Privatized War is a Black(water) Box

Guest Writer L. Vincent Sebastian

The expansion of Blackwater USA to new locations in Illinois and California is a grave indicator that America is moving in the wrong direction with respect to private military and security contractors (See ~ Blackwater Grows as Support For Iraq Shrinks). The role of these contractors should shrink, not grow, due to a number of legal and moral problems.

Some of the controversies surrounding Blackwater and other private contractors have been covered here previously this year (see - June 26; March 11 (3-Part Series); and February 9). And today, controversy erupted anew when the Iraqi government ordered Blackwater to leave the country after the fatal shooting of eight Iraqi civilians following a car bomb attack against a State Department convoy (see "Iraq expels American security firm" by Robert H. Reid, Associated Press, September 17, 2007).

Questioned in response to this incident, American officials refused to explain the legal authority under which Blackwater operates in Iraq or say whether the company was complying with an order. The real problem here is one of accountability: Private security contractors operating on foreign soil are not really accountable to anyone. By and large, they operate beyond the control of U.S. military and are not subject to military law. At the same time, they have immunity from Iraqi law (akin to diplomatic immunity). Apparently, the only thing holding a contractor in check is the prospect that its client (the State Department in this case) will be dissatisfied and not renew its contract. But in the insider game of no-bid government contracts, how likely is this for the politically connected Blackwater?

Ultimately, the biggest problem with private contractors is a moral one that affects us all. As war becomes increasingly privatized (about 129,000 contractors are currently operating in Iraq), it becomes further removed and concealed from the attention of the American people. The historic role of our government as the legitimate perpetrator of a war shifts to one of manager-at-arms-length of a war carried out by third parties, the contractors. This further distances us, the public, from the war and its consequences, and separates us from the sense of buy-in, participation, oversight, and responsibility we all must have if war is to be waged.

Blackwater Grows as Support for Iraq War Shrinks

Guest Writer: L. Vincent Sebastian

With each passing month, more and more Americans are finding the Iraq war unacceptable and are calling for near-term troop redeployment and withdrawal. As for political progress in Iraq, the recent report of the Government Accountability Office (GAO) report said the Iraqi government has failed to meet 11 of 18 benchmarks set by the U.S. Congress earlier in the year, and has only partially met another four benchmarks. On the military side, the "surge" has had only mixed results and violence continues in most parts of the country. The widely anticipated report by Gen. Petraeus later this month will be mixed as well, giving both sides of the debate plenty of reasons to stick to their positions.

Against this backdrop of civil war in Iraq and political stalemate here at home, the private military contractor Blackwater is quietly expanding outward from its 7,000-acre headquarters in Moyock, North Carolina. Blackwater now has two new facilities in the works: a newly completed 80-acre compound in Mount Carroll, Illinois, and plans for an 800-acre facility in the hills outside San Diego, California. Groups of concerned citizens such as Blackwater Watch and Clearwater are keeping an eye on, and in some cases protesting, this expansion.

As Blackwater expands its geographic footprint, it is also growing the list of services it offers. The most recent new service is its training class to prepare law enforcement officers to handle active shooters such as the one who killed 32 people at Virginia Tech. This five-day session will put trainees into simulated scenarios at a mock high school. While special tactical units such as SWAT teams are often part of large domestic law enforcement agencies, the direct involvement of a private military contractor in the training of police here at home is cause for concern. It blurs the line between our domestic police and our national defense, and unfortunately puts us one step closer to a militarized home front.

Sources:

The Virginian-Pilot, "Others not so neighborly to Blackwater as North Carolina", by JOANNE KIMBERLIN, , August 26, 2007.

Associated Press, "Blackwater Offers Classes to Combat Active Shooters", by MIKE BAKER, August 27, 2007.

CLICK for Related Pieces by L. V. Sebastian

Blackwater Trying to Gain Popular Appeal

The Spy Who Billed Me blog shares with us that Blackwater is now a NASCAR sponsor.

Blackwater is owned and operated by a christian fundamentalist ideologue (Erik D. Prince). Their stock in trade is the use of force, or they might say managing the risk of violence. Actually, it's both.

Blackwater has major contracts with the State Department and other federal agencies to provide security. What happens when there's a contract dispute? Are the contractors going to be more loyal to the agency they work for or to the contract? Who is their ultimate boss, the President of the United States or the CEO of Blackwater?

Well-paid federal employees, or members of the US military, they are far more likely to be loyal to the mission. The commercialization of our security forces is an unacceptable security risk.

Blackwater, and firms like it, are accumulating wealth and power. We need to stop them before they have the influence to force the hand of Congress. The sponsorship of NASCAR by Blackwater is an indication that they are trying to gain popular appeal in mainstream culture. We need to act before they gain un-stoppable momentum.

Blackwater Follows Bush-Cheney Playbook in Three Lawsuits

Guest Conributor: L. Vincent Sebastian

In recent years Blackwater USA, a private military and security contractor, has made the news on a number of fronts due to its involvement in the Iraq War, the global War on Terror, and other foreign policy/ military initiatives of the Bush Administration (see prior postings on Blackwater on this website). Tragic episodes in Iraq and Afghanistan resulted in the deaths of employees of Blackwater and its affiliates, and this in turn led to two high-profile lawsuits against Blackwater. A third lawsuit alleging corporate espionage was brought about by Blackwater against one of its former employees. In each of these suits, Blackwater has followed the three-pronged strategy used by the Bush administration of maintaining secrecy, bullying the opposition, and denying accountability to the bitter end. First, a brief review of the suits:

Lawsuit #1. In March, 2004, four Blackwater security guards were attacked and killed by a frenzied mob as they escorted a supply convoy through Fallujah, Iraq. The families of these employees then sued Blackwater, accusing the company of breaking its contractual obligations to the four men by sending them into hostile territory unprepared and failing to provide them with appropriate equipment such as armored vehicles or even a map. This lawsuit, which had made its way to the Supreme Court in a series of unsuccessful appeals by Blackwater, was recently sent to arbitration. Last month (May, 2007), a federal judge ordered the lawsuit to be decided behind closed doors, allowing Blackwater to avoid public examination of its practices in Iraq. Apparently, the employment contracts signed by these security guards contained an arbitration clause. Arbitration is a non-judicial process that has a number of advantages for Blackwater. There is no right to a trial by jury. The verdict is final and binding. There is no appeal. There is no right to discovery, which means the plaintiffs do not have the same access to internal documents, Blackwater documents. The proceedings are confidential and the outcome is confidential.

