[Reader-list] The World's Largest Private Mercenary Company

[Ananth]

August 13, 2007
Flush with Profits from the Iraq War, Military Contractors See a  
World of Business Opportunities
The Mercenary Revolution

By JEREMY SCAHILL

http://www.counterpunch.org/scahill08132007.html

If you think the U.S. has only 160,000 troops in Iraq, think again.

With almost no congressional oversight and even less public  
awareness, the Bush administration has more than doubled the size of  
the U.S. occupation through the use of private war companies.

There are now almost 200,000 private "contractors" deployed in Iraq  
by Washington. This means that U.S. military forces in Iraq are now  
outsized by a coalition of billing corporations whose actions go  
largely unmonitored and whose crimes are virtually unpunished.

In essence, the Bush administration has created a shadow army that  
can be used to wage wars unpopular with the American public but  
extremely profitable for a few unaccountable private companies.

Since the launch of the "global war on terror," the administration  
has systematically funneled billions of dollars in public money to  
corporations like Blackwater USA , DynCorp, Triple Canopy, Erinys and  
ArmorGroup. They have in turn used their lucrative government pay- 
outs to build up the infrastructure and reach of private armies so  
powerful that they rival or outgun some nation's militaries.

"I think it's extraordinarily dangerous when a nation begins to  
outsource its monopoly on the use of force and the use of violence in  
support of its foreign policy or national security objectives," says  
veteran U.S. Diplomat Joe Wilson, who served as the last U.S.  
ambassador to Iraq before the 1991 Gulf War.

The billions of dollars being doled out to these companies, Wilson  
argues, "makes of them a very powerful interest group within the  
American body politic and an interest group that is in fact armed.  
And the question will arise at some time: to whom do they owe their  
loyalty?"

Precise data on the extent of U.S. spending on mercenary services is  
nearly impossible to
obtain - by both journalists and elected officials-but some in  
Congress estimate that up to 40 cents of every tax dollar spent on  
the war goes to corporate war contractors. At present, the United  
States spends about $2 billion a week on its Iraq operations.

While much has been made of the Bush administration's "failure" to  
build international consensus for the invasion of Iraq, perhaps that  
was never the intention. When U.S. tanks rolled into Iraq in March  
2003, they brought with them the largest army of "private  
contractors" ever deployed in a war. The White House substituted  
international diplomacy with lucrative war contracts and a coalition  
of willing nations who provided token forces with a coalition of  
billing corporations that supplied the brigades of contractors.

'THERE'S NO DEMOCRATIC CONTROL'

During the 1991 Gulf War, the ratio of troops to private contractors  
was about 60 to 1. Today, it is the contractors who outnumber U.S.  
forces in Iraq. As of July 2007, there were more than 630 war  
contracting companies working in Iraq for the United States. Composed  
of some 180,000 individual personnel drawn from more than 100  
countries, the army of contractors surpasses the official U.S.  
military presence of 160,000 troops.

In all, the United States may have as many as 400,000 personnel  
occupying Iraq, not including allied nations' militaries. The  
statistics on contractors do not account for all armed contractors.  
Last year, a U.S. government report estimated there were 48,000  
people working for more than 170 private military companies in Iraq.  
"It masks the true level of American involvement," says Ambassador  
Wilson.

How much money is being spent just on mercenaries remains largely  
classified. Congressional sources estimate the United States has  
spent at least $6 billion in Iraq, while Britain has spent some $400  
million. At the same time, companies chosen by the White House for  
rebuilding projects in Iraq have spent huge sums in reconstruction  
funds - possibly billions on more mercenaries to guard their  
personnel and projects.

The single largest U.S. contract for private security in Iraq was a  
$293 million payment to the British firm Aegis Defence Services,  
headed by retired British Lt. Col. Tim Spicer, who has been dogged by  
accusations that he is a mercenary because of his private involvement  
in African conflicts. The Texas-based DynCorp International has been  
another big winner, with more than $1 billion in contracts to provide  
personnel to train Iraqi police forces, while Blackwater USA has won  
$750 million in State Department contracts alone for "diplomatic  
security."

