Unanswered Questions:
Thinking For Ourselves
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By Margie Burns
A
company that provided security at the World Trade Center, Washington D.C.'s
Dulles International Airport and United Airlines between 1995 and 2001 was
backed by a private Kuwaiti-American investment firm whose records were not
open to full public disclosure, with ties to the Bush family.
Marvin
P. Bush, a younger brother of George W. Bush, was a principal in the company
from 1993 to 2000, when most of the work on the big projects was done. But
White House responses to 9/11 have not publicly disclosed the company's part in
providing security to any of the named facilities.
Public
records indicate that the firm, formerly named Securacom, had Bush on its board
of directors. He was also listed as a significant shareholder. The firm, which
is now named Stratesec, Inc., is located in Sterling, Va., a D.C. suburb, and
emphasizes federal clients. Bush is no longer on the board.
Bush
has not responded to repeated telephoned and emailed requests for comment.
The
American Stock Exchange delisted Stratesec's stock in October 2002. (Securacom
also had a contract to provide security at Los Alamos National Laboratories,
notorious for its security breach.)
According
to its present CEO, Barry McDaniel, the company had an ongoing contract to
handle security at the World Trade Center "up to the day the buildings
fell down." Yet instead of being investigated, the company and companies
involved with it have benefited from legislation pushed by the Bush White House
and rubber-stamped by Congressional Republicans. Stratesec, its backer KuwAm,
and their corporate officers stand to benefit from limitations on liability and
national-security protections from investigation provided in bills since 9/11.
HCC
Insurance Holdings, Inc., a reinsurance corporation on whose board Marvin Bush
sat as director until November 2002, similarly benefits from terrorism
insurance protections. (Bush's first year on the board at HCC coincided with
his last year on the board at Stratesec.) HCC, formerly Houston Casualty
Company, carried some of the insurance for the World Trade Center. It posted a
loss for the quarter after the attacks of Sept. 11 and dropped participation in
worker's compensation as a result. Bush remains an adviser to the chairman and
the Board of Directors, as well as a member of the company's investment
committee.
The
former CEO of Stratesec is Wirt D. Walker III, who is still chairman of the
board. Although he has also been the managing director of KuwAm for several
years, Walker states definitively in phone interviews that there was no
exchange of talent between Stratesec and KuwAm during the WTC and other
projects.
As
Walker put it, "I'm an investment banker." He continued, "We
just owned some stock." The investment company "was not involved in
any way in the work or day-to-day operations" of the security company. He
explained clearly and pleasantly that there was no sharing of information or of
personnel between the two companies.
In
December 2000 -- when the presidential election was determined -- Stratesec
added a Government Division, providing "the same full range of security
systems services as the Commercial Division," in the company's words.
Stratesec now has "an open-ended contract with the General Services
Administration (GSA) and a Blanket Purchase Agreement (BPA) with the agency
that allows the government to purchase materials and services from the Company
without having to go through a full competition."
The
company lists as government clients "the US Army, US Navy, US Air force,
and the Department of Justice," in projects that "often require
state-of-the-art security solutions for classified or high-risk government
sites." In 2000, the US Army accounted for 29% of the company's earned
revenues, or about $6.9 million.
The
White House opposed an independent commission to investigate 9/11 until after
the terrorism insurance protections and protections for security companies had
safely passed Congress. It has also quietly intervened in lawsuits against United
Airlines in New York, brought by relatives of the victims.
Marvin
Bush joined Securacom's Board of Directors in 1993, as part of new management
hired when the company separated from engineering firm Burns and Roe. The new
team was capitalized by KuwAm, the D.C.-based Kuwaiti-American investment
company. Bush also served on the Board of Directors at KuwAm, along with Mishal
Yousef Saud al-Sabah, Chairman of KuwAm and also a Director on Securacom's
(Stratesec's) board.
The
World Trade Center and the Metropolitan Washington Airport Authority -- which
operates Dulles -- were two of Securacom's three biggest clients in 1996 and
1997. (The third was MCI, now WorldCom.)
Stratesec
(Securacom) differs from other security companies which separate the function
of consultant from that of service provider. The company defines itself as a
"single-source" provider of "end-to-end" security services,
including everything from diagnosis of existing systems to hiring
subcontractors to installing video and electronic equipment. It also provides
armored vehicles and security guards.
When,
following the 1993 bombing of the World Trade Center, the Port Authority of New
York and New Jersey began its multi-million-dollar, multiyear revamping of
security in and around the Twin Towers and Buildings 4 and 5, Securacom was
among numerous contractors hired in the upgrade.
