U.S. company turned blind eye to wild behavior on Iraq base

The two American investigators felt a sense of foreboding that Sunday as they headed to an emergency meeting with their boss on the Iraqi air base. But they didn't expect to be surrounded by armed guards, disarmed, detained against their will — and fired without explanation.

It was March 12 — less than two months ago. Robert Cole and Kristie King were in Iraq working as investigators for Sallyport Global, a U.S. company that was paid nearly $700 million in federal contracts to secure Balad Air Base, home to a squadron of F-16 fighter jets as part of the U.S.-led coalition to annihilate the Islamic State.

Cole and King had spent more than a year together in Iraq investigating all manner of misconduct at Balad and beyond. They'd uncovered evidence that Sallyport employees were involved in sex trafficking, they said. Staff on base routinely flew in smuggled alcohol in such high volumes that a plane once seesawed on the tarmac under the weight. Rogue militia stole enormous generators off the base using flatbed trucks and a 60-foot crane, driving past Sallyport security guards.

Managers repeatedly shut down Cole and King's investigations and failed to report their findings to the U.S. government that was footing the bill, the investigators said.

Right before they were fired, Cole and King had opened an investigation into allegations of timesheet fraud among Sallyport employees. In a call with Sallyport lawyers, they said, they were advised to keep two sets of books about potential crimes and contract violations.

"One for the government to see and one for the government not to see," King told The Associated Press.

In a statement to the AP, Sallyport said it follows all contracting rules at the base, home to the F-16s that are a key to the fight against the Islamic State.

"Sallyport has a strong record of providing security and life support services in challenging war zones like Iraq and plays a major but unheralded role in the war against ISIS," Chief Operating Officer Matt Stuckart wrote. "The company takes any suggestion of wrongdoing at Balad very seriously."

More than 150 documents obtained by AP, as well as interviews with more than a half-dozen former or current Sallyport employees, show how a contractor ran amok after being hired for lucrative and essential combat support operations. The investigators and other witnesses describe grave security breaches and illegal schemes that went unreported until the government asked about them.

The point behind requiring contractors to employ their own investigators was to limit the waste and corruption that has marred federal security contracting going back to the aftermath of the Sept. 11 attacks.

The Pentagon's own auditors, who were frequently on the base 50 miles north of Baghdad, were not told of the serious problems until early this year, a potential violation of law. The Pentagon auditors' reports, obtained by the AP, detail dozens of more minor infractions. That gap illustrates the limits of U.S. oversight for billions of dollars in contracts run by companies that have cashed in on the fight to protect Americans from extremism.

The Defense Department declined to comment.

The morning of March 12, King had gone to church and was still carrying her Bible when she and Cole walked into the office foyer for the meeting with the boss. To their astonishment, they were immediately surrounded by armed security guards and forced to turn over the 9 mm pistols they both routinely carried on the job.

The boss, David Saffold, informed them they were being fired but wouldn't say why.

"We knew too much," King told AP in an interview at her home in Amarillo, Texas. "They want to cover it up and move on because it's a huge amount of money."

Bodyguard or terrorist?

In 2004, Rob Cole was a retired California police officer and licensed private investigator when he decided to go to Iraq for a series of contracting jobs. Like many U.S. contractors working in hazardous regions, he went because the work paid a lot more than he could make back home.

Americans have been at Balad on and off since 2003.

Sallyport's parent company, Michael Baker International, announced in 2014 its subsidiaries had been awarded $838 million for work on the base.

Cole's first job at Balad was cut short in June 2014, a month after he arrived, when the Islamic State group began sweeping across Iraq and Syria. The extremists ultimately made it to the gates of Balad, which was evacuated.

When the Americans went back, they found a looted base largely under the control of Iranian-backed Shiite militias that were supporting the Iraqi government, according to former employees. A former senior manager told the AP that Sallyport reached an understanding with the militias that they would not enter the flight and residential areas. He declined to be named because he wasn't authorized to discuss the matter and didn't want to be blacklisted from future jobs.

Cole, now 62, returned to Balad in May 2015, as Sallyport was preparing for the arrival of American F-16s sold to the Iraqi government. Sallyport's mission, along with its parent company, was to keep the base operating smoothly, train the Iraqis, and most importantly maintain security on the base, where thousands of Iraqis and hundreds of contractors work.

The federal contract required investigations into potential crimes and violations involving the company's work at Balad. That was Cole and King's assignment. "They wanted someone to be competent enough to process an investigation, if there was a crime, or if someone turned up dead," King said. "The way it was put to me: If someone turned up with a knife in their back, who are you going to call?"