At present, an American or a British Special Forces veteran working  
for a private security company in Iraq can make $650 a day. At times  
the rate has reached $1,000 a day; the pay dwarfs many times over  
that of active duty troops operating in the war zone wearing a U.S.  
or U.K. flag on their shoulder instead of a corporate logo.

"We got [tens of thousands of] contractors over there, some of them  
making more than the Secretary of Defense," House Defense  
Appropriations Subcommittee Chairman John Murtha (D-Penn.) recently  
remarked. "How in the hell do you justify that?" In part, these  
contractors do mundane jobs that traditionally have been performed by  
soldiers. Some require no military training, but involve deadly  
occupations, such as driving trucks through insurgent-controlled  
territory.

Others are more innocuous, like cooking food or doing laundry on a  
base, but still court grave risk because of regular mortar and rocket  
attacks.

These services are provided through companies like KBR and Fluor and  
through their vast labyrinth of subcontractors. But many other  
private personnel are also engaged in armed combat and "security"  
operations. They interrogate prisoners, gather intelligence, operate  
rendition flights, protect senior occupation officials and, in at  
least one case, have commanded U.S. and international troops in battle.

In a revealing admission, Gen. David Petraeus, who is overseeing  
Bush's troop "surge," said earlier this year that he has, at times,  
been guarded in Iraq by "contract security." At least three U.S.  
commanding generals, not including Petraeus, are currently being  
guarded in Iraq by hired guns. "To have half of your army be  
contractors, I don't know that there's a precedent for that," says  
Rep. Dennis Kucinich (D-Ohio), a member of the House Oversight and  
Government Reform Committee, which has been investigating war  
contractors.

"Maybe the precedent was the British and the Hessians in the American  
Revolution. Maybe that's the last time and needless to say, they  
lost. But I'm thinking that there's no democratic control and there's  
no intention to have democratic control here."

The implications are devastating. Joseph Wilson says, "In the absence  
of international consensus, the current Bush administration relied on  
a coalition of what I call the co-opted, the corrupted and the  
coerced: those who benefited financially from their involvement,  
those who benefited politically from their involvement and those few  
who determined that their relationship with the United States was  
more important than their relationship with anybody else. And that's  
a real problem because there is no underlying international  
legitimacy that sustains us throughout this action that we've taken."

Moreover, this revolution means the United States no longer needs to  
rely on its own citizens to fight its wars, nor does it need to  
implement a draft, which would have made the Iraq war politically  
untenable.

'AN ARM OF THE BUSH ADMINISTRATION'

During his confirmation hearings in the Senate this past January,  
Petraeus praised the role of private forces, claiming they compensate  
for an overstretched military. Petraeus told the senators that  
combined with Bush's official troop surge, the "tens of thousands of  
contract security forces give me the reason to believe that we can  
accomplish the mission."

Taken together with Petraeus's recent assertion that the surge would  
run into mid-2009, this means a widening role for mercenaries and  
other private forces in Iraq is clearly on the table for the  
foreseeable future.

"The increasing use of contractors, private forces or as some would  
say 'mercenaries' makes wars easier to begin and to fight - it just  
takes money and not the citizenry," says Michael Ratner, president of  
the Center for Constitutional Rights, whose organization has sued  
private contractors for alleged human rights violations in Iraq.

"To the extent a population is called upon to go to war, there is  
resistance, a necessary resistance to prevent wars of self- 
aggrandizement, foolish wars and in the case of the United States,  
hegemonic imperialist wars. Private forces are almost a necessity for  
a United States bent on retaining its declining empire. Think about  
Rome and its increasing need for mercenaries."

