Multinational Monitor

MAR 2004
VOL 25 No. 3


Saddam’s Debt: The Emerging Conflict Over How to Deal with Saddam’s Devastating Economic Legacy
by Justin Alexander

Hijacking Iraq’s Skies: The Secret Plans to Privatize Iraqi Airway
by Svetlana Tsalik, Isam al Khafaji and Julie McCarthy

"Don’t Worry About Price:"Whistleblowers Sound the Alarm on Halliburton in Iraq
by Representatives Henry Waxman and John Dingell


The Aftermath: Iraq’s Perilous Future Under U.S. Control
an interview with Medea Benjamin

The Privatized Military: The Unmonitored, Unregulated and Unchecked Global Growth of Private Military Firms
an interview with Peter W. Singer


Behind the Lines

Outsourcing Common Sense

The Front
Justice on the Range - Pakistan's Oil Spill Disaster

The Lawrence Summers Memorial Award

Names In the News

The Privatized Military: The Unmonitored, Unregulated and Unchecked Global Growth of Private Military Firms

an interview with Peter W. Singer

Peter W. Singer is National Security Fellow: Foreign Policy Studies at the Brookings Institution in Washington, D.C., and director of the Brookings Project on U.S. Policy Towards the Islamic World. He is the author of Corporate Warriors: The Rise of the Privatized Military Industry, published in 2003, and one of the foremost analysts of the privatized military industry. He previously served as Action Officer for Balkans Task Force of the Office of the U.S. Secretary of Defense.

Multinational Monitor: What is the range of services that private military contractors are providing in Iraq?

Peter Singer: The role that private military firms play on the ground in Iraq is very extensive and I think would be quite surprising to much of the public. Overall, there are approximately 15,000 private military contractors on the ground.

That's an estimate. It's unfortunate that it is an estimate only, because it indicates how there is not good tracking and accounting of the numbers.

Their roles are very extensive. They are doing everything from the logistics tasks -- feeding, housing, supporting U.S. troops -- to maintaining equipment. They are taking on training tasks. For example, the formation of the post-Saddam police, post-Saddam paramilitary force and the post-Saddam army has all been outsourced to private companies. Finally, they are taking on many of what would be described as battlefield roles in an insurgent environment, doing things like convoy escort, and protecting key individuals, facilities, installations and reconstruction sites. These battlefield roles obviously involve carrying and using weapons on the ground.

The contractor force is very multinational. You have everything from ex-American army folks to Brits, South Africans, Ukrainians, Filipinos, Chileans, Russians. In a sense we have created our international coalition, only it is more accurately described as a "coalition of the billing."

MM: How do the private firms or the private employees interact with the government soldiers, especially where they are undertaking core military functions?

Singer: It is something that the military itself is growing a bit uncomfortable with. On the one hand, they are carrying out needed roles, but on the other these contractors lie outside the chain of command and the Code of Military Justice. The result is that there are a lot of gray areas that are both confusing and troubling to soldiers I have interviewed.

In Iraq, as an illustration, you have questions regarding the authority that local unit commanders have over contractors in their areas. The problem arises because the contractors are not just working directly for these units. In some cases, they are working as subcontractors for other firms. Halliburton may have a construction contract, for example, but 10 percent of its funds are going for security subcontractors for that. Or you have private security folks escorting news media around.

So, the first issue is the question of command and control over them. The second is, if they get into trouble, what are the rights and responsibilities involved? For instance, do U.S. soldiers have to bail these guys out if they get into a firefight? Then there's the concern expressed about the repercussions back on soldiers if things go wrong. If contractors do get involved in a firefight, or accidentally kill civilians -- the kinds of things that regularly happen on a very confused battlefield -- what are the rights and responsibilities there? And how do you prevent any local anger that is directed at the companies not filtering over to U.S. soldiers?

MM: Is it possible to assess in Iraq how the contractors are doing? Are they doing what they are being paid to do, and are they doing it well?

Singer: It is tough to make a universal, 100 percent one way or the other assessment like that. We are doing a bad job on the accounting, and an even worse job on oversight. So I or any other analyst can't make such a blanket statement. You can only identify within certain areas where things are going right and others where things went wrong.

