Dodging an Ethical Dilemma
Buddy, can you spare a million? You can?
Oh, well, never mind. Don’t need it after all.
That’s essentially what happened when a $3 billion-a-year company with a dark background of waste, environmental abuse, and complicity in human sex trafficking went looking for a tax abatement to increase its corporate footprint at Alliance Airport.
DynCorp International maintains an office with about 1,000 employees at Alliance and sends tens of thousands of other workers to overseas locales.
Last month city officials revealed that DynCorp was considering moving its Virginia-based headquarters and an additional 100 employees to Fort Worth in exchange for a tax abatement of almost $1 million over 10 years.
Fort Worth officials led by Mayor Betsy Price were eager to comply.
“I believe relocating this headquarters here will be a great thing not only for us but for the airport and everyone,” she said in a pre-council meeting last month after Economic Development Manager Robert Sturns pitched the idea.
None of the city officials mentioned DynCorp’s record. But as it turned out, “everyone” wasn’ton board.
“This is a company I wouldn’t want in my community,” State Rep. Lon Burnam said. “I sure as heck don’t want to be providing them with tax subsidies to keep them here.”
Sturns was planning to make his official recommendation during a city council meeting later this month. Now that won’t be necessary.
DynCorp spokeswoman Ashley Burke said this week that the company is no longer considering the move.
“While we are committed to an ongoing strong presence in Texas, after a detailed analysis, we have decided not to relocate our headquarters to Fort Worth,” she said.
DynCorp is keeping its headquarters in Virginia, but moving from Falls Church to the nearby city of Tysons Corner. The Washington Post quoted DynCorp CEOSteven Gaffney as saying it was advantageous for the company to remain close to Washington, D.C.
“Being part of the herd, being part of the Northern Virginia/D.C. area is important to us, and we’re closer to our customers,” he said.
DynCorp is a private military contractor that sends security teams, mechanics, technical workers, and others to distant and often turbulent places such as Iraq and Afghanistan.
Last week, Washington Business Journal staff writer Daniel J. Sernovitz penned a column speculating that DynCorp might be using Fort Worth as a negotiating tool to get a better deal to stay in Virginia.
He became suspicious after DynCorp went public with its plans for apossible move to Fort Worth. Another Virginia company, Sodexo, had similarly publicized plans to move to another state in 2012 and ended up getting $3.5 million in incentives to stay put, as well as an extended lease at a discount price.
“So why, then, is DynCorp being so public about its prospects?” Sernovitz wrote. “In seven years covering commercial real estate, I’ve found the vast majority of companies considering big headquarters shifts try to keep their search as quiet as possible until a deal is done.”
The longtime real estate writer wouldn’t go so far as to say DynCorp was attempting corporate greenmail to get a better deal, but he told Fort Worth Weekly that “a company coming out in public and saying, ‘Hey, we’re thinking about moving to Fort Worth’ would appear to be a firm trying to leverage public sentiment or at least influence the landlords.”
DynCorp is consolidating four offices in Northern Virginia into a single office at Tysons Corner. That city did not provide tax incentives to the company, but the owner of the empty office building that lured DynCorp to fill 80,000 square feet of space might have provided an enticing offer, Sernovitz said.
Burnam was relieved to hear that his hometown wouldn’t be giving tax breaks to a company that was complicit in sexual slavery about 10 years ago.
“I’m glad they’re not coming here, but I’m sad [that]in the economic development game, local governments get played by corporations all the time,” he said. “This is another example.”
Burnam said he had reached out to every city council member to discuss his reservations about an abatement but had heard back from only four — Gyna Bivins, Kelly Allen Gray, Jungus Jordan, and Dennis Shingleton. All four said they were unaware of DynCorp’s poor track record on human rights issues, Burnam said.
Burnam became involved in anti-slavery legislation in the early 2000s, back when federal law enforcement agencies worked with Fort Worth police to bust a ring of traffickers smuggling Honduran women here to work as prostitutes.
In 2001, the Weekly published its first of several stories on DynCorp employees involved in the sex trade in Bosnia (“To Bosnia With Lust,” Dec. 6, 2001).
Ben Johnston was working for DynCorp as an airplane mechanic in the late 1990s at a U.S. Army base in Bosnia. The country had been torn apartby years of war and human carnage. The United States vowed to help rebuild Bosnia and sent DynCorp employees into conservative Muslim communities to help re-establish safety and ensure that residents’ human rights were observed.
Many of the DynCorp employees were earning close to $100,000 in tax-free salaries while living in a country where locals lived on about $5,000 a year. Some employees lived wild and free, knowing that if they got into trouble they would be reassigned to the United States and escape criminal prosecution in Bosnia. At worst they would be fired.
After two years, Johnston complained to his supervisor about co-workers who were buying underage girls as sex slaves. Teenage girls were promised high-paying jobs at hotels and other businesses in Bosnia, then forced by organized crime operativesinto prostitution. Some were sold to American workers as full-time, live-in sexual companions.
Instead of disciplining the offenders, DynCorp fired Johnston. He sued, and DynCorp responded by assigning a team of attorneys to the case. The Weekly story appeared just days before the trial, which was scheduled for a Fort Worth district court. DynCorp and Johnston settled for an undisclosed amount less than 24 hours before the trial was to begin.
Another employee, Kathryn Bolkovac, was working for DynCorp as a U.N. police officer in Bosnia at about the same time. She complained about DynCorp employees taking part in the sex trade, and she too was fired. A British employment tribunal heard the case, described DynCorp as “callous, spiteful, and vindictive,” and ordered the company to pay Bolkovac about $150,000. She later worked with a couple of film students to create The Whistleblower, a 2010 movie starring Rachel Weisz and Vanessa Redgrave. DynCorp issued a statement back then saying Bolkovac’s allegations were “thoroughly investigated and were aggressively and responsibly addressed.”
Negative news reports continued throughout the 2000s, with DynCorp employees being accused of human rights offenses — roughing up reporters in Haiti, spraying toxic herbicides on crops in Colombia and Ecuador. The United States reportedly spent about $6 billion from 2002 to 2010 with DynCorp to train police officers in Afghanistan. A Senate subcommittee later blasted the training as woefully inadequate.
“Everything that could go wrong here has gone wrong,” Department of Defense Inspector General Gordon S. Heddell was quoted as saying in the Washington Business Journal.
The DynCorp spokeswoman said sex trade accusations and other problems are old news. Beside, she said, they occurred when DynCorp was owned by a “predecessor company.”
Cerberus Capital Management bought the company in 2010 and replaced the chief executive.
“I can tell you that since that time, the company … developed a strict code of ethics and business conduct, which includes a zero tolerance policy on human trafficking; created the position of chief compliance officer; introduced global training programs; and has taken a number of steps to ensure [an] … ethical, successful workplace,” Burke said.
She lauded the company’s approximately 30,000 employees who work around the world, often in harm’s way, to “help secure a better tomorrow.”
But DynCorp has continued to make its way into the headlines in recent years. The Associated Press reported in 2010 on a State Department audit that pointed out questionable spending practices by the company in its $2.5 billion contract to train police forces in Iraq. For instance, the State Department spent about $4.5 million a year to provide security to a small group of U.S. contractors. But the contractors already had a security team, and the DynCorp detail wasn’t necessary.
DynCorp repaid $7.7 million to the Defense Department in 2011 after being accused of defrauding the government.
Burnam finds it difficult to forget how hard DynCorp fought to cover up its egregious behavior, instead attacking the whistleblowers who tried to improve the company’s conduct overseas. Giving tax breaks to such companies feels wrong to him.
“We have so abandoned any sense of morality in the dollar chase,” he said.