WASHINGTON/BENGHAZI, Libya (Reuters) - The State Department's decision to hire Blue Mountain Group to guard the ill-fated U.S. diplomatic mission in Benghazi, Libya, entrusted security tasks to a little-known British company instead of the large firms it usually uses in overseas danger zones.
The contract was largely based on expediency, U.S. officials have said, since no one knew how long the temporary mission would remain in the Libyan city. The cradle of last year's uprising that ended Muammar Gaddafi's 42-year rule, Benghazi has been plagued by rising violence in recent months.
Security practices at the diplomatic compound, where Blue Mountain guards patrolled with flashlights and batons instead of guns, have come under U.S. government scrutiny in the wake of the September 11 attack in Benghazi that killed U.S. Ambassador J. Christopher Stevens and three other Americans.
Federal contract data shows that the Benghazi security contract, worth up to $783,284, was listed as a "miscellaneous" award, not as part of the large master State Department contract that covers protection for overseas embassies.
"Blue Mountain was virtually unknown to the circles that studied private security contractors working for the United States, before the events in Benghazi," said Charles Tiefer, a commissioner at the Commission on Wartime Contracting, which studied U.S. contracting in the Iraq and Afghanistan wars.
Several British government sources said that they were unfamiliar with Blue Mountain, which is based in Wales. They said British authorities used a different contractor for security protection in Libya.
Fred Burton, vice president of intelligence at the Stratfor consulting firm and a former U.S. diplomatic security agent, said he did not know Blue Mountain, but it likely got State Department work because it was already working in Libya.
"They may have been the path of least resistance," he said.
Blue Mountain was able to work in Libya because it forged a business alliance with a local security firm, as required by Libyan regulations.
Eric Nordstrom, former regional security officer for the U.S. Embassy in Libya, testified at a congressional hearing last week that contracting out for security in the eastern Libyan city "was largely based on our concern of how long we would be in Benghazi. We were concerned that if we retained or brought on board full-time employees we would have to then find a position for them if that post ever went away."
In describing the challenges of hiring private security at Benghazi, he added: "It's my understanding that there was a very high turnover with those people."
Blue Mountain hired about 20 Libyan men - including some who say they had minimal training - to screen visitors and help patrol the mission at Benghazi, according to Reuters interviews.
Some of the guards sustained injuries and said they were ill-prepared to protect themselves or others when heavily armed militants last month stormed the rented villa that was serving as the mission.
They also described being hired by Blue Mountain after a casual recruiting and screening process.
State Department security officials had their own concerns about some of the guards at the mission months before the recent attack, according to emails obtained by Reuters this week. One guard who had been recently fired and another on the company's payroll were suspected of throwing a homemade bomb into the U.S. compound in April. They were questioned but not charged.
The State Department has declined to comment on the company other than confirming it was the contractor in Benghazi. Blue Mountain did not respond to numerous emails and phone calls, and a person answering the phone at its office in Carmarthen, Wales, said the company would not discuss the issue.
Previously known as Pilgrim Elite, Blue Mountain says on its website that it offers security services and professional training and has operated in Afghanistan, Iraq, and Pakistan.
The website once listed General Motors as a client, and a GM spokeswoman in Detroit told Reuters that Blue Mountain's work for the company was "on a very limited basis and mostly in the UK."
A Blue Mountain recruiter posted a notice on a security website in 2011 seeking employees with visas to work in Libya.
The State Department contract for "local guard" services in Benghazi took effect in March 2012. Several of Blue Mountain's Libyan employees told Reuters that they had no prior security training or experience.
"I was never a revolutionary or a fighter, I have never picked up a weapon during the war or after it," said Abdelaziz al-Majbiri, 28, who was shot in the legs during the September 11 assault.
The Libyan commander in charge of the local guards at the mission was a former English teacher who said he heard about Blue Mountain from a neighbor. "I don't have a background in security, I've never held a gun in my life," he said, speaking on condition of anonymity out of fear for his safety.
When hired, the commander said he was told "you have great English and get along with everyone and are punctual; we want you to be a guard commander."
The unarmed guards were told to sound the alarm over the radio and then run for cover if there was an attack, a Libyan who acted as a supervisor for the Blue Mountain local guard team at the mission said during an interview with Reuters.
He also displayed a medal embossed with "Department of State" and a horseman carrying Libyan and U.S. flags. "They thanked us for our help and also gave us this medal as an appreciation," he said.
Despite their inexperience, the Blue Mountain guards said they feared the Americans were not concerned enough about security.
"We used to tell the Americans who spoke to us on many occasions that we needed more support in security, because it felt thin on the ground. But they didn't seem to be so worried, and (were) confident that no one will dare to come close to the consulate," one guard said.
Tiefer, who is also a government contracting law professor at the University of Baltimore, said the Benghazi contract paled in comparison to other State Department security awards.
"This is down in the weeds," he said in a telephone interview.
Most State Department work goes to eight large private security firms with vast experience.
In the late summer of 2011, after Libyan rebels took control of Tripoli, Blue Mountain guards were seen working security at the Corinthia Hotel and its sister Palm City residential compound in the Libyan capital.
A United Press International report indicated that Blue Mountain and its local partner, Eclipse, also were competing for contracts guarding oil fields.
Blue Mountain and Eclipse parted ways in the spring over problems with Tripoli contracts, several sources familiar with the matter said.
The severed relationship may have prevented Blue Mountain from getting additional work in Libya, which required the local affiliation.
On a social network website earlier this year, a Blue Mountain official described the firm as "one of the few companies certified and legally allowed to work in Libya."
Blue Mountain Chief Executive Officer Nigel Thomas, a former British special forces member, did not respond to emails or phone calls.
Setting up security in Libya after the anti-Gaddafi revolution was not easy, documents show.
In a July 9 memo approved by the late ambassador Stevens, regional security officer Nordstrom said his office hoped to shore up defenses at U.S. compounds in Libya and would consider partial arming of some local guard supervisors, without being more specific.
But Nordstrom described difficulties getting local gun permits, noting it could take up to 60 days for "selection, training, equipping, policy approvals and deployment" of armed guards.
Hadeel Al Shalchi reported from Benghazi; Additional reporting by Marie-Louise Gumuchian in Tripoli, Mark Hosenball and Lucy Shackelford; Editing by Marilyn W. Thompson and Paul Simao