As an illustration, Halliburton's food service contract had immense troubles at the start, with very disturbing delays in getting the field kitchens set up and running. That created a lot of anger on the part of the Third Infantry Division in particular. Months after President Bush's infamous aircraft landing, soldiers were still living out there without hot food, without running water, basically "living like crap," in the words of one of them. Since then, though, the problems were fixed and those field operations are fine -- and in fact may be operating a bit too much, because the latest controversy is that Halliburton was cooking too much, and overbilling for meals that weren't actually served to troops. But from the troops' point of view, the situation went from very, very bad to just fine, as they just care about the food being hot.

The Iraqi army training program is another example of a stop-and-go contract that has had some troubles. There has been a lot of controversy there about why that contract was awarded to certain companies such as Nour and Vinnell, which certainly had the political linkages but may not have the necessary expertise to follow through to get an important job done not only quickly but well.

You have other areas where things have gone quite smoothly. Vehicle maintenance has been one on which we have heard no complaints.

MM: Are there monitoring systems that are supposed to be working, but aren't; or are they just not in place at all?

Singer: In Iraq, the Pentagon's own audits are now finding that they were originally absent, and now they are stopgap measures. So they are getting a little bit better but are not good enough.

For example, the contract management office that was doing oversight over the $18 billion reconstruction aid, which encompasses some of these things, originally had five personnel. Then after the complaints, they just added nine, so they have 14 doing oversight over $18 billion worth of contracts. That would be unacceptable back in the States, let alone in the middle of a war zone, let alone for something as important as getting Iraq started up again.

A particular issue is that, within the military, the military contracting officers I have spoken with constantly complain about not having enough resources to do their job, that they are hampered by not having eyes and ears on the ground.

In contrast, the contracting firms frequently lobby against efforts to create visibility and numbers tracking. People can draw their own conclusions as to why.

MM: What is the status of these contractors under international law? As an occupying force, does the United States have a legal right to give private parties authorization to carry guns, hold people at gunpoint and enforce security measures?

Singer: The question of status is one of the most troubling aspects of this. International law simply does not have a definition of what private contractors' status are. International law has some anti-mercenary laws, but they have been found to be inapplicable to private military personnel, because they have a series of limiting legal definitions and restrictions. The result is that international law has a vacuum when it comes to folks in this industry -- not only who can work for it, but who these companies can work for and what their status is on the ground.

Despite a lot of officers in the U.S. military increasingly calling out for efforts to be made to clarify the status of the contractors, it has not been done. There is no clarity under international law.

With the absence at the international level, you look to national law to be applied. But for most folks involved in the industry, they are acting extraterritorially, operating somewhere other than their homeland. Also, remember that you have companies that are not exclusively based in the United States. For example, some of the companies operating in Iraq are based in South Africa, Ukraine, the UK, Jordan or Iraq. And you have the similarly multinational reflection of their employees. So domestic law in the United States doesn't really provide any solutions.

Then you fall under local law -- but guess what? It is the very absence of local law in Iraq that is one of the reason we have a need for all of these guys there. What legal entity in Iraq are you going to turn anyone over to now if you think there is a problem?

The final complication to this discussion is that we violate our own limited doctrine on how we are supposed to utilize the firms. The U.S. military has very clear doctrinal rules, for example, that say contractors cannot be in mission-essential areas. But all the roles they are playing are critical to the mission. Likewise, the doctrine says that the contractors are not supposed to be carrying weapons unless specifically authorized by unit commanders. But we know on the ground that the whole range of contractors are carrying weapons -- for very good reasons, because they are constantly under attack. In many cases they are getting these weapons off the black market because they can't get them in the States and they are cheaper in Iraq. Similarly, the doctrine says that contractors are not supposed to wear uniforms.

That is also in flux. On the cover of my book is a picture of three contractors in about as close to U.S. military uniform as you can get. They are wearing U.S. fatigues, U.S. helmets. The only difference is they don't have the unit insignia on their shoulders.

MM: Have contractors been killed or injured in Iraq?

Singer: Unfortunately, yes, contractors have been among the casualties in Iraq. We don't know the exact numbers. Again, not only is the government not tracking the exact number of contractors who are there, we are not tracking the exact number of killed and wounded. This is a further way to displace the political cost of discretionary operations like Iraq. Obviously, it points to some of the undiscussed advantages to outsourcing these roles.

