bribed Afghan officials to get exclusive control over a key NATO supply route in southern Afghanistan and paid Taliban commanders to avoid attacks along the highway.

As of Dec. 6, Watan has been given a "proposed debarment status" -- which prevents it from signing new contracts with the U.S. government or renewing existing contracts -- according to U.S. military letters sent to the company's top officers and obtained by The Associated Press. The action was first reported by the Wall Street Journal.

Watan's subsidiary Watan Risk Management is headed by two of Karzai's cousins -- Ahmed Rateb Popal and Rashid Popal. According to the U.S military letters, the two acknowledged to the bribes in the Congressional report and also told Congressional staffers that company guards regularly use illegal weapons, according to the letters.

A Watan representative confirmed the company received the letters but stressed it had not violated any rules.

"The Watan Group takes the accusations of the army and its actions seriously," said Simon Hilliard, the managing director. "The Watan Group believes it has been in full compliance and that it can demonstrate this to the Army once it is given its chance."

Watan has 30 days from the receipt of the letters to submit its argument against the debarment. Hilliard said they planned to reply. If their appeal is rejected, the temporary ban will be extended for up to three years, according to the letters.

If a full ban goes into effect, Watan will be the seventh Afghan company or individual to be blocked from future U.S. contracts this year, according to a senior U.S. military official. The official spoke on condition of anonymity because the information was not officially released.

The Congressional report described a man known as Commander Ruhullah -- whose Kandahar security company is affiliated with Watan -- as a warlord with about 600 men. Ruhullah, known as "the Butcher," uses his guards to control Highway 1, the main route for transporting supplies between Kabul and Kandahar, the report says.

"He readily admits to bribing governors, police chiefs and army generals," the report said.

Despite regulations that ban U.S.-hired security companies from using more powerful arms than an AK-47 assault rifle, the reports aid Ruhullah's guards use heavy machine guns and rocket-propelled grenades and regularly fight with insurgents.

Afghan law bars any security firm from operating if it has direct ties to government officials but many such firms have indirect ties to those in power, as Watan does.

It's difficult to know how much U.S. money Watan receives because many of its deals are subcontracted and are not thoroughly tracked by the military. Hilliard declined to disclose the value of Watan's contracts with the U.S. government.

The ban on Watan also applies to its affiliated companies, including firms working in construction, communications, gas and mining.

The measure against Watan comes as Afghanistan is taking steps to disband all private security companies working in the country and replace them with Afghan police officers.

Karzai had originally set a deadline of Dec. 17 for the security firms to shut down but a shortage of qualified police officers has led him to extend the deadline in several cases, saying the shutdown would be gradual.

Seven security firms will continue to work for U.S. military convoys past the deadline until there are enough police to take over the role, according to Gen. Abdul Manan Farahi, who is overseeing the process. He predicted it could take up to six months.

The U.S. has not provided an exact number of how many guards are employed to provide convoy security, but military officials have said the majority of the 26,000 armed guards under U.S. government contracts are involved in convoy security.

Farahi did not name the seven companies that will be allowed to continue convoy security.

[Associated Press; By HEIDI VOGT]

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