Military contracting conglomerate Caliburn International Corporation, has withdrawn its application for an initial public offering on the New York Stock Exchange. The company planned to sell $100 million worth of shares.
This decision comes after The Daily Beast published two major investigations by the independent Government Accountability Project into Caliburn and its subsidiaries. These investigations revealed mismanagement on base in Iraq run by a Caliburn subsidiary and a federal investigation into whether bribes were paid to a company allegedly linked to Iraq’s former Prime Minister, Nouri al-Maliki, in order to obtain a contract to manage that base.
“Due to variability in the equity markets, we are withdrawing our public offering,” said Jim Van Dusen, Caliburn’s President and CEO, in a press release issued Tuesday morning.
Caliburn is a holding company, owned by a private equity firm, D.C. Capital Partners. It was created from the combination of several D.C. Capital Partners ventures, including military contracting company Sallyport Global Services, which manages Balad Air Base, a massive military outpost near Baghdad, Iraq. Sallyport’s work at Balad represents a large part of Caliburn’s business.
“We received 38% and 34% of our pro forma revenue during fiscal year 2017 and the nine months ended September 30, 2018, respectively, for base support services we performed at Balad,” Caliburn said in documents filed in for their public offering application.
In September 2018, our first investigation revealed allegations of theft, procurement issues, generator explosions, confiscated passports, issues with an Iranian backed militia, security failures, animal abuse, and rigged security inspections at Balad. We also uncovered a white South African security guard clique mistreating minority coworkers.
Sallyport removed its security leadership at Balad after that investigation. Then, in early February, the company fired and reassigned a large number of South African guards at Balad, potentially as many as 100, sources said.
A second investigation, published in February, revealed Sallyport was facing a Department of Justice investigation into potential violations of the Foreign Corrupt Practices Act due to deals made with a Kuwaiti company, Afaq Umm Qasr Marine Services. Afaq is allegedly tied to powerful Iraqi businessmen and former government officials, including former Prime Minister Nouri al-Maliki, retired special forces General, Abdul Ghani al Asadi, and former acting Interior Minister, Adnan al-Asadi. “To this day we continue to fully cooperate with the Department of Justice on this matter,” said Sallyport, when asked about the Afaq allegations.
Our investigation also attracted controversy within Iraq.
The newspaper Al-Araby reported members of Iraq’s Sadrist and Communist parties called for opening corruption files and purging corrupt elements of the government in response to the story.
An exiled former Vice President of Iraq, Tareq al-Hashemi also commented on the article, criticizing “mafia corruption.”
In an interview with Russia Today, a representative for al-Maliki criticized The Daily Beast and suggested the former Prime Minister would take legal action over the allegations against him.
The Daily Beast stands by its reporting.