The
companies doing security jobs received due mention in print, in security
industry publications and elsewhere. The board membership of a son of former
President Bush went unnoticed, at least in print.
According
to SEC filings, Securacom/Stratesec acquired the $8.3 million World Trade
Center contract in October 1996. The project generated 28% of over-all revenues
for the company in 1996, part of increased over-all revenues. SEC filings
indicate that revenues from the World Trade Center project commenced in 1996 at
$1.6 million, peaked in 1997 at $6.6 million ($4.1 million in the first half),
and diminished in 1998 to less than $1 million.
A
key concept in security is "access control." In hindsight, as the
security industry's reportage on the WTC precautions makes clear, further
attacks would have to come from the air. Unfortunately, such detailed reports
did not convey that message at home. Nobody thought outside the box enough to
deduce that a jumbo jet could overcome even the extraordinary controls at the
World Trade Center. With 20-20 hindsight, it is obvious that the intricate
procedures in the building's lobbies and on its perimeters were like trying to
stop a 767 with ID badges.
Barry
McDaniel, CEO of the company since January 2002, declines on security grounds
to give specific details about work the company did at the World Trade Center.
According to McDaniel, the contract was ongoing (a "completion contract"),
and "not quite completed when the Center went down." The company
designed a system, but - as he points out -- obviously that "didn't have
anything to do with planes flying into buildings."
The
key words "access control" are less feeble and irrelevant, however,
in regard to airports and airlines. Had the hijackers failed on the ground,
they would have lost their airborne weapon.
Two
of the hijacked planes took off from Dulles Airport, and the other two were
United Airlines planes.
McDaniel
makes clear that Securacom's contract for UAL was a single-site contract, in
Indianapolis (at least five years ago), and not local. The work done, finished
several years before he joined the board, was not in or near D.C.
Dulles
Airport, obviously, is another matter. Dulles is regarded as "absolutely a
sensitive airport," according to security consultant Wayne Black, head of
a Florida-based security firm, given its location, size, and the number of
international carriers it serves.
Black
has not heard of Stratesec, but responds that for one company to handle
security for both airports and airlines is somewhat unusual. It is also
delicate for a security firm serving international facilities to be so
interlinked with a foreign-owned company: "Somebody knew somebody,"
he suggested, or the contract would have been more closely scrutinized.
As
Black points out, "when you [a company] have a security contract, you know
the inner workings of everything." And if another company is linked with
the security company, then "What's on your computer is on their
computer."
In
this context, retired FAA special agent Brian F. Sullivan is angry, and
eloquent. "You can have all the security systems in the world, but the
people behind the systems make the difference." The Bush administration,
says Sullivan, "spit in the faces" of the victims' families, in
pushing for last-minute protections for foreign-owned security companies (in
the Homeland Security bill). Sullivan points out that "not one single
person" in an upper-level position has lost a job as a result of 9/11,
"not in the FBI, CIA, FAA, DOT." As he sums up, "No
accountability, no progress."
Stratesec
got its first preventive maintenance contract with Dulles Airport in 1995,
generating $0.3 million that year. The Dulles project generated revenue of $1.2
million in 1996, $2.5 million in 1997, and $2.3 million in 1998, accounting for
22% of the company's revenues in 1996 and in 1998
Like
other specialists, Professor Dale B. Oderman, in the Aviation Technology
Department at Purdue, concurs that Dulles "was considered a very high
profile target" as the primary international airport near the nation's
capital. It serves as port of entry to about 15 international airlines as well
as serving eight of the 11 major US passenger carriers. In comparison, Reagan
Airport hosts only Air Canada from outside the US, and Baltimore-Washington
Airport hosts about a half dozen."
Stratesec
did not handle screening of passengers at Dulles. According to a contracting
official for the Metropolitan Washington Airport Authority, its three-year
contract was for maintenance of security systems: It maintained the airfield
access system, the CCTV (closed circuit television) system, and the electronic
badging system.
In
1997, the World Trade Center and Dulles accounted for 55% and 20% of the
company's earned revenues, respectively. The WTC and Dulles projects figured
largely in both Securacom's growing revenues from 1995 to 1997 and its
decreases from 1997 to 1998.
Stratesec
continued to refer to "New York City's World Trade Center" as a
former client through April 2001. It listed Dulles Airport and United Airlines
as former clients through April 2002.