Lawsuit #2. Blackwater’s aviation division is being sued by the families of three U.S. soldiers who were killed in a plane crash in Afghanistan in November of 2004. This was a plane operated by Blackwater's aviation affiliate, Presidential Airways of Florida. All six people aboard died, the three Presidential civilian crewmen and the three soldiers. The plane was ferrying the men from an airfield in Bagram, Afghanistan, to Farah, Afghanistan, and was not flying a combat mission. According to the suit, Blackwater sent the men to their deaths in an under-equipped and poorly manned aircraft. The plane lacked even the most basic safety equipment. It had no global positioning system or radar. Its crew did not wear oxygen masks. And its two pilots, who had been in Afghanistan only two weeks and had never flown the route before, failed to take the basic step of filing a flight plan, which led to a delay in finding the wreckage. In late 2006, the National Transportation Safety Board found that unprofessional behavior by the Presidential Airways flight crew was a key cause of the crash. The Board concluded that the crew deliberately avoided the standard route and took a joy ride in another direction, eventually becoming trapped in a canyon and slamming into a mountainside. The unorthodox route contributed to a delay in locating the wreckage. Had rescuers reached the site sooner, one of the servicemen (Harley Miller) might have been saved, the investigators found. Last month (May, 2007), Blackwater was in federal appeals court in Miami today trying to get that case thrown out.

Lawsuit #3. On Feb. 21, 2006 Blackwater filed a lawsuit against former employee Curtis Smith, claiming that Smith gave trade secrets (an accounting system) to Covenant Special Projects, a rival security company in Northern Virginia where Smith now works. Blackwater actually has an affidavit from Smith in which he admits giving away trade secrets. Smith claims, however, that the statement was induced under duress and intimidation in a Blackwater conference room where he was confined against his will. After Blackwater filed suit, Smith countersued Blackwater and its executive vice president, William Mathews, alleging that his affidavit was extracted under duress. The day after Blackwater’s lawsuit was filed, Virginia Beach police raided Smith's home, authorized by a search warrant issued on suspicion of computer fraud and computer trespass, which are criminal offenses. According to the police report, the raid yielded a computer, related equipment and papers. But to date, Smith has not been charged with any crime. This criminal investigation is continuing as the civil case unfolds. Smith says that trade secret in question is a generic technique that uses simple accounting principles and that he gave up no confidential information. Moreover, he says, Blackwater has made it difficult for him to defend himself by failing to specify the trade secrets he is alleged to have stolen, saying that the information is classified. It so happens that the leader of the police raid, Maj. Jon Worthington of the Camden County, VA Sheriff's Office, moonlights as an instructor on Blackwater's Moyock, NC compound, and that the Virginia Beach Police Department leases a training facility there.

The move of the Fallujah lawsuit to arbitration will keep Blackwater away from the light of a courtroom, where many had expected to learn details about this firm and the private army it fields in Iraq and elsewhere. What is interesting is that Blackwater did not make much of disputing the specific allegations of the Fallujah lawsuit. Instead, Blackwater attorneys (which have included former Whitewater prosecutor Kenneth Starr and current White House Counsel Fred Fielding) argued that the company should not face scrutiny in civilian courts because the contracting industry is an extension of the military. That is, they took the legal approach that says, “We can’t be sued.” Blackwater argued in both the Fallujah and Afghanistan suits that it is part of the U.S. “total force” and therefore should be entitled to the same immunity from civilian litigation for wrongful death, for casualties in a war zone, enjoyed by the US military. (In February 2006, then-Secretary of Defense Donald Rumsfeld classified Blackwater and other contractors as legitimate parts of the total force making up the U.S. war machine.)

Blackwater has also tried to block the testimony of witnesses who worked for Blackwater and who are thought to have information that would show that questionable activities took place in the days leading up to the four men being killed in Fallujah. In particular, Blackwater was able to block the deposition of a former Blackwater manager, claiming that this former employee potentially was in possession of information that, if it was revealed publicly, could damage the national security of the United States.

At the same time, however, Blackwater’s lobbyists and PR specialists at the Alexander Strategy Group (the Republican lobbying firm operated by senior staffers of former Rep.Tom DeLay) were in the media proclaiming how it would be inappropriate to apply the Uniform Code of Military Justice, the court-martial system, to Blackwater operatives, because they are civilians. So, Blackwater wants it both ways: the secrecy and immunity enjoyed by the military, but not the military’s system of accountability.

Blackwater uses a secrecy-at-all-costs approach to doing business not only with the courts, but also with the U.S. Congress. “(The Fallujah) incident was a bit of a wake up call to many people to not only the extent of the private security contracting but the questions surrounding it,” said North Carolina Rep. David Price, who helped add increased contracting oversight measures to the defense authorization bill approved recently by the House. Blackwater is notoriously reticent to discuss the details of its business, and Congress has struggled at times to get answers about Blackwater and others in the private military contracting industry. Blackwater has repeatedly refused to turn over documents related to deadly incidents in Iraq and Afghanistan. It has stone-walled to the point of telling Rep. Henry Waxman, chair of the House Government Oversight Committee, that they cannot provide him with documents because they are classified.

Of the three lawsuits discussed above, Blackwater wants only one of them to go to court: the one that it initiated (against its former employee). Here, the corporation has sought to intimidate an individual through a coerced affidavit and a “police” raid carried out by one of its part-time employees. But even here, Blackwater continues its national security-based argument for secrecy.

