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The DynCorp-Government Connection
by Uri Dowbenko
Organized White-Collar Crime is the absolute essence of Mega-Corporate-Government Business.
As Jim Hougan wrote in his landmark book, Spooks: The Haunting of America - The Private Use of Secret Agents, "With their cultural and career investments in upholding the stereotype of the Mafia as the vehicle of organized crime, the public and the press have generally failed to grasp the felonious nature of the outfit's WASP counterparts on the Big Board. Whereas some petty hoodlums put out contracts on individuals, the multinationals have begun to place contracts on entire countries (for example, ITT versus Chile). With that difference, their operational styles are similar: offshore laundries used to wash bribes paid in clandestine support of a sales effort designed to create and satisfy the potentially lethal addictions of their would be customers. Whether the product is heroin or Starfighter jets, the result is often the same: profits that corrupt and impoverish… In short it appears that some multinationals had evolved into genuinely criminal enterprises." (p. 441)
Likewise, outsourcing State Terrorism is the fastest growing segment of the US Government market. In fact, white-collar criminal activities, like Federal IT, or Information Technology, which involves "privatizing" the financial database management of government agencies, accounts for some of the most lucrative contracts available anywhere on earth.
The practice of privatizing (using private companies for government work) has been long exploited by the CIA and the Pentagon, who like to use proxies, like contractors or mercenaries, to fight their covert wars.
The benefits for federal agencies include "plausible deniability" with respect to assassination and drug trafficking, as well as the ability to bypass the Military Code of Honor and the accords of the Geneva Convention, which hold "official" combatants to a different standard.
In other words, by privatizing "dirty tricks," a federal agency cannot be held liable to the standards one would expect of, well, the US Government.
Acting as one of the US Government's primary privatized Dirty Tricks Divisions, DynCorp has become one of the leading prime federal contractors, reaping a global harvest of shame and disgrace.
The Murky Origins of DynCorp
And where did DynCorp come from?
In the apocryphal story, DynCorp began as an Air Force contractor in 1954. Since then, however it has garnered a reputation as a shadowy company with a spooky pedigree, rumored to be a CIA "cutout," or front company, for the Agency's dirty tricks.
Using high-level government insider connections, DynCorp provides a range of "services" one would expect to facilitate fraud and money laundry activities, acting like a virtual conduit between the corporate (private) and government (public) worlds.
According to DynCorp, the US Government is its biggest client, accounting for more than 95% of its revenues.
After it gobbled up GTE Information Services LLC in 1999, DynCorp has become one of the nation's largest Federal contractors for IT, or Information Technology, services. Along with Lockheed Martin, SAIC, AMS, and others, DynCorp contracts with federal government agencies to "manage" federal databases.
Dyncorp's clients include the Drug Enforcement Agency, the Department of Defense, Department of State, Department of Justice, Internal Revenue Service, Securities and Exchange Commission, FBI, CIA, and HUD -- all government agencies notorious for rampant, unchecked and egregious fraud.
For example, the Pentagon cannot account for a mind-boggling $2.3 trillion. In fact, at Secretary of Defense Donald Rumsfeld's confirmation hearing in January 2001, Sen. Robert Byrd wondered aloud, "How can we seriously consider a $50 billion dollar increase in the Defense Department's budget when the DoD's own auditors cannot account for $2.3 trillion in transactions?"
After September 11, of course, fresh fraud at DoD will become virtually limitless because of the new "War on Terrorism," a black hole of a boondoggle that may surpass even the "Cold War" in Pentagon corruption, waste and malfeasance.
Meanwhile, HUD cannot account for $59 billion, according to the testimony of former HUD Inspector General Susan Gaffney. (See "Why Is $59 Billion Missing from HUD?" by Kelly O'Meara, Insight Magazine)
Coincidentally, that was the year that "HUD Taps DynCorp for Services," according to a Washington Post headline from August 2, 1999, describing a new $51 million contract to provide desktop services to the Office of Inspector General at Housing and Urban Development.
Even more sinister is the fact that DynCorp manages email and information systems for many federal investigation agencies like FBI, DOJ and SEC. What does that mean? Whenever criminal behavior is detected, DynCorp controls the information, giving it defacto power to subvert the process of law and cover-up corporate-government criminal activities.
And guess who's DynCorp's auditor of record?
It's none other than Arthur Andersen, the best Corporate Cooking-the-Books-and-Shredding-Documents firm money can buy. If this Big Eight Firm did it for Enron, you can bet they're doing it for most of their other clients.
