GovernmentExecutive.com is reporting that "the State Department's Directorate of Defense Trade Controls, which is responsible for export controls on some arms, is moving to hit [Blackwater] with what could be millions of dollars in fines," allegedly for shipping weapons to U.S. government-sanctioned police training facilities in Iraq and Jordan.
Apparently the paperwork wasn't in order. "Sources said the foul-up may have been unintentional but left the company unable to properly account for the weapons."
The State Department isn't talking for the record, though the company "has partly acknowledged" inquiries, according to the report.
"Ongoing reviews by the departments of Justice, State and Commerce have highlighted the need for a significant and systems-wide initiative," Blackwater General Counsel Andrew Howell said in an Oct. 9 statement. Citing problems with "export compliance," the firm that day announced a new export compliance committee and vice president of export compliance job.
Spokeswoman Anne Tyrell said Blackwater has "not been informed of an intent to impose a fine," but noted the Directorate of Defense Trade Controls' "resolution of export matters with other significant defense contractors" usually results in fines. "The potential fine depends on the regulatory scheme at issue and the facts of the case," she said.
The company set up an export control panel last month.
Officials would be wise not to read too deeply into many Democrats' longstanding criticisms of the company. Senators John Kerry (D-Mass.) and Jim Webb (D-Va.) say they're OK with Blackwater competing for federal contracts, as long as there's sufficient oversight and accountability. President-Elect Barack Obama has similarly tempered his criticism. Even so, a top Obama aide said earlier this year that the senator would not rule out continuing to retain Blackwater's services. And last July, when he saw Blackwater security professionals up-close during his trip to Afghanistan, Obama admitted that the company was getting unfairly treated.
"Blackwater is getting a bad rap," Obama said. (The photo, on Obama's website, shows the presidential candidate with troops and security during the July trip to Afghanistan.)
Crippling Blackwater with unreasonable fines just might end up hamstringing the new president at a time when he will need everything the company can offer.