|
House Oversight and Government Reform Committee Chairman Henry Waxman (D-Calif.) on Monday called on three federal agencies to investigate Iraq contractor Blackwater Worldwide. The lawmaker wants the Department of Labor (DOL), the Small Business Administration (SBA) and the IRS to look into the private security firm’s dealings. In a memo to committee members, Waxman laid out the findings of an investigation of the company. He said the probe unveiled three areas in which “Blackwater appears to have improperly exploited [the classification of its ‘employees’ as ‘independent contractors’].” In a letter to DOL Secretary Elaine Chao, Waxman said his committee “has obtained evidence indicating that Blackwater may have improperly sought to avoid compliance with labor standards” by designating its security guards as independent contractors. Similarly, in a letter to SBA Administrator Steven Preston, Waxman asserted that the company used the same designation to “improperly [claim] it was eligible for small business preferences.” Lastly, in a letter to IRS Acting Commissioner Linda Stiff, Waxman said that Blackwater has been withholding taxes by not designating guards as employees. As part of the investigation, Waxman notes that his staff determined that Blackwater’s claims that it does not have a great degree of control over its guards in Iraq and Afghanistan to qualify them as employees “appear to be false.” It is that argument by which Blackwater bases its employment classification. Waxman believes that the company “has avoided paying or withholding up to $50 million in federal taxes by treating its guards as independent contractors rather than employees. “It also appears that Blackwater has received more than $144 million in small-business contracts that may not be justified and has evaded oversight by the Department of Labor,” Waxman stated. Blackwater did not immediately respond to a request for comment. |