Other recent commentary: The Bush administration has engaged in private contracting on a scale previously unimagined, and we need to have a handle on it (Rep. David Price). “We're spending an awful lot of money on these companies, and people still can't define their role” (John Pike, a military analyst with think tank GlobalSecurity.org). “The losers in this development are ultimately the American people,” (Jeremy Scahill, author of “Blackwater: The Rise of the World's Most Powerful Mercenary Army”).

End Notes: How connected is Blackwater to the Bush administration and to the Republican Party? In addition to the connections mentioned above, consider the following.

* Since February 2005, J. Cofer Black has been Vice Chairman of Blackwater USA. From December 2002 to November 2004 he was the U.S. Department of State Coordinator for Counterterrorism with the rank of Ambassador at Large. He was a key figure in the rendition program, the government-sanctioned “kidnap-and-torture” program, where suspected terrorist prisoners are sent to third-country locations to be interrogated. Black is also chairman of a new privatized intelligence company called Total Intelligence Solutions that is being bankrolled by Erik Prince, the head of Blackwater. Recently, presidential candidate Mitt Romney tapped Black to be his senior advisor on counter-terrorism.

* Mitt Romney grew up in Michigan and is the son of former Michigan governor George Wilcken Romney (1907 -1995). The elder Romney was the chairman of American Motors Corporation from 1954 to 1962 and was the Republican Governor of Michigan from 1963 to 1969. He was also a candidate for the Republican presidential nomination in 1968 but lost to Richard Nixon.

* Erik Prince, the head and founder of Blackwater, also grew up in Michigan where his father, Edgar Prince (died 1995) founded a company in 1965 called Prince Manufacturing (Prince Automotive) in Holland, Michigan, which serviced the auto industry. Revenue from this company was used to fuel the rise of the religious right in America. The elder Prince gave seed money to Gary Bauer to found the Family Research Council, where Erik Prince was once an intern. The Prince’s were also significant bankrollers of James Dobson and his group Focus on the Family. Erik Prince was a Navy SEAL (one of the wealthiest people ever to join the SEALS) prior to founding Blackwater. His reason for founding Blackwater was to anticipate government outsourcing of training and firearm-related activity. This closely followed a Halliburton study commissioned by Dick Cheney (as George H.W. Bush’s Secretary of Defense) on how to further privatize the military bureaucracy.

Sources:

“Afghanistan: Families Sue Private Contractor Over Soldiers' Deaths”
Kristin Collins, The News & Observer, June 14, 2005

“Crew's behavior is blamed for '04 plane crash in Afghanistan”
Bill Sizemore, The Virginian-Pilot, December 7, 2006

“The Rise of Blackwater”
Sandip Roy, New America Media, April 24, 2007

“US: Blackwater lawsuit accuses ex-employee of stealing secrets”
Bill Sizemore, The Virginian-Pilot, May 10, 2007

“Pivotal Family Lawsuit Against Blackwater USA Blocked from Court -- and Moved to Panel with Company Ties”, Amy Goodman, Democracy Now! May 23, 2007

“Blackwater lawsuit over U.S. security contractors killed in Iraq headed for private arbitration” Mike Baker, May 26, 2007

Privatizing War - Part 3

Guest Writer: L. Vincent Sebastian

FINAL in a Three-Part Series,

My recent posting, “Privatizing the War in Iraq”, describes the Bush administration’s growing reliance on private contractors such as Blackwater USA to conduct military operations in Iraq. Yet, the issues and potential problems with private contractors described in that posting are only the tip of the iceberg. In the new posting below, the many problems surrounding private military firms (PMFs) are more fully laid out. The source material for this posting is: P.W. Singer, “Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry”, International Security, Vol. 26, No. 3, Winter 2001/2002. Although Singer’s article, turned into a book, was published before the U.S. invasion of Iraq, its relevance has only increased in the last five years.

Impacts of the Privatized Military Industry on Conflict, Security, and Public Policy

The likely consequences of PMF activities fall into three broad categories: contractual dilemmas; military market dynamics and disruptions on security relations; and the policy impact of PMFs as alternative military actors.

(1) Contractual Dilemmas. Three types of contractual dilemmas are considered: the financial bottom line; monitoring and oversight, and the dependences of states on PMFs.

(a) The Bottome Line. At issue here are divided loyalties and different goals. Clear tensions exist between the client's security objectives and the PMF’s desire to maximize profit, so that the public good and the PMF’s good often conflict. In spite of claims to the contrary, the PMF may not act only in its client’s best interests. Given that the PMF’s focus is on the bottom line, it may have an incentive to cut corners to increase profits. For example, during the Balkans conflict, Brown & Root (a subsidiary of Halliburton) is alleged to have failed to deliver or severely overcharged the U.S. Army on four out of seven of its contractual obligations. In addition, PMFs have similar financial incentives to prolong their contracts and to avoid taking undue risks that might endanger their own corporate assets. The result may be a protracted conflict that could have been avoided. Finally, it is no stretch to imagine two arms of a large PMF contracting to support opposing sides in a conflict.

(b) Monitoring and Oversight. Few clients have experience in contracting with PMFs, and frequently there is little oversight and/or a lack of clearly defined requirements. Add in the fog of war, and proper monitoring becomes extremely difficult. Moreover, the actual consumer may not be the contracting party. Some nation-states pay PMFs to supply personnel on their behalf to their allies or to international organizations. The accountability gap between the server and served is becomes much wider in such cases.

(c) Dependence. As the use of PMFs becomes increasingly popular, so too does the danger that clients will become overly dependent on PMF services. Reliance on PMFs means that the client’s strategic success is vulnerable to changes in market conditions and to the client-PMF balance of power. This can result in three potential risks to the client. First, the PMF might leave its client in the lurch. A PMF may have no compunction about suspending a contract if a situation becomes financially or physically too risky. Because they are typically based elsewhere, and in the absence of applicable international laws to enforce compliance, PMFs face no real risk of punishment if they defect from their contractual obligations. The employees of PMFs cannot be forced to stay at their posts in the face danger. To the extent that entire military functions such as weapons maintenance and supply have become privatized, the entire military machine would break down if even a modest number of PMF employees chose to leave.

