In 2003, Lt. Col. Dominic “Rocky” Baragona was only days away from returning home to Ohio when he was killed in Iraq. The 42-year-old West Point alum was a passenger in a Humvee when a Kuwait & Gulf Link Transport tractor-trailer, working as a U.S. defense contractor, jackknifed and swerved into the Humvee, killing Baragona in the pileup. There is a question as to whether Baragona was wearing a seat belt, but an Army investigation concluded that the KGL driver was at fault.
Pam Baragona is the sister of Rocky Baragona, and her family has honored him by investigating Kuwait & Gulf Link Transport (KGL) to the hilt — “walking the halls of Congress for seven years” to seek accountability. What they recently uncovered was that KGL, fattened beyond imagination by U.S. taxpayers, was working with a militant regime that is hardcore anti-American.
The Baragonas’ self-driven investigation brought them to the U.S. Department of the Treasury on February 3, where they pleaded for a federal investigation after discovering that KGL once had a joint venture with an Iranian government-run shipping company. They asked the Treasury: How did the U.S. government not know that KGL was working with an Iranian company previously charged with violating U.S. and UN sanctions meant to block Iran’s alleged production of nuclear weapons? What’s more, shouldn’t KGL be investigated to the maximum to see what else may be going on in a region called the “Wild West” of U.S. defense contracting?
“We’re not standing on our own soapbox — our soapbox says ‘USA’ on it,” said Pam Baragona. “KGL was doing major business with Iran and we’re giving them billions?”
At the onset of the 2003 Iraq invasion, KGL was a mid-level logistics operation with seven subsidiaries. During the insurgency, KGL grew into a juggernaut by delivering supplies for Coalition troops and removing their trash, winning hundred-million dollar contracts from the Department of Defense (DOD) and subcontracts from Kellogg, Brown & Root, helping to increase its number of subsidiaries to over 30 by 2010. KGL was awarded a four-year $157 million Defense Logistics Agency contract in February.
Another thriving KGL venture is an investment project with Hyde Park Global, a hedge fund company based in Atlanta. KGL has also convinced governments in the Persian Gulf, such as the United Arab Emirates, Egypt, and Iran, to privatize their government-run ports, which Baragona believes will further disable the Department of Defense — and anyone else for that matter — from policing KGL.
In 2010, as they investigated KGL’s drive to privatize ports, the Baragonas soon discovered that one of KGL’s subsidiaries, Combined Shipping Company, had a joint venture with Valfajr Shipping of Iran — 51 percent KGL, 49 percent Valfajr.
Valfajr is an Iranian government-owned subsidiary of the Islamic Republic of Iran Shipping Lines, or IRISL, Iran’s largest shipping line. In 2008, the Treasury had classified both as Specially Designated Nationals (sanctioned company), which blocks their assets and prohibits U.S. citizens from dealing with them.
“IRISL’s actions are part of a broader pattern of deception and fabrication that Iran uses to advance its nuclear and missile programs,” stated the Treasury in a press release.
After finding KGL and IRISL to be shipping cargo bound for Iran, Baragona alerted her Congressional allies, such as Representative Brad Sherman (D-Ca.), who took her complaint to Secretary of Defense Robert Gates. KGL soon announced it was ending business with Valfajr, but told this reporter it wasn’t because of pressure from the Baragonas.
“KGL began to divest its interests on its own initiative after the U.S. government added the Iranian company to the list of sanctioned entities,” said Clifford Zatz, a Washington-based attorney and spokesperson for KGL. “Neither KGL nor the jointly owned company (KGL-Valfarj) engaged in any sanctionable activity. Any claim to the contrary is false and there is no remaining relationship between any KGL entity and this Iranian company.”
Zatz added that even though KGL was indeed linked to Valfajr, there is zero evidence showing KGL may have been running nuclear or ballistic missile parts for Iran — something he says the Army investigators acknowledge.
But Baragona and others say questions linger, and that is why she’s calling for a U.S. government inquiry. She has not seen any certified documents showing that the KGL-Valfajr relationship has been severed. What’s more, when KGL has been challenged in the past for questionable defense contract work, such as the time one of its subsidiaries recruited laborers from India to work in Kuwait but then forced them to work in a dangerous Iraq war zone, KGL went “underground,” Baragona said — meaning KGL divested the embattled subsidiary and reinvested under a different name.
The prospect of corruption is plenty motivating. What’s also driving Baragona, however, is justice for her brother and protection for other Americans working overseas. Two years ago she inspired the Lieutenant Colonel Dominic Baragona Justice for American Heroes Harmed by Contractors Act, which would give families of soldiers the ability to sue foreign defense contractors in U.S. courts. Recently the bill has been re-introduced after being stuck in committee.
Before pushing for the bill, Baragona met in 2005 with President Bush, who personally initiated a debarment inquiry into KGL that potentially could have shut them out of future DOD contracts.
KGL challenged the inquiry, said Baragona, hiring retired U.S. Brigadier Richard Bednar as a liaison to deal with the White House. Bednar, by the way, was a former Army chief debarring official and, essentially, hired by KGL to lobby his former office which investigates charges against defense contractors.
Not long after Bednar was retained by KGL, the White House dropped the inquiry.
“He made that inquiry go away,” claims Baragona.
She believes the DOD is so dependent on KGL to support U.S. troops that KGL has essentially become untouchable.
Defense expert John Pike, who directs the web site GlobalSecurity.org, said if a DOD defense contractor also has joint venture with a company that may have connections to the Iran’s Revolutionary Guard, this is not only foolish but self-destructive: DOD may deny them millions in contracts. The question is, he asks, is the evidence strong enough to show KGL was acting illegally, violating Iran sanctions while working with Valfajr-IRISL?
“If it is illegal, and they [KGL] are doing this surreptitiously, they should be investigated. If what they are doing is not illegal, I can’t complain about it. They have a fiduciary responsibility to their shareholders,” he said.
In the meantime, several members of Congress, after taking heed of the Baragona’s investigations, continue to challenge DOD to keep a close eye on KGL.
Sen. Claire McCaskill (D-Mo.), chairwoman of the Senate Homeland Security and Governmental Affairs Ad Hoc Contracting Oversight Subcommittee, recently called for a government-wide review of KGL and other contractors, to make certain they are in compliance with U.S.-enforced sanctions against Iran.
“Given KGL’s unsatisfactory record of integrity on previous government contracts and the importance of the recent contract award to U.S. military efforts, I have serious concerns regarding KGL’s current compliance with United States laws, regulations, and policies related to Iran,” wrote McCaskill to Defense Secretary Robert Gates.
The Baragonas are currently awaiting the Treasury’s decision to investigate KGL.