Corporate Insiders at the Government Trough
So who's minding the store at DynCorp?
The sordid cast of characters includes Herbert S. (Pug) Winokur, member of the Council on Foreign Relations, as well as a director of DynCorp since 1988, according to a May 9, 2001 Proxy Statement.
By the way, the Council on Foreign Relations, which has been liberally described as a think tank, is actually "a clearinghouse for the really choice frauds," according to whistleblower Al Martin, author of The Conspirators: Secrets of an Iran Contra Insider.
In fact, Winokur was the also Chairman of the Board of DynCorp from 1988 to 1997.
So here is the connection between criminal corporate and government networks.
Winokur is also on the Board of Directors of the notorious Enron -- the notorious slush fund/ money laundry disguised as a corporation. It should be noted that Enron has declared bankruptcy after paying corporate insiders hundreds of millions of dollars for their "services."
As the chair of Enron's Finance Committee, Winokur approved the creation of more than 3000 offshore limited partnerships and subsidiaries, used by the corporation to hide losses from derivative trading, other bogus transactions and money laundering.
Winokur is also a director of Harvard Management Company and a member of Harvard Corporation.
Harvard, of course, has all the trademarks of a highly successful money laundry, but is cleverly disguised as a prestigious "educational institution." Its endowment fund rose remarkably from $5 billion to $19 billion in just 6 years.
(Imagine if you could get that kind of return.)
Winokur also has the ability and the means to coordinate money flows in and out of offshore slush funds with little or no public supervision -- as Chairman and CEO of Capricorn Holdings, Inc., a "private investment company" and Managing General Partner of three Capricorn Investors Limited Partnerships "concentrating on investments in restructure situations." That's code for "bottom feeding" on so-called "distressed" properties.
As far as DynCorp is concerned, though, there's Winokur's pal, Dudley Mecum, DynCorp Director since 1988, who just happens to also be the managing director of Winokur's Capricorn Holdings Inc., as well as CitiGroup, the New York banking conglomerate, convicted of serial money laundering and other criminal offenses.
The DynCorp Board itself is filled with so many shadowy characters that the company could be rightly considered a retirement/ slush fund for former spooks and military honchos.
They include General P.C. Carns, a retired General US Air Force who served as Vice Chief of Staff and as Director of the Joint Chiefs of Staff. According the DynCorp Proxy statement, Carns is also a member of the Defense Science Board and the Board of Advisors, National Security Agency.
Then there's General Russell E. Dougherty, Director since 1989, whose term as director expired in 2001. He was an attorney with the law firm of McGuire, Woods, as well as a retired General US Air Force, who served as Commander in Chief, Strategic Air Command and Chief of Staff, Allied Command, Europe.
Who needs a pension when you have the coffers of the government open to you?
Dirty Business, Dirty Clients
One of the DynCorp's biggest clients is the US Department of Justice. The ironically named JCON (Justice Consolidated Office Network) also awarded DynCorp a $500 million contract to design, implement and manage and integrated hardware and software program as early as 1996.
Reliable inside sources claim that a new improved PROMIS software with increase real-time tracking capabilities has also been used by DynCorp in recent times. By all accounts, it comes in very handy when you're trying to coordinate government interagency fraud.
JCON after all is available to Executive Attorneys (USA), Executive Office for US Marshals, Executive Office for Immigration Justice Management Division, Office of the Solicitor General and the six litigating divisions including Civil, Civil Rights, Environmental, Tax Criminal, and Anti Trust Divisions of the US Department of Justice.
Between its DoJ contracts (PROMIS) and HUD contracts, it's not unlikely that DynCorp may have had the ability to falsify evidence of HUD system e-mail and offshore accounts. After all, DynCorp is also in charge of so-called asset seizure (forfeiture) programs for HUD and Treasury.
DynCorp's sweet contract deal with JCON is the ultimate insider scam. The fed-speak for it is "a single-vendor indefinite delivery, indefinite quantity contract."
Another major client of DynCorp is the FBI. DynCorp will do a $51 million upgrade of the FBI network for the information technology and transport network components of its Trilogy program, a $300 million, three-year initiative to update the FBI backbone network. By the way, the notorious Andersen will be doing the audit. Imagine how many documents will be shred in that deal…
DynCorp's RICO Problems
According to Washington Technology Magazine (April 2, 2001), DynCorp's revenue for 2000 was more than $1.8 billion, up from $1.4 billion in 1999. Its contract backlog at the time was $6 billion, and about half of DynCorp's revenue comes from the Department of Defense.