Privatized forces are also politically expedient for many  
governments. Their casualties go uncounted, their actions largely  
unmonitored and their crimes unpunished. Indeed, four years into the  
occupation, there is no effective system of oversight or  
accountability governing contractors and their operations, nor is  
there any effective law - military or civilian being applied to their  
activities. They have not been subjected to military courts martial  
(despite a recent congressional attempt to place them under the  
Uniform Code of Military Justice), nor have they been prosecuted in  
U.S. civilian courts. And no matter what their acts in Iraq, they  
cannot be prosecuted in Iraqi courts because in 2004 the U.S.  
occupying authority granted them complete immunity.

"These private contractors are really an arm of the administration  
and its policies," argues Kucinich, who has called for a withdrawal  
of all U.S. contractors from Iraq. "They charge whatever they want  
with impunity. There's no accountability as to how many people they  
have, as to what their activities are."

That raises the crucial question: what exactly are they doing in Iraq  
in the name of the U.S. and U.K. governments? Rep. Jan Schakowsky (D- 
Ill.), a leading member of the House Select Committee on  
Intelligence, which is responsible for reviewing sensitive national  
security issues, explained the difficulty of monitoring private  
military companies on the U.S. payroll: "If I want to see a contract,  
I have to go up to a secret room and look at it, can't take any  
notes, can't take any notes out with me, you know - essentially, I  
don't have access to those contracts and even if I did, I couldn't  
tell anybody about it."

'A MARKETPLACE FOR WARFARE'

On the Internet, numerous videos have spread virally, showing what  
appear to be foreign mercenaries using Iraqis as target practice,  
much to the embarrassment of the firms involved. Despite these  
incidents and the tens of thousands of contractors passing through  
Iraq, only two individuals have been ever indicted for crimes there.  
One was charged with stabbing a fellow contractor, while the other  
pled guilty to possessing child-pornography images on his computer at  
Abu Ghraib prison.

Dozens of American soldiers have been court-martialed - 64 on murder- 
related charges alone - but not a single armed contractor has been  
prosecuted for a crime against an Iraqi. In some cases, where  
contractors were alleged to have been involved in crimes or deadly  
incidents, their companies whisked them out of Iraq to safety.

U.S. contractors in Iraq reportedly have their own motto: "What  
happens here today, stays here today." International diplomats say  
Iraq has demonstrated a new U.S. model for waging war; one which  
poses a creeping threat to global order.

"To outsource security-related, military related issues to non- 
government, non-military forces is a source of great concern and it  
caught many governments unprepared," says Hans von Sponeck, a 32-year  
veteran U.N. diplomat, who served as head of the U.N. Iraq mission  
before the U.S. invasion.

In Iraq, the United States has used its private sector allies to  
build up armies of mercenaries many lured from impoverished countries  
with the promise of greater salaries than their home militaries can  
pay. That the home governments of some of these private warriors are  
opposed to the war itself is of little consequence.

"Have gun, will fight for paycheck" has become a globalized law.

"The most worrying aspect is that these forces are outside  
parliamentary control. They come from all over and they are  
answerable to no one except a very narrow group of people and they  
come from countries whose governments may not even know in detail  
that they have actually been contracted as a private army into a war  
zone," says von Sponeck.

"If you have now a marketplace for warfare, it is a commercial issue  
rather than a political issue involving a debate in the countries.

You are also marginalizing governmental control over whether or not  
this should take place, should happen and, if so, in what size and  
shape. It's a very worrying new aspect of international relations. I  
think it becomes more and more uncontrollable by the countries of  
supply."

In Iraq, for example, hundreds of Chilean mercenaries have been  
deployed by U.S. companies like Blackwater and Triple Canopy, despite  
the fact that Chile, as a rotating member of the U.N. Security  
Council, opposed the invasion and continues to oppose the occupation  
of Iraq. Some of the Chileans are alleged to have been seasoned  
veterans of the Pinochet era.

"There is nothing new, of course, about the relationship between  
politics and the economy, but there is something deeply perverse  
about the privatization of the Iraq War and the utilization of  
mercenaries," says Chilean sociologist Tito Tricot, a former  
political prisoner who was tortured under Pinochet's regime.

