Blackwater’s Slap on the Wrist for Gun Smuggling and Arms Trafficking

Viewed from one perspective the facts that Blackwater has admitted to amount to running guns–precisely the crime that Fast and Furious attempted to combat. Viewed from another perspective, Blackwater’s actions amount to the same kind of thing Viktor Bout is in prison for: making weapons deals with sanctioned entities.

But Blackwater will suffer no more than a wrist slap for such things: a $7.5 million fine, a third of which can be credited to implementing a compliance system that is substantially already in place, as well as a $42 million Consent Agreement fine it signed two years ago. (It has paid two $6 million installments of the $42 million fine it owes to State Department; even while it continues to get contracts with State)

That doesn’t make the Deferred Prosecution Agreement any less funny.

There are the repeated lists of all the aliases of Blackwater–by my count some 37 companies or subsidiaries. Just in case you needed master list of how many times it has tried to change its identity.

There’s the bragging about Blackwater’s new compliance structure (paid for, presumably, as part of this fine), featuring John Ashcroft (the monitor on one of the most corrupt DPAs ever) and former AIG (AIG?!?!?!) compliance whiz Suzanne Folsom.

There’s the way it says Blackwater can’t charge the government any aspect of its fine (what is left after its credit for compliance infrastructure, that is). Only in DPAs is money not fungible, I guess.

There’s the way they try to guard against Blackwater rebranding again (the DPA is written in the name Academi and invokes Xe) by selling itself to someone else. (There’s apparently an Erik Prince declaration I’m going to have to chase down tomorrow.)

And there’s the way that of those who signed this DPA for Blackwater, only the name of the attorney is included in the text.

Now maybe I shouldn’t be laughing so hard. The DPA implies that the US Attorney in North Carolina’s Eastern District, Thomas Walker, is still investigating. Maybe Erik Prince will go to jail? Ha!

But this DPA is more a case study in the myriad ways corporate entities escape all justice in this day and age than any real accountability for the same kind of actions we impose stiff sentences on others for.

As always, the lesson is if you’re going to commit crimes, do it as a corporation.

13 replies
  1. MadDog says:

    I can hear der Mittster now – Shorter Romney: “Corporations are people too! Unless laws are broken in which case they’re not.”

  2. MadDog says:

    EW, your trifecta of posts today on the always unpunished and above-the-law corporate and US government miscreants leave me distinctly depressed (not to mention the Shingles vaccination shot from last week which has given me 3 non-stop days of headaches).

    I’m wondering whether we’re missing the boat here. Is the celestial meaning we’re missing is that we should all incorporate? Is that all that is missing from becoming perpetually healthy, happy and wise?

    Does anybody know a good incorporation lawyer, or is that an oxymoron?


  3. scribe says:

    Just to note: if an individual were charged with only the crimes detailed in the last two paragraphs of the statement of facts – giving a rifle, a shotgun and three handguns to the King of Jordan (i.e., a foreign national not a legal permanent resident of the US) and then falsifying the 4473s for those guns, that individual would be looking at at least 5 years on each of two counts per gun. (And that doesn’t consider the possibility that the Bushmaster M4 was a machinegun – they come in machinegun and non-machinegun variants). In other words, at least 50 years prison exposure. And that doesn’t even bring into play the possibility of 10 years per gun on the “Straw” purchases – every gun store one goes into has a sign (required by law) saying “don’t lie for the other guy”, i.e., don’t be the straw purchaser.

    And the bookkeeping travesty on their gun transfers (including the straw purchases of machineguns for the Sheriff) could yield literal centuries of prison time to an individual.

    At a minimum, the Blackwater entities should be losing their firearms licenses. Any other person would.

    But they won’t. And no one will go to prison, either.

  4. What Constitution? says:

    Well, gee, the very purpose of incorporating is to limit liability, isn’t it? So, reasoning from that premise, incorporate away! The more the merrier! And if by doing so, those corporations each gain all the “rights” of “people” to “free speech”, who’s to say they shouldn’t use those “rights” to maximize their “limitations” of “liability”? Tah dah — no accountability whatsoever, infinite opportunities for profit and gain. How’s that for an Invisible Hand? It’s just too delicious to watch Blackwater and its lawyers negotiate some erstwhile “limitations” on rank hucksterism in the guise of “corporate restructuring” and have the government sign off on it as if it was praiseworthy (now wait for the tax treatment once the accountants are done with this “settlement”).

