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International | U.S. | Anti-War | Fault Lines

Making a Killing: America's Private Army and the Business of War
by David Zlutnick ( info [at] faultlines.org )
Sunday Mar 25th, 2007 6:12 PM
On January 20th the Iraqi resistance shot down a Blackhawk helicopter killing thirteen American soldiers. Three days later, just hours before Bush would give his State of the Union address, a Little Bird helicopter was shot down, killing five more Americans—but this incident didn’t make nearly the amount of news as the former. While the five men died in combat, they were not members of the US military. They were employees of Blackwater USA, the shining star in a new breed of corporation specializing in private soldiers—also known as mercenaries.
These private companies are part of a huge surge in the outsourcing of war, which is extremely evident in Iraq, as well as Afghanistan, Colombia, Haiti, and numerous other countries. Private contractors are the second-largest con- tingent of the “Coalition of the Willing” with a ratio of about one armed con- tractor for every two American soldiers. This is up from a ratio of one to sixty during the first Gulf War. The Pentagon estimates the number of contractors at around 100,000—but this is only an estimate because after four years in Iraq the military is only now beginning a survey to find the size of its contractor force.

According to the Government Accountability Office, approximately 48,000 of these contractors are working in Iraq as private soldiers, about six times the number of British troops in the country. Their roles include everything from operators of US military aircraft to security guards to bodyguards for high-level officials to interrogators (such as the CACI employees involved in the Abu Ghraib torture scandal).

For political purposes it is in the interests of the US government to build a large army of private soldiers. Even though 770 contractors have been killed in Iraq and 7,761 have been injured, they are not included in the official US death toll. Perhaps even more have been killed but the Pentagon doesn’t track contractor deaths, citing military regulations as the reason for this lack of oversight. Figures have to be deduced from insurance claims filed through the Depart- ment of Labor. Plus, if contractors are used for missions that are not quite legal or want to be distanced from official policy, their actions are completely deniable as they are not employees of the US government. This is the case along the Afghanistan-Pakistan border, where American forces are not allowed to venture into Pakistani territory.

With the job being so risky, what would attract so many to private companies? Well, Blackwater has been known to pay its employees $365,000 per year, compared to the $36,000 an average US soldier makes. No wonder so many former military personnel are signing up with a private employer instead of re-enlisting.

Blackwater is able to pay its soldiers so much because they have received $505 million in contracts from the US government since 2000. Three hundred twenty million of this has been since June 2004 alone, when they received a no-bid contract to guard diplomats and staff in Iraq. With this amount of money the company has been able to build the largest base for a private military in the world, acquire a fleet of 20 aircrafts (including helicopter gunships, a Boeing 767, and even a zeppelin), develop its own armored vehicle called the Grizzly, and build up a force of 20,000 soldiers.

The scariest thing about Blackwater and other such companies is that they currently lie in a legal no-man’s land, under no authoritative jurisdiction from any US or international law, nor the Geneva Conventions. In fact, when L. Paul Bremer—whose personal bodyguards were a specialized Blackwater team—was placed in charge of the Coalition Provisional Authority (CPA), one of his first mandates was to make contractors immune from Iraqi law.

In October, Republican Sen. Lindsey Graham inserted a clause into the 2007 Defense Bill attempting to place contractors under the Uniform Code of Military Justice, the code of laws for the US military. Proponents of expanded controls on contractors initially saw this as a small victory. In response Peter Singer, an expert on private military companies at the Brookings Institution, said “contractors’ ‘get-out-of-jail-free’ cards may have been torn to shreds.”

However, Doug Brooks, president of the International Peace Operations Association, a lobbying group represent- ing military contractors, disagrees and insists that the clause would not cover all military firms. “It might be doable for Defense Department contractors, but it’s not a panacea,” Brooks says. “It’s a square peg in a round hole.” And he’s most likely right. As many of the contracts are not through the Defense Department—especially those of most companies in a “security” role, the ones most likely to engage in combat and therefore needing a means of accountability the most—military law would not apply. Blackwater’s operations, for instance, are conducted under a variety of agencies, including the Department of State and the CIA, among others.

