By Jenny Wiggins in New York
Published: June 2 2004 0:33 | Last Updated: June 2 2004 0:33
CACI International, the US contractor whose employees allegedly helped interrogate prisoners in Iraq, could have its credit ratings downgraded if it loses future government contracts as a result of the situation, a credit agency warned on Tuesday.
Standard & Poor's has changed its outlook on the information technology company's BB junk credit rating to negative from stable amid concern that five investigations into the company's work for the Department of Defense in Iraq could find that its employees participated in abusing prisoners.
If the company - which was hired to provided technology services - is found to have violated the government's rules for contractors, it could be barred from future contracts. CACI receives more than 90 per cent of its revenues from government contracts.
Credit analysts are also worried that CACI's business could suffer from negative publicity. Although services in Iraq are only a small part of the company's overall business, analysts said that CACI could develop a bad reputation.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1085944448184Standard & Poor's said that it's putting CACI International's (CAI) debt on review for possible downgrade amid multiple investigations into the company's work for the Defense Department in Iraq, including assisting the Army with prisoner interrogation. See full story. CACI stock rose $1.09, or 2.9 percent, $38.23.
http://www.investors.com/breakingnews.asp?journalid=21452901&brk=1Concern Over Mercenaries’ Role in Iraq Rises With Private Spending
New standards for security escort contracts written by the CPA require contractors to have a copy of the US government's “Rules on the Use of Force,” which provides for “coordination for the use of armed contractors in theatre.” The rules state that private contractors are “responsible for providing immediate aid to civilians that may be injured due to hostile or friendly action,” but the contractor is “responsible for determining the threat situation at hand.” They must also provide more vehicles than under previous contracts by adding “a lead element to clear the route and a trail element to prevent rear attack,” a set of duties usually handled by military personnel, the Washington Post reports.
But newly hired contractors rushing to fill security positions may not be prepared or willing to carry out such tasks, according to some veterans of the security industry. “They lack the experience and the knowledge of how to carry out projects in that type of environment,” Kenn Kurtz, CEO of a US-based security company, told the BBC. “There are many, many companies that are really throwing bodies -- as opposed to well-trained professionals -- at the opportunities,” Kurtz said.
More than 200 US civilian employees, 36 of them working with Halliburton, have died in Iraq, according to the Washington Post. The increased risk of attack, which military sources say is due partly to the slow rebuilding effort and lack of jobs being provided to Iraqis, has some British officials calling for increased oversight of the hiring process for private contractors, the Financial Times reports.
Civilian contractors have also worked as translators and interrogators for the military in Iraq. A Pentagon report has named employees of at least two companies, Virginia-based CACI International and Titan Corp. of California, as possible suspects or witnesses in the torture of Iraqi prisoners at Abu Ghraib prison. The Army has yet to file any criminal charges against individual workers or either of the companies, both of which continue to provide translation and interrogation services, according to a report in Washington Technology, a trade journal for government contractors.
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