Execs from banned firm still getting Iraq deals

updated 6:43 p.m. ET June 12, 2005

Former executives of Custer Battles — an American firm accused of stealing millions from Iraq reconstruction projects and banned from further government contracts — have continued doing contracting work and have formed new companies to bid on such projects, The Associated Press has learned.

This may or may not be illegal, military officials say; Custer Battles officials deny any wrongdoing.

The new companies (there are at least three) are all headed by Rob Roy Trumble, who previously was operations chief for Custer Battles, according to state records.

The fledgling companies have different names but all are housed in the same office as Custer Battles — Suite 100 on Hammerlund Way in Middletown, R.I., 3,000 square feet on the ground floor of a squat building in an industrial park.

Meanwhile, Custer Battles’ former chief financial officer Joseph Morris, accused of submitting fake invoices to the government, has been working for another American contractor in Iraq, according to interviews.

The military was not aware of either the new companies or Morris’ new employment, a Pentagon official said, speaking only on condition of anonymity. Military investigators would have to decide whether these actions violate the suspension order.

Morris did not return phone messages or e-mail sent to his company and private addresses.

By itself, Custer Battles is already in a great deal of trouble. It is under investigation by the Pentagon for allegedly cheating the U.S. government out of tens of millions during the chaotic months following the Iraq invasion. In September 2004, the military banned Custer Battles and 15 of its subsidiaries and officials, including Morris, from obtaining government contracts while the criminal probe proceeds.

Custer Battles employees have also been accused of firing on unarmed Iraqi civilians, of using fake offshore companies to pad invoices by as much as 400 percent, and of using forgery and fraud to bilk the American government. Two former associates have filed a federal whistle-blower suit, accusing top managers of swindling at least $50 million.

Former Army Rangers Mike Battles and Scott Custer formed a limited liability corporation before the Iraq invasion to seek rebuilding contracts. Battles, a GOP campaign contributor and a former CIA case worker, ran unsuccessfully for Congress in 2002 as a Rhode Island Republican.

The actions of Morris, their chief financial officer, were among the worst, according to the military’s suspension order and the federal lawsuit. The order cites “serious improper conduct” by Morris which required immediate suspension, so he could not be “awarded new public contracts in Iraq and elsewhere.”

But Morris has worked on subsequent reconstruction contracts, for an American firm called Sallyport Global Holdings. Executive John DeBlasio said Morris worked as a contracts consultant “off and on,” for the past six months. “We employed him for that, for his expertise,” DeBlasio said. “He’s got a lot of knowledge about Iraq.”

He didn’t know Morris had been suspended, DeBlasio said.

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