Claim: Blackwater billed US for 'Morale Welfare Recreation' provided by prostitute

The world's oldest profession may have been subsidized by the US government during the war on terror.

"Two former employees of Blackwater Worldwide have accused the private security contractor of defrauding the government for years with phony billing, including charging for a prostitute, alcohol and spa trips," Carol D. Leonnig reports for the Washington Post.

The article continues, "In newly unsealed court records, a husband and wife who once worked for Blackwater said they had personal knowledge of the company falsifying invoices, double-billing federal agencies and charging the government for personal and inappropriate items whose real purpose was hidden. They said they witnessed 'systematic' fraud on the company's security contracts with the Department of State in Iraq and Afghanistan, and with the Department of Homeland Security and Federal Emergency Management Agency in Louisiana after Hurricane Katrina."

Brad and Melan Davis worked in various Blackwater locations. Brad Davis, a former Marine, served as a team leader and security guard, including in Iraq. His wife, Melan Davis, worked as a finance and payroll employee, starting in Louisiana. They have filed their allegations that Blackwater defrauded the government as part of a false claims lawsuit, which allows the whistleblowers to win a portion of any public money that the government recovers as a result of the information. However, the Justice Department has chosen not to join them in pursuing their civil suit, a decision that led to the Davises' claims being unsealed this week in a Virginia federal court.

The Davises assert that Blackwater officials kept a Filipino prostitute on the company payroll for a State Department contract in Afghanistan, and billed the government for her time working for Blackwater male employees in Kabul. The alleged prostitute's salary was categorized as part of the company's "Morale Welfare Recreation" expenses, they said.

The New York Times adds, "In an interview on Wednesday, Ms. Davis said that she and her husband had decided to proceed with the case because 'it’s the right thing to do,' and that it was time for 'the truth from inside the company' to be made public. If the government is able to recover money from Blackwater as a result of the lawsuit, the Davises could claim a percentage as whistleblowers."

According to the lawsuit, Ms. Davis raised concerns about the company’s bookkeeping with her bosses in March 2006, when she was handling accounts for the company’s contracts with the Federal Emergency Management Agency and the Department of Homeland Security. The lawsuit claims she was told to “back off,” and that she “would never win a medal for saving the government money.”

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Ms. Davis also asserts that a Filipino prostitute in Afghanistan was put on the Blackwater payroll under the “Morale Welfare Recreation” category, and that the company had billed the prostitute’s plane tickets and monthly salary to the government.

This isn't the first time that Blackwater has been accused of being involved in prostitution.

In August of 2009, it was reported that two former Blackwater employees claimed the firm was guilty of using child prostitutes at its compound in Baghdad’s fortified Green Zone and that owner Erik Prince knew of this activity and did nothing to stop it.

The declarations revealed in a lawsuit describe Blackwater as “having young girls provide oral sex to Enterprise members in the ‘Blackwater Man Camp’ in exchange for one American dollar.” They add even though Prince frequently visited this camp, he “failed to stop the ongoing use of prostitutes, including child prostitutes, by his men.”

One of the statements also charges that “Prince’s North Carolina operations had an ongoing wife-swapping and sex ring, which was participated in by many of Mr. Prince’s top executives.”

According to the two former employees, Blackwater supervisors in Iraq sometimes sent men back to the United States for wanting to “kill ragheads,” excessive drinking, steroid use, or failure to follow weapon safety procedures, but “Mr. Prince and his executives would send them back” with a reprimand to the supervisor for costing the firm money. Blackwater even fired “those mental health professionals who were not willing to endorse deployments of unfit men.”

The former employees additionally stated that Prince was engaged in illegal arms dealing, money laundering, and tax evasion, that he created “a web of companies in order to obscure wrong-doing, fraud, and other crimes,” and that Blackwater’s chief financial officer had “resigned … stating he was not willing to go to jail for Erik Prince.”

"Iraq has ordered about 250 former and current employees of Blackwater Worldwide to leave the country within seven days or face having their visas pulled," the Associated Press reported Wednesday.

The AP added, "Interior Minister Jawad al-Bolani said on Wednesday the order targets security contractors who worked for Blackwater at the time of the shootout. He said all 'concerned parties' were notified of the order three days ago."

"We want to turn the page," al-Bolani told AP. "It was a painful experience, and we would like to go forward."

More information on the 2009 charges can be found at this link.