Second, the PMF might gain dominance over the client. In weak or failed nation-states, PMFs, which are often the most powerful force on the local scene, may take steps to protect their own interests. Thus early termination of a contract, dissatisfaction with the terms of payment, or disagreements over specific orders could lead to unpleasant repercussions for a weak client. For example, it is suspected that in 1996 Executive Outcomes helped to oust the leader of Sierra Leone, who headed the very regime that had hired it, in favor of another local general with whom the firm’s executives had a better working relationship.

Third, the PMF might engage in economic imperialism. Clients of (type 1, military provider) PMFs are often those most in need but least able to pay and thus at the highest risk of default. This imbalance can lead to the mortgaging of valuable public assets to the PMF or its associates in an attempt to align the client’s and firm’s incentives. For example, the PMF may obtain mineral rights following the fulfillment of its contract, or possibly in exchange for protecting those very resources and their production. A variation of this is the client’s promise to pay the PMF in public resources or assets currently held by enemy forces, following a successful campaign. Ultimately, the result is that valuable resources for the nation as a whole are lost in order to meet short-term exigencies.

(2) Military Market Dynamics and Disruptions. Military market dynamics and disruptions can complicate international security because military powers are no longer exclusively sovereign states but include private players. The privatized military industry is an independent, globalized supplier operating beyond any one state’s domain. Non-state actors can access formidable military capabilities, and where state structures are weak, the result is a direct challenge to state sovereign authority. Even when PMFs are hired by strong states, decision making shifts beyond the states’ immediate control and is subject to the PMF’s own motivations, with all of the uncertainty that these processes entail. The very act of military outsourcing also runs counter to the tenet that states seek to maximize their power through self-sufficiency in order to minimize their reliance on others. Five potential impacts or disruptions on the state or global security environment caused by the private military industry are considered below.

(a) The New Fungibility of Power. Today, the entire spectrum of conventional forces can be obtained in a matter of days or weeks, for a price. A state or non-state entity need not have a large population, institutional support or expertise in order to wield capable military might. The barriers to acquiring military strength are lowered, making power more fungible than ever.
This ability to quickly transform money or other economic assets into force – that is, into a military threat – makes economic power itself more threatening, contrary to conventional assumptions. The capitalist ethos tends to assume only what is positive about the profit motive, and the spread of capitalism and globalism is seen, conventionally, as a way to reduce the incentives for violent conflict. However, the emergence of the PMF as a new type of private transnational firm, which relies instead on the existence of conflict for its profits, counters the assumption that non-state economic actors are generally peace orientated.

(b) New Complexities in the Balance of Power. The privatized military industry lies beyond any one state's control. The uncertainties of a dynamic global market creates major complications for the already-difficult task of assessing the balance of power between states. In an open market, where a wide range of military services can be procured, likely outcomes become increasingly difficult to discern. Once-predictable deterrence relationships can rapidly collapse, and the hire of PMFs can quickly and unexpectedly tilt local balances of power. Arms races might become instant bidding wars on the open market, with adversaries competing first for PMF services before taking to the battlefield. The result is that the pace of the race is accelerated, and first-mover advantages are heightened. Indeed, such changes could well increase the likelihood of war initiation and preemptive strikes. In addition, conventional arms control is made more difficult with the existence of this market. A nation-state can reduce its in-house force capacity, perhaps to comply with a treaty or avoid sanctions, without reducing its overall threat potential.

(c) Changes in Strategic Relationships. The privatized military market has fundamentally altered the former patron-client relationships of the Cold War. Instead of bowing to the demands of their superpower patrons in exchange for support and protection, weaker states can buy the military skills, training, and capabilities that they need on the open market. As a result, the patron’s leverage is diminished, and weaker states are no longer bound by their patrons’ prerogatives.

Traditionally, states in alliances have divided up their military tasks, making them more dependent on one another in the process. Now that PMFs can perform some of these tasks, mutual reliance among allied states is effectively reduced. A state may then feel less need for the approval of its allies in conducting its own affair, and ultimately the alliance may become weakened. For example, NATO members rely on the U.S. to supply much of its external deployment capacity (e.g., lift capacity, logistics, intelligence gathering and analysis). However, this capacity could also be adequately supplied by type 3 PMFs (military support firms).

The PMF market also makes available new forms of aid and alliances. Because PMFs allow the easy conversion of financial resources into military might, allies can provide military aid in the guise of simple cash infusions. The rationale for this new form of aid is that it lowers potential risks for donors by reducing the likelihood of their becoming embroiled in their allies’ fighting. In addition, possible donors are no longer restricted to states. With equal ability to pay, non-state actors, including even rich individuals, can become valuable allies, able to bolster local forces and shift military balances from a distance.

(d) Non-State Actors Empowered. The global private military industry provides easy access to military services, and therefore provides non-state actors with new options and paths to power not imagined until recently. The increase in military capability of non-state groups has resulted in a widening of conflicts and a lessening of weak states’ ability to put down internal opposition. In the current unregulated market, PMFs decide for whom they work. Thus far, they have contracted with all types of clients, from reputable governments to unsavory customers; the only limitation being the ability of the client to pay. Although some PMFs contend that they work only for reputable states, both the structure of the market and the record so far argue against this. Because firms make decisions that are in their own (financial) interest, single-shot payoffs from disreputable clients might prove too great a temptation, especially if the relationship can be hidden. PMFs that have difficulty attracting the business of reputable clients in the competitive market are the most likely to work with violent non-state entities.

(e) The Military Market Human Rights Abuses. Tensions exist regarding the impact of PMFs on human rights during conflict. On the one hand, PMFs point to market incentives for engaging in good behavior, as their long-term profits are partly dependent on having a good public image. PMFs also emphasize the positive impact that they might have in helping to professionalize local forces. On the other hand, however, war is a business in which nice firms might not finish first. PMF aspirations of corporate responsibility and a good-guy image may be overridden by the need to fulfill a contract or by the desire to be seen as the kind of firm that gets things done. Thus, in certain situations human rights may be transgressed for the corporate interest. For example, Executive Outcomes is known to have used fuel air explosives (FAEs or vacuum bombs) in its Angola operations. International organizations regard the use of FAEs as a transgression of human rights, because they inflict particularly torturous injuries. But FAEs are also highly effective, which explains why a firm would choose to use them.

