Sovereign Deed Founder Steeped in Legal Controversy

Steeped in legal conflicts since its founding, Sovereign Deed, a private security firm spun off from a controversial Iraq war contractor, is seeking to build a base of operations near Pellston.

The firm, founded in 2006 by Barrett Moore, a Chicago-area entrepreneur who founded Triple Canopy — one of the largest private security firms operating in Iraq — wants to establish a national catastrophe response center in northern Michigan that would provide personal disaster relief to well-heeled subscribers. State and county officials are supporting a package of tax breaks for the company worth $11 million.

Moore’s success in building Triple Canopy and now Sovereign Deed has been accompanied by three lawsuits. He was sued in 2005 by his former colleagues at Triple Canopy for fraud and theft of company funds, a case that was closed after the parties negotiated a deal. Earlier this year a supplier took Sovereign Deed to court for alleged fraud and breach of contract. That case is still pending. And a Virginia jury criticized the company’s governance earlier this year in connection with a shooting incident in Iraq that occurred after Moore left the firm.

Continued -A Michigan Messenger investigation sheds new light on Moore’s record in Iraq, on Sovereign Deed’s complex corporate structure, and on the company’s need for state and county tax incentives.

* Triple Canopy employees were involved in 36 shooting incidents in Iraq between January 2005 and April 2007, according to a congressional report released in October. Moore retained an ownership stake in Triple Canopy for the first nine months of that period and has defended the management team that took over after he sold his interest. Last year, two former employees of Triple Canopy in Iraq sued the firm, alleging they were fired for reporting that a supervisor had gone on a shooting spree in Baghdad in July 2006.

A Virginia jury ruled against the two employees earlier this year but issued an unusual statement saying that the litigation had exposed Triple Canopy’s “poor conduct, lack of standard reporting practices, bad investigation methods, and unfair double standards amongst employees.” Moore said he is proud of his management record. “Triple Canopy continues to excel under the leadership of the individuals Moore recruited to the organization,” according to Sovereign Deed’s web site.

* The complex corporate structures established by Moore have drawn complaints from associates and one supplier. After Moore was forced out as CEO of Triple Canopy in April 2004, the firm’s new management sued him for control of the company’s trademarks, web sites and Internet operations. Moore acknowledged in an August 2005 court filing that he still controlled key pieces of the company’s intellectual property through a holding company, more than a year after he formally left the company. Moore says he sold all of his interest in the Triple Canopy group of companies in the fall of 2005.

The supplier lawsuit against Sovereign Deed in an Illinois court alleges that the company avoided payment for services through a confusing web of companies, including a company called Triple Canopy Group. Moore has rejected the allegations in court filings.In a telephone interview with Michigan Messenger, Moore denied any connection to Triple Canopy today.  “You’re looking for smoke where there isn’t any,” he said.

* State Sen. Jason Allen (R-Traverse City) has said tax abatements for the proposed facilities in Pellston are “crucial for Michigan to compete with sites in Wisconsin and Illinois.” But Richard Mills, a former Special Forces general who serves as a vice president for the firm, said in an interview that the incentives were not key to the firm’s location decision. “Tax abatements are nice,” Mills told Michigan Messenger last week, “but there are a thousand reasons we chose Pellston.”

Sovereign Deed does not lack for access to funds. Moore told the Petoskey News-Review earlier this year that a Texas billionaire, Richard Rainwater, is one of the biggest investors in Sovereign Deed. Rainwater, who ranks 335th on Forbes magazine’s list of the world’s most wealthy people, has built his fortune via speculation in oil, real estate and health care. Lately Rainwater has been predicting that the end of cheap oil will bring on economic chaos and widespread hostilities–and a growing market for private security services.

Sovereign Deed, which claims its operations will create 40 jobs in its first year of operations, has not promised that those jobs will go to local people. A fiscal analysis by the state legislature said that the tax breaks sought by Allen on behalf of Sovereign Deed “will reduce local [governmental] unit revenue and increase School Aid Fund expenditures by an unknown amount.”

Emmet County Planning Commissioners will review Sovereign Deed’s building plans for the Pellston Response Center at a meeting on Thursday, Nov. 1.