CACI in the Dark on Reports of Abuse
Employee Named in Army Report Still Working in Iraq, Company Says
Officials at CACI International Inc. fought back against allegations that one of its employees was involved in abusing detainees at the Abu Ghraib prison in Iraq, saying that it has not been notified of any problems, that the man is still at work and that he has been doing "a damn fine job."
Clearly exasperated, J.P. "Jack" London, the Arlington-based company's chief executive, said during a conference call Wednesday with investment analysts that he still had not received any information from the government about a report that said a CACI interrogator, an interpreter and two military intelligence officials were probably "either directly or indirectly responsible" for problems at the prison.
"The information we've been getting comes from the news media and there's been plenty of it, as you all know," London said.
For the past few days, CACI has been in the awkward position of defending itself against accusations in a report it has not been given by the Defense Department but which has been widely circulated. To get a copy, CACI downloaded it from the Internet.
Company officials said they had been called by customers with questions about the allegations and that they had received electronic "hate mail" from people expressing "extreme dissatisfaction" with the alleged behavior of its contractors at the prison.
The Army report detailing the abuse of Iraqi prisoners names a CACI employee, identified as Steven Stephanowicz, as one of four men who may be responsible for the problems because he allowed or instructed soldiers to aid in interrogations by "setting conditions" that he "clearly knew his instructions equated to physical abuse."
Records in the man's hometown of Telford, Pa., spell his name "Stefanowicz."
London said the company sent a senior executive to Iraq to investigate the accusations and hopes to report findings soon.
Meanwhile, he said, the company asked for an official copy of the Army report from its contact at the Defense Department, which hired CACI to help interrogate prisoners. Spokesmen for the Pentagon and for military command in Baghdad could not explain why CACI had not been told about the investigation and its conclusions.
L. Kenneth Johnson, CACI's president of U.S. operations, said that because the company had not received any instructions to change its activities at the prison, the company's employees remain at the site and continue to perform their duties. Johnson would not elaborate on the company's employees. A military official said there were four contract interrogators at Abu Ghraib and that all work for CACI.
CACI is among an elite group of Washington area companies that do classified work for the federal government. The company, formed in the 1960s, first caught the government's eye with a computer language it developed that could be used to build battlefield simulation programs. CACI founders Herbert W. Karr and Harry M. Markowitz had deep technical backgrounds; Markowitz won a Nobel prize in economics in 1990 for his pioneering work on stock portfolio diversification, one of the tenets of modern investment theory.
Nearly two-thirds of CACI's business is with the Defense Department and intelligence agencies and most of it involves developing, linking and maintaining computer systems, software programs and other electronic devices.
The company is a newcomer to the interrogation business. It picked up interrogation contracts with the acquisition a year ago of Premier Technology Group, a 360-person company in Fairfax.
"The important point I think is that almost 90 percent of the employees of PTG have higher-level security clearances and you can read between the lines in terms of the kinds of things that we will be doing with that organization," Johnson said at the time.
Defense technology companies such as CACI International, Anteon International Corp. and ManTech International Corp. often trumpet the extent of their work for intelligence agencies to investors because government spending on intelligence gathering is growing at a faster rate than overall military spending, according to investment analysts. Although the companies are sometimes prohibited from announcing individual contracts, they frequently tout the total value of their intelligence contracts.
The companies pursue contracts related to indispensable or core functions of the military, such as analyzing raw intelligence, to shield themselves from the vagaries of defense spending.
CACI's share price has dropped significantly since the Abu Ghraib abuses were reported. It fell 4 percent, to $41.45, on Tuesday and recovered slightly yesterday to close at $43.10.
Mark C. Jordan, an analyst for A.G. Edwards Inc., said the stock's drop was an overreaction by investors because the cost of any lawsuit or settlement would likely be far less than $112 million. But Timothy J. Quillin, an analyst from Stephens Inc., said he is concerned that Congress will use the incident as an excuse to limit the role of contractors in military operations. "CACI has clearly benefited from a recent trend toward greater use of contractors in battlefield roles," Quillin wrote in a research note yesterday.
