U.S. defense contractor pays $7.5 million to settle Kabul brothel row

WASHINGTON — An American firm providing security at the US embassy in Afghanistan has paid $7.5 million to settle claims its guards visited brothels in Kabul with the knowledge of company officials, the Justice Department said Thursday.

Armor Group North America Inc. (AGNA) and its affiliates made the payout ostensibly to resolve allegations that it submitted false claims for payment on State Department contracts.

But the Justice Department said: "The settlement resolves US claims that in 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA's management knew about the guards' activities."

The settlement also resolves allegations that AGNA misrepresented the prior work experience of 38 guards -- third country nationals -- that it had hired to watch the embassy.

The case came to light thanks to a whistleblower, James Gordon, who was employed as the director of operations at the company. The Justice Department said Gordon had been awarded $1.35 million of the settlement proceeds.

The nonprofit Project On Government Oversight (POGO) watchdog reported in September 2009 that security at the US embassy in Kabul was being undermined by a breakdown in discipline and morale among guards.

It said it had obtained emails, photographs, and videos that "portray a Lord of the Flies environment," referring to the title of the novel by William Golding about stranded schoolboys who turn into savages on a desert island.

It said guards presented POGO with allegations and photographic evidence that some supervisors and guards were engaging in "near-weekly deviant hazing and humiliation of subordinates."