What we do know is that the number killed is somewhere more than 25. The number of wounded can only be extrapolated. That is, if the number wounded versus killed is equivalent to the ratio among U.S. forces, you can probably multiply the number killed by a factor of six to figure out the number of contractors who have been wounded in the various attacks on them.

MM: Do they or their families potentially have claims against their employer or the U.S. government, or are they treated the same as a U.S. solider would be?

Singer: They are not treated the same as a soldier would be. The contracting company under most contracting terms is responsible for everything from notifying the family to bringing the body back.

Some companies have a great reputation for treating the employees' families well if something goes wrong; and some of them do a quite terrible job, and try and avoid any of the costs.

There is an ongoing incident in Colombia right now that is probably the best illustration of firms shirking their duties to their employees in a way the military could never get away with. Private American military employees were working for a company called California Microwave Systems, a subsidiary of Northrop Grumman. They were doing military intelligence gathering on the FARC rebels, under a U.S. Navy contract, authorized by the State Department and CIA. Their plane crashed in rebel-held territory. Three of them were taken captive. A second plane that was looking for them crashed, and three of them were killed. The company they were working for dissolved itself, basically said it didn't exist anymore and disowned these guys and their families. A number of the executives then formed a new company, called Ciao, which carried out the exact same contract. However, they said, "Look, we are a different company. We don't have any responsibility toward the families." The result is that the insurance and benefits have not been paid. It is really distasteful how they have treated these families.

MM: What is LOGCAP?

Singer: LOGCAP is the Logistics Civilian Augmentation Program. It was the genesis of the military support industry. It is one of the more mundane sectors in the overall private military industry, but one of the more profitable ones. It is not as sexy as armed troops for hire, but it is where billions of dollars worth of business is done.

The program was started in 1992 by the Pentagon to explore the use of civilians to take over logistical tasks for the military. Basically the U.S. military looked at is role in the world after the Cold War, and said, "We're not going to be fighting in places like Germany where we have local base support and long-standing apparatus. We're going to be operating in places where we have to bring in our own supply train. Well, we don't have the ability to do that because of downsizing, so we'll hire a private company to take over that role for us." Halliburton won the first contract for it. It was a very small contract, $3.9 million, at the very end of Dick Cheney's period at the Pentagon. Since then, subsequent contracts turned out to be quite lucrative, because the LOGCAP program boomed. It went from this very small contract to being utilized in places like Somalia and then Haiti. By the time it was activated in Bosnia and Kosovo, it was over the $1 billion range in its revenue size. It truly kicked in when we deployed all over Central Asia and Afghanistan, and then finally in Iraq. Depending on who's doing the counting, the contract in Iraq has been worth at least $6 billion to Halliburton. A very small contract has turned out to be quite lucrative. Many credit it with keeping Halliburton's head above water at a time when the rest of the business was in the dumps because of a buy into the asbestos industry when Cheney was the CEO.

MM: Does military outsourcing in fact save taxpayers money?

Singer: The stunning thing in this whole discussion is that we've carried out so much outsourcing -- the U.S. military since 1994 has outsourced about 3,000 different contracts to the private military industry -- however, we have still not proven comprehensive cost savings. There were never sufficient studies made before we jumped onto the trend and there still hasn't been enough tracking.

Outsourcing in theory holds out the possibility of saving money. Having good competition allows you to get the best price, being able to utilize the services only when you need them -- that's why people think the private market can be more efficient.

But we know the theory has not been borne out in reality. On the contracting end, usually there has not been sufficient competition. The contracts often get awarded to politically connected firms. We haven't had the kind of oversight necessary to make sure we're getting the best bargain as we go along.

We also have found that we end up paying the employees at greater rates than we are paying soldiers. Then you add in the fact that the client, the U.S. military, has already provided the human capital -- it already paid for the training that it is now being billed back to it.

People often say that we end up paying them more per person, but we're only using them for certain parts of the year, so we only pay for them when we need them. It turns out we've often been kidding ourselves in this business realm, but for political reasons. These contracts, when they get activated, tend not to play out in terms of months, but years. But people don't like to admit these things at the start of such troop deployments. As an example, the Bosnia contract was activated in 1995 and was supposed to be just one year, but it is still going today. Likewise, we know Iraq is not going to be a short-term contract. The contracts in Iraq are going to last for five, maybe 10 years. The result is that we don't just overpay in the short term, we overpay for the long haul.