From the start, it was clear that much was awry on the base. Despite the urgency of fighting ISIS, the delivery of the F-16s had been delayed by months amid security concerns. It would be catastrophic if ISIS seized the base and its multimillion-dollar jets.

On July 13, 2015, four F-16s flew in from Arizona, the first of 36 fighter jets that the U.S. planned to deliver. Brett McGurk, then the U.S. deputy envoy for the international coalition against ISIS, hailed the arrival in a tweet.

"After years of preparation & training in the U.S., Iraqi pilots today landed the 1st squadron of Iraqi F16s in #Iraq," he wrote.

The first security breach came in less than 24 hours: A long black skid mark on the tarmac was reported. It stopped about 45 yards from the nose of one of the fighter jets. A truck had plowed through a rope barrier in the "no-go" zone, where lethal force is authorized to protect the planes. For more than 10 minutes, no one even responded as the vehicle drove away, according to reports citing surveillance video.

That turned out not to be a terrorist. But Cole says the out-of-control truck was a harbinger. He noted the lax protection for the F-16s in his report and forwarded it to the chief of security, Steve Asher. Under the requirements of the contract, Cole's report should have then made its way to the Pentagon. But he says Asher kept a lid on the incident.

Three months later, in October 2015, Cole reported another security breach, the theft of a Toyota SUV that Sallyport had assigned to bodyguards to drive VIPs around the base. Cole eventually uncovered a plot by three Iraqi Sallyport staff working with a dangerous Iran-backed militia, known as Kataib Imam Ali.

The Shiite militia was an ongoing headache, politically connected and operating outside the law, with sidelines in theft and gunrunning. It has ties to the leader of the umbrella militia Popular Mobilization Forces, which is on the U.S. list of designated terrorists.

To Cole's astonishment, the prime suspect threatened to join the militia during his interrogation. He was a Sallyport bodyguard. In fact, the investigators later found a photo of him on his Facebook page, dressed in black militia garb and a patch indicating his allegiance to the group.

He is "viewed by the Investigations Unit as a hard-core recruit to become a terrorist who poses a serious threat to all personnel on this base," Cole wrote in another report. The Toyota was recovered within a few days, but Cole was ordered off the case. In an interview with AP, the former senior manager defended the company's order, saying negotiations with the militias were highly sensitive and had to be handled with Iraqi cooperation. Still, the suspect was supposed to be banned from the base, and Cole later saw the man walking around freely.

Gummy bears soaked in vodka

The longer Cole was on the base, the more he suspected that management was turning a blind eye to criminal activity. On the books, Balad is a dry base, where alcohol is restricted. But in reality the booze was everywhere and everyone knew it. Finding out how it got there led to more troubling questions.

A Sallyport employee who worked in the air terminal reported in late 2015 that co-workers were involved in a smuggling scheme. They were bringing in cases and cases of water bottles filled with liquor that they'd sneaked onto planes flying in from Baghdad.

According to investigative documents and people who watched the smuggling in action, three empty suitcases would routinely be loaded onto a flight to Baghdad. Each time, the bags came back with plastic water bottles filled with liquor. When they were unloaded, the bags were not searched but taken directly outside to be picked up — a serious security risk in a war zone.

"You could be putting a bomb in there," said one former employee who witnessed the smuggling. "You've got people just going rogue." He spoke only on condition of anonymity because he didn't want to imperil his new job with a different overseas contractor.

Steve Anderson, who worked on flight logistics, says he was pressured to sign off on faked flight manifests that omitted passenger names and falsified the weight of cargo to cover for the alcohol smuggling and other infractions — a violation of international flight regulations. The planes were getting so weighed down he was worried about flight safety.

"They were playing Russian roulette with the passengers' lives — including mine," Anderson said.

Once, he watched a plane that was being unloaded tip nose-forward on its wheels onto the tarmac because it was so overloaded.

"I could hear the people inside the aircraft yelling. I never seen anything like that in my entire life," he recalled. "It was like a seesaw."

Then out came the telltale bags that he watched get shepherded around security.

When Anderson aired his concerns to management and refused to sign the falsified manifests, his boss said he didn't want to hear about any more problems.

"He said, 'If you don't like the job that you're doing maybe you ought to find somewhere else to work.'"

Anderson went on a medical leave and was told his position had been filled when he sought to return.

Rumors of the alcohol smuggling reached Cole and King separately. Informants told them that flight line staff, who directed airplanes on the runways and handled cargo, were showing up drunk. In one instance they had passed around a bowlful of gummy bears soaked in vodka.

