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Benghazi Middleman Tied To Unaoil Bribery Scandal, Source Told FBI

This is the Benghazi investigation you should actually read.

12/10/2016 11:02 AM AEDT | Updated 26/10/2016 2:51 AM AEDT
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WASHINGTON ― A middleman the State Department relied on to hire unarmed guards at the U.S. facility in Benghazi, Libya, previously worked with a company that’s now at the center of a massive international bribery scandal.

The FBI and law enforcement agencies in at least four other countries are investigating allegations ― first published by The Huffington Post and Fairfax Media ― that a Monaco-based company called Unaoil bribed public officials to secure contracts for major corporations in corruption-prone regions. In Libya, Unaoil partnered with a Tripoli-based businessman named Muhannad Alamir. A former Unaoil employee who served as a confidential source for the FBI told investigators that Unaoil and Alamir bribed Libyan officials. Unaoil and Alamir deny they bribed anyone.

Alamir started working with the State Department in early 2012, less than three years after cutting ties with Unaoil. He provided Blue Mountain Group, the small British security firm that won the Benghazi guard contract, with the license it needed to legally operate in Libya.

The State Department hired Alamir and Blue Mountain to recruit the local unarmed guards who were supposed to secure the perimeter of the Benghazi compound on the night of the Sept. 11, 2012, attack.

The State Department’s Accountability Review Board concluded that Blue Mountain’s performance was “inadequate” and contributed to the deaths of U.S. Ambassador Chris Stevens and three other Americans ― but made no mention of Alamir or his companies, Eclipse and Xpand. The ARB acknowledged that unarmed guards couldn’t be expected to repel an attack, but nonetheless faulted them for failing to warn U.S. personnel.

“No [Blue Mountain] guards were present outside the compound immediately before the attack ensued, although perimeter security was one of their responsibilities, and there is conflicting information as to whether they sounded any alarms prior to fleeing,” the ARB found.

Jason Reed/Reuters
Ambassador Chris Stevens, U.S. Foreign Service officer Sean Smith and CIA contractors Tyrone S. Woods and Glen Doherty were killed in the Sept. 11, 2012, attack in Benghazi.

None of the myriad Republican-led investigations into the Benghazi attack ― and then-Secretary of State Hillary Clinton’s role in the aftermath ― have exposed who Blue Mountain’s local partners were or how they got the job.

Here’s what HuffPost and Fairfax Media found when we investigated: It’s not clear that the State Department knew — or cared — exactly whom Blue Mountain was working with in-country.

Clinton, who’s now the Democratic nominee for president, convinced President Barack Obama to intervene in Libya. The operation was supposed to be a low-cost triumph of what Clinton called “smart power,” in which U.S. airstrikes, diplomacy, and Libyan rebel groups would win a swift victory without the need to involve U.S. ground troops. An invasion wasn’t on the table. Instead, the U.S. led “from behind,” one of Obama’s aides told The New Yorker.

But the problems that beset the State Department’s Benghazi guard contract — and contributed to the deaths of the four Americans at the mission there — highlight the limited options the U.S has when it tries to intervene in an unstable country, such as post-Gaddafi Libya, without committing many of its own personnel. They show just how little due diligence the State Department did before hiring a key element of the security force for the Benghazi facility. And they point to the flaws in a 1990 law that required the department to choose the lowest-cost guards “technically acceptable” — even in dangerous regions.

No [Blue Mountain] guards were present outside the compound immediately before the attack ensued, although perimeter security was one of their responsibilities. State Department's Accountability Review Board

This story comes out of a broader HuffPost investigation of international bribery. In March, HuffPost and Fairfax Media, drawing on over 100,000 of Unaoil’s internal emails, revealed the company’s habit of bribing foreign officials to secure contracts for its clients.

Unaoil has denied the allegations but declined to answer specific questions for this story. Alamir wasn’t aware of Unaoil’s “alleged bribery business model” when he worked with the company, he said in a phone interview. “I never took part in any such schemes,” he added.

Unaoil and Alamir started working together in 2008, when Unaoil entered into a joint venture with Eclipse. Unaoil executives were initially attracted to Alamir because they believed he had ties to the regime of Libyan dictator Muammar Gaddafi.

The key strength of Muhannad is that he has Aisa [Basher] working for him (who takes 50% of the gross profit of all business generated) whose uncle is Abdul Rahman Kafar, a close confidant of Saif’s,” a Unaoil employee wrote in the minutes for an internal December 2008 meeting. “Saif” referred to Saif Gaddafi, the dictator’s son and heir apparent, who exercised enormous power over the disposition of Libyan oil contracts.