MM: Are you able to estimate the size of the industry and the distinct sectors?

Singer: Overall, we estimate it does about $100 billion of revenue on an annual basis. That encompasses the whole business -- everything from the very small military provider contracts, which rarely go over the millions; to the consulting contracts, which are usually in the tens of millions; to the logistics and maintenance contracts, which are often weighed in the billions. That is on a global level.

The number of companies globally is in the high hundreds, but it fluctuates.

MM: Do you know how much Pentagon money goes to these firms?

Singer: Again, there is terrible transparency and tracking. We know roughly the number of contracts that are entered into -- 3,000 in total over the last decade -- but the Pentagon itself admits that it does not do a good job of tracking the exact number of contractors working for it, or the exact amount of revenue of these contracts. For example, right now it does not know the exact number of private military folks in the Gulf. Likewise, it can only estimate the amount it is spending on them in the operating budget it submits to Congress.

MM: How have these companies affected U.S. policymaking?

Singer: It goes in a number of directions. You have the new possibility of carrying out public policy by private means. That means operations that often would not garner public support can still be conducted. Those can be operations many would consider quite positive, such as Bosnia. We used contractors there on the logistics side, so we didn't have to call up about 9,000 Army National Guardsmen. If instead we had to have that reserve call-up, it is questionable whether we would have sent troops to Bosnia.

However, it can also cover things that are more controversial, like what is going on in Colombia today. There are clear Congressional restrictions on how many troops the U.S. can send and what roles they can play, but it has been pretty loosey-goosey on the private contractor side.

These private companies also lobby to affect policy in a number of ways. They hire ex-military folks and ex-senior government folks who can then go back to their old offices, bringing a lot of familiarity with the issues and the people now working there.

In some cases, you'll have someone's old boss come in and say, "This is something we should explore. You should authorize this state we're thinking of working with." Or, "You should let us get this contract."

You also have formal lobbying. Companies in this industry, such as Halliburton and Dyncorp, like companies in other industries, give significant political campaign donations, particularly to one political party, the Republicans. And they do it for a simple reason, because just like all other companies that make such donations, they see an advantage in it.

MM: Are there any controls on the global operations of the industry?

Singer: The biggest concern I have is that we have an industry operating in probably the most important area of public concern, global and national security. Lives, soldiers' and civilians' welfare, human rights, etc. are all at stake. But we have left it up to very raw market forces to figure out who can work for these firms, and who they can work for. In some cases, it has worked out great. You get honorable people working for quality firms doing the best they can. In other cases, you get fly-by-night companies who are in it for the quick buck, or who hire people who would not pass muster elsewhere, such as companies that have hired folks with quite terrible human rights backgrounds.

The problem is we don't have a legal backstop to deal with them. To put it in other market terms, you get both Ben & Jerry's-type firms and Enrons, but the difference is that we don't have any legal way to deal with the Enrons of the private military world.

MM: In Corporate Warriors, you raise the scenario of corporations battling and negotiating with states in military terms, on almost equal footing. Is that a realistic scenario, apart from very tiny states?

Singer: A lot of people have looked at this and asked: Is the day coming where corporate armies will dominate the battlefield of international politics and eliminate all other contenders? I don't see that as being realistic, certainly as far forward as we can eye.

I see the trend more to what people have called neo-Medievalism. You have a system developing that has, much like the Middle Ages, multiple actors, both sovereign and not, and all of them contending within the system. Some of them will have legitimacy but not power, such as the UN. Others will have power, but not legitimacy, like drug cartels, terrorist groups. A question mark is where private military contractors will fall into this. You'll have states, both powerful and states in name only. So you have basically this massive system, which is a lot more complex and difficult than the very simple view of the balance of power that we saw in the state sovereign system.

Private military companies will be increasingly important actors in this system.

They have shown that they have military capacities that at a minimum match the military skills of certain states, primarily the weak states of Africa and elsewhere.

In turn, they have proven that they have become essential to the military power of a lot of significant states. For example, the U.S. military now openly acknowledges that it could not carry out a major military operation without the support of private military firms.

It is an interesting space that they will occupy in this twenty-first century makeup of international politics.

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