"The lack of a legal framework for battlefield contracting has allowed certain rogue contractor employees to perpetrate heinous criminal acts without the threat of prosecution,” said Democratic Congressman David Price. One such incident occurred this past Christmas Eve when an off-duty Blackwater contractor shot and killed an Iraqi contractor. The Blackwater employee was quickly sent back to the US and fired, although there is no indication he will be extradited to Iraq to face trial. The history of armed contractors in Iraq is filled with similar stories.

Price has recently introduced legislation that he hopes will apply more generally anyone “employed under a contract (or subcontract at any tier) awarded by any department or agency of the United States Government, where the work under such contract is carried out in a region outside the United States in which the Armed Forces are conducting a contingency operation.” However, it is not clear that such legislation will pass a vote on the House floor.

Many Americans first heard of Blackwater back in March of 2004. Four Blackwater guards were ambushed as they were driving through Fallujah. After being shot and burned, two of their mutilated bodies were hung from a nearby bridge. This episode—captured on video and broadcast around the world—became the excuse for a three-week attack on Fallujah that April, and subsequently another operation that completely destroyed the city in November, killing around 5,000 Iraqi fighters, hundreds of civilians, and 95 US Marines.

The families of the four men killed in Fallujah have sued Blackwater for wrongful death by cutting corners on the mission, saying the company violated contract by sending out the private soldiers without the weapons and manpower they were promised. In response, Blackwater has countersued for $10 million, targeting the family’s lawyer, Richard Nordan. They argue that by suing for wrongful death, the family is in turn breaching the dead soldiers’ contracts.

The most interesting fact about the families’ lawsuit, however, is that Blackwater has been unable to get the lawsuit dismissed or stayed. They have been arguing that their work is an extension of the military and therefore is not subject to the jurisdiction of civilian courts. As their strategy seems to be failing, Blackwater has asked a federal court to move the case to arbitration. It is necessary “in order to safeguard both [Blackwater’s] own confidential information,” their attorneys say, “as well as sensitive information implicating the interest of the United States at war.”

This is very dangerous for Blackwater and other companies providing similar services, as this case could become a precedent, making every death of an employee a potential lawsuit. As of fall 2006, Blackwater had nine pending lawsuits from dead employees’ families. But it seems that the most damaging part of the case to Blackwater—and what they are most afraid of—might not be the bad PR or the price of losing the lawsuit, but instead the fact that sensitive information that they have so far been able to keep private might be made public.

Private companies, unlike government agencies, are not subject to the Freedom of Information Act, and for the past two years this has prevented members of Congress from getting the government to explain the details of Blackwater’s contracts in regards to billing and payment. But this case might be a chance for a rare peak into the secretive company.

One part of the contract under scrutiny in the lawsuit, for instance, has revealed that Blackwater was paying its soldiers $600 per day but charged its client, Regency Hotel and Hospital Co., whom the deceased men were escorting, $945 per day. Regency was in turn a subcontractor of ESS, a division of Compass, who was subcontracted by Halliburton’s subsidiary KBR. There have been no documents showing how much each of the other companies added on to these charges by the time it reached the top contractor, Halliburton, who then billed the US government. Under Halliburton’s $16 billion contract they are only allowed to rely on the US military for armed protection and not private firms. If too many documents of this nature are released, there’s a possibility it could ultimately threaten Blackwater’s ability to win contracts.

This shouldn’t be too big of a problem, however, as Blackwater has so far won only no-bid contracts. And with a global market opening as quickly as it is now, plenty of new opportunities have arisen. For example, the head of the mission in Washington for Southern Sudan’s regional government, Ezekiel Lol Gatkuoth, recently announced that he expects Blackwater to start working with security forces in the next few weeks, although this has not officially been confirmed by Blackwater.

Sudan was placed under sanctions in 1997 after the US accused the government of supporting terrorism. Bush lifted the embargo this past October, giving Blackwater the ability to operate in the country legally. The company was apparently hired because no state was willing to send troops to aid the southern Christian militias, which have allied themselves with the Muslim government following a peace accord in order to fight off the other rebel groups. The conflict in Southern Sudan was separate from that of Darfur, in the west, but the government whose support has aided the Janjaweed in its extermination of as many as 450,000 non-Arabs in that region is the same.

