http://www.examiner.com/x-14795-Page-One-Examiner~y2009m9d29-American-Police-Force


This story about American Police Force is shaping up to be a quite wonderful little scandal. It's perhaps a little early to offer a definitive statement of the facts so I'll constrain myself to reasonable interpretations and point out that this is very much personal supposition, opinion, not a definitive statement of facts.



But I would start by saying that American Police Force and their contract to run the empty jail in Hardin, Montana, well, it looks like a group of small time entrepreneurs (not that there's anything wrong with being a small time entrepreneur, I am one myself) who have bitten off rather more than they can chew.



Let's start with the complaints over at Prison Planet:



A private security force whose biggest role is helping the U.S. government to “combat terrorism” is now patrolling the streets of a town in Montana, acting as law enforcement but accountable to nobody and operating completely outside the limitations of the U.S. constitution in a chilling throwback to the brownshirts of Nazi Germany.



No, this isn't the second coming of the Nazis, no it isn't black helicopters from the UN or anything like that. It's something much more prosaic and amusing than that. From Billings, Montana, here's a reasonable over view of what the American Police Force story is:



BILLINGS - The jail in Hardin has been empty for about two years, but on September 4th officials with the Two Rivers Authority, the economic development agency that paid for the facility, signed a contract with a private police firm called American Police Force to fill the jail.

"I think it's a great situation," said Al Peterson the Vice President of Two Rivers Authority. "I have found these people to be wonderful community partners."

The company's website states the U.S. government is their biggest client, but an Associated Press search of two comprehensive federal government contractor databases turned up no record of American Police Force.



So what did AP find out about American Police Force?



The Associated Press has raised questions about the legitimacy of American Police Force. Government contract databases show no record of the company, and security industry representatives and federal officials said they have never heard of it. However, representatives of security trade groups said added secrecy was prevalent in the industry and it was possible the company had avoided the public limelight.

The company's Web site lists as its East Coast headquarters a building in Washington near the White House that holds "virtual offices." A spokeswoman for the building said American Police Force's application to use the address is pending, but incomplete.



OK, so it's either a shell company, a brand new one of a recently incorporated subsidiary of another one. There's more from AP as well:



The lead public figure for American Police Force, Michael Hilton, said more than 200 employees would be sought for the jail and a proposed military and law enforcement training center.

That would be a significant boost to Hardin, a struggling town of 3,500 located about 45 miles east of Billings. An earlier announcement that a job fair would be held during the last week never came to fruition.



Hilton also said he planned a helicopter tour of the region in coming days to look at real estate for a planned tactical military training ground. He said 5,000 to 10,000 acres were needed to complement the training center, a $17 million project.



Ah, now, this is all becoming depressingly familiar. I cannot of course prove anything here, but this has that smell of cow manure (the male kind, you know) that surrounds so many grand plans put forward by small businesses and would be owners of large businesses. Forgive me if I don't detail all of my experiences right here but I've seen this kind of grandeur in the UK, Russia and the US: it's more common than many would normally think.



Mike Young picks up on some interesting details:



In April 2009, Two Rivers Authority and the Hardin City Council started looking into housing enemy combatants currently detained in Guantanamo Bay (Gitmo), Cuba. A few weeks later (May 15th), a business called the American Police Force (”APF”) registers the domain name AmericanPoliceGroup.com. The next thing you know, APF is trying to contract to build a $27 million private jail and police training center.



(Note that that website appears to be down.)



However, there's another company registered with similar addresses, on the same server, with personnel in common. The excellent Kevin Flaherty has been looking around at documents. Have a look at that first link for that's what I think pretty much explains it all. There's also this, which is a list of contracts performed by what I assume is a related company.



We need add only one more point: I have been on the periphery of this sort of business for the past 18 years: no, not myself supplying the US Government or law enforcement agencies but several business associates have been. Everything from American police cars to the Russian police forces of cities in Siberia to supplying Soviet era (and later) tanks to the US Army. This isn't my area of expertise, but it is something I know about.



That list of contracts is indicative of what they've been doing. The US military is fighting two wars at present and the entire logistics train is very stretched. So there are a lot of contracts, small stuff, which gets hired out to just about anybody willing to do the work. If you actually run the numbers, around $30 million of contracts since 2004 is $5 million a year or so of total sales. There's competition for this sort of work so gross margins on sales (they're providing goods here, don't forget, not just their labor) tend to be in the 20% range.



So we're talking about a company here with maybe $1 million a year to spend on salaries, profits, overheads and so on. Nice work if you can get it but it's not by any means instant riches: there will be a lot more than just one person eating out of that sum.



So what do I think is happening here with American Police Force? I emphasize again that this is opinion, a piecing together of inherent knowledge and publicly available facts, not proof perfect that this indeed what is happening.



We've a small time operator feeding on the scraps and tail end of the Pentagon's logistics chain: the sort of contracts they've been doing look remarkably similar to what one associate of mine was doing a decade ago. There are myriads of these companies out there at the moment, all scrapping to get these small contracts.



They saw that Hardin, Montana, had built this jail but had no prisoners to put into it. The bonds issued to pay for the jail are in default. So, how hard could it be to construct a story that would fly with the Town Manager?



"Yes, yes, we'll sort it all out for you. We've great experience. Don't worry, just sign the contract."



In the tradition of so many of these small companies, it's all about getting the contract first. Worry about how to perform, how to complete the contract, once it's all been signed.



I doubt very much indeed if this bodes well for the filling up of that empty prison with paying convicts.



The one person I might actually feel sorry for is the local newspaper reporter who quit her job to become the press liaison officer for American Police Force on $60,000 a year. I doubt those checks are going to be coming in for all that long darling: you might want to make sure you're still on good terms with your ex-editor.