The private military industry is an outlet for those naturally drawn to mercenary work and is likely to attract disreputable players looking for the cover of legitimacy. As employers, PMFs want to hire individuals who will be effective, even if this means casting a blind eye on past human rights abuses. As a result, many members of the most ruthless military and intelligence units (from the Soviet Union and the apartheid regime in South Africa) have found employment in the industry. Even when firms scrupulously screen prospective employees (which is easier said than done, given that most CVs do not have an “atrocities committed” section), it is still difficult to monitor troops in the field. If employees do commit violations, there is little incentive for firms to report them. A firm that does so risks scaring off both clients and prospective employees. Even if external legal action or sanctions were attempted, it is doubtful whether any PMF would allow its employees to be tried in a client state’s judicial system.

The ultimate problem with PMFs is that they diffuse responsibility. Questions about who monitors, regulates, and punishes employees or companies that go astray (“rogue firms”) have not been fully answered. That many of these firms are chartered in offshore accounts complicates the matter even further. In sum, privatization provides no greater assurance of moral military behavior and may even produce countervailing incentives.

(3) The Policy Impact of PMFs as Alternative Military Actors. The civilian-military relationship is a story of institutional balance (and sometimes imbalance), where civilian control over the military vies with the military’s need for autonomy to do its jobs. The privatized military industry may upset this balance because it supplants core military positions and functions. PMFs may be attractive to leaders, to the extent that they allow them to get rid of politically unreliable or untrustworthy military officers. Of course, local militaries know this and may seek to preempt such action if PMFs are to deploy. Additionally, the hire of PMFs would be destabilizing if any of the following conditions applies: (a) PMF employees receive higher pay than local soldiers for performing similar tasks; (b) PMF employees have vastly better equipment, (c) PMF employees are kept separate and distinct from local forces, or (d) PMF officers are placed in command positions or their presence blocks normal promotion tracks. At least (a) and (b), and possible (c) and (d) as well, are common in the relationship between U.S. troops and private forces currently in Iraq.

The rise of the privatized military industry provides a new means for leaders to evade public policy restrictions. In the U.S., for example, the executive branch can use PMFs as a means to circumvent limits placed on it by the Congress or by public opinion. The president, as commander in chief, may resort to using PMFs if he wishes to avoid the potential political costs of other actions (e.g., reinstating the draft), or if Congress places limits on troop numbers. Recourse to PMFs therefore has negative implications for the democratic principle of checks and balances. It may allow the executive branch to gain too much autonomy and power and undertake public-private activities against the intent of Congress.

The use of PMFs also allows the executive branch to avoid both public debate of its policies and accountability for results. Responsibility and accountability on the part of public officials are greatly diminished because the use of PMFs moves decision making power one step further away from elected representatives. The use of PMFs instead of official covert action provides the cover of plausible deniability that public forces lack. If an operation goes awry, the activities of a firm are easier for a government to deny and the blame easier to shift. But, without public debate and monitoring, the actions of PMFs may prove embarrassing or worse. In Colombia, for example, Airscan was implicated in coordinating the bombing of a village in which eighteen civilians (including nine children) were killed. In addition, PMF operations might even backfire and ultimately involve the client in direct fighting without the requisite public debate.

Conclusion

The rise of the modern privatized military industry has created a host of new problems and challenges. Nation-states no longer have an exclusive role in the military sphere. International institutions, non-state organizations, corporations, and even individuals can now lease military capabilities of the highest level from the global market. In terms of policy, just as Western militaries recently had to develop a system for working with NGOs during humanitarian operations, they now must also consider how to deal with PMFs, which they will increasingly encounter in the field. At the decision-making level, governments and international organizations must develop standard contracting policies and establish vetting and monitoring systems attuned to PMFs, including the assurance of legislative oversight. A policy that defers to the market will not curb threats to peace. PMFs, to the extent that they are, or are part of, publicly traded corporations, have a legal requirement to generate maximum profits for their shareholders. Not only is this a mandate for PMFs to seek out conflict wherever they can find it, but it is also a strong incentive to promote the escalation of existing tensions and even instigate new conflict where it does not yet exist. After all, they are in the business of war.

This concludes the three-part series.

Part 1: The Privatized Military Industry in the Global Context

Part 2: Organization and Operation of the Privatized Military Industry
.

Privatizing War - Part 2

Guest Writer: L. Vincent Sebastian

SECOND in a Three-Part Series,

My recent posting, “Privatizing the War in Iraq”, describes the Bush administration’s growing reliance on private contractors such as Blackwater USA to conduct military operations in Iraq. Yet, the issues and potential problems with private contractors described in that posting are only the tip of the iceberg. In the new posting below, the many problems surrounding private military firms (PMFs) are more fully laid out. The source material for this posting is: P.W. Singer, “Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry”, International Security, Vol. 26, No. 3, Winter 2001/2002. Although Singer’s article, turned into a book, was published before the U.S. invasion of Iraq, its relevance has only increased in the last five years.

Organization and Operation of the Privatized Military Industry

The privatized military industry is neither a capital-intensive sector, nor requires the heavy investment needed to maintain a public military structure. The barriers to entry are relatively low, as are the economies of scale. Unlike state militaries, which require substantial budget outlays, PMFs need only a modicum of financial and intellectual capital. All the necessary tools are readily available on the open market, often at bargain prices from the international arms bazaar. The labor input – predominantly skilled former soldiers – is also relatively inexpensive and widely available. Spurring their recruitment is the comparatively low pay and declining prestige of many state militaries. PMF employees tend to receive two to ten times as much as they did in the military, allowing the best and brightest to be lured away, as mentioned above.