With little or no public scrutiny, DynCorp has acted like a white-collar organized crime outfit. Besides being a federal contractor with insider deals for rigging computer systems to facilitate government fraud and malfeasance, whistleblowers working in Bosnia have revealed that
DynCorp supervisors are engaging in sex slavery and prostitution of local 12-year old girls. [See "DynCorp's Disgrace" By Kelly O'Meara, Insight Magazine.
In Johnson v. DynCorp Inc., et al, DynCorp employee Ben Johnston alleges that his former employer breached his three-year contract, firing him without cause in June 2000 because of Johnson's whistleblower activities. The lawsuit alleges that DynCorp engaged in racketeering activities in violation of the RICO, the Racketeer Influenced and Corrupt Organizations Act, and that Johnson was fired because he refuse to commit an illegal act.
The suit alleges that DynCorp engaged in peonage and slavery, sexually exploiting children, dealing in obscene material and procuring fraudulent identification documents for the underage victims. When Johnston told his DynCorp supervisor that co-workers were buying women from the mafia, he was told to mind his own business.
Johnston is not the only DynCorp employee to blow the whistle on Dirty Works, Inc., otherwise known as DynCorp. A UN International Police Force monitor called Kathryn Bolkovac has also filed a lawsuit in Great Britain against DynCorp for wrongful termination.
Bolkovac discovered that DynCorp, whose $15 million contract to train police officers in Bosnia, had officers who were also participating in sex- trafficking.
And you'd think that government fraud would be enough?
DynCorp Drug Trafficking and Cover-Up?
"The Resister," a US military whistleblower publication, has claimed that DynCorp was also contracted by the CIA to "observe" activities against the Kosovo Liberation Army (KLA) on the part of the Serbs.
For the record, the KLA was a drug-financed army of gangsters, murderous thugs and terrorists, trained by the CIA, and used to undermine attempts at peace between Kosovars, Albanians and Serbs.
DynCorp's contracted employees are typically ex-military, probably "sheep dipped" (moved into a new cover) into DynCorp, standard operating procedure for black ops and other covert activities by US military and intelligence organizations.
Most recently, DynCorp's use of military veterans and retired spooks to do the dirty work for the phony War on Drugs in Colombia, known as "Plan Colombia," is no exception.
In June 2001, DynCorp's unsavory presence in the War on Drugs in Colombia was exposed when an American missionary plane was shot down in Peru, leaving a mother and her baby daughter dead.
DynCorp Technical Services had been paid hundreds of millions of dollars by the CIA, Customs Service, Defense Department and State Department for "missions" like these, everywhere from Bosnia, Rwanda, Haiti, Colombia and Peru.
According to an AP story ("Peru incident shines spotlight on shadowy practice," by Lisa Hoffman, April 24, 2001), "DynCorp has supplied dozens of mechanics, trainers, maintenance and administrative workers, logistics experts, rescuers and pilots" for a price tag of $600
The UK Guardian describes DynCorp's role in the five-year $200 million contract as providing "crop dusting pilots for eradication of coca plantations [could they be CIA competitors?] and helicopter pilots to ferry Colombian troops and DynCorp's own security personnel."
Another DynCorp Aerospace Technology subcontractor in the so-called War on Drugs (Plan Colombia) called EAST (Eagle Aviation Service and Technology, Inc. has an equally notorious.
EAST "helped Oliver North run guns to Nicaraguan rebels in what would be known as the Iran Contra affair," wrote AP reporter Ken Guggenheim on June 5, 2001.
Founded in the 1980s by Richard Gadd, EAST helped North secretly supply weapons and ammunition to the Nicaraguans.
General Richard Secord hired Gadd in 1985 to oversee weapons deliveries, and it's a good bet that drugs would have been flown north on the return trip in Oliver North's infamous "Guns-For-Drugs" operation.
Bid Rigging De Rigueur
Here's another example of insider government contract shenanigans.
According to a General Accounting Office report of Feb. 28, 2001, "the Department of State awarded two contracts to DynCorp Aerospace technology for aviation services to support the Bureau's counter narcotics aviation program." One five-year contract for $99 million was awarded by State in 1991. Then in 1996, State awarded DynCorp another sole-source contract for another $170 million without competitive bidding.
Rigged deals can't get much sweeter, can they?
At the time, DynCorp's Jim McCoy got new contracts from the State, Treasury, and Commerce Departments, as well as the CIA and NASA. It became common knowledge that DynCorp acted as a front-company on behalf of the CIA, hiring mercenaries and "assets" in order to distance itself from the manipulation of US foreign policy from behind the scenes.
