Contact l Sitemap

home industries issues reasearch weblog press

Home  » Industries » War & Disaster Profiteering

U.S. Congressional Wartime Commission Targets Armed Contractors

by Pratap ChatterjeeSpecial to CorpWatch
June 23rd, 2010

Aegis security contractor in Tikrit, Iraq, March 21, 2010 Credit: Michael Heckman, U.S. Department of Defence

On June 21 Jerry Torres, whose company provides translators and armed security guards in Iraq, was invited to testify before the Commission on Wartime Contracting (CWC). The bi-partisan body was created by the U.S. Congress in early 2008 to investigate waste, fraud and abuse in military contracting services in Afghanistan and Iraq.

The CEO of Torres Advanced Enterprise Solutions failed to show up for the hearing.

Torres is a relatively small player in an enormous and growing industry of private contractors, who are assuming more and more functions that used to be carried out by the U.S. military, and who are, some charge, assuming inherently governmental functions.

Today, every U.S. soldier deployed to Afghanistan and Iraq is matched by at least one civilian working for a private company. All told, about 239,451 contractors work for the Pentagon in battle zones around the world. Roughly one in five is a U.S. citizen, two out of five are natives of the country at war, and the remaining workers are from third countries, according to a census taken by the Pentagon's Central Command in the first quarter of 2010.

Torres, a former Green Beret, one of the elite Army Special Forces, is now a businessman and part of that army of private contractors. In 2007 the 7th annual "Greater Washington Government Contractor Awards" named him "Executive of the Year."

His empty chair sat in front of a witness table that bore a placard with his name and those for representatives of three other companies working in Iraq -- Virginia-based companies DynCorp and Triple Canopy, alongside UK-based Aegis who attended the hearing.

In January Torres's company had dispatched hundreds of Sierra Leonian armed security guards to protect Forward Operating Base Shield, a U.S. military base in Baghdad. "This Commission was going to ask him, under oath, why his firm agreed in January to assume private security responsibilities at FOB Shield with several hundred guards that had not been properly vetted and approved," said Michael Thibault, one of the co-chairs of the commission and a former deputy director of the Defense Contract Audit Agency.

"This Commission was also going to ask Mr. Torres why he personally flew to Iraq, to FOB Shield, and strongly suggested … that Torres AES be allowed to post the unapproved guards, guards that would protect American troops, and then to ‘catch-up the approval process,’" added Thibault.

Instead, Torrres’s lawyer informed the commission staff that the former Green Beret was "nervous about appearing."

The failure of a contractor to appear for an oversight hearing into lapses highlighted the entrenched reliance on private contractors in Afghanistan and Iraq that has led to numerous abuses from alleged fraud to the killing of innocent bystanders.

Currently, the Pentagon and the State Department employ some 18,800 armed "private security contractors" in Iraq and another 23,700 in Afghanistan to protect convoys, diplomats and other personnel, and military bases and other facilities at a cost estimated to run into billions of dollars a year.

Inherently Governmental

The Commission on Wartime Contracting hearings on June 18 and 21 was attempting to step back and ask basic questions about whether using private armed security in war zones usurps "inherently governmental" functions and if not, how contracting could be done better.

This thorny question of what constitutes an "inherently governmental" function, and what can be turned over to contractors was singled out by President Barack Obama. In March 2009 he ordered the Office of Federal Procurement Policy (OFPP), a department within the White House's Office of Management and Budget, to come up with an answer.  More than a year later, a preliminary draft document has been issued that is narrowly focused on the issue of whether or not the contractors are making decisions that affect “national sovereignty”

The trend of using non-military personnel to conduct and support war has accelerated in the past decade and is part of a broader trend in government. President George W. Bush, for example, initiated a controversial program known as A-76 that forced selected government agencies to prove that they were more efficient than the private sector or "outsource" their work. By some estimates, as many as half the staff members at all U.S. government civilian agencies are now temporary and even long-term specialists contracted from the private sector.

The Pentagon caught the outsourcing bug when former Defense Secretary Donald Rumsfeld ordered that the March 2003 invasion of Iraq be conducted with no more than 150,000 troops. Almost by default and with little guidance, the military turned over as much as possible to private contractors.

