N.M. security firm target of lawsuits

Multibillion-dollar Akal grows from humble beginning

Akal Security officer Chris Thomas, left, checks Khadija Ismail at a security checkpoint at a registration station for Iraqi voters, in Skokie, Ill. Founded in 1980 in Española, N.M., with a $1,200 loan and launched with tiny contracts to guard area grocery stores and bars, the company now guards U.S. embassies around the globe, has won security contracts in Iraq, and it provides security checkpoints at American airports. Enlarge photo

Nam Y. Huh/Associated Press file photo

Akal Security officer Chris Thomas, left, checks Khadija Ismail at a security checkpoint at a registration station for Iraqi voters, in Skokie, Ill. Founded in 1980 in Española, N.M., with a $1,200 loan and launched with tiny contracts to guard area grocery stores and bars, the company now guards U.S. embassies around the globe, has won security contracts in Iraq, and it provides security checkpoints at American airports.

SAN FRANCISCO – Few security companies have benefited as much from the surge of Sept. 11-related government contracts as Akal Security, an Española, N.M.-based company controlled by American converts to a Sikh religious sect.

The company launched in 1980 with small contracts to protect grocery stores and bars and now has 10,000 employees who stand guard at federal courthouses in 40 states, Army bases, airports, U.S. embassies and federal immigration detention centers. It has won more than $3 billion in federal contracts since Sept. 11, 2001, and has become the largest courthouse security contractor in the country.

But along with its phenomenal growth comes mounting legal problems.

Akal is the subject of dozens of legal cases pursued by federal officials, whistle-blowing employees and others with wide-ranging allegations, including many wrongful terminations. The company itself disclosed 134 “pending, or current litigation matters” throughout the country to a Washington, D.C., federal court last year. A competitor, Walden Security, disclosed 12 such matters to the same court. Walden employs 3,000.

Just last month, Akal agreed to pay $1.9 million to settle Justice Department allegations that it falsified firearms training tests for guards at several federal courthouses in northern California.

Akal’s president Daya Khalsa said his company faces no more legal problems than other similar-sized companies.

The overwhelming majority of Akal employees, he said, are performing admirably, and the mistakes of a few workers are blown out of proportion in costly lawsuits that are largely meritless.

“We are in a legal system in our country and a regulatory system that encourages a tremendous amount of litigation,” Khalsa said in a phone interview from his New Mexico office. “We don’t consider it to be a large number.”

Khalsa said the company settled the gun-range allegations Sept. 28 to avoid further financial exposure; the company feared an even bigger financial loss if it fought the allegations before an unpredictable jury.

Specifically, gun-range operators were accused of allowing some guards to complete target-shooting tests beyond the allotted time limit and then telling the Marshals Service they passed.

“They were simply wrong,” Khalsa said. “Every court security officer is fully and properly trained.”

Founded in 1980 with a $1,200 loan, Akal is owned by the nonprofit religious organization Sikh Dharma created in the early 1970s by a charismatic Sikh leader named Yogi Bhajan. Bhajan died in 2004.

It’s now one of the Southwest’s biggest business success stories, ranking as the second-biggest U.S. Department of Justice contractor and claiming $500 million annual revenues.

The company’s name, pronounced “a-CALL,” is a Sanskrit word meaning “undying” or immortality, and it was a battle cry of Sikh warriors. The Sikh religion is 500 years old and claims 26 million followers worldwide.

The U.S. Marshals Service last year awarded Akal $1.6 billion over five years to guard federal courthouses in 11 of the country’s 12 federal districts. The Marshals Service didn’t respond to requests for comment.

Khalsa said the company’s rapid growth after the Sept. 11 terrorist attacks also may have contributed to Akal’s legal woes.

“We grew tremendously,” he said. “Some of our growth got ahead of our system and quality controls.”

Daya Khalsa is president of Akal Security, a New Mexico-based company that has benefited greatly from the surge of Sept. 11-related government contracts. Akal is controlled by American converts to a Sikh religious sect. Enlarge photo

Neil Jacobs/Associated Press file photo

Daya Khalsa is president of Akal Security, a New Mexico-based company that has benefited greatly from the surge of Sept. 11-related government contracts. Akal is controlled by American converts to a Sikh religious sect.