Estimates suggest that annual revenues for the private military industry as a whole were $100 billion in 2001. Since then, revenues have increased by over 85 percent in industrial countries and 30 percent in developing countries, an indication of the industry's robust health and growing power. Many PMFs operate very efficiently as virtual companies with little investment in fixed (brick and mortar) assets. Most PMFs do not maintain standing forces but instead draw from databases of qualified personnel and specialized subcontractors on a per-contract basis. In 2001 the overall number of firms in the industry was in the high hundreds, although the industry is consolidating into fewer, larger transnational firms. Armor Holdings, for example, was listed among Fortune magazine’s 100 fastest-growing companies in 1999 and 2000 following its string of global acquisitions. However, niches will remain for smaller firms that can make informal deals and barter arrangements that bigger firms cannot. Such practices are less tenable for large “brand name” firms, which have formal accounting practices and may be subject to the oversight of institutional investors.

PMFs can be divided into the following three types, based on their capabilities and clients. (1) Military Provider Firms engage in actual fighting, direct command and control of field units, and/or the provision of weapons. In many cases, they are utilized as force multipliers, with their employees distributed across a client’s force to provide leadership and experience. Clients of type 1 firms tend to be those with comparatively low military capabilities facing immediate, high-threat situations.

(2) Military Consulting Firms provide advisory and training services. They also offer strategic, operational, and organizational analysis that is often integral to the function or restructuring of armed forces. The primary difference between type 1 and type 2 firms is that consultants do not to engage in combat. Type 2 clients are usually in the midst of force restructuring or are attempting a transformative gain in capabilities. Their contract requirements tend to be less immediate and more long term than those of type 1 clients.

(3) Military Support Firms provide rear-echelon and supplementary services. Although they do not participate in the planning or execution of direct hostilities, they do fill functional needs (including logistics, technical support, and transportation, among others) critical to overall combat operations. Clients of type 3 firms are typically engaged in long-duration interventions and have standing forces requiring a surge capacity.

End of the SECOND in a three-part series.

Part 1: The Privatized Military Industry in the Global Context

Part 3: Impacts of the Privatized Military Industry on Conflict, Security, and Public Policy
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The Problem with Privatizing War

Guest Writer: L. Vincent Sebastian

FIRST in a Three-Part Series,

My recent posting, “Privatizing the War in Iraq”, describes the Bush administration’s growing reliance on private contractors such as Blackwater USA to conduct military operations in Iraq. Yet, the issues and potential problems with private contractors described in that posting are only the tip of the iceberg. In the new posting below, the many problems surrounding private military firms (PMFs) are more fully laid out. The source material for this posting is: P.W. Singer, “Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry”, International Security, Vol. 26, No. 3, Winter 2001/2002. Although Singer’s article, turned into a book, was published before the U.S. invasion of Iraq, its relevance has only increased in the last five years.

The Privatized Military Industry in the Global Context

(a) Introduction: Private military firms are profit-driven organizations that trade in professional services intricately linked to warfare. They are corporate businesses that specialize in the provision of a wide range of military skills and services, including tactical combat operations, strategic planning, intelligence gathering and analysis, operational support, logistics support, troop training, military technical assistance, and post-conflict resolution. PMF capabilities extend across the entire spectrum of military activity, from a team of commandos to a wing of fighter jets. PMFs actively advertise their services, and one can gain access to them simply by becoming a business client.

As the principal private actors in warfare, today's PMFs have evolved far beyond ad-hoc groups of mercenaries. PMFs operate and compete openly on the international market, and provide military skills and services to a wide variety and number of clients. PMFs can gain a competitive advantage in serving niche markets through specialization within the military sector. PMFs are often tied through complex financial arrangements to other firms, both within and beyond their own industry. Many of the most active PMFs are subsidiaries of larger corporations listed on public stock exchanges. For a large multinational corporation, the addition of profitable military services to their list of offerings may help support their bottom line. Because PMFs maintain permanent corporate hierarchies, they can make use of complex corporate financing schemes and can engage in a wide variety of deals and contracts. As legal entities, PMFs are at least nominally tied to their home nations through laws requiring registration and licensing, although codified standards for corporate behavior vary widely among countries. PMFs are contractually bound to their clients and can work for multiple clients in multiple markets or theaters at once.

(b) Historical Background: The private provision of violence was a routine aspect of international relations before the twentieth century, and every empire from Ancient Egypt to Victorian England utilized contract forces. By the twentieth century, a system of state sovereignty had spread across the globe, and with the rise of superpowers the social-political norm ran against private armies. But, the 1990’s witnessed a resurgence of private military activity around the world. Every major U.S. military operation in the post-Cold War era (Iraq 1991, Somalia, Haiti, Zaire, Bosnia, Kosovo, Afghanistan, and Iraq 2003) has involved significant and growing levels of PMF support. In addition, corporations, international organizations, and even individuals now rely increasingly on military/ security services supplied by the private market.

The growth in the private military industry has resulted from the changed global security environment at the end of the 20th century compounded by the Bush administration’s global war on terrorism. The end of the Cold War resulted in massive disruptions in the supply and demand of capable military forces. In the 1990s, the world’s armies shrank by more than 6 million personnel, and a huge number of individuals with military skills found themselves looking for work, including for example an estimated 70 percent of the former KGB. Many elite units, such as apartheid South Africa’s 32nd Reconnaissance Battalion, simply kept their structure and formed their own private companies. At the same time, massive arms stocks flooded the market. Machine guns, tanks, and even fighter jets became available to anyone who could afford them. With the end of superpower pressure for stability, new security threats began to appear, many involving ethnic or internal conflicts.

(c) PMF Services: Supply and Demand No longer strategic pawns of the Cold War and shorn of their superpower support, many nation-states have suffered breakdowns in governance, and have seen a decrease in their ability to respond to internal and external threats. This has been particularly true in developing areas, where many regimes lack any real political authority or capability. The security apparatuses – local military and police – of these regimes are likely to be deficient to some extent, and PMFs have aimed to fill the void. As one company executive explained, “The end of the Cold War has allowed conflicts long suppressed or manipulated by the superpowers to reemerge. At the same time, most armies have got smaller, and live footage on CNN of U.S. soldiers being killed in Somalia has had staggering effects on the willingness of governments to commit to foreign conflicts. We fill the gap.”

