Jeremy Scahill - Blackwater

As Blackwater plotted its tremendous expansion at home, it emerged as the mercenary industry trendsetter. “Increased violence this month has thrown a spotlight on the small army of private US security firms operating as paramilitaries in Iraq under Pentagon contracts,” reported PR Week, a public relations trade journal. 37“As calls for greater regulation over these companies increase, [they] are ramping up their presence in Washington to make their voices heard…. At the forefront is Blackwater USA, the North Carolina firm that lost four employees after an attack in Fallujah on March 31.” After Blackwater started using well-connected ASG lobbyists to promote its services, other mercenary firms followed suit. All seemed to realize that the mercenary gold rush was on. The California-based Steele Foundation, one of the earliest private security companies to deploy in Iraq, hired former Ambassador Robert Frowick, a major player in the Balkans conflicts, on April 13, 2004, to help manage “strategic government relationships” in Washington. 38Meanwhile, the London-based mercenary provider Global Risk Strategies rented office space in D.C. that month to base its own lobbying operations. “We are fully aware that D.C. operates in a totally different manner,” said Global executive Charlie Andrews. “What we need to assist our company is a hand-holding organization basically who will guide us through procedures and D.C. protocols.” 39In the midst of the flurry of lobbying activity by private military companies, Senator Warner told the New York Times his view of the mercenaries. “I refer to them as our silent partner in this struggle,” he said. 40

The day after Erik Prince met with Warner and the other Republican senators, his new ASG spokesman, Chris Bertelli, boasted about a considerable spike in applications from ex-soldiers to work for Blackwater. “They’re angry,” Bertelli said, “and they’re saying, ‘Let me go over.’” 41Bertelli said that with the graphic images of the Fallujah ambush, “it’s natural to assume that the visibility of the dangers could drive up salaries for the folks who have to stand in the path of the bullets.” 42By late April, the New York Times was reporting, “[S]ome military leaders are openly grumbling that the lure of $500 to $1,500 a day is siphoning away some of their most experienced Special Operations people at the very time their services are most in demand.” 43

In Iraq the situation was fast deteriorating. On April 13, in a dispatch from Baghdad, British war correspondents Robert Fisk and Patrick Cockburn reported, “At least 80 foreign mercenaries—security guards recruited from the United States, Europe and South Africa and working for American companies—have been killed in the past eight days in Iraq.” 44The violence rocking the country had brought “much of the reconstruction work” to a halt and contractors were being killed or abducted in record numbers. 45Nearly fifty were kidnapped in the month after the March 31 Blackwater ambush. 46The targeting of foreign contractors (brought in to support Washington’s occupation and reconstruction operations), aid workers, and journalists would provide a major source of funding for the very forces fighting the United States in Iraq. Though the United States has an official policy of not paying ransoms, a classified U.S. government report estimated that resistance groups were taking in as much as $36 million annually from ransom payments. 47In April 2004, Russia withdrew some eight hundred civilian workers from Iraq 48and Germany followed suit, 49while a senior Iraqi official said that month more than fifteen hundred foreign contractors had left the country. 50As Fortune magazine reported, “[T]he upsurge in violence comes just as the government is awarding $10 billion in new contracts, and companies like Halliburton and Bechtel are trying to increase their presence there.” 51The United States was struggling to interest more business partners and organized a series of international conferences to entice new businesses. “In Rome there were over 300 companies and there was so much interest we had to use a spillover room,” said Joseph Vincent Schwan, vice chair of the Iraq and Afghanistan Investment and Reconstruction Task Force. 52He boasted that 550 businesses showed up at a similar conference in Dubai, and another 250 in Philadelphia. The U.S. Chamber of Commerce also distributed its “Doing Business in Iraq” PowerPoint presentation across the world, from Sydney to Seoul to London. 53

