According to the IG, "For contract number FA8903-04-D-8694, Task Order 17, the contractor did not renovate or build any new facilities. However, the contractor had received, as of May 31, 2007, $31.9 million of the $34.2 million total obligated amount."
IraqSlogger has learned that the unnamed contractor in question is Ellis World Alliance Corporation--a spin off of Ellis Environmental Group--which was launched in 2005 apparently to handle Ellis's lucrative ballooning workload in the war zone.
According to the listing of contracts appended to SIGIR's quarterly reports, the $34.2 million was supposed to pay for the building of an Iraqi military installation at Ramadi. MNSTC-I says the project faltered after Iraq's Ministry of Defense was unable to obtain rights to build a military installation on the chosen piece of land.
The IG reports that according to AFCEE officials, the contractor operated a construction camp and procured raw materials for the project. But the IG found that "the cost vouchers submitted by the contractor did not provide support for any materials being procured for the construction project." Further, while the AFCEE officials said that the construction project was ultimately canceled, they didn't provide the IG with any official documentation to prove it.
The report says, "This task order may require litigation for resolution, according to AFCEE officials."
Though Ellis Environmental Group is the prime contractor identified in AFCEE's database, a company representative made effort today to maintain a firewall between his firm and the corporate entity earning the ire of government auditors, responding to inquiry with a simple statement, "The company working in Iraq is Ellis World Alliance and the majority shareholder is Imad Damah."
When pressed to define the relationship between the two businesses, Ellis Environmental's Stephen Brownstein--his liability alarm almost perceptibly ringing--responded in precise legalistic terms, "Ellis Environmental Group novated the contract to Ellis World Alliance Corporation."
Corporations are not generally prone to give away multi-million dollar contracts, but they do regularly form technically distinct legal entities and transfers assets and work in order to minimize potential liability to the parent. Ellis World Alliance Corporation appears to be exactly that kind of spawn.
Its president, Imad Damah, abruptly interrupted a phone conversation when the questioning turned to the nature of the business relationship between the two entities, suddenly realizing he was right in the middle of lunch.
After having a chance to read the IG's comments, Damah later wrote to express regret for being of no assistance to IraqSlogger's investigation, saying, "I am sorry but we can not release any information to the press without the consent of the Public Affairs office at AFCEE."