CACI's legal culpability if an employee is found guilty of having participated in the abuse is unclear. Companies can be barred from pursuing federal contracts if an agency decides "that the contractor lacks the corporate ethics and procedures and control necessary to properly perform government work," said Frederic M. Levy, a partner at McKenna Long & Aldridge who specializes in compliance with government procurement law. He said it was unlikely that an isolated incident would result in a company being prohibited from government contracts.
More than 300 companies or individuals are banned from new federal procurement contracts, according to a database maintained by the General Services Administration. Any agency has the power to initiate the order but it applies government-wide. Reasons a party might be temporarily suspended or banned for a specific period of time include fraud, billing irregularities or felony charges.
The government's right to ban a company from the contracting process is not exercised regularly. After DynCorp employees were terminated from a United Nations program to help rebuild police forces in the Balkans, the company remained eligible to bid on U.S. contracts. And even as a Titan Corp. interpreter at Guantanamo Bay was investigated for allegedly stealing classified information, the company continued to get new contracts, including one to provide linguists to the Abu Ghraib prison.
London told investors that interrogation services accounted for less than 1 percent of the company's business. "There has been no immediate economic impact on CACI as a result of any of these allegations in terms of contracts or ongoing work," he said. "The likelihood of any significant major downside or action against the company, in my opinion at this point, is quite remote, extremely remote."
London urged people not to jump to conclusions before the investigation is complete. Residents of Telford, Pa., population 4,600, where a high school yearbook lists a Steven Stefanowicz as a member of the basketball team, governing council and the student newspaper, expressed similar sentiments yesterday.
"We want proof before we believe somebody could do a thing like that," said Linda Moyer, co-owner of Visions Salon Inc.
Jean and James Campbell, who identified themselves as Stefanowicz's parents, said they were reserving judgment about the accusations about his work in Iraq. "He's 7,000 miles away. How are we supposed to know what's going on?" James Campbell said.
- Anitha Reddy and Ellen McCarthy, Washington Post
Officials at CACI International Inc. fought back against allegations that one of its employees was involved in abusing detainees at the Abu Ghraib prison in Iraq, saying that it has not been notified of any problems, that the man is still at work and that he has been doing "a damn fine job."
Clearly exasperated, J.P. "Jack" London, the Arlington-based company's chief executive, said during a conference call Wednesday with investment analysts that he still had not received any information from the government about a report that said a CACI interrogator, an interpreter and two military intelligence officials were probably "either directly or indirectly responsible" for problems at the prison.
"The information we've been getting comes from the news media and there's been plenty of it, as you all know," London said.
For the past few days, CACI has been in the awkward position of defending itself against accusations in a report it has not been given by the Defense Department but which has been widely circulated. To get a copy, CACI downloaded it from the Internet.
Company officials said they had been called by customers with questions about the allegations and that they had received electronic "hate mail" from people expressing "extreme dissatisfaction" with the alleged behavior of its contractors at the prison.
The Army report detailing the abuse of Iraqi prisoners names a CACI employee, identified as Steven Stephanowicz, as one of four men who may be responsible for the problems because he allowed or instructed soldiers to aid in interrogations by "setting conditions" that he "clearly knew his instructions equated to physical abuse."
Records in the man's hometown of Telford, Pa., spell his name "Stefanowicz."
London said the company sent a senior executive to Iraq to investigate the accusations and hopes to report findings soon.
Meanwhile, he said, the company asked for an official copy of the Army report from its contact at the Defense Department, which hired CACI to help interrogate prisoners. Spokesmen for the Pentagon and for military command in Baghdad could not explain why CACI had not been told about the investigation and its conclusions.
L. Kenneth Johnson, CACI's president of U.S. operations, said that because the company had not received any instructions to change its activities at the prison, the company's employees remain at the site and continue to perform their duties. Johnson would not elaborate on the company's employees. A military official said there were four contract interrogators at Abu Ghraib and that all work for CACI.
