Private Shill Contractors

December 5, 2008 • Commentary
This article appeared in United Press International on December 5, 2008

The story of how retired four‐​star Army Gen. Barry McCaffrey, a military analyst for NBC News, signed on as a consultant to a small Beltway contractor seeking a contract in Iraq is a fascinating glimpse into a walled garden.

McCaffrey’s relationship with Defense Solutions leaves one with the impression that the acronym PSC, for Private Security Contractor, might also refer to Private Shill Contractor.

The story was reported recently in The New York Times, which also broke the news in April on the use of retired military officers to help generate domestic propaganda for the Bush administration’s wartime performance.

In that article McCaffrey was identified as one of some 75 military analysts who were the focus of a Pentagon public relations campaign that is now being investigated by the Pentagon’s inspector general, the Government Accountability Office and the Federal Communications Commission. The campaign, begun in 2002 but suspended after the article’s publication, sought to transform the analysts into “surrogates” and “message force multipliers” for the Bush administration.

In April 2003 The Nation magazine listed defense contractors to which McCaffrey had a substantial connection and detailed how the viewpoints McCaffrey was advocating as a “military analyst” on NBC directly benefited those companies.

Now The New York Times states that Defense Solutions sought McCaffrey’s aid not because he was an expert on its products but because he was “someone who could open doors at the highest levels of government.”

It is an old and disappointing story but hardly a surprising one. Companies seeking to win contracts on access, as opposed to merit, are the rule, not the exception. Political connections are very important when landing contracts.

Consider other past examples in the world of private military contractors.

Diligence LLC set up shop in Baghdad in July 2003 to provide security for reconstruction projects. It was founded by William Webster, the only man to head both the CIA and the FBI. Mike Baker, its CEO, spent 14 years at the CIA as a covert field operations officer specializing in counter‐​terrorism and counterinsurgency operations. Whitley Bruner, its chief operating officer in Baghdad, was once the CIA station chief in Iraq. Shortly before the U.S. invasion, he directed a covert operation for the Bush administration to persuade high‐​ranking generals loyal to Saddam Hussein to cooperate with U.S. forces.

Although that management team sounds formidable, it is the Diligence directors and advisers who are the real power in the firm.

Richard Burt, the chairman, was a U.S. ambassador to Germany and a key adviser to the Carlyle Group, the Washington private equity fund with a string of former senior officials and for whom the first President George Bush has worked for the past seven years.

Ed Rogers, Diligence’s vice chairman, was one of Bush 41’s top assistants when he was president. Among Diligence’s senior advisers are John Major, the former British prime minister and chairman of Carlyle Europe; Ed Mathias, Carlyle’s managing director; and Lord Charles Powell, a former foreign policy adviser to Margaret Thatcher.

For a brief time ArmorGroup International had Stephen Kappes, a former deputy director of the CIA’s clandestine Directorate for Operations, working as its Washington vice president of global strategy; in November 2005 it named him chief operating officer. Kappes was named deputy director of the CIA in May 2006.

In the hope of cultivating contacts with the U.S. administration, Triple Canopy hired Alan Ptak, former assistant legislative counsel at the CIA, in September 2005. Ptak worked as a staffer on the Senate Select Intelligence Committee for several years.

In April 2004 the Steele Foundation announced that retired U.S. Ambassador Robert Frowick had joined its executive advisory board as an executive director. Prior to joining the Steele Foundation, Frowick, who died in January 2007, was a career diplomat appointed to numerous ambassadorships under four different U.S. presidents.

And CACI, known for its involvement in the Abu Ghraib scandal, is linked to former U.S. Deputy Secretary of State Richard Armitage. He was elected a CACI director in 1999, when he was a member of the Pentagon’s Defense Policy Board and president of Armitage Associates, a consulting firm with a long list of powerful clients that included Boeing, Unocal, Texaco, Goldman Sachs and the Brown & Root subsidiary of Halliburton.

In 2007 retired Army Gen. Hugh Shelton, chairman of the Joint Chiefs of Staff from 1997 to 2001, joined the board of CACI International.

In fact, someone who provides access doesn’t even have to believe in the product to be able to make a profit. Consider former Army Chief of Staff Gen. Peter Schoomaker. In August 2005 he said commanders in the field were best qualified to answer questions about contracting, but he added that the use of private security firms in places like Iraq raised key issues of command and control. “I can see where, on the battlefield, there would be issues that could be problematic in terms of the rules of engagement, what kind of controls were placed on people that are roaming the battlefield,” he said.

Schoomaker evidently resolved his concerns, since a bit over two years later he joined DynCorp International’s board.

None of this, of course, is illegal. But in the case of McCaffrey, one is left wondering what, if any, his standards are for the clients he agrees to work for.

As a Wired magazine blog noted, Defense Solutions wants to arrange a donation of some 77 Hungarian‐​owned T‐​72s. The Hungarians were likely happy to unload the outdated tanks for free, and the Iraqi government would pay Defense Solutions to refurbish them. That sounds fine, except the contract was what many might consider a sweetheart deal. The contract appears to be a “cost plus percentage of cost fee” agreement, meaning Defense Solutions was essentially guaranteed a profit regardless of what condition the tanks were in or how much it cost to get them running.

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