Two other trends have helped raise the demand for PMF services. First, the military operations of great powers have become more high-tech, and civilian specialists are relied on more than ever to run these increasingly sophisticated military systems. With sophisticated military technology, strategic objectives can be achieved by a relatively small number of soldiers who may not even be on the battlefield. Fewer individuals are doing the actual fighting, while massive, high-tech, and information-intensive support systems are required to maintain modern forces. Economic realities are creating an in-house vacuum of high-tech military support personnel, and the armed forces of nation-states must rely increasingly on specialized expertise provided by the private sector. Such expertise is in demand in all sectors of the economy, not just the military, so the best and brightest in the public armed forces are often lured away by the higher salaries of private employment.

Second, the primary tools of warfare – conventional weapons – have both diversified and become more available to a broader array of actors. Non-state actors with newfound ability to disrupt world society are increasing in number, power, and stature: regional warlords, terrorist networks, and drug cartels. The opportunity for profit may be as much a cause of conflict as socio-political factors. With the global spread of cheap infantry weapons, individuals and small groups can purchase and wield disproportionately large military might. Almost any group operating inside a weak nation-state can acquire at least limited military capabilities, which lowers the bar for creating viable threats to the status quo. Furthermore, this shift in the balance of power from states to non-state actors encourages the proliferation and criminalization of local warring groups. With enough money anyone can equip a powerful military force, and with a willingness to use crime, anyone can generate enough money. Many local conflicts have lost the ideological motivation they once had and instead have become grabs for local resources. As a result, warfare itself becomes self-perpetuating, as violence generates profit for those who wield it most effectively (which often means most brutally), while no one group can eliminate the others. PMFs thrive in such profit-oriented conflicts, either working for these new conflict groups or reacting to the humanitarian disasters they create.

The last few decades have seen a shift toward the marketization of the public sphere, which has gone hand in hand with globalization. Both are premised on the belief that the principles of comparative advantage and competition maximize efficiency and effectiveness. Privatization, with an emphasis on downsizing government, is the economic policy of choice among many of the world’s elite. At the same time, outsourcing has become a dominant strategy of the modern corporation and a huge industry in its own right. Global outsourcing expenditures topped $1 trillion in 2001, a doubling from three years earlier. Thus, the use of profit-motivated military service providers has become not only a viable option but frequently the favored solution for both public institutions and private organizations. The successes of privatization programs and outsourcing strategies in other sectors of the economy have helped give PMFs the stamp of legitimacy.

End of the FIRST in a three-part series.

Part 2: Organization and Operation of the Privatized Military Industry

Part 3: Impacts of the Privatized Military Industry on Conflict, Security, and Public Policy
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Privatizing the War in Iraq

Guest Writer: L. Vincent Sebastian

This article summarizes some of the issues surrounding private armed forces involved in the U.S. invasion and occupation of Iraq. It draws from the sources referenced at the end.

With the casualty count growing daily and troops stretched thin on the ground, the Bush administration is looking to mercenaries to help control Iraq. The practice of using mercenaries to fight wars is not new, but has become increasingly popular in recent years. During the first Gulf War, one out of every 50 to 60 soldiers on the battlefield was a mercenary. The number had climbed up to one in ten during the Bosnian conflict. Currently in Iraq, more than 40 percent of the total occupying force comprises private contractors. For President Bush and his political allies, war has become just another industry to be outsourced, with contractors providing a backdoor means of expanding the occupation through the deployment of private armies.

In his State of the Union address in last month, Bush mentioned a major new initiative in the U.S. disaster response/reconstruction/war machine: a Civilian Reserve Corps. Bush said: “Such a corps would function much like our military Reserve. It would ease the burden on the armed forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them.” But this is precisely what the administration has already done, largely behind the backs of the American people and with little congressional input. Private contractors constitute the second-largest force in Iraq, about 100,000 strong, of which 48,000 work as private soldiers, according to a Government Accountability Office report. The number of private soldiers (armed security contractors) has more than doubled in the last two years, up from 20,000 in the first quarter of 2005. This is an undeclared expansion of the scope of the occupation.

This expansion is paid for with taxpayer dollars, of course. Obviously, the training of U.S. military personnel is paid for by our tax dollars. However, once skilled and experienced soldiers becomes eligible for discharge, private, for-profit corporations such as Blackwater USA (see footnote below) may recruit them away from the military, offering salaries much higher than those paid by the military. The average pay for a contractor on “active duty” is $500 to $600 a day, and may be as much as $1,000 a day, which is far more than that of military personnel. This is a strong incentive. One contractor said that he is regularly approached by far younger, low-paid U.S. servicemen, who ask about jobs at Blackwater.

The problem is that firms such a Blackwater rely primarily on large, taxpayer-funded U.S. government contracts to stay in business, not on the business of private sector customers or clients. Blackwater has a $300-million, no-bid contract (from 2003) with the State Department to guard diplomats in Iraq. Thus, tax dollars are used first to pay to train the troops, then to pay them a lot more to do basically the same job with a private contracting firm, and finally to pay hefty profits to the contracting firm.

While Blackwater is known in some quarters for its professionalism (it sees itself as the FedEx of defense and homeland security operations), the credentials of other firms are more questionable. Consider Aegis Defense Services, for example. Aegis was awarded a $293 million contract from the U.S. government to provide security in Iraq, despite the fact that its principal (Tim Spicer) was suspected of being involved in the 2004 coup attempt in Equatorial Guinea, for which his former business associate (Simon Mann) was convicted and sentenced to seven years in prison in Zimbabwe; and despite the fact that Aegis had no previous experience in Iraq and didn't have the resources to fulfill the contract. The controversial nature of this contract got the attention of Congress, and eventually the Pentagon admitted that its contracting officer was completely unaware of Spicer's background. Aegis’s first DOD audit in 2005 was damning, including the charge that the company was trying to ramp up so fast to meet the contract requirements they were hiring poorly vetted Iraqis and giving them passes to the Green Zone. The company also came under scrutiny when videos of Aegis contractors indiscriminately firing at civilian cars surfaced on the Internet. Despite this, Aegis continues to carry out extensive contracting operations in Iraq.