According to an article in The Nation ("DynCorp's Drug Problem," by Jason Vest), DynCorp employees have also been implicated in narcotics trafficking. It must be remembered that US involvement in Colombia is ultimately a gambit to control the lucrative drug trade, as well as the oil fields, explored by Bush Family connected Harken Energy.
DynCorp Charged with Terrorism
Most recently DynCorp has been charged with terrorism.
According to NarcoNews.com reporter Al Giordano (www.narconews.com), a class-action lawsuit has been filed in Washington, DC, on behalf of 10,000 farmers in Ecuador and the AFL-CIO-related International Labor Rights Fund. Why? DynCorp has US Government contracts to spray toxic herbicides over 14 percent of Colombia, supposedly to eliminate coca in the phony War on Drugs.
Giordano writes, "Although DynCorp's taxpayer-sponsored bio-warfare has not made a dent in the cocaine trade, it has caused more than 1,100 documented cases of illness among citizens, destroyed untold acres of food crops, displaced tens of thousands of peasant farmers, and harmed the fragile Amazon ecosystem, all in the name of the 'war on drugs.'"
"DynCorp may be about to get its comeuppance in federal court," continues Giordano, "where Justice Richard W. Roberts is presiding over a lawsuit brought by labor, environmental and indigenous groups against the aerial herbicide program. The text of the legal complaint is available online for all to read: www.usfumigation.org/compliant.htm.
In addition, NarcoNews.com writes that DynCorp's top corporate director, Paul Lombardi, attempted to intimidate the International Labor Rights Fund, one of the plaintiffs in the lawsuit.
According to documents obtained by NarcoNews.com , on October 25, 2001, "Lombardi wrote to each of the board members of the AFL-CIO allied Rights Fund in an unsuccessful attempt to scare them off the lawsuit. In that letter, Lombardi accused the group, without offering evidence, of fronting for illicit 'drug cartels.' Lombardi also attempted, bombastically, to portray the Rights Fund as an enemy in the war on terrorism. He wrote: 'Considering the major international issues with which we are all dealing as a consequence of the events of September 11th, none of us need to be sidetracked with frivolous litigation the aim of which is to fulfill a political agenda.' And DynCorp's Lombardi attempted to cause the Rights Fund to drop the lawsuit, saying, 'Clearly it is not in our mutual best interests to continue politically charged litigation.' Bishop Jesse DeWitt, president of the International Human Rights Fund, responded in a November 5, 2001 letter to DynCorp's Lombardi, suggesting that it is DynCorp that engages in terrorist actions."
In this letter, Bishop DeWitt called DynCorp's actions in South America "terrorism." He wrote "we found your reference to September 11 particularly apt, but for a very different reason. Based on what appear to be uncontested facts, a group of at least 10,000 Ecuadoran subsistence farmers have been poisoned from aerial assault by your company."
"Imagine that scene for a moment. You are an Ecuadoran farmer, and suddenly, without notice or warning, a large helicopter approaches, and the frightening noise of the chopper blades invades the quiet," he continues. "The helicopter comes closer and sprays a toxic poison on you, your children, your livestock and your food crops. You see your children get sick, your crops die. Mr. Lombardi, we at the International Labor Rights Fund, and most civilized people, consider such an attack on innocent people terrorism. Your effort to hide behind September 11 is shameful and breathtakingly cynical."
"Bishop DeWitt put Lombardi on notice that he and other DynCorp officials may be added as defendants in the lawsuit, now having been officially informed of the harm done by their fumigation program: 'If there is any further spraying done that causes similar harm, we will amend the legal complaint and name you and other DynCorp decision-makers as defendants in your personal capacities, and will charge you with knowingly conducting aerial attacks on innocent people. Again, based on well-established principles of international law, that would be terrorism.'"
Lombardi has shown that Homegrown White-Collar Terrorism is alive and well at DynCorp.
Translating the "Drug War" into Dollars: How Much Pop Per Dead Colombian?
So how much does DynCorp really make on the notorious War on Drugs Scam?
According to Catherine Austin Fitts, former FHA Commissioner in the Bush I Administration and former CEO of Hamilton Securities, an investment banking/ software company, the creation of Stock Value, also referred to as Capital Gains, is called "Pop" in Wall Street jargon.
She explains the money dynamics of DynCorp's business model with regard to its War on Drugs activities.
