Ex-employees sue Blackwater, accuse company of overbilling, spending on strippers, prostitute

Ex-employees sue Blackwater, allege overbilling

RALEIGH, N.C. — Two former Blackwater Worldwide employees say the security company repeatedly billed the U.S. government for excessive or inappropriate expenses, including a prostitute for workers in Afghanistan and strippers in the aftermath of Hurricane Katrina.

In a federal lawsuit filed in Virginia, Brad and Melan Davis say Blackwater officials also deceived the government by double-billing for travel costs and creating false invoices. They say the U.S. government “has been damaged in the amount of many millions of dollars in funds.” Brad Davis also claims he witnessed acts of excessive force by company workers in Iraq.

A federal law enforcement official told The Associated Press that federal authorities in Virginia were investigating whether Blackwater had overbilled for its State Department work. The official spoke on condition of anonymity because he was not authorized to speak publicly.

Blackwater or its workers have also faced federal probes for shootings in Iraq and Afghanistan and accusations of arms smuggling.

An audit released last year found that the State Department could have been able to recover $55 million from Blackwater because the company didn’t provide the personnel necessary to fulfill its contract during the months examined in 2006 and 2007.

Mark Corallo, a spokesman for the Moyock, N.C.-based company, which has since changed its name to Xe, said Thursday that the lawsuit is misguided and noted that the Justice Department declined to join the case.

“The allegations are without merit and the company will vigorously defend against this lawsuit. It is noteworthy that the government has declined to intervene in this action,” he said.

The lawsuit was filed in 2008 in the eastern district of Virginia by the Davises, a married couple, and was recently unsealed after the Justice Department passed on the case. Melan Davis, who said she handled some record-keeping and billing roles at Blackwater, said in a signed court statement that she found that a prostitute in Afghanistan had been placed on Blackwater’s payroll under the “Morale Welfare Recreation” category.

Davis, who was fired from the company and is challenging her dismissal, said she also helped with record-keeping for Blackwater’s response in Louisiana to Hurricane Katrina. Among other charges of excessive billing there, Davis said two workers paid a vendor for “cleaning services” but the vendor would instead provide strippers.

Brad Davis says in the court filing he witnessed three instances in 2005 in which company workers used excessive force in Iraq. He said the contractors involved in the shootings used unjustified force to “kill or seriously injure innocent Iraqi civilians,” but that the company did not stop to see whether the targets of the shootings were alive or injured.

Goldman reported from New York.