"This externalization of services or outsourcing attempts to lower  
costs - third world mercenaries are paid less than their counterparts  
from the developed world - and maximize benefits. In other words, let  
others fight the war for the Americans. In either case, the Iraqi  
people do not matter at all."

NEW WORLD DISORDER

The Iraq war has ushered in a new system. Wealthy nations can recruit  
the world's poor, from countries that have no direct stake in the  
conflict, and use them as cannon fodder to conquer weaker nations.  
This allows the conquering power to hold down domestic casualties -  
the single-greatest impediment to waging wars like the one in Iraq.  
Indeed, in Iraq, more than 1,000 contractors working for the U.S.  
occupation have been killed with another 13,000 wounded. Most are not  
American citizens, and these numbers are not counted in the official  
death toll at a time when Americans are increasingly disturbed by  
casualties.

In Iraq, many companies are run by Americans or Britons and have well- 
trained forces drawn from elite military units for use in sensitive  
actions or operations. But down the ranks, these forces are filled by  
Iraqis and third-country nationals. Indeed, some 118,000 of the  
estimated 180,000 contractors are Iraqis, and many mercenaries are  
reportedly ill-paid, poorly equipped and barely trained Iraqi nationals.

The mercenary industry points to this as a positive: we are giving  
Iraqis jobs, albeit occupying their own country in the service of a  
private corporation hired by a hostile invading power.

Doug Brooks, the head of the Orwellian named mercenary trade group,  
the International Peace Operations Association, argued from early on  
in the occupation, "Museums do not need to be guarded by Abrams tanks  
when an Iraqi security guard working for a contractor can do the same  
job for less than one-fiftieth of what it costs to maintain an  
American soldier. Hiring local guards gives Iraqis a stake in a  
successful future for their country. They use their pay to support  
their families and stimulate the economy. Perhaps most significantly,  
every guard means one less potential guerrilla."

In many ways, it is the same corporate model of relying on cheap  
labor in destitute nations to staff their uber-profitable operations.  
The giant multinationals also argue they are helping the economy by  
hiring locals, even if it's at starvation wages.

"Donald Rumsfeld's masterstroke, and his most enduring legacy, was to  
bring the corporate branding revolution of the 1990s into the heart  
of the most powerful military in the world," says Naomi Klein, whose  
upcoming book, The Shock Doctrine: The Rise of Disaster Capitalism,  
explores these themes.

"We have now seen the emergence of the hollow army. Much as with so- 
called hollow corporations like Nike, billions are spent on military  
technology and design in rich countries while the manual labor and  
sweat work of invasion and occupation is increasingly outsourced to  
contractors who compete with each other to fill the work order for  
the lowest price. Just as this model breeds rampant abuse in the  
manufacturing sector - with the big-name brands always able to plead  
ignorance about the actions of their suppliers-so it does in the  
military, though with stakes that are immeasurably higher." In the  
case of Iraq, the U.S. and U.K. governments could give the public  
perception of a withdrawal of forces and just privatize the  
occupation. Indeed, shortly after former British Prime Minister Tony  
Blair announced that he wanted to withdraw 1,600 soldiers from Basra,  
reports emerged that the British government was considering sending  
in private security companies to "fill the gap left
behind."

THE SPY WHO BILLED ME

While Iraq currently dominates the headlines, private war and  
intelligence companies are expanding their already sizable footprint.  
The U.S. government in particular is now in the midst of the most  
radical privatization agenda in its history. According to a recent  
report in Vanity Fair, the government pays contractors as much as the  
combined taxes paid by everyone in the United States with incomes  
under $100,000, meaning "more than 90 percent of all taxpayers might  
as well remit everything they owe directly to [contractors] rather  
than to the [government]."

Some of this outsourcing is happening in sensitive sectors, including  
the intelligence community. "This is the magnet now. Everything is  
being attracted to these private companies in terms of individuals  
and expertise and functions that were normally done by the  
intelligence community," says former CIA division chief and senior  
analyst Melvin Goodman. "My major concern is the lack of  
accountability, the lack of responsibility. The entire industry is  
essentially out of control. It's outrageous."