John Nagl, president of the Washington, DC-based Center for a New American Security, submitted a report to the commission hearings that explained Rumsfeld's move to privatize formerly governmental functions. "Simple math illuminates a major reason for the rise of contractors: The U.S. military simply is not large enough to handle all of the missions assigned to it."

The bulk of this outsourced workforce consists of low-wage workers from South and Southeast Asia who perform menial tasks such as cooking and cleaning up after the troops. But such critical military tasks as the protection of senior diplomats and supply convoys as well as military bases and reconstruction projects are also turned over to armed men (and a few women) who work for private companies with exotic names like Four Horsemen and Blue Hackle.

While pay packets of $15,000 a month and more marked the early days of the "war on terror" in 2003, salaries for private security contractors have spiraled down to $1,200 for Peruvians, then $800 for Ugandans. Torres' Sierra Leonian guards are being paid a new low -- $250 a month, or about the same as local Iraqi security guards.

Blackwater's new Afghan contract

Curiously, Blackwater, the most famous private military contractor in Afghanistan and Iraq, was not even invited to sit at the congressional witness table, despite the fact that the North Carolina-based company had been the subject of several investigations into misconduct. (See sidebar.)

Outsourcing security has spawned a litany of abuses and allegations of killing innocent civilians.  If perpetrated by U.S. troops such acts would undoubtedly constitute as war crimes:



* In late May 2005, Marines arrested U.S private security guards from Zapata, a North Carolina company, after its convoy was alleged to have shot up a U.S military guard tower in Fallujah, Iraq. (see David Phinney's "Marines Jail Contractors in Iraq")



* London-based Aegis Defence Services ran into trouble in November 2005 when an employee circulated a video of a contractor in Iraq holding a gun, apparently spraying bullets at civilian cars coming up behind. (see David Phinney's "From Mercenaries to Peacemakers?")



* In July 2006, two employees of Virginia-based Triple Canopy, claimed that their shift leader, Jake Washbourne, deliberately fired at vehicles and civilians in two incidents, saying it was his last day in Iraq and he was determined to kill.

* DynCorp, a Virginia based company, that holds security contracts as well as police training contracts in Afghanistan, is currently being investigated after one of its employees died of a drug overdose in Kabul in March 2009. Four of his co-workers tested positive from drugs smuggled in from Thailand.

*In September 2007, security guards from North Carolina-based Blackwater shot and killed 17 Iraqi civilians in Baghdad's Nisour Square.  Blackwater staff have also been accused of killing other private security contractors and in December 2006,  Andrew J. Moonen, was accused of killing a security guard of the Iraqi vice president, Adel Abdul Mahdi

*As recently as May 2009, four Blackwater contractors were accused of killing an Afghan on the Jalalabad road in Kabul.

Members of the commission noted with astonishment that the State Department had awarded Blackwater a $120 million contract to guard U.S. consulates in Herat and Mazar-i-Sharif in Afghanistan on June 18. (http://www.cbsnews.com)

Asked to explain why Blackwater, which has been banned by the government of Iraq, won the contract, Charlene R. Lamb, deputy assistant secretary for International Programs at the State department, stated that the competitors for the contract, DynCorp and Triple Canopy, weren't as qualified. (Don Ryder of DynCorp and Ignacio Balderas of Triple Canopy disagreed and threatened a formal protest.)

"What does it take for poor contractual performance to result in contract termination or non-award of future contracts?" wondered Thibault.

USAID ducks legal responsibility

The U.S. Agency for International Development (USAID) also drew extended criticism for David Blackshaw's contention that his agency was not legally responsible for the actions of armed guards that accompanied their grantees that are rebuilding schools, hospitals and power plants. "The role of the USAID's SEC's International Security Programs Division is limited to advice and counsel," the AID division chief for overseas security told the commissioners.

Incensed, several commissioners pulled out copies of a May USAID Office of Inspector General report on private contracting. It concluded that that a third of USAID private security contracts in Afghanistan have no standard security requirements.

Commissioner Christopher Shays, a former Republican member of Congress from Connecticut, alleged that USAID was trying to "wash their hands" of any responsibility.

"God forbid something would happen with a violent accident in Afghanistan that would affect our national policy in Afghanistan, and you would try that ridiculous line of argument," said Commissioner Robert Henke, a former assistant secretary for Management in the Department of Veterans Affairs, said. "It won't work."