"If DynCorp has a $60 million per year contract supporting knowledge management for asset seizures in the United States," she says. "The current proxy shows that they value their stock, which they buy and sell internally, at approximately 30 times earnings."
"So, if a contract has a 5-10% profit, then per $100 million of contracts, DynCorp makes about $5-$10 million, which translates into $150 million to $300 million of stock value."
"That means that for a $200 million contract, with average earnings of 5-10% ($10 million to $20 million), DynCorp is generating $300 million to $600 million of stock value. Pug Winokur of Capricorn Holdings appears to have about 5% ownership, which means that his partnerships' stock value increase $15-$30 million from the War in Colombia."
"If the DynCorp team kills 100 people, as an example, then that means they make $1.5 - $3 million per death. That way the Pop per Dead Colombian can be estimated, or, how much capital gains can be made from killing one Colombian. Since DynCorp was also in the Gulf and in Kosovo, we should be able to calculate the relative value of killing people in various cultures and nationalities. Pug Winokur's partnership, under these assumptions, makes $75,000 to $250,000 of Pop per Dead Colombian."
"Since the stock of prison companies trades on a per bed basis, my guess is that defense stocks are going to evolve towards a per person expenditure and other similar performance rules-of-thumb for profit-making opportunities."
"One of my expectations is that the numbers for the Colombian war will yield a very high per death cost," Fitts continues. "That means lots of shareholders' profits, but probably very few American Jobs Created per Dead Colombian. That's because the big money is not made on labor intensive contracts, but on switching ownership of land, natural resources and other resources, including control of the drug markets and their reinvestment in our stock market and university endowments like Harvard, as opposed to local Colombian investments. This insider trading cabal is where the real money goes."
"That's why DynCorp's role as a knowledge manager (managing federal agency databases) is so important," she concludes. "It's worth far more money than the straight-up government contract. The profit will not show up for insider trading on DynCorp's portfolio, but in other capital gains that flow to the players of the Chase and Council on Foreign Relations syndicates and their private and institutional portfolios."
Outsourcing State Terrorism
This analysis of Catherine Austin Fitts, current CEO of Solari, Inc. (www.solari.com) is probably the best model available for calculating the cost-benefit numbers in this egregious corporate-government scam.
The implications are ominous. By subcontracting (outsourcing) State Terrorism to so-called "private" entities like DynCorp, the US Government abdicates any moral/ ethical high ground in future confrontations. The proverbial "Iron Fist in the Velvet Glove" of the US Military in a Global Imperial Rampage is all that's left.
It was Executive Order 12333 that precipitated the shift during the Reagan-Bush Regime - a policy change in which so-called "national security" and "intelligence" functions were "privatized."
Likewise the DOJ-CIA Memorandum of Understanding allowed the outsourcing of illicit drug trafficking and weapons sales to private firms and individuals. (Regarding CIA Inspector General Fred Hitz's cover-up of CIA drug trafficking, see "The Curious Case of the Spooky Professor")
According to Washington Technology Magazine, this is the future. "The global market for outsourcing of government services is growing faster than outsourcing in any commercial segment, and is likely to more than double over the next five years, according to a new study by Accenture Ltd.," writes Patience Wait in her article "Government outsourcing grows fastest of all sectors" (March 4, 2002). In this outsourcing market, DynCorp has an estimated 5% market share, while Lockheed Martin leads the proverbial pack with 30%.
However there's a bigger question. When a handful of federal contracting firms with lucrative insider deals control federal accounting and computer systems, does US Government sovereignty even exist anymore?
In other words, if the US Government and its agencies do not control their proprietary accounting, payment and information systems, it becomes even questionable whether we have a sovereign government at all.
The outsourcing of these systems, then, in essence has become a silent coup d'etat by Corporate-Government Insiders.
According to Washington Technology Magazine (March 4, 2002), top outsourcing vendors to the US Government in fiscal 2000 are Lockheed Martin Corp (30% market share), CSC (13%), EDS (7%), DynCorp (5%), TRW (5%), Raytheon (4%) SAIC 4%) Northrop Grumman (3%) and Unisys (2%).
This is America's Corporate/ Public Enemy #1 -- the parasitic constituents of the so-called Military-Industrial-Pharmaceutical Complex.
Now that the parasites have literally overwhelmed the host, the question remains -- how long will companies like DynCorp continue to give America the finger?
And, more importantly, how long will America put up with the Enemy Within?
© Copyright 2002, Uri Dowbenko. All rights reserved.
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