Brothers, Bad Blood and the Blackwater Tangle

New York Times (2007-11-17) Scott Shane

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By SCOTT SHANE
Published: November 17, 2007

BALTIMORE, Nov. 16 — They were smart, scrappy brothers who rose from modest circumstances in Baltimore to become lacrosse stars at Princeton, succeed in business and land big government jobs.

Now the Krongard brothers — who have carried childhood nicknames, Buzzy and Cookie, through long careers — are tied up in the tangled story of Blackwater, the security contractor accused in the deaths of at least 17 Iraqis while guarding a State Department convoy in Baghdad.

The shorthand version boils their involvement down to that Washington catchall conflict of interest. The full story appears more complicated, less about cozy nepotism than about family estrangement.

But the concern about a conflict resulted Friday in the resignation of Alvin B. Krongard — Buzzy — from the Blackwater advisory board he had just joined. The company said he hoped to defuse accusations that his ties to the company were causing Howard J. Krongard — Cookie — the State Department inspector general, to go easy on Blackwater.

Alvin Krongard, 71, who left a $4 million-a-year job in investment banking to serve in top posts at the Central Intelligence Agency from 1998 to 2004, played what he describes as a routine role as an intermediary in helping Blackwater get its first big security contract from the agency for guards in Afghanistan in 2002.

A martial arts enthusiast and former Marine who has regaled friends with tales of punching a great white shark while scuba diving, Mr. Krongard said he later became friendly with the company’s founder, Erik D. Prince. They have hunted near Blackwater’s North Carolina training ground and at Mr. Krongard’s hunting club in Maryland.

Meanwhile, Howard Krongard, 66, a former general counsel at the accounting firm of Deloitte & Touche who took the State Department job in 2005, was grilled this week by House Democrats. They accused Mr. Krongard (who does not use his nickname professionally, as his brother does) of alienating his staff and improperly interfering in investigations, including a Justice Department inquiry into allegations of weapons smuggling by Blackwater employees.

Hence Representative Henry A. Waxman’s disclosure at a hearing Wednesday, the latest in a string of revelations the California Democrat has used to torment the Bush administration.

“We have now learned that Mr. Krongard’s brother, Buzzy Krongard, serves on Blackwater’s advisory board,” Mr. Waxman declared, saying the inspector general had “concealed this apparent conflict of interest.”

Howard Krongard grew indignant, saying his brother had no ties to Blackwater.

“When these ugly rumors started recently, I specifically asked him,” he said. “I do not believe it is true that he is a member of the advisory board.”

Then came a break, and Howard phoned his older brother. Buzzy told Howard he had just returned from his first Blackwater advisory board meeting in Williamsburg, Va.

A chagrined Howard Krongard returned to the witness stand. “I want to state on the record right now that I hereby recuse myself from any matters having to do with Blackwater,” he said.

Howard Krongard has also disqualified himself from an inquiry into the construction of the American Embassy in Baghdad, and subordinates have lambasted him for what they called abusive and erratic conduct. John A. De Dona, Howard’s assistant for investigations until August, said in an interview that he believed top State Department officials had influenced the inspector general to back away from tough investigations, including that of Blackwater, which diplomats depend on for protection in Iraq under a $1.2 billion contract.

At the hearing, Howard Krongard, who did not respond to a request for an interview for this article, described himself as an apolitical auditing lawyer whose reforms have met resistance from subordinates who resent supervision. “I want to say in the strongest terms that I have never impeded any investigation,” he told the House Oversight and Government Reform Committee.

From a distance, events might suggest that Mr. Prince chose to recruit Buzzy Krongard to curry favor with Howard Krongard and blunt any inquiry into Blackwater. But if that was Mr. Prince’s strategy, his intelligence was gravely flawed, according to people who know the family.

The Krongard brothers barely speak, friends say. In fact, Howard appears to be estranged from several family members, including his son Kenneth, whom he sued last year over a home loan. And Buzzy Krongard has said that when Howard called him a few weeks ago as he prepared his testimony, it was their first conversation in months.

Even their accounts of that brief call are at odds: Buzzy says that he told Howard he was joining the Blackwater advisory board, and that Howard said that was not a good idea. Howard testified that they had no such discussion.

Still, Buzzy Krongard said in an interview, “Whatever issues I have with my brother, I don’t question his integrity.” Given their estrangement, any attempt to reach Howard through him would have backfired, he said. “Based on our recent relationship,” he said, “the effect would be the other way around.”

Buzzy Krongard spoke in his 15,000-square-foot Georgian mansion, Torch Hill, north of Baltimore, where family photos were propped atop an antique piano and memorabilia of his lacrosse days covered half a den wall.

The two brothers grew up in a middle-class West Baltimore neighborhood, sons of a partner in a uniform-manufacturing business. Buzzy’s nickname was bestowed by an aunt who thought he resembled a comics character by that name; a few years later, when his grandmother wanted to buy him a war bond, she had to ask his parents his formal name. Howard got his nickname from knocking on doors and asking for cookies, his brother said.

They went to public school and on to Princeton, and their athletic exploits — Buzzy as a midfielder, Cookie as a goalie — landed both men in the National Lacrosse Hall of Fame in Baltimore.

“Most people around here started to play lacrosse at 7 or 8,” said Ralph N. Willis, 76, another Hall of Famer from Baltimore and Princeton. “Buzzy and I used to play with those old wooden sticks.”

After rising to the helm of Alex. Brown & Sons, the venerable Baltimore investment banking firm, Buzzy Krongard oversaw its acquisition by Bankers Trust in 1997 and left the next year for the C.I.A., as a counselor to George J. Tenet, then the director of central intelligence. He became executive director, the No. 3 post, in 2001 and helped design the agency’s secret detention program after the Sept. 11 attacks.

Mr. Krongard said he visited Blackwater’s training facilities for C.I.A. officers but did not meet Mr. Prince until early 2002, shortly after a visit to the agency’s quarters at a hotel in Kabul, Afghanistan. Mr. Krongard said he told the Blackwater chief, who was making the rounds at the C.I.A.’s headquarters in Virginia to drum up business, of his worries about the reliability of Afghan perimeter guards.

“I just thought, ‘Here’s a guy who says he can get highly skilled special operations types over there in a hurry to help with security,’” Mr. Krongard recalled. He said he connected Mr. Prince with the proper C.I.A. officials to discuss a contract but neither then nor later exerted pressure on the company’s behalf.

Buzzy Krongard vigorously defends Blackwater’s record in Iraq. “It’s very easy to second-guess them when you’re sitting back in an air-conditioned office,” he said. After Mr. Krongard’s resignation from the Blackwater board was announced late Friday, Mr. Prince expressed his dismay at the politically charged maelstrom around the company.

“It’s a real shame in this country when honorable men and private companies are presumed guilty based on politicized allegations, even while investigations are under way,” Mr. Prince said.

But Mr. Waxman seems disinclined to back down. He announced Friday that in light of the discrepancy between the brothers’ statements, he plans to call both to a hearing after Thanksgiving to sort it out.

“The information from Buzzy Krongard,” Mr. Waxman wrote to other committee members, “raises serious questions about the veracity of Howard Krongard’s testimony before the committee.”