Refusing to Acknowledge Reality

There are almost as many explanations of what is wrong with the contracting system as there are contractors. Some say that the problem is their poor quality. "Qualified security operatives were available only in limited numbers, so the fly-by-night firms took on virtually anyone who sought employment: military washouts, ex-cons, gunmen fired by other contractors, and the utterly unqualified," wrote Ralph Peters, a retired U.S. Army officer, in the Washington Post. "Many of the Western hires were dysfunctional characters who could make it in neither the military, with its demands for emotional stability and discipline, nor in the civilian world. Even many of the former special-operations personnel hired by firms such as Blackwater either left the military because they ultimately didn't measure up, or simply got out to grab the contractor money."

The reason for this is a system of awarding contracts to the "lowest price technically acceptable" bidder, said commission Co-chair Thibault, an opinion that was supported strongly by the contractors who testified.

Yet others say that the problem is inadequate regulation. "We need smart-sourcing that can restore proper government oversight while harnessing the energy and initiative of the private sector for the public good," says Allison Stanger, professor of international politics and economics at Middlebury College, Vermont, and author of One Nation Under Contract, who testified at the hearings. Some witnesses and experts saw a more fundamental issue: By definition this work should not be handed out to private contractors in a war zone. "Private security contractors are authorized to use deadly force to protect American lives in a war zone, and to me, if anything is inherently governmental, it's that," said Commissioner Clark Kent Ervin, a former inspector general at both the State Department and the Homeland Security Department. "We don't have a definitional problem, we have an acknowledgment of reality problem."

Private security contractors "are performing inherently governmental functions," said Danielle Brian executive director of the NGO Project on Government Oversight. "A number of jobs that are not necessarily inherently governmental in general become so when they are conducted in a combat zone. Any operations that are critical to the success of the U.S. government's mission in a combat zone must be controlled by government personnel."

Warlord, Inc.

"U.S. taxpayer dollars are feeding a protection racket in Afghanistan that would make Tony Soprano proud," said Massachusetts Democratic Rep. John Tierney, referring to a fictional mafia boss in a TV series The Sopranos. “This arrangement has fueled a vast protection racket run by shadowy network of warlords, strongmen, commanders, corrupt Afghan officials, and perhaps others,” the prepared statement charged.

New warlords spawned by the trucking contracts:

* “Commander Ruhullah” leads a small army of more than 600 armed guards, and is the single largest security provider for the U.S. supply chain in Afghanistan. Ruhullah operates under the license of Watan Risk Management, a registered private security company owned by Ahmed Rateb Popal and Rashid Popal, two cousins of President Karzai. (The Popals are now planning to sell their business to Ruhullah who is setting up a new company called Kandahar Security Force)

“Commander Ruhullah is prototypical of a new class of warlord in Afghanistan. Over a cup of tea in Dubai, he complained to the subcommittee staff about the high cost of ammunition in Afghanistan: He says he spends $1.5 million per month on rounds for an arsenal that includes AK-47s, heavy machine guns, and RPGs. Villagers along the road refer to him as “the Butcher,” write the investigators.

“Despite this critical and sensitive role, nobody from the Department of Defense or the U.S. intelligence community has ever met with him (except for a brief detention by U.S. Special Forces on what he says are false drug charges”)

* Matiullah Khan, a former police office and now top warlord in Uruzgan Province, just north of Kandahar, commands an armed militia of more than 2,000 men, called the Kandak Amniante Uruzgan (KAU), and controls all traffic along the main highway between Kandahar and Tarin Kowt, the provincial Uruzgan capital.

One high-ranking Dutch official claimed that Matiullah is so feared that, “If we appoint Matiullah police chief, probably more than half of all people in the Baluchi valley would run over to the Taliban immediately.”

* Abdul Razziq controls the Spin Boldak border crossing, the crucial gateway for all supplies coming from Pakistan directly to southern Afghanistan. Several reports have conclusively linked him to drug trafficking

* Pacha Khan Zadran, also known as “the Iron Grandpa,” reportedly commands a private militia of 2,000 men who “control all major checkpoints on the main roads.” A reporter for the Christian Science Monitor once quoted him saying: “They must not call us warlords. If you call us warlords, we will kill you.”