Blackwater has big plans for Sudan, and wants to use the situation in Darfur to prove its ability to operate in a “peacekeeping” capacity. It has been pushing the idea for sometime to members of Congress and high-ups in the military, saying it can send in a large ground force aided by gunships for air support in a moment’s notice. Gary Jackson, Blackwater’s CEO, seems pretty confident about their future in Darfur. “We are going to field a brigade-sized peacekeeping force,” he says. “You can quote me on that.”

While Blackwater soldiers begin to operate in Sudan, their deployment will likely increase in the Middle East as well. Their 2004 “diplomatic security” contract with the State Department was part of much larger plan called the Worldwide Personal Protective Service (WPPS) program, characterized as designed to protect US officials as well as "certain foreign government high level officials whenever the need arises,” according to official documents. Other than Blackwater, several other high profile private military firms are included in the WPPS, such as DynCorp and Triple Canopy.

Blackwater’s contract under the WPPS is for five years and the payment is supposed to be a total of $229.5 million. However, after only two years in the program it had received a total of $321,715,794. The State Department has not been able to provide an answer as to why the firm has received almost $100 million more than required for only half the work that is due. And the contract still has two and a half years left.

During Bush’s State of the Union address he asked Congress to approve two immense military buildups. First, he requested “an increase in the size of our active Army and Marine Corps by 92,000 in the next five years. A second task we can take on together is to design and establish a volunteer civilian reserve corps. Such a corps would function much like our military reserve.” Bush, however, was not the first to mention this idea. Blackwater CEO and co-founder Erik Prince, a huge campaign contributor to Bush and the GOP, presented his plan for a “contractor brigade” of private military firms at a military conference two years ago.

KBR’s CEO Bill Utt said they plan on increasing the size of their force in Iraq in response to Bush’s announcement of sending more troops. The company now has over 500,000 resumes on file for people seeking employment in Iraq, Kuwait, or Afghanistan. With every troop “surge” the private military business gets an extra boost as well.

Former Secretary of Defense Phillip Coyle sees this privatization of war as directly related to the occupation of Iraq, where contractors now perform jobs previously done by US soldiers. “Obviously the military could do it,” Coyle says, “but indeed the Administration is looking for places to get more troops for Iraq.”

The 21,500 combat troops Bush is sending into Iraq will have to be supported by 28,000 additional US military men and women, a government assessment recently concluded. This makes the actual number of US soldiers being deployed around 50,000 at a cost of $27 billion according to the Congressional Budget Office. Exactly how many more contractors will arrive in Iraq as a result has yet to be determined, but with the current ratio of nearly one contractor for every soldier, we can expect it to be a significant number.

From Fault Lines #20

Comments  (Hide Comments)

Mr. Zlutnick's article, while seemingly informative, is unfortunately rife with inaccuracies; inaccuracies that seem to be repeated as more and more journalists rely on originally inaccurate articles for research instead of doing their own. I will do my best here to dispel some of these fallacies so that the American taxpayer can actually make a sound decision based on accurate information.

First, I have followed this industry for years. I am not necessarily for or against any particular company but this industry does bring to policymakers a capacity that could be very useful if properly regulated and held accountable.

1. You can't really say "48,000 private soldiers" because in fact, the majority of contractors in Iraq are logistics contractors. Perhaps, there are about 6000 actual security contractors. Nor is it constructive to assume one is a private "soldier" just because he or she is cooking or driving a truck or providing security. Yes, soldiers used to cook food or do the laundry. The Army has a finance department, too. Does that make accounting inherently military? It's just not an accurate depiction.

2. "Blackwater has been known to pay it's employees $365,000 per year..." Absolutely incorrect. Nobody at Blackwater makes $1000 per day. I have spoken to dozens and dozens of Blackwater contractors and not one's salary has come close to that. Additionally, Blackwater does not normally deploy its contractors for a year. Mostly, they work on 90-180 rotations; so again, using an inaccurate annualized number in your article that doesn't accurately reflect what a contractor actually makes only serves to confuse the issue and the American taxpayer. Additionally, there is no follow-on costs associated with the contractor; i.e. health insurance, housing allowance, salary, etc. His obligation ends when the contract ends. Finally, there is a July 2005 GAO report that says there is no empirical evidence to support that active duty military folks left the military for private companies. In fact, when "stop loss" was rescinded, those servicemen who were getting out anyway, simply left, yet it is sexier to ascribe the exodus to the private security companies.