The role of private contractor personnel is ambiguous and controversial. Typically, they are bodyguards (for diplomats and other officials), or are armed guards hired to protect oil wells or to provide security for airports or along transportation corridors. These private soldiers have operated with almost no oversight or effective legal constraints. In the first years of the war, there were no rules limiting contractors’ use of force in Iraq. They could shoot to kill, but had little accountability. If contractors misbehaved – as they did at Iraq's Abu Ghraib prison – they rarely faced charges. Why? Because private contractors are not legally considered combatants. Military law applies to the troops, but not to contractors, even though contractors are frequently in the same combat situations as the troops – where life and death decisions are made. The military can take disciplinary action and/or bring criminal charges against U.S. troops – but not against contractors – that break rules, regulations, and laws (including the Geneva Conventions) that govern troop conduct during times of war.

U.S. military officials have expressed concern about combat situations in which contractors open fire. Recently, the State Department imposed restrictions discouraging contractors from firing warning shots. As a consequence, private military firms have recently shifted their focused to “peacekeeping” duties (in part, to improve their image). But, there are still frequent reports of contractors running Iraqis off the road or injuring or killing innocent people. In carrying out their assignments, contractors can be very aggressive, offending locals and making enemies each time they go out (from a statement by retired Marine colonel T. X. Hammes). Ultimately, a contractor’s paid mission may not be fully consistent with that of the U.S. military, and may not support the broader interests of the U.S. counterinsurgency.

At the same time, the contractor’s work is as risky or riskier than that of the U.S. troops, and may make the jobs of both more difficult. The prospect of private armed security guards moving around combat zones adds a level of uncertainty and complexity for the troops (“Is that SUV coming toward us friend or foe?”). On many occasions, contractors have been fired upon by U.S. soldiers and Marines at checkpoints. Contractors are also targets for insurgents and militia in Iraq, as seen in early 2004 when four Blackwater employees were ambushed and burned in the Sunni hotbed of Fallouja. Multiple execution-style killings of contractors have taken place since then, the most recent just hours before Bush’s State of the Union address last month.

As the number of U.S. (and coalition) troop deaths rises, contractor deaths go uncounted in the official toll. The non-counting of contractors is certainly politically expedient since the official number hides some of the human costs of war. As of the first quarter of 2005, there were an estimated 240 deaths among some 20,000 armed private security contractors in Iraq. This number was not obtained from military sources, but from the Department of Labor (through Freedom of Information Act requests), which tracks the number of contractors that have been killed because the federal government has a program to insure contractors who service the US military abroad (an outgrowth of the Defense Base Act). More than 600 families of contractors in Iraq have filed for these benefits. Contractor firms such as Blackwater are under no obligation to make public the identities of those killed or details of the deaths.

Yet, 240 deaths (as of early 2005) is an underestimate of true number of contractors killed because it accounts for only contractors that are eligible for federal benefits inside the United States. Many of the 48,000 U.S.-funded mercenaries in Iraq are not Americans, and their deaths are not tracked by the Labor Department.

Blackwater and other U.S.-based military contractors have created a private military melting pot by hiring not only Americans, but also mercenaries from Bosnia, Chile, Colombia, the Filipeans, and South Africa. Many of these soldiers-for-hire are veterans of repressive military regimes, including that of the former Chilean dictator Augusto Pinochet and South Africa’s former apartheid government. Other recruits are impoverished former military personnel desperate for a paying job (Blackwater has a recruitment center in the Philippines).

Foreign mercenaries are typically paid much less than their American counterparts. One firm pays Filipino mercenaries $60,000-$80,000 a year, half of what it pays American mercenaries with equivalent qualifications and for the same assignments (although this is still more than the salaries of most active duty U.S. military personnel).

But it is ultimately the U.S. taxpayer who foots the bill, as illustrated by the following scenario reported by Sonni Efron with comments from Rep. Jan Schakowsky (D-Ill.) (Los Angeles Times, July 2005). The U.S. government has funded “Plan Colombia”, a counter-terrorism and counter-narcotics program that includes training and support for the Colombian police and military. We have been training foreign nationals – who then take that training and market it to private companies, who pay them three or four times as much as we are paying soldiers. American taxpayers are paying for the training of those Colombian soldiers. When they leave to take more lucrative jobs, perhaps with an American military contractor, they take that training with them. So then we are paying to train that person's replacement. And then we are paying the bill to the private military contractors.

The fact that U.S. firms recruit foreign nationals does not sit well with their home countries. South Africa’s Regulation of Foreign Military Assistance Act prohibits South African citizens from direct participation as a combatant in armed conflict for private gain. Michelle Bachelet, Chile's defense minister, has ordered an investigation into whether such recruitment is legal under Chilean laws. And, Blackwater's recruitment activities in the Philippines have triggered severe criticism and massive protests there.

* Footnote: Blackwater USA has a 6,000 acre para-military training facility as part of its corporate headquarters, in Moyock, North Carolina, just south of the Virginia border. This training center was founded in 1996 to fulfill the “anticipated demand” for government outsourcing of firearms and related security training. Blackwater has trained more than 50,000 military and law enforcement personnel. The firm also has additional offices in Baghdad, Iraq, and Kuwait City, Kuwait.

Sources:

Bill Berkowitz, “Mercenaries ‘R’ Us”, AlterNet, March 24, 2004.

Amy Goodman, “Our mercenaries in Iraq: Interview with Jeremy Scahill”, Democracy Now! January 26th, 2007.

Mark Hemingway, “Warriors for Hire: Blackwater USA and the rise of private military contractors”, Weekly Standard, v. 012(14), December 18, 2006.

Jeremy Scahill, “Our mercenaries in Iraq” Op Ed, Los Angeles Times, January 25, 2007.

Sourcewatch: A project of the Center for Media & Democracy

Ann Scott Tyson, “Private Security Workers Living On Edge in Iraq”, Washington Post, April 23, 2005.

Photo credits:

Private Security Near Landcruiser

Blackwater USA Helicopter: Agence France Presse—Getty Images.