At the conference in Dubai three weeks after the Fallujah ambush, described by the local press as an “opportunity to win billions of dollars in subcontracted work in Iraq,” Schwan told potential contractors, “Iraq presents an opportunity of a lifetime.” 54But to cash in on this opportunity, security was a necessity, and the contractors were being encouraged to add on new costs in their billing to hire mercenaries. As a public service the “Doing Business in Iraq” presentation included a list of mercenary companies for hire. 55

Meanwhile, the newly appointed U.S. Special Inspector General for Iraq, Stuart Bowen Jr., explained the extent of the new demand for mercenary services in Iraq. “I believe that it was expected that coalition forces would provide adequate internal security and thus obviate the need for contractors to hire their own security,” Bowen said. “But the current threat situation now requires that an unexpected, substantial percentage of contractor dollars be allocated to private security.” 56As a result of the ever-increasing demand for private security services from companies like Blackwater, corporations servicing the occupation began billing the CPA substantially more for their protection costs. “The numbers I’ve heard range up to 25 percent,” Bowen said, versus the initially estimated 10 percent of the “reconstruction” budget that would go to pay for security for private companies like Halliburton. 57The Pentagon official in charge of Army procurement contracts backed up Bowen’s estimate. 58

“The US military has created much of the demand for security guards,” reported The Times of London. “It has outsourced many formerly military functions to private contractors, who, in turn, need protection.” 59Because the U.S. privatized so many of these essential services—like providing food, fuel, water, and housing for the troops—and made private corporations necessary components of the occupation, the Bush administration didn’t even consider not using contractors when the situation became ultralethal. As one occupation official, Bruce Cole, put it, “We’re not going to stop just because security costs go up.” 60Instead, the administration dug deeper into the privatization hole, paying out more money to more companies and encouraging an already impressive growth in the mercenary industry. “When Halliburton teams working to rebuild oil pipelines first arrived in the country, they had military protection,” according to Fortune magazine. “But now they’ve had to hire private security. With armored SUVs running more than $100,000 apiece and armed guards earning $1,000 a day, big contractors like Bechtel and Halliburton are spending hundreds of millions to protect their employees. Since the government picks up the tab, ultimately that means fewer dollars for actual reconstruction work.” 61And many more dollars for private military companies.

What became clear after the Fallujah ambush and firefight at Najaf was that mercenaries had become a necessary part of the occupation. “With every week of insurgency in a war zone with no front, these companies are becoming more deeply enmeshed in combat, in some cases all but obliterating distinctions between professional troops and private commandos,” reported the New York Times . “[M]ore and more, they give the appearance of private, for-profit militias.” 62A year after the invasion began, the number of mercenaries in the country had exploded. Global Risk Strategies, one of the first mercenary companies to deploy in Iraq, went from ninety men to fifteen hundred, Steele Foundation from fifty to five hundred, while previously unknown firms like Erinys thrived—hiring fourteen thousand Iraqis to work as private soldiers. 63The global engineering firm Fluor—the largest U.S. publicly traded engineering and construction company—hired some seven hundred private guards to protect its 350 workers, servicing its nearly $2 billion in contracts. 64“Let’s just say there are more people carrying guns and protecting than turning wrenches,” said Garry Flowers, Fluor’s vice president. 65“Established” mercenary firms—or those with connections to the occupying powers—began complaining about ramshackle operations offering security services in Iraq for cheaper and with far less “qualified” contractors. There was also controversy about former apartheid-era security forces from South Africa, whose presence came to light only after some were killed. “The mercenaries we’re talking about worked for security forces that were synonymous with murder and torture,” said Richard Goldstone, a retired justice of the Constitutional Court of South Africa who also served as chief prosecutor of the UN war crimes tribunals for the former Yugoslavia and Rwanda. “My reaction was one of horror that that sort of person is employed in a situation where what should be encouraged is the introduction of democracy. These are not the people who should be employed in this sort of endeavor.” 66A Pentagon official told Time magazine, “These firms are hiring anyone they can get. Sure, some of them are special forces, but some of them are good, and some are not.” 67