The investigators got a tip that the bootleggers were working out of two hotels in Baghdad.

Thinking they were undercover, King and an Iraqi investigator on the team went to one of the hotels, the al-Burhan, five minutes from Baghdad's airport. She said informants told them the smuggling was run by the hotel manager and a number of Sallyport employees. During their interviews, they discovered an even more alarming scheme.

The hotel had been running a prostitution ring, and Sallyport employees were among the customers, informants said. Four Ethiopian women who had worked as prostitutes at the hotel were later hired in housekeeping by Sallyport, and were still sending money back to a pimp in the al Burhan.

The evidence suggested, the investigators told the AP, that Sallyport managers had either knowingly or unwittingly abetted human trafficking involving vulnerable female immigrants in a war zone, a revelation the company would be required to report to the U.S. government under federal law.

In the hotel's courtyard, a prime smuggling suspect, who was a Sallyport employee, angrily confronted King and said that a senior manager at the headquarters in Virginia, Roy Hernandez, had tipped him off about the investigation.

On Feb. 15, 2016, Cole and King were ordered by Sallyport's Balad program manager, Kim Poole, to shut down the investigations into both the bootlegging and the prostitution on Hernandez's instructions, according to the investigators.

The following day, Sallyport sent out an email to staff warning that they might be audited over trafficking and noting that they were required to report violations. But Stuckart says the prostitution allegations were not substantiated.

"It is absurd to suggest that the company would shut down an inquiry into a matter of such gravity," he said. More than a year later, two of the Ethiopian women were still working on the base, Cole said, and the alcohol smuggling had started back up, according to a report obtained by AP dated May 28, 2016.

"It was mind-blowing"

Late last year, it became clear that little had changed after the earlier security breaches. On Nov. 15, Cole got a report that three large generators had been stolen from the base for a total loss of $1 million.

According to surveillance videos, just before 2 a.m., militia had driven two flatbed trucks and a crane onto the base, driving right past the security gate. Cole estimates the crane, when extended, was at least 60 feet tall. After successfully loading the three generators and partially covering them with burlap, the militia drove off the base unchallenged. The episode lasted three hours.

Cole said they passed within about ten feet of the Sallyport security guard force. "Nobody reported anything. It was a disaster and it was covered up. That is absolutely covered up," he said. "What if the intent was not to steal but to commit a terrorist act?"

According to Sallyport's Stuckart, the theft occurred when the Iraqi base commander "granted local militia members access to the base" and said the generators weren't located in his company's security zone. "Sallyport had no authority to keep these militia members from taking the generators."

It was after that incident that a Defense Department auditor, who normally concerned himself with bin tagging, trash collection and the accounting minutiae of base life, began asking questions.

Cole and King had kept all their reports in an investigative log. They had also flagged the important cases to management and they had assumed that the company informed the government.

It became clear from the auditor's question that he knew nothing about it. "When we finally got the idea that they were hiding all of the stuff from the U.S. government, it was mind-blowing," said King.

By then, clouds were looming for Cole and King. They had begun yet another investigation into timesheet fraud after getting a tip that Sallyport employees were systematically collecting salaries but not working.

They say the company stalled the investigation, ordered every step to be approved by its lawyers and finally told Cole and King in a conference call to keep two sets of books.

The implication for Cole was that they should omit from the government's copy anything that would "be controversial and would reveal any failure or embarrassing detail." The lawyers explained that that information was covered under attorney-client privilege. The two investigators, sitting together on the other end of the call, looked at each other in disbelief and shook their heads.

"We realized right away that that's fraud, probably a crime, and we weren't going to be a part of it," Cole said. Shortly after they notified Sallyport that they wanted to interview managers who were suspects, their boss, Saffold, asked them to come to his office. It was Sunday morning, and King left church early.

At an interview in his family home in Georgia, Cole recalled the fine sand that stuck to his sweat as he walked across the base to the meeting. Saffold ordered armed guards to take their pistols and detain the two at their work stations. King burst into tears, and the guards apparently thought better of restraining her when she said she wanted to bring her Bible back to her quarters, the investigators say.

Cole and King said their termination paperwork was signed by the human resources manager they were investigating as part of the timesheet fraud.

In an interview in Amarillo, Texas, where King has returned to work as a sheriff's deputy, she expressed regrets.

"It hurts me that I had to leave and not correct issues that were occurring, and it hurts me that they want to cover them up," she said. "It's so painful to me, it makes me lose sleep at night. Something's wrong and did not get right."