RJ Hillhouse, a blogger who investigates the clandestine world of  
private contractors and U.S. intelligence, recently obtained  
documents from the Office of the Directorate of National Intelligence  
(DNI) showing that Washington spends some $42 billion annually on  
private intelligence contractors, up from $17.54 billion in 2000.  
Currently that spending represents 70 percent of the U.S.  
intelligence budget going to private companies.

Perhaps it is no surprise then that the current head of the DNI is  
Mike McConnell, the former chair of the board of the Intelligence and  
National Security Alliance, the private intelligence industry's  
lobbying arm. Hillhouse also revealed that one of the most sensitive  
U.S. intelligence documents, the Presidential Daily Briefing, is  
prepared in part by private companies, despite having the official  
seal of the U.S. intelligence apparatus.

"Let's say a company is frustrated with a government that's hampering  
its business or business of one of its clients. Introducing and  
spinning intelligence on that government's suspected collaboration  
with terrorists would quickly get the White House's attention and  
could be used to shape national policy," Hillhouse argues.

MUTLINATIONAL MERCENARIES

Empowered by their new found prominence, mercenary forces are  
increasing their presence on other battlefields: in Latin America,  
DynCorp International is operating in Colombia, Bolivia and other  
countries under the guise of the "war on drugs" - U.S. defense  
contractors are receiving nearly half the $630 million in U.S.  
military aid for Colombia; in Africa, mercenaries are deploying in  
Somalia, Congo and Sudan and increasingly have their sights set on  
tapping into the hefty U.N. peacekeeping budget (this has been true  
since at least the early 1990s and probably much earlier). Heavily  
armed mercenaries were deployed to New Orleans in the aftermath of  
Hurricane Katrina, while proposals are being considered to privatize  
the U.S. border patrol.

Brooks, the private military industry lobbyist, says people should  
not become "overly obsessed with Iraq," saying his association's  
"member companies have more personnel working in U.N. and African  
Union peace operations than all but a handful of countries." Von  
Sponeck says he believes the use of such companies in warfare should  
be barred and has harsh words for the institution for which he spent  
his career working: "The United Nations, including the U.N. Secretary  
General, should react to this and instead of reacting, they are mute,  
they are silent."

This unprecedented funding of such enterprises, primarily by the U.S.  
and U.K. governments, means that powers once the exclusive realm of  
nations are now in the hands of private companies with loyalty only  
to profits, CEOs and, in the case of public companies, shareholders.  
And, of course, their client, whoever that may be. CIA-type services,  
special operations, covert actions and small-scale military and  
paramilitary forces are now on the world market in a way not seen in  
modern history. This could allow corporations or nations with cash to  
spend but no real military power to hire squadrons of heavily armed  
and well-trained commandos.

"It raises very important issues about state and about the very power  
of state. The one thing the people think of as being in the purview  
of the government - wholly run and owned by - is the use of military  
power," says Rep. Jan Schakowsky. "Suddenly you've got a for-profit  
corporation going around the world that is more powerful than states,  
can effect regime possibly where they may want to go, that seems to  
have all the support that it needs from this administration that is  
also pretty adventurous around the world and operating under the  
cover of darkness.

"It raises questions about democracies, about states, about who  
influences policy around the globe, about relationships among some  
countries. Maybe it's their goal to render state coalitions like NATO  
irrelevant in the future, that they'll be the ones and open to the  
highest bidder. Who really does determine war and peace around the  
world?"

Jeremy Scahill is author of The New York Times-bestseller  
"Blackwater: The Rise of the World's Most Powerful Mercenary Army.".  
He is a Puffin Foundation Writing Fellow at the Nation Institute.  
This article appears in the current issue of The Indypendent  
newspaper. He can be reached at jeremy(AT)democracynow.org