Firm run by Iraq war veteran Tim Collins faces US fraud probe into Afghan police training costs
A defence contractor run by Northern Ireland's best-known modern military figure is under criminal investigation by the US government's watchdog against fraud and waste in Afghanistan, it can be revealed.
It can also be revealed that the company founded by Colonel Tim Collins OBE - who is best known for delivering a powerful speech to his men on the eve of the Iraq war - is facing questions over a $176m (£116m) US contract to train Afghan security forces in counterinsurgency.
His firm, New Century Consulting, is the subcontractor in a Pentagon contract held by the US company Jorge Scientific, now known as Imperatis. A financial audit of Imperatis, carried out on behalf of the US Special Inspector General for Afghanistan Reconstruction (Sigar), identified $130m "unsupported" and "questioned" costs paid to New Century, to which most of the work was subcontracted.
John F Sopko, head of Sigar, said in a statement: "This is a classic example of a prime contractor not knowing how its subcontractors are spending hard-earned American taxpayer dollars."
Last night Sigar, a US federal agency, said it had an ongoing criminal investigation involving both New Century and Imperatis. The investigation began before the audit was carried out, and it is not known if they are connected.
Both New Century and Imperatis deny any wrongdoing and disagree with the findings of the audit, which include concerns about the $130m in "unsupported" costs. Col Collins said: "New Century has no knowledge of the criminal investigation which you allege."
Sigar has the job of overseeing reconstruction projects and activities, conducting audits and investigations to "promote efficiency" and "detect and prevent waste, fraud, and abuse".
Auditors tasked by Sigar examined $175,873,361 in expenditure between October 2011 and March 2014 and found that Imperatis "did not retain sufficient supporting documentation for a subcontractor's [New Century Consulting] costs." This amounted to $129,707,328 in "questioned costs" - part of an overall total of $134,552,665 of unsupported costs racked up by Imperatis over its "Legacy East" contract with the Pentagon.
Sigar recommended that US Army Contracting Command should "determine the allowability of and recover, as appropriate, $134,552,665 in questioned costs identified in the report". Its auditors warned of "material weakness and non-compliance" over the documentation held by Imperatis of New Century's costs and said that "the government may have been charged for costs that were unallowable to the Legacy East project".
Under the contract, New Century (NCC) has sent counterinsurgency advisers, many of them British, to Afghanistan, to run what amounts to an intelligence mentoring and training programme for the Afghan National Security Force (ANSF). The aim is to take tactics developed and used during the Troubles in Northern Ireland and apply them in Afghanistan, to help the country's soldiers and police recruit and use informants from within the Taliban.
In a statement yesterday, an Imperatis spokesperson said: "Imperatis and NCC maintain extensive records to evidence the costs incurred. These records were repeatedly offered to the auditors for their inspection, and remain available for review."
Imperatis added: "Throughout performance of the Legacy East contract, NCC provided Imperatis with supporting documentation for every invoice submitted by NCC for payment as required by the terms of the contract."
The company also claimed that the auditors based their findings on a sample of documents and did not seek to extend the sample size.
It added: "We are confident that further audit of the documentation would provide Sigar with complete assurance that all of the expenditures billed to the US government were incurred and claimed in accordance with the Legacy East contract, and in each case comply with all applicable cost principles."
New Century also challenged the results of the audit, insisting it had provided all necessary documentation.
Yesterday, Col Collins said: "New Century was the subcontractor to Legacy East. Apart from that we have no privileged access to the matter mentioned nor have we been approached by the US government to assist or comment on the matter.
"The US government has now contracted directly with New Century to deliver these services based on the excellence of our performance and not least our administration and accounting which have been audited by the USG to their satisfaction."
Col Collins said he was unaware of any criminal investigation, and added: "Sigar's concerns are not with my company."
Lee Hess, division chief of Army Contracting Command, which runs the US Army's outsourcing contracts, also challenged the Sigar audit. Speaking yesterday at the request of New Century, he said that "the financial audit was not complete". He added: "We are engaged with Sigar to try to complete the audit because it wasn't properly completed when it was released."
But last night a Sigar spokesman insisted the audit was complete. Referring to a meeting held last October to discuss the audit, attended by Mr Hess, the Sigar spokesman added: "He was fully aware of the findings and raised no objections."
Whether or not the audit into New Century and Imperatis is complete, it emerged yesterday that both firms are the subjects of a criminal investigation by Sigar.
Referring to the British sub-contractor, a Sigar spokesperson said: "Sigar has an ongoing investigation of the company" and that the investigation began before the audit was carried out. When pressed for details, they said: "The investigation is criminal in nature", but would not elaborate.
It is not known whether the investigation is connected to the issues raised in the recent audit. The investigation "is related to both companies", said the spokesperson.
An Imperatis spokesperson said: "We have not been informed of any criminal investigation, nor do we have knowledge of one."
When approached, a US Department of Defence spokesperson said: "It is the Department's policy to first respond to Sigar on their recommendations before responding to your request."
The Pentagon's Legacy programme is part of a wider effort which has seen billions spent in trying to create an Afghan army and police force capable of fighting the Taliban. But the latest assessments of the Afghan National Security Force, released by Sigar earlier this year, show that only 11 out of 43 units are judged as being "fully capable".
And the US Department of Defence's latest progress report on Afghanistan, released six months ago, admitted: "Within the ANSF, reports of corruption range from Afghan National Police extortion at illegal checkpoints to higher-level corruption in the Afghan security institutions (eg pay-for-position schemes, taking bribes from contractors, and 'land grabbing')."
This comes amid mounting concern over the fate of funds spent in Afghanistan. Last week it emerged that US Department of Defence was unable to provide financial data on $890m spent on emergency reconstruction and humanitarian projects over the past decade.
Last Thursday, Sigar reported that the Afghan government was unable to account for $100m given to help fill a shortfall in its budgets.
Career soldier who catapulted to fame after Iraq speech to troops
Colonel Tim Collins is a charismatic figure best known for an inspirational speech given to the troops under his command shortly before the invasion of Iraq in 2003.
Speaking to 1st Battalion The Royal Irish Regiment, he said: "We go to liberate, not to conquer," and told his troops: "If you are ferocious in battle remember to be magnanimous in victory." Col Collins, dubbed "Nails" by his men, went on to say: "The enemy should be in no doubt that we are his nemesis and that we are bringing about his rightful destruction."
A copy of the speech is said to have hung in the White House's Oval Office.
The Army career of the 54-year-old Queen's University graduate saw him serve in Northern Ireland, the Falklands, Germany, Cyprus, and Gibraltar. He served in the SAS and in 2001 became commanding officer of 1st Battalion Royal Irish. He later received the OBE.
Married with four children, Col Collins retired from the Army in 2004 and two years later co-founded New Century, a security and intelligence contractor based in Guernsey with offices in London and Belfast.
Much of the work New Century does for the US government is modelled on undercover police tactics used in Northern Ireland. New Century's staff includes former members of the RUC Special Branch, as well as ex-British military officers. The company's director of doctrine, standards, audit and training is Dr Norman Baxter, a former RUC detective chief superintendent.