But Alamir downplays any ties to the ousted regime. “Mr. Basher acted as a consultant from time to time in conducting business in Libya, but he was never on my payroll,” he told HuffPost. “If Unaoil thought they were going to get big contracts because of him, they were going to be disappointed.”

Bribery facilitated by local operators was commonplace under Gaddafi’s regime. “Most of these companies are run by families or militia groups,” said David Mack, a former U.S. ambassador to Libya who was based in Benghazi in the 1970s. “They are basically general purpose companies that trade on the degree of their relationship with the government or its contact rather than on any great track record in terms of providing a specific kind of industrial service.”

At least some of Unaoil’s clients seemed to think that the role of Unaoil and Eclipse in Libya was to pay bribes on their behalf.

“What we are curious about is to what type of Baksheesh is needed to present to these men in order to get work started,” Kelsey Kalinski, then-president of Canadian fracking firm Canuck Completions, wrote to Alamir in a December 2008 email. “I believe this is common practice in Libya, but we are not sure how to handle this. Is this something that needs to be done after work hours one on one? A added value amount to the ticket for them, or a flat fee a month, we are not sure. What are your thoughts on this?”

“I dont know what [he] means by bakhsheesh,” Saman Ahsani, Unaoil’s chief operating officer and allegedly a key figure in its bribery efforts in other countries, wrote to Alamir and two Unaoil employees the next day after seeing the email. “May I remind everybody of our Group’s code of conduct and zero tolerance of any facilitation activities. He needs a talking to.”

What we are curious about is to what type of Baksheesh is needed to present to these men in order to get work started. Business executive Kelsey Kalinski in an email to Muhannad Alamir

It’s not clear whether Ahsani ever responded to Kalinski directly, and Kalinski did not return a request for comment. But Alamir said he never responded to Kalinski’s email. “I completely ignored his baksheesh comment, because that is not the way we do business,” he said.

Unaoil ended its partnership with Eclipse in 2009. “I am pure fed up with these deceiving guys,” Ata Ahsani, Unaoil’s founder, wrote in an October 2009 email to two of his sons, who are executives at the company. “Let us get the best deal possible, noting our expenses ... and say goodbye.”

“I sincerely have no idea what deception they are referring to,” Alamir told HuffPost, adding that he returned Unaoil’s initial investment money when they split up. “I don’t think business developed fast enough for them. Maybe we’re just too small for them.”

Less than three years after that split, the State Department needed local guards in Benghazi. Department officials didn’t seem bothered by — or even necessarily interested in — the history of Blue Mountain’s partners in Libya. Presented with detailed questions for this story, the department wouldn’t say whether it knew about Eclipse’s work with Unaoil or its supposed connections to Gaddafi. Nor would it say whether the contracting process included any vetting of Blue Mountain’s local partners.

You either didn’t have any people there at all, or you invade and occupy Libya against their will and set yourself up for the kind of thing that happened in Iraq. Former Ambassador David Mack

Part of the problem was that the State Department had very few options. U.S. troops weren’t welcome in Libya, and America’s role in that country was designed to be low-profile and low-cost. Without the option of U.S. Marines guarding the Benghazi compound ― as is the case in some conflict zones ― the department relied on local unarmed guards to patrol the building’s perimeter and serve as a first-warning system.

“The same people providing security were the ones who import refrigerators for other clients,” said Mack, the former ambassador, describing the options for locally hired security firms.

“All the discussion that’s taken place about why didn’t we have more security there ― it’s really beside the point,” Mack said. “You either didn’t have any people there at all, or you invade and occupy Libya against their will and set yourself up for the kind of thing that happened in Iraq.”

State officials also didn’t have much time.

“This was a contract that was slapped together in a hurry,” Jan Visintainer, the State Department contracting officer who oversaw the security contract after it was awarded, testified last year to the House Select Committee on Benghazi. “So it was not in the best of shape.”

She said the full contracting process usually takes 18 months, but “this was solicited in January … and contract performance started on March 1st.” (The publicly released transcript did not include the name of the person testifying, but multiple congressional sources confirmed it was Visintainer. She did not return a request for comment.)

Although Eclipse was Alamir’s main company, he created a new entity, which he called Blue Mountain Libya, to partner with Blue Mountain Group on the Benghazi contract, he told HuffPost. He said he started another company, Xpand, with investors he knew in Jordan and used it to fund Blue Mountain Libya. There’s no publicly available evidence that the State Department ever vetted Alamir or his companies.