  5. MadDog says:

    OT – On the US drone strike front, this from AP:

    Yemen: US Drone Strikes Kill 10 Al-Qaida Militants

    “U.S. drones killed 10 al-Qaida militants – one believed to be a top bomb-maker – in separate strikes targeting moving vehicles in Yemen, officials and the country’s state-run agency said on Tuesday.

    The first attack hit two vehicles carrying seven passengers in the southern town of Radda late Monday, killing them all. The official SABA news agency said one was Abdullah Awad al-Masri, also known as Abou Osama al-Maribi, whom it described him as one of the “most dangerous elements” of al-Qaida in the militant stronghold of Bayda province and the man in charge of a bomb-making lab.

    SABA did not specify his nationality. The agency said the dead also included a Bahraini, a Saudi, two Egyptians, and one Tunisian, SABA reported. Officials said the strike was carried out by a drone.

    Further east, another U.S. drone targeted a second vehicle on Tuesday carrying three al-Qaida militants in the Zoukaika region of Hadramawt, the officials said…”

  6. MadDog says:

    @MadDog: And on a related OT note, this from the Los Angeles Times:

    Raytheon develops 13-pound ‘smart bomb’ for drone aircraft

    …After developing a 13.5-pound “smart bomb” for four years, Raytheon has carried out a successful test flight at the Army’s Yuma Proving Ground in Arizona. The bomb, called Pyros, was dropped from a drone flying at 7,000 feet and hit the designated bull’s-eye on a target that lay below.

    The target had two dummies, which simulated insurgents planting an improvised explosive device…


    …Marines in Afghanistan have said there is urgent need for a weapon that is small and powerful enough to protect them from insurgents planting roadside bombs. Marines already have small spy drones with high-powered cameras. What they want is a way to destroy the enemies that their drones discover.

    “Those guys don’t necessarily need a 500-pound bomb to take out the whole block,” Smith said. “They need something small and precise…”

    …Pyros could also be used on larger robotic aircraft, such as the lethal Predator and Reaper drones that are currently deployed and typically carry 100-pound laser-guided Hellfire missiles or 500-pound GPS-guided smart bombs.

    “You could put 12 of these small bombs on a Predator,” Smith said. “It would be especially useful in a target-rich environment…”

  7. emptywheel says:

    @MadDog: Yup, and oh by the way, another of the Gitmo “recidivists” returned from AQAP back to Saudi Arabia the other day.

    I’m sure his return has nothing to do with all these drone strikes. Or maybe …

  8. MadDog says:

    @MadDog: There is an important point to ponder with this latest news regarding a “small” smart bomb for US drones.

    Ask yourself how long it will be before our usual fetish for miniaturization will bring about a “miniature” smart bomb (think about something the size of the US military’s standard 14 oz M67 hand grenade) with GPS and/or Laser precision guidance.

    Think about a US Predator/Reaper drone armed with hundreds of these “miniature” smart bombs guided by GPS and/or Laser targeting, and the likely claim by the US that miniaturization is beneficial and makes them more precise, more focused, and less likely to cause civilian collateral damage.

    No mention will be made of our descent further down the slippery slope where the decision to use such weaponry becomes easier and easier. If there’s no risk (perceived by blind-as-bats US bureaucrats) to US folks, why ever not? Shoot and scoot!

  9. Ben Franklin says:

    Bankster and War Profiteer ‘fines’ are not percentage of illegal and/or immoral gains, but basis points.

    How does that proscribe future behavior? It ends up as the cost of doing business, and has a negligible effect on future behavior.

    This is where there is no diff between Obama and Romney.

  10. earlofhuntingdon says:

    $7.5 million fine. Huh, that’s about the value of a few cases of ammunition and Bollinger. Guess the buyers there will have to celebrate with 25 year old whisky instead.

  11. Bob Schacht says:

    @What Constitution?:
    “Well, gee, the very purpose of incorporating is to limit liability, isn’t it? So, reasoning from that premise, incorporate away! The more the merrier! And if by doing so, those corporations each gain all the “rights” of “people” to “free speech”, who’s to say they shouldn’t use those “rights” to maximize their “limitations” of “liability”? Tah dah — no accountability whatsoever, infinite opportunities for profit and gain.”

    Welcome to the United Corporations of America, oh Brave New World.

    Bob in AZ

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