Jeremy Scahill - Blackwater

On April 28, 2004, the Abu Ghraib prison scandal was blown into the open when CBS’s 60 Minutes II broadcast graphic images depicting U.S. soldiers torturing and humiliating Iraqi prisoners. 68It soon emerged that private contractors from two U.S. corporations—the San Diego-based Titan Corporation and the Virginia-based CACI—were allegedly involved in the torture, having provided interrogators for use at the prison during the period of alleged abuse. An Army investigative report by Maj. Gen. Antonio Taguba found that an interrogator at CACI and a translator for Titan “were either directly or indirectly responsible for the abuses at Abu Ghraib.” 69Both companies denied the allegations. CACI counted as one of its former directors Deputy Secretary of State Richard Armitage, 70a key administration official in the war on terror. A subsequent class action lawsuit filed by the Center for Constitutional Rights charged that Titan and CACI conspired with U.S. officials to “humiliate, torture and abuse persons” to win more contracts for their “interrogation services.” 71Though a greater spotlight was being shone on private contractors, it was hardly having an adverse effect on business.

In Iraq, Blackwater, with its former Special Forces operators and political connections, billed some clients $1,500 to $2,000 per man per day, according to Time magazine. 72The private military industry, meanwhile, used the Fallujah ambush to argue for overt approval from the United States for private soldiers to use heavier weapons in Iraq. 73Even with the growing controversy and image problems, it was an incredible moment in mercenary history, blowing open a door to legitimacy that would have been difficult to fully imagine before the launch of the war on terror. A year after the Iraq invasion, shares in one of the largest private security firms, Kroll Inc.—which provided security for the U.S. Agency for International Development in Iraq—had soared 38 percent, while its profits had “skyrocketed” 231 percent with sales doubling to $485.5 million. 74“Listen, it is the Gold Rush,” said Michael Cherkasky, Kroll’s president, warning, “This is what happens: People who don’t know what they’re doing can really get hurt.” 75The full magnitude of the industry-wide profits is difficult to gauge because many of the firms, like Blackwater, are ultrasecretive and not publicly traded. But some experts began estimating the value of the industry at $100 billion a year. 76“We have grown 300 percent over each of the past three years,” Blackwater’s Gary Jackson bragged shortly before the Fallujah killings. “We have a very small niche market, we work towards putting out the cream of the crop, the best.” 77

In the aftermath of Fallujah and Najaf, some of the private military firms began to coordinate informally with one another, sharing information and intelligence. “Each private firm amounts to an individual battalion,” a U.S. government official told the Washington Post . “Now they are all coming together to build the largest security organization in the world.” 78It became like a Frankenstein experiment in military and intelligence outsourcing, with Iraq as the laboratory. “[T]he power of the mercenaries has been growing,” Robert Fisk wrote from Baghdad in the summer of 2004. “Blackwater’s thugs with guns now push and punch Iraqis who get in their way: Kurdish journalists twice walked out of a Bremer press conference because of their mistreatment by these men. Baghdad is alive with mysterious Westerners draped with hardware, shouting and abusing Iraqis in the street, drinking heavily in the city’s poorly defended hotels. They have become, for ordinary Iraqis, the image of everything that is wrong with the West. We like to call them ‘contractors’, but there is a disturbing increase in reports that mercenaries are shooting down innocent Iraqis with total impunity.” 79

That summer, the United States began funding a large intelligence and operations center for the mercenaries, intended as a sort of privatized Green Zone within the Green Zone. It started in May 2004 with a massive $293 million, three-year contract awarded to the newly formed UK firm Aegis Defense Services, founded and run by the world’s most infamous mercenary, Tim Spicer, a former British Special Forces officer. 80Spicer’s previous firm, Sandline, was hired by warring factions in Papua New Guinea and Sierra Leone in the late 1990s, sparking a major controversy in Britain about the use of mercenaries. 81He started the new firm in September 2002 to shake the mercenary image of Sandline. “I wanted to make sure that Aegis was a completely different animal,” he said. 82Spicer became the godfather of sorts of the campaign to recast mercenary firms as “private military companies.” That Spicer was awarded the largest security contract to date in the Iraq occupation was an ominous symbol of the dawning of a new era. What’s more, the scale of the contract and its timing made a bold statement about real U.S. intentions with the “handover of sovereignty” a month away: We—and our mercenaries—are here to stay . It was also a devastating commentary on the flimsiness of a key part of the “handover” rhetoric—that Iraqis would be assuming responsibility for the country’s security. Like the system that Halliburton used to guarantee itself large-scale profits through its government contracts, Spicer’s contract was a “cost plus” arrangement. “In effect, this deal rewards companies with higher profits the more they spend, and thus is ripe for abuse and inefficiency,” wrote Peter Singer, a Brookings Institution expert on private military contracting. “It has no parallel in the best practices of the business world, for the very reason that it runs counter to everything Adam Smith wrote about free markets.” 83

The official intent of the contract was twofold: Aegis was to coordinate and oversee the activities and movements of the scores of private military firms in the country servicing the occupation, including facilitating intelligence and security briefings. Aegis would soon establish six control centers across Iraq. 84Under the contract, Aegis was also to provide up to seventy-five “close protection teams” to protect employees of the occupation authority’s Program Management Office from “assassination, kidnapping, injury and embarrassment.” 85The deal pushed Aegis from an unprofitable company to one of the most successful ones operating in the war on terror. “The contract has taken us from a very small organization to a big one,” said Spicer, the largest single shareholder in Aegis. “Now we want to consolidate. We will go wherever the threat takes us.” 86The awarding of the contract to Spicer sparked outrage from various sectors—including from other private military companies. Texas-based DynCorp, one of six original bidders for the contract, filed a protest with the U.S. Government Accountability Office. 87Aegis was not even on the list of State Department-recommended private military firms in Iraq. 88Even Republican lawmakers were up in arms over the deal. Texas Congressman Pete Sessions, in supporting DynCorp, wrote a letter to Defense Secretary Rumsfeld, saying, “It is inconceivable that the firm charged with the responsibility for coordinating all security of firms and individuals performing reconstruction is one which has never even been in the country.” 89

Then there was the issue of Spicer’s past. In a letter to Rumsfeld shortly after the Aegis contract was announced, Senators John Kerry, Edward Kennedy, Hillary Clinton, Christopher Dodd, and Charles Schumer called on the Defense Secretary to order an Inspector General’s review of the contract, labeling Spicer “an individual with a history of supporting excessive use of force against a civilian population” and a man “who vigorously defends [human rights abuses].” 90As evidence, the senators cited a Boston Globe article charging that Spicer has “a reputation for illicit arms deals in Africa and for commanding a murderous military unit in Northern Ireland.” 91The senators’ protests apparently fell on deaf ears, as Spicer’s contract was renewed by the United States each of the following two years. 92“The contract is a case study in what not to do,” Peter Singer, the Brookings scholar, wrote in the New York Times . 93Citing the already evident lack of coordination, oversight, and management of the mercenaries in Iraq, Singer asserted, “[O]utsourcing that very problem to another private company has a logic that would do only Kafka proud. In addition, it moves these companies further outside the bounds of public oversight.” 94