3. "The scariest thing about Blackwater and other such companies is that they currently lay in a legal no-man’s land, under no authoritative jurisdiction from any US or international law, nor the Geneva Conventions." Again, untrue. Blackwater and all US companies involved in this industry fall under substantial domestic and international law. For starters, they fall under the Military Extraterritorial Jurisdiction Act (2004), the War Crimes Act of 1996, The Anti-Torture Statute, The Victims of Trafficking and Violence Act (2000), The Foreign Corrupt Practices Act, and the Defense Federal Acquisition Regulations, just to name a few. In fact, we have so confused the issue regarding the Geneva Conventions and through use of the word, "mercenary" that even experts have gotten it wrong in print. For the record, Blackwater and companies like it do NOT fit any definition of "mercenary"; not Webster's and not the UN's. In December 2005, the UN Special Rapporteur on the Use of Mercenaries specifically stated that private security companies should not fall into this category. Finally, CPA Order 17, signed by Ambassador Bremer did NOT give immunity to contractors. What it actually said was this: Any action required to fulfill a legal and authorized contract cannot be a crime. However, rape, murder, manslaughter, etc. are not actions required to fulfill any legal and authorized contract so therefore, those crimes and all others can be tried under Iraqi law and under all of the other laws I cited earlier. And in exactly what Iraqi court would you have people tried in yet, anyway? Ask any company or battalion commander if he would leave one of his men or women behind to be tried in an Iraqi court for a crime committed while there. ALL of them would say, "NO!" Using the UCMJ as a means of accountability is well-intentioned but it is not a panacea. The problem with the UCMJ is that it does not extend to "third country nationals" of which there are thousands working in Iraq on American contracts. It would also place undue stress on the already stressed JAG Corps. Further, what articles of the UCMJ would apply? What if a contractor is not working on a DoD contract, but on a State Department contract? Who has primacy? Too may questions make the UCMJ far less effective than one would imagine. MEJA is best suited for full accountability.

4. As to the lawsuit... As I understand it, the Defense Base Act applies here because the contract ultimately flowed to KBR and the US Army. The Defense Base Act, passed by Congress some 60 years ago makes the "insurance" contained within it the sole remedy when death occurs. The issue is that the administrative judge at the Department of Labor has yet to issue a ruling after a year or so. Not to mention that these brave men all signed contracts acknowledging and accepting the risks they were taking. Finally, when serving in a chaotic environment such as war, one has to take into consideration personal decisions made on the ground, some of which lead to dire consequences.

5. All government contracts are subjet to Freedom of Information Act (FOIA) requests. True, Blackwater's non-government contracts are not subject to FOIA, but you led your readers here to believe that their government contracts were not either. FOIA requests generally go to government agencies, so perhaps you should have turned your attention to them.

6. "Blackwater has so far only won no-bid contracts." WHAT? This statement alone demonstrates that you did no research, nor do you have a clear understanding of some of the government contracting processes. Probably, 85-90% of Blackwater's contracts were won open and competitively. But here is some insight into how the system works. The government puts out a "Request for Proposal" with specific requirements and criteria. Companies bid on the RFPs and eventually a few are "down selected" which means they are now eligible to bid against the other down selected companies for the subsequent task orders that come out for bid. This offers the taxpayer a redundant selection process where they can get the best deal open and competitively. In government contracting, there are "ceilings" that cap the amount of money that can be spent on the contract. However, sometimes, the money from "out years" can be brought forward if there is a specific need, but the selection process remains the same. With regard to the Halliburton contract that has so captivated Congress and journalists. I fail to see how the majority of attention is given to Blackwater when they were the fourth tier (bottom) in the contract. This again seems to be a stretch to get Blackwater's name in the paper yet one more time.

