DynCorp

DynCorp International Inc

Company type	Public (NYSE: DCP)
Industry	private military contractor, aircraft maintenance
Founded	1946
Defunct	23 November 2020
Headquarters	Falls Church, VA, USA
Area served	Worldwide
Key people	Robert B. McKeon (Chairman) William L. Ballhaus (President) & (CEO)
Products	Drug eradication, law enforcement training, logistics, security services; maintenance for aircraft, support equipment, and weapons systems
Revenue	US$ 2.139 billion (2008)
Operating income	US$ 120.00 million (2008)
Net income	US$ 47.95 million (2008)
Total assets	US$ 1.402 billion (2008)
Total equity	US$ 424.29 million (2008)
Number of employees	16,800 (2009)
Parent	Cerberus Capital Management
Website	Dyn-intl.com

DynCorp International is a United States-based private military company (PMC) and aircraft maintenance company. DynCorp receives more than 96 percent of its $2 billion in annual revenues from the federal government.

The corporate headquarters are in Falls Church, Virginia. However, substantially all of the company's contracts are managed out of its office at Alliance Airport in Fort Worth, Texas.

The company has provided teams for the U.S. military in major theaters, such as Bolivia, Bosnia, Somalia, Angola, Haiti, Colombia, Kosovo and Kuwait. DynCorp International also provided much of the security for Afghan interim president Hamid Karzai's presidential guard and trains much of Afghanistan's and Iraq's fledgling police force. DynCorp was also hired to assist recovery in Louisiana and neighboring areas after Hurricane Katrina. Recently, Dyncorp and the Department of State have been criticized for not properly accounting for $1.2 billion in contract task orders authorized by the State Department to be used to train Iraqi police.

History

DynCorp traces its origins from two companies formed in 1946: California Eastern Airways, an air freight business and Land-Air Inc, an aircraft maintenance company. Two years after being organized, California Eastern Airways—- despite emerging as the second largest independent air carrier—- filed for bankruptcy in May 1948.

Aviation Background

Land-Air, Inc., which is the predecessor to today's DynCorp International's Maintenance and Technical Support Services (MTSS) strategic business unit, reached a major milestone in 1951, when it was awarded the first Contract Field Teams (CFT) contract by the Air Force Logistics Command (AFLC). Contract field teams provide mission support and depot-level repair to U.S. military aircraft and weapons systems worldwide. This was a major innovation in aviation services. Under the Contract Field Teams system, teams of aviation-maintenance experts are deployed anywhere around the world to provide fast, flexible maintenance services to aircraft at their home bases.

DynCorp International and its predecessors have provided services under the CFT program continuously since being awarded that first contract, having been awarded one CFT contract in every round of recompetition including the most recent round which began in October 2008.

Name changes

From 1951 to 2004 the company went through a number of name changes from Land-Air, Inc. in 1951 to California Eastern Airways, Inc., and in 1962, California Eastern Aviation, Inc., changed its name to Dynalectron Corporation, and then in 1987, Dynalectron changed its name to DynCorp. In December 2000, DynCorp formed DynCorp International LLC, and transferred to it all of its international business to this entity while DynCorp Technical Services LLC continued to perform DynCorp’s domestic contracts. In March 2003, DynCorp and its subsidiaries were acquired by Computer Sciences Corporation (CSC) for approximately US$914 million. Less than two years later, CSC announced the sale of three units of the business to a private equity firm, Veritas Capital, for US$850 million. The units sold were DynCorp International, DynMarine and certain DynCorp Technical Services contracts.. In December 2004, DynCorp and CSC entered into an agreement to sell their equity interests in DynCorp International LLC, including its subsidiaries, Dyn Marine Services LLC, and DTS Aviation Services LLC, to DynCorp International Inc. In 2006, DynCorp International Inc went public on the New York Stock Exchange under the symbol DCP

Recent Leadership Changes

Stephen J. Cannon, age 54, was the President and Chief Executive Officer of DynCorp International LLC from February 2005 to July 2006 and President from January 2000 to February 2005. Mr. Cannon worked at DynCorp for approximately 25 years. Herbert J. Lanese, age 63, served as the President and Chief Executive Officer of DynCorp International LLC, from July 2006 to May 2008 and has continued to be a director since March 2006. William L. Ballhaus, age 40, has been the President & Chief Executive Officer and a director since May 19, 2008.

Economic Downturn of 2008 and 2009

DynCorp has been having problems with too much overhead costs and not enough new business. William Ballhaus has a strong focus on maintaining a lean instrastructure. It was expected that the Army INSCOM linguistic program and the Army LOGCAP program would bring in major new revenue and work, but this did not happen. Beginning in mid-year 2008 DynCorp began laying off people. Then on September 10, 2008 they had their largest Reduction In Force with over 100 overhead positions being eliminated. This was repeated with almost 100 more in January over a couple of day period.