As
with the World Trade Center -- which also had electronic badging, security
gates, and CCTV -- the ultimate problem with Dulles' security controls was not
the controls themselves, but that they could be sidestepped. All the hijackers
had to do was buy a ticket. As former FAA special agent Sullivan comments,
"If they [attackers] knew about the security system, they knew how to
bypass it."
One
obvious question for investigators is how much potential hijackers could have
known about the security system.
From
1993 to 1999, KuwAm -- the Kuwait-American Corporation -- held a large and
often controlling interest in Securacom. In 1996, KuwAm Corporation owned 90%
of the company, either directly or through partnerships like one called Special
Situations Investment Holdings and another called "Fifth Floor Company for
General Trading and Contracting." KuwAm owned 31% of Securacom in 1998 and
47% of Stratesec in 1999. It currently holds only about 205,000 shares of
Stratesec; Walker, KuwAm's managing director, holds 650,000.
Marvin
Bush was reelected annually to Securacom's board of directors from 1993 through
1999. His final reelection was on May 25, 1999, for July 1999 to June 2000.
Throughout, he also served on the company's Audit Committee and Compensation
Committee, and his stock holdings grew during the period. Directors had options
to purchase 25,000 shares of stock annually. In 1996, Bush acquired 53,000
shares at 52 cents per share. Shares in the 1997 IPO sold at $8.50. Records
since 2000 no longer list Bush as a shareholder.
Stratesec
and KuwAm were and still are intertwined at the top. Walker, while a principal
at Stratesec (a director since 1987, chairman of the board since 1992, and
formerly CEO since 1999), was also on the board of directors at KuwAm and is
still managing director (both since 1982). Mishal Yousef Saud Al Sabah, the
chairman at KuwAm, also served on Stratesec's board from 1991 to 2001. Walker
and Al Sabah had major stock holdings in each other's companies. Their sons
also held shares in both companies.
Stratesec,
which currently lists 45 employees, hired KuwAm for corporate secretarial
services in 2002, at $2,500 per month.
For
several years, Walker has also been chairman and CEO of an aircraft company,
Aviation General, about 70% owned by KuwAm.
The
Saudi Arabian embassy, the Kuwait embassy, and KuwAm have office suites in the
Watergate complex, where both Stratesec and Aviation General held their annual
shareholders' meetings in 1999, 2000, and 2001. Bush was reelected to his
annual board position there, across the hall from a Saudi Arabian Airlines
office. (This year, the companies' shareholders meetings switched to the fifth
floor, in space also held by Saudis and Kuwaitis.)
Incidentally,
Riggs Bank -- where the Saudi Princess Al-Faisal had her checking account --
also has a large office in the Watergate. Given that Jonathan Bush, the president's
uncle, is a Riggs executive, it is difficult to understand any obstacle for US
authorities pursuing the recently reported "Saudi money trail." The
princess's charitable activities were processed through Riggs, but attention
focused on the Saudis seems not to extend to the US bank they used.
McDaniel
was asked in a brief telephone interview whether FBI or other agents have
questioned him or others at Stratesec about the company's security work in
connection with 9/11. The concise answer: "No." Asked the same
question regarding KuwAm, Walker declines to comment further, and refers to the
public record.
According
to a spokesman in an FBI regional office, by October 2001, "the
investigation [of 9/11] is being coordinated at the national level directly from
the White House." If so, you'd think that an administration that could
seriously consider infiltrating American mosques would ask a few questions
closer to home.
But
the suggestion is inescapable that any investigation into security arrangements
preceding 9/11, at some of the nation's most sensitive facilities, has been
impeded to this day by narrowly political concerns in the White House.
"Mayberry Machiavellis" strike again: Rather than face possible
embarrassment at disclosing Bush family interests in the security industry,
Team Bush has stonewalled any concession to the public interest, statesmanship
or even common sense. Every public statement from the White House seems
designed to direct public attention toward Middle Easterners and away from Americans
doing business with them -- at least if their name is Bush.
From
a purely business or political perspective, stonewalling might be
understandable. But from the perspective of the victims' families or of the
public, it looks odd. This is the White House we're talking about. In all the
public expressions of sorrow or pity for the victims, it would have been
natural, surely, for the president to say something along the lines of
"Why, my own brother was part of that business. He and all of us are heartbroken"
etc etc. But such comment has not been forthcoming. He might even have said,
"My own relatives, if they had any transactions that might have any
connection at all with the individuals involved, will turn over every
record" etc. But that statement has also not been uttered.
***********
Margie Burns is a Texas native who now writes from Washington, D.C.
Email margie.burns@verizon.net.
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