I could go on and on about the inaccuracies in both your writing and your intent. If you truly want to see accountability, if you truly want to see the American taxpayer benefit then give them accurate information. This will drive true accountability for all.
by david zlutnick
Friday Mar 30th, 2007 7:17 PM
I'm going to be responding to the so called "inaccuracies" of my article soon, but I don't have my research with me as I'm out of town. Check back and I'll reinforce my disputed points with sources.
by David Zlutnick
Wednesday Apr 4th, 2007 3:46 PM
Okay here's my response by number according to the objections by John Szeleski.

1) If you look at my article you'll see that I wrote that there are over 100,000 military contractors in Iraq. I did not call them all private soldiers. I called 48,000 of them private soldiers meaning that most of the rest are the contractors in charge of food service, laundry, truck driving, etc. as was mentioned by Mr. Szeleski. There is obviously a fundamental difference between military laundry service and weapons operation (although I feel all contractors in Iraq should be removed regardless of the service they perform as they are there to benefit an occupying army). I took this 48,000 number from Jeremy Scahill's op-ed in the LA Times (http://www.latimes.com/news/opinion/commentary/la-oe-scahill25jan25,0,4485578.story?coll=la-news-comment-opinions) in which he attributes the figure to the Government Accountability Office.

2) Definately not all contractors make that much per year, that's why I said "up to" $365,000 per year. Most make less than $1000/day but it depends on what the mission is and the risk level. I got the $365,000 figure from Congressman Marcy Kaptur's adress to Congress on July 12, 2005 (http://www.kaptur.house.gov/Speech.aspx?NewsID=1417) in which she questions the military's massive dependence on unaccountable private soldiers.

3)There is far too much to go into now on the laws that attempt to regulate private military firms, but I did try to adress some of the reasons why most of them have failed in my article. Last June I wrote a 25 page research paper on private military firms and the lack of accountability not just in the United States but worldwide, examining UN rules on mercenaries, South African law, etc, etc. I can't sum up everything in a paragraph but if you're interested please post a comment and I'd be happy to send it to you. Admittedly it was written last June so it may be somewhat outdated but there haven't been any drastic changes in national or international law. Plus I tried to cover recent legislation in the article. The bottom line is that none of them work and there has yet to be a set of American or international laws governing the private military industry.

4)From what I've read about that particular lawsuit is that the issue is in the contract the men were supposed to have three Blackwater operators in each car- a driver, a navigator, and a rear gunner. But the company was trying to start their contract early to impress their employer and sent the men out w/ only two men per car, leaving both cars w/out a rear gunner, which could have made the diffence in defending and repelling the attack. Therefore it was a breach of contract. Also there were many personal issues between a contactor and his boss within Blackwater that has allegedly played into him being sent out on the mission unprepared and unaccostomed to working with the rest of the crew. Having said that they did know the risks going into Iraq carrying weapons to protect American business. And that's what the countersuit is for, saying that the families are breaching contract for suing for wrongful death because the contractors knew the risk and signed saying that they would be putting themselves in harm's way. It's just an interesting case altogether. (I read a great article a long time ago on the details leading to the mission being conducted without proper manpower and the personal issues leading to certain people being put on the mission but I can't find it right now. I've got it somewhere, if I find it I'll post it as a comment.)

5) That's true but the military as well as private contractors have refused to hand over information citing national security. This is a huge threat to public accountability and transparency within the military and government. Nothing more needs to be said.

6) Well, this article focuses on Blackwater so, yes, that's why I brought them up in this case and looked at their role in the scandal. In no way does this excuse Halliburton, KBR or any of the other contractors. But I'm focusing solely on military contractors, specifically Blackwater for this article. I'd be curious to see where Mr. Szeleski got the "85-90%" figure. That's just wrong. But I was also wrong about all of them being no-bid. That was a mistake. I should have said "mostly no-bid contracts." My bad. I concede on that point. A simple mistake.

So that's it as far as what has been presented to me so far. I hope this has helped. If anyone else feels they need to point out my alleged "inaccuracies" please do so and I'll back up my points with my research.

For more reading please check out the following:

Blackwater: The Rise of the World's Most Powerful Mercenary Army by Jeremy Scahill
Corporate Warriors: The Rise of the Privatized Military Industry by Peter Singer
Licensed to Kill: Hired Guns in the War on Terror by Robert Young Pelton
and the film Shadow Company by Nick Bicanic and Jason Bourque