Acquisition

On April 12, 2010 DynCorp announced a conditional deal to be acquired by private equity investment firm Cerberus Capital Management at a price of $17.55 per share ($1 Billion).

Major Programs

• Contract Field Teams (CFT; DynCorp has held one contract on every round of competition since receiving the first CFT contract in 1951)
• LOGCAP (DynCorp won the LOGCAP II contract and is one of three contract holders on the current LOGCAP IV contract)

Controversies

Lawsuit

In August 2009, Forbes reported a lawsuit brought by former Dyncorp executive Thomas Campbell against Dyncorp Chairman Robert McKeon. Campbell, formerly McKeon's closest friend as well as business partner, alleges that McKeon forced him out of the Dyncorp deal at the last minute in order to prevent him from getting any of the huge payout. McKeon allegedly made hundreds of millions of dollars while Campbell was left out altogether. http://www.forbes.com/forbes/2009/0803/iraq-afghanistan-obama-wall-street-goes-to-war.html

Report from the Special Inspector General for Iraq Reconstruction

A January 2010 report by the SIGIA assessed that oversight of Dyncorp police training contracts by DOS Bureau of International Narcotics and Law Enforcement Affairs found that INL exhibited weak oversight of the Dyncorp task orders for support of the Iraqi police training program. It found that INL lacks sufficient resources and controls to adequately manage the task orders with DynCorp. As a result, more than $2.5 billion in U.S. funds were vulnerable to waste and fraud. http://www.sigir.mil/reports/quarterlyreports/Jan10/pdf/Report_-_January_2010.pdf#view=fit

New York Times on Possible Conflict-of-Interests

On November 29, 2008, a lengthy article in The New York Times questioned the seeming conflict-of-interest in the hiring by Veritas capital, holding company for Dyncorp, of General Barry McCaffrey, who allegedly could aid them in their procurement of military contracts. http://www.nytimes.com/2008/11/30/washington/30general.html?pagewanted=1&sq=dyncorp international&st=nyt&scp=14

Inspector General's Office Begins Fraud Inquiry

The New York Times reported on February 1, 2007 that the Special Inspector General for Iraq Reconstruction found that Dyncorp seemed to act almost independently of its reporting officers at the Department of State, billing the United States for millions of dollars of work that were not authorized and beginning other jobs without a go-ahead. According to the report, the findings of misconduct against Dyncorp on a $188-million job to buy weapons for, and build quarters for, the Iraqi police were serious enough to warrant a fraud inquiry. http://www.nytimes.com/2007/02/01/world/middleeast/01reconstruction.html?_r=1&scp=47&sq=dyncorp+international&st=nyt

Pakistan

Pakistan Interior Minister Rehman Malik that DynCorp was working in Pakistan for capacity-building and training of police and paramilitary Frontier Corps for which the United States had granted $46 million, besides help from Japan, France and Australia for the purpose.

Colombia

See also: Colombian armed conflict and Plan Colombia

Since the late 1990s, the United States has paid private contractors an estimated $1.2 billion, both to eradicate coca crops and to assist the Colombian army put down rebels that use the illegal drug trade to finance their insurgency.

DynCorp has been awarded under competitive bid more of this business than any other company. They help Colombia's national police destroy coca crops with aerial defoliants. Although Colombia remains a major drug producing country, the Government of Colombia (GOC) is completely committed to fighting the production and trade in illicit drugs. Colombia had a sixth consecutive record year for illicit crop eradication and continued its aggressive interdiction programs. In 2006, the U.S.-supported Colombian National Police (CNP) Anti-Narcotics Directorate (DIRAN) sprayed 171,613 hectares of illicit coca and opium poppy, and manual eradication accounted for the destruction of an additional 42,111 hectares of coca and 1,697 hectares of poppy. Colombia is a party to the 1988 UN Drug Convention. According to experts familiar with this operation, the company's role goes far beyond crop spraying. DynCorp employees "are engaged in combatant roles, fighting in counterinsurgency operations against the Colombian rebel groups," says Peter W. Singer, a foreign-policy fellow at the Brookings Institution and author of Corporate Warriors. "Indeed, the DynCorp personnel have a local reputation for being both arrogant and far too willing to get ‘wet,' going out on frequent combat missions and engaging in firefights." DynCorp has not responded to the allegation.

In this regard, concerning the company's activities and alleged abuses in Colombia, an extensive accusation was presented against DynCorp at the Hearing on Biodiversity of the Permanent Peoples' Tribunal, session on Colombia, which took place at the Cacarica Humanitarian Zone from February 24 to 27, 2007.