CACI is among an elite group of Washington area companies that do classified work for the federal government. The company, formed in the 1960s, first caught the government's eye with a computer language it developed that could be used to build battlefield simulation programs. CACI founders Herbert W. Karr and Harry M. Markowitz had deep technical backgrounds; Markowitz won a Nobel prize in economics in 1990 for his pioneering work on stock portfolio diversification, one of the tenets of modern investment theory.
Nearly two-thirds of CACI's business is with the Defense Department and intelligence agencies and most of it involves developing, linking and maintaining computer systems, software programs and other electronic devices.
The company is a newcomer to the interrogation business. It picked up interrogation contracts with the acquisition a year ago of Premier Technology Group, a 360-person company in Fairfax.
"The important point I think is that almost 90 percent of the employees of PTG have higher-level security clearances and you can read between the lines in terms of the kinds of things that we will be doing with that organization," Johnson said at the time.
Defense technology companies such as CACI International, Anteon International Corp. and ManTech International Corp. often trumpet the extent of their work for intelligence agencies to investors because government spending on intelligence gathering is growing at a faster rate than overall military spending, according to investment analysts. Although the companies are sometimes prohibited from announcing individual contracts, they frequently tout the total value of their intelligence contracts.
The companies pursue contracts related to indispensable or core functions of the military, such as analyzing raw intelligence, to shield themselves from the vagaries of defense spending.
CACI's share price has dropped significantly since the Abu Ghraib abuses were reported. It fell 4 percent, to $41.45, on Tuesday and recovered slightly yesterday to close at $43.10.
Mark C. Jordan, an analyst for A.G. Edwards Inc., said the stock's drop was an overreaction by investors because the cost of any lawsuit or settlement would likely be far less than $112 million. But Timothy J. Quillin, an analyst from Stephens Inc., said he is concerned that Congress will use the incident as an excuse to limit the role of contractors in military operations. "CACI has clearly benefited from a recent trend toward greater use of contractors in battlefield roles," Quillin wrote in a research note yesterday.
CACI's legal culpability if an employee is found guilty of having participated in the abuse is unclear. Companies can be barred from pursuing federal contracts if an agency decides "that the contractor lacks the corporate ethics and procedures and control necessary to properly perform government work," said Frederic M. Levy, a partner at McKenna Long & Aldridge who specializes in compliance with government procurement law. He said it was unlikely that an isolated incident would result in a company being prohibited from government contracts.
More than 300 companies or individuals are banned from new federal procurement contracts, according to a database maintained by the General Services Administration. Any agency has the power to initiate the order but it applies government-wide. Reasons a party might be temporarily suspended or banned for a specific period of time include fraud, billing irregularities or felony charges.
The government's right to ban a company from the contracting process is not exercised regularly. After DynCorp employees were terminated from a United Nations program to help rebuild police forces in the Balkans, the company remained eligible to bid on U.S. contracts. And even as a Titan Corp. interpreter at Guantanamo Bay was investigated for allegedly stealing classified information, the company continued to get new contracts, including one to provide linguists to the Abu Ghraib prison.
London told investors that interrogation services accounted for less than 1 percent of the company's business. "There has been no immediate economic impact on CACI as a result of any of these allegations in terms of contracts or ongoing work," he said. "The likelihood of any significant major downside or action against the company, in my opinion at this point, is quite remote, extremely remote."
London urged people not to jump to conclusions before the investigation is complete. Residents of Telford, Pa., population 4,600, where a high school yearbook lists a Steven Stefanowicz as a member of the basketball team, governing council and the student newspaper, expressed similar sentiments yesterday.
"We want proof before we believe somebody could do a thing like that," said Linda Moyer, co-owner of Visions Salon Inc.
Jean and James Campbell, who identified themselves as Stefanowicz's parents, said they were reserving judgment about the accusations about his work in Iraq. "He's 7,000 miles away. How are we supposed to know what's going on?" James Campbell said.
- Anitha Reddy and Ellen McCarthy, Washington Post
publicado por MP às 13:59