U.S. officials didn’t have to pick Blue Mountain Group and Alamir. The State Department’s effort to hire local guards started in January 2012, according to documents obtained by HuffPost, and initially yielded only one bidder: Torres Advanced Enterprise Solutions, a Virginia firm owned and operated by Jerry Torres, a Special Forces veteran. The Torres firm had its own local partner, a Libyan group called Atlas.

In an effort to create a competitive process, State asked for more bids. Torres applied again. But this time, Blue Mountain — which had partnered with Alamir and Eclipse in late 2011 to seek contracts guarding Libyan oil fields — jumped in.

Torres had recruited, trained and managed thousands of armed and unarmed local guards worldwide, including in conflict zones like Iraq and Afghanistan. When it bid on the Benghazi contract, it was also providing local guard services to U.S. embassies in Slovakia, Burundi, Paraguay and Zambia, according to its technical proposal.

Blue Mountain, headed by former Special Forces member and Tough Mudder enthusiast Nigel Thomas, was comparatively unknown. “Prior to taking over that contract, I had not heard of Blue Mountain Group,” Visintainer testified.

“Nobody had ever heard of them. It was headquartered in Wales. It was tiny,” said Charles Tiefer, a law professor at the University of Baltimore who served on the U.S. Commission on Wartime Contracting, which investigated government procurement practices in Iraq and Afghanistan.

As part of the bidding process, Blue Mountain, Torres and Atlas were scheduled to visit the Benghazi mission on Feb. 1, 2012. The State Department pushed the visit back half an hour to accommodate one participant’s flight delay, an internal department email shows. Blue Mountain never showed up, said Brad Owens, who oversaw Torres’ work in Libya.

Brad Owens
Brad Owens (center), then with Torres Advanced Enterprise Solutions, stands with some of the local people he worked with in Libya. The photo was taken after the fall of Tripoli, before Muammar Gaddafi was killed. The gun belonged to one of Gaddafi's sons, Owens said.

A State Department spokeswoman declined to comment on the site visit. Blue Mountain did not respond to a list of questions, including one about the site visit.

But Blue Mountain’s inability to show up didn’t appear to hurt its pitch. What mattered ― apparently far more than Blue Mountain’s credentials or connections — was that the company was the lowest bidder.

At the time, a 1990 law required the State Department to award the contract to the bidder with the “lowest-priced technically acceptable” proposal. Blue Mountain bid around $30,000 less than Torres — about 4.5 percent ― according to contracting documents obtained by HuffPost. So Blue Mountain got the contract. (There’s no evidence that State’s contracting officials at the time thought Torres would do better work.)

Two weeks after the bungled site visit, the department began finalizing a yearlong contract with Blue Mountain to provide unarmed guards, whose main responsibility was to limit access to the Benghazi facility and provide early warning of an attack. (The State Department relied on diplomatic security agents and a small contingent of the February 17 Martyrs Brigade, a poorly trained Libyan militia, for armed protection.) Taxpayers ended up shelling out nearly $800,000 to Blue Mountain for some 50,000 guard hours.

Nobody had ever heard of them. It was headquartered in Wales. It was tiny. Professor Charles Tiefer, speaking of Blue Mountain Group

All the while, Blue Mountain was partnered with Alamir, the same man with whom the now-notorious Unaoil had cut ties two years earlier. Alamir was “not the type” to get a contract like the Benghazi arrangement, one former business associate told HuffPost. “I was shocked.”

Several months after the State Department awarded the contract to Blue Mountain, a U.S. official raised his own concerns about the firm. “The company has lost several security contracts here in Tripoli, including the Corinthian Hotel and Palm City Complex,” Tripoli Acting Regional Security Officer Jairo Saravia wrote to colleagues in June 2012. (Saravia declined to comment.)

The relationship between Alamir and Blue Mountain deteriorated rapidly. By the end of June, Xpand informed the State Department that it wanted to cut Blue Mountain out of the contract and replace it with a Washington-based firm called Cohort International. State officials responded that Blue Mountain and Xpand should resolve the conflict on their own.

On Aug. 20, Blue Mountain told the department it had dissolved the relationship with Xpand. A lawyer claiming to represent Alamir’s firm informed the State Department on Sept. 9 ― two days before the Benghazi attack ― that Blue Mountain was prohibited from using Xpand’s Libyan license going forward.

