Waxman seeks 3 federal Blackwater probes

March 10, 2008 at 4:12 PM
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WASHINGTON, March 10 (UPI) -- A U.S. House panel chairman Monday called on three federal agencies to investigate Iraq contractor Blackwater Worldwide.

Rep. Henry Waxman, D-Calif., chairman of House Oversight and Government Reform Committee, asked the Department of Labor, the Small Business Administration and the IRS to examine Blackwater's dealings based on his committee's findings indicating Blackwater may have acted improperly, The Hill reported.

In a letter to Labor Secretary Elaine Chao, Waxman said his committee has evidence indicating Blackwater may have improperly tried to avoid compliance with labor standards by designating its security guards as independent contractors.

In a letter to SBA Administrator Steven Preston, Waxman said the company used the same designation to improperly claim it was eligible for small business preferences.

In his a letter to IRS Acting Commissioner Linda Stiff, Waxman said Blackwater withheld taxes by not designating guards as employees.

Waxman said his staff determined Blackwater's claims it lacks control over its guards in Iraq and Afghanistan to qualify them as employees rang false.

Because of the classification, Waxman said he believed Blackwater avoided paying or withholding up to $50 million in federal taxes and received more than $144 million in small-business contracts that may not be justified.

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