The deaths of three DynCorp employees, whose helicopter was shot down in 1992 during an anti-drug mission in Peru, received a brief 113 word mention in the New York Times.

Iraq

In February 2007 federal auditors cited DynCorp for wasting millions on projects, including building an unapproved, Olympic-sized swimming pool at the behest of Iraqi police officials.

On October 11, 2007, a DynCorp security guard in a US State Department convoy killed a taxi driver in Baghdad. According to several witnesses, the taxi did not pose a threat to the security of the convoy.

A US government audit report of October 2007 revealed that $1.3 billion was spent on a contract with DynCorp for training Iraqi police. The auditors stated that the program was mismanaged to such an extent that they were unable to determine how the money was spent.

Gaza strip

On October 15, 2003, three DynCorp employees were killed in a bombing in the Gaza Strip. They were serving as security guards for American diplomats, supplementing the Diplomatic Security Service.

Involvement in trafficking of child sex slaves

According to whistleblower Ben Johnston, a former aircraft mechanic who worked for the company in Bosnia, Dyncorp employees and supervisors engaged in sex with 12 to 15 year old children, and sold them to each other as slaves. Ben Johnston ended up fired, forcing him into protective custody. According to Johnston, none of the girls were from Bosnia itself, but were imported by Dyncorp from Russia, Romania and other places.

On June 2, 2000, members of the 48th Military Police Detachment conducted a sting on the DynCorp hangar at Comanche Base Camp, one of two U.S. bases in Bosnia, and all DynCorp personnel were detained for questioning. CID spent several weeks working the investigation and the results appear to support Johnston's allegations. For example, according to DynCorp employee Kevin Werner's sworn statement to CID, "during my last six months I have come to know a man we call 'Debeli,' which is Bosnian for fat boy. He is the operator of a nightclub by the name of Harley's that offers prostitution. Women are sold hourly, nightly or permanently."

Johnston is not the only DynCorp employee to blow the whistle and sue the billion-dollar government contractor. Kathryn Bolkovac, a U.N. International Police Force monitor hired by the U.S. company on another U.N.-related contract, has filed a lawsuit in Great Britain against DynCorp for wrongful termination. DynCorp had a $15 million contract to hire and train police officers for duty in Bosnia at the time she reported such officers were paying for prostitutes and participating in sex-trafficking. Many of these were forced to resign under suspicion of illegal activity, but none have been prosecuted, as they also enjoy immunity from prosecution in Bosnia.

DynCorp has admitted it fired five employees for similar illegal activities prior to Johnston's charges. In the summer of 2005, the United States Defense department drafted a proposal to prohibit defense contractor involvement in human trafficking for forced prostitution and labor. Several defense contractors, among others Dyncorp, stalled the establishment of a final proposal that would formally prohibit defense contractor involvement in these activities.

DynCorp torture lawsuit (re Colombia & Ecuador)

In September 2001, a group of Ecuadorian farmers filed a class-action lawsuit against DynCorp under the Alien Tort Claims Act (ATCA), the Torture Victim Protection Act and state law claims in US federal court in the District of Columbia. The plaintiffs claimed that from January to February 2001 DynCorp sprayed the herbicide almost daily, in a reckless manner, causing severe health problems (high fever, vomiting, diarrhea, dermatological problems) and the destruction of food crops and livestock of approximately 10,000 residents of the border region. In addition, the plaintiffs alleged that the toxicity of the fumigant caused the deaths of four infants in this region. The plaintiffs alleged under ATCA that DynCorp’s intensive aerial spraying of a toxic fumigant amounted to torture, a crime against humanity and cultural genocide. DynCorp moved to dismiss the case, arguing that it raised nonjusticiable questions of foreign and national security policy. DynCorp also argued that the plaintiffs’ claims of violations of international law were based on actions by DynCorp that were expressly authorised by the US Congress under Plan Colombia. In May 2007, the district court granted DynCorp’s motion to dismiss the plaintiffs’ claims under the Torture Victim Protection Act, but ordered that the balance of the plaintiffs’ claims should stand. The court found that the case did not raise nonjusticiable questions because the action did not call into question US foreign policy in Colombia. The court also found that the claims raised by the plaintiffs were outside the scope of the Congressional authorisation of DynCorp’s contract.

In December 2006, 1660 citizens of the Ecuadorian provinces of Esmeraldas and Sucumbios who were not part of the class-action lawsuit described above filed a separate lawsuit against DynCorp in US federal court in Florida. The provinces of Carchi, Esmeraldas and Sucumbios also sued DynCorp in Florida federal court over the spraying, in lawsuits filed in December 2006, and March and April 2007. The plaintiffs in these four cases allege that DynCorp’s spraying of fumigants injured the residents of these provinces, for which they are bringing claims under Florida state law, Ecuadorian law and international law.

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