* Abdul Wali Khan, also known as “Koka” from Musa Qala district in northern Helmand Province. Koka was imprisoned by the U.S. for 14 months at Bagram jail “for suspected insurgent involvement.” According to the governor of Helmand, Koka took $20,000 a day in opium taxes and was involved in many mass murders.

The lifeblood of that racket is as many as 260 trucks that flow every day from the Pakistani port of Karachi across the Khyber Pass into Afghanistan. The convoy is filled with supplies for U.S. troops – from muffins to fuel to armored tanks.

Supply lines through the high mountain passes of Afghanistan have always been a dangerous mission –Soviets soldiers reportedly spent most of their occupation in the 1980s fighting off attacks on the route. The U.S. has chosen another method – outsourcing the delivery and even the protection of the vehicles – to private contractors.

Almost four out of every five containers delivered to Afghanistan are now hauled by a consortium of eight Afghan, Middle Eastern, and U.S. companies under a $2.16 billion contract called Host Nation Trucking (HNT) that started May 1, 2009. A typical large convoy of trucks may travel with 400 to 500 guards in dozens of trucks armed with heavy machine guns and rocket-propelled grenades.

These trucks come under irregular attack. On December 7, 2008, a parked convoy of trucks carrying military vehicles for U.S forces in Afghanistan near Peshawar was attacked by insurgents who torched and destroyed 96 trucks, As recently as June 8, a convoy of contractor was attacked when it stopped at a depot just outside of Islamabad. The insurgents burned 30 trucks and killed six people.

In November 2009, Aram Roston in the Nation magazine, published a startling charge: The trucking and security contractors were paying off warlords, and perhaps even the Taliban.

On Tuesday, a new report by U.S. Congressional investigators: “Warlord, Inc. Extortion and Corruption Along the U.S. Supply Chain in Afghanistan,” confirmed Roston’s allegations. The six-month investigation was conducted by the staff of the House Subcommittee on National Security and Foreign Affairs, which is chaired by John Tierney, (D-MA).

“The HNT contractors and their trucking subcontractors in Afghanistan pay tens of millions of dollars annually to local warlords across Afghanistan in exchange for “protection” for HNT supply convoys to support U.S. troops,” wrote the investigators in the 79-page report. “Within the HNT contractor community, many believe that the highway warlords who provide security in turn make protection payments to insurgents to coordinate safe passage.”

Memos show that occasionally the contractors even worked with the insurgents to shakedown the U.S. military for more money.

The report comes on the heels of a two-day hearing in the U.S. Congress by the Commission on Wartime Contracting into abuses – including multiple charges of killings of civilians – by private security contractors hired by the State Department and the Pentagon in Iraq.

Three high-ranking military officials were asked to report to the Tierney and other members of the subcommittee at a public hearing in Congress on Tuesday. “Why weren’t questions raised about these allegations earlier?” asked Congressman Mike Quigley (D-IL) echoing similar questions asked repeatedly by Tierney.

“I was personally unaware of these kind of allegations, but we take it seriously,” replied Lieut. Gen. William Phillips, principal military deputy to the assistant secretary of the Army for Acquisition, Logistics, and Technology. He explained that it was difficult to investigate corruption in Afghanistan.

Tierney dismissed this answer. Noting that the allegations were widely rumored within days of the new contract and appeared in the media in late 2009, he pointed out that his staff was easily able to secure meetings with one of the warlords. “It took one email … and when we met with him, he readily admitted to bribery and corruption.”

Perhaps a more accurate answer came from Brig. Gen. John Nicholson. The highest priority of the military was making sure that supplies got to the troops, said the director of the Pakistan/Afghanistan Coordination Cell for the Joint Chiefs of Staff at the Pentagon: “Was the product delivered on time?”

Congressman Jeff Flake, a Republican from Arizona, said that a more appropriate question was: “Where is the tipping point when we say that that the funding of a parallel authority structure should become unacceptable?”

"There seems to be very little indication the Department of Defense is doing anything," Flake concluded.

Several experts also testified to the subcommittee to indicate that the new report presented a major problem for the U.S. military objectives in Afghanistan.

Colonel T.X. Hammes, senior research fellow at the National Defense University Hammes, said that the military needed to look into whether or not the choice of contractors “directly undercut[s] a central theme of our own counterinsurgency doctrine.’


* This article was produced in partnership with Inter Press Service News Agency. Pratap Chatterjee may be reached at "pchatterjee@igc.org."