“We kindly inform you that any use of such license by [Blue Mountain] in Libya shall be illegal and a clear violation of Libyan laws,” wrote the lawyer, whose name was redacted from the State Department email. “We therefore request that the U.S. mission ceases any dealings with [Blue Mountain] if such dealings are based on any form of reliance on such security license.”

Despite the lawyer’s claims, the dissolution agreement between the two firms allowed Blue Mountain to continue relying on Xpand’s license, State Department spokeswoman Elizabeth Trudeau told HuffPost.

Nonetheless, it appears that State officials were considering other options. On Aug. 31, Visintainer, the contracting officer, pulled a Torres employee out of an unrelated meeting and asked if his company was prepared to work in Libya.

“She would not state the reason,” the Torres employee told co-workers in an email obtained by HuffPost. He suspected that either there were problems with the Benghazi contract or a new opportunity had arisen in Tripoli. “I said we could and I would ensure that our arrangements with Atlas remain in effect,” the email continued.

Had we won that bid, Ambassador Stevens would be alive today. Brad Owens, the former Torres Advanced Enterprise Solutions employee

On the day of the Benghazi attack, State officials wrote in internal emails that they felt they had to terminate Blue Mountain’s contract. They planned to hire approximately 20 guards as mission employees “in case [Blue Mountain] was unable to perform the contract services,” Trudeau said.

Before they could act, more than 100 gunmen armed with machine guns and rocket-propelled grenades breached the wall surrounding the Benghazi compound and set fire to the facility. Ambassador Stevens, U.S. Foreign Service officer Sean Smith and CIA contractors Tyrone S. Woods and Glen Doherty were ultimately killed in the attack.

Blue Mountain was “the wrong contractor in the wrong place at the wrong time,” Tiefer said.

Owens, the former Torres employee who oversaw its Libya work, is convinced events would have turned out differently if his company had been in charge of security that day. “Had we won that bid, Ambassador Stevens would be alive today,” he said.

It’s impossible to know whether Owens’ assessment is true.

But Blue Mountain’s poor performance and the small price margin by which it won the job exposes the fatal flaw in “lowest-priced technically acceptable” contracting. “The truth of the matter is you get what you pay for. We’ve seen this over and over again,” said Dov Zakheim, a former undersecretary of defense who served with Tiefer on the U.S. Commission on Wartime Contracting.

“When life and limb are at risk, such as when buying body armor for our troops overseas or barriers for our embassies, I don’t know that ‘lowest-priced technically acceptable’ is the right vehicle,” said Rep. Tammy Duckworth (D-Ill.) during an 11-hour congressional hearing on Benghazi last October.

Former Secretary of State Clinton, the hearing’s star witness, suggested that a working group, including members of key congressional committees, could look to see whether we couldn’t get a little more flexibility into this decision making.”

Pete Marovich/Bloomberg via Getty Images
Hillary Clinton testified in an 11-hour hearing of the House Select Committee on Benghazi.

So far, for all the congressional outrage over the security situation in Benghazi, the 1990 law remains on the books.

Partially in response to the 2012 attack, Congress included language in the past two annual spending bills that temporarily authorized the State Department to award local-guard contracts based on “best value” rather than lowest price. Duckworth supports permanently lifting the lowest-price requirement for such contracts.

But the spending deal with the temporary language expires at the end of December, and there’s no guarantee the exception will make it into next year’s bill. The latest State Department authorization bill includes a permanent lifting of the lowest-price requirement ― but the department can operate without a new authorization and Congress often neglects to pass one.

State Department officials declined to comment on how much the department had known about Eclipse and Xpand. But if staffers had been aware of Alamir’s past ties to Unaoil, a company that relied on bribery to get work, it’s unlikely that Blue Mountain would have received the contract.

There is now widespread agreement, including at the State Department, that security arrangements at the Benghazi facility were insufficient. The department’s reliance on unarmed Blue Mountain guards and “poorly skilled” February 17 Martyrs Brigade members for protection “was misplaced,” the Accountability Review Board found.

Despite the damning internal review and seven prior congressional probes, House Republicans voted overwhelmingly in 2014 to establish a special committee to further investigate the 2012 attack. Two years and $7 million later, the committee released an 800-page report. Democrats dismissed it as a partisan attack on Clinton, by then their expected presidential nominee.

The report echoed earlier criticisms of security lapses, but revealed little substantive information about the contracting process that contributed to the problem. The Benghazi committee report mentioned Blue Mountain 12 times. Alamir, Eclipse and Xpand weren’t mentioned once.

Laura Barron-Lopez contributed reporting. 

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