An economic professor wrote that “[e]xcessive use of private contractors erodes checks and balances, and it substitutes market transactions, controlled by the executive branch, for traditional political mechanisms of accountability. When it comes to Iraq, we’ve yet to see the evidence of a large practical gain in return; instead, use of contractors may have helped to make an ill‐advised venture possible.”
Many academics who examine the issue of the relative cost of private versus public point to the politics behind the various ways one can measure cost. What you include or exclude in your study can be a complicated political exercise. Economists disagree on how to answer this question, at least in part because they use different variables when measuring cost. When you measure the savings of using retired special operations forces personnel, do you factor in the hundreds of thousands of tax dollars used to train these ex‐soldiers? This is a valid economic variable worth including, but no study yet published seems to have done so. Even more difficult can be attaching a dollar value to in‐house military ‘services.’ Because military establishments often have a ‘monopoly’ of service delivery and information regarding cost, getting accurate comparative information is not easy.
Privatization has been touted as one way to actually allow a government the ability to see cost comparisons between, say, what the army will charge and what a private provider would charge. It is not a bad idea, but problems arise when cost reductions are assumed, or when statistics measuring savings from outsourcing are based on hypothetical projections.
Furthermore, ‘cost’ is not the only way to measure value. Logistics officers often talk about value in terms of cost/speed of delivery/quality of service. If you need it tomorrow in a war zone, you can’t expect Federal Express to get it there for you. That affects quality and price. The private and public sectors might‐and do‐behave differently because of inherent differences between these two sectors.
What little cost‐benefit analysis there has been to date has focused on narrow economic cost comparisons and has generally avoided addressing equally important political factors, such as avoiding tough political choices concerning military needs, reserve call‐ups, and the human consequences of war.
Nevertheless, the fact that outsourcing of military functions from the public to the private sector has not been proven to be more cost effective has not stopped people from claiming that it is so. Typical of this is the statement by Doug Brooks, president of the International Peace Operations Association, that “[c]ontractors are cost effective. Although the popular perception is of huge salaries for cushy jobs, the reality is that contractors live along side military personnel and generally cost the government far less in the long run.”
In truth recent events in Iraq are far from the first time the U.S. government has turned to the private sector for help. Before the 1990s privatization push, private firms had periodically been used in lieu of U.S. forces to enforce covert military policies outside the view of Congress and the public. Examples range from Civil Air Transport and Air America, the CIA’s secret paramilitary air arm from 1946 through 1976‐prominently used during the Vietnam War‐to the use of Southern Air Transport to run guns to Nicaragua in the Iran‐Contra scandal.
Historically speaking, in fact, the story goes back even farther. Privateers, or private ships licensed to carry out warfare, helped win the American Revolution and the War of 1812. In World War II, the Flying Tigers, American fighter pilots hired by the government of Chiang Kai‐shek, helped defeat the Japanese.
The only point I try to make with these figures is that the use of civilians in American military operations goes back to the founding of the country. Beyond that, any comparisons are problematic because of differences caused by the changes in military control.
For example, none of the eras cited used volunteer armies. Civilian workers in the Revolutionary War were sutlers. These were merchants traveling behind the columns who each night would sell the troops extra items not supplied by the military (jam for the hardtack, liquor, better shoes, and so on). They were not part of the war effort in the way we talk about today, and they certainly did not provide a personal security detail for General George Washington.
Thus we can say that private military industry is neither as new nor as big as is frequently claimed. Also, it is evident that civilians have always been instrumental to military operations and have often been in harm’s way in support of the military.
So what is new? Specifically, the past two to three decades have seen increased prominence given to the reemergence of an old phenomenon: the existence of organizations working solely for profit. The modern twist, however, is that rather than being ragtag bands of adventurers, paramilitary forces, or individuals recruited clandestinely by governments to work in specific covert operations, the modern firm is solidly corporate. Instead of organizing clandestinely, such firms now operate out of office suites, have public affairs staffs and Web sites, and offer marketing literature.
But although they like to call themselves private security firms, such organizations are clearly quite different from the traditional private security industry that provides watchmen and building security.
Some questions, despite being increasingly asked over the past few years, are still unanswered: How many private security firms work in Iraq? How many contractors do they employ? How many contractors have been wounded or killed? What cost is incurred in such operations?
For the first three years of Operation Iraqi Freedom, the U.S. government had no accurate count of its contractors. As recently as December 2006, the Iraq Study Group estimated that only 5,000 civilian contractors worked in Iraq. The same month, however, Central Command issued the results of its own internal review: about 100,000 government contractors, not counting subcontractors, were operating in Iraq. Then, in February 2007, the Associated Press reported 120,000 contractors working in Iraq.
A Government Accountability Office report released in July 2005 noted that neither the Department of State, the Department of Defense, nor the U.S. Agency for International Development has complete data available on the costs of using PSCs.
In December 2006 the Washington Post reported that about 100,000 government contractors were operating in Iraq, not counting subcontractors‐a total approaching the size of the U.S. military force there. That finding, which includes Americans, Iraqis, and third‐party nationals hired by companies operating under U.S. government contracts, was significantly higher and wider in scope than the Pentagon’s only previous estimate, which claimed that 25,000 security contractors were in the country. It is also 10 times the estimated number of contractors that were deployed during the Persian Gulf War in 1991.
Reporting a major milestone, the Los Angeles Times wrote in July 2007 that the number of U.S.-paid private contractors in Iraq exceeded that of American combat troops. More than 180,000 civilians, including Americans, foreigners, and Iraqis, were working in Iraq under U.S. contracts, according to State and Defense Department figures. The numbers include at least 21,000 Americans, 43,000 foreign contractors, and about 118,000 Iraqis. That number, by the way, is still bigger than U.S. military forces, even after the United States increased the number of forces during its 2007 “surge.” Furthermore, private security contractors were not fully counted in the survey‐so the total contractor number was even larger.
The truth is, for most of the time since the United States went to war in both Afghanistan and Iraq, the Pentagon simply didn’t know how many contractors worked in the U.S. Central Command’s area of responsibility, which includes both countries.
Some questions, despite being increasingly asked over the past few years, are still unanswered: How many private security firms work in Iraq? How many contractors do they employ? How many contractors have been wounded or killed? What cost is incurred in such operations?
We may be getting closer to answers though. For example, back in February 2007, a relatively unknown senator named Barack Obama introduced the Transparency and Accountability in Military and Security Contracting Act, which required federal agencies to report to Congress numbers of security contractors, types of military and security equipment used, numbers of contractors killed and wounded, and disciplinary actions taken against contractors.
What kind of casualties do contractors suffer? In February 2006 it was reported that 505 civilian contractors had died in Iraq since the beginning of the war. Another 4,744 contractors have been injured, according to insurance claims on file at the U.S. Department of Labor.
As of December 2006, at least 770 contractors had been killed in Iraq and at least 7,700 wounded. According to U.S. Labor Department statistics, the first three months of 2007 brought the highest number of contract worker deaths for any quarter since the beginning of the Iraq war. At least 146 contract workers were killed, topping the previous quarterly record of 112 killed at the end of 2004. From August 2004 to the beginning of June 2007, 138 private security workers were killed, and 451 were wounded.
In May 2007 the New York Times reported the total number of contractors killed in Iraq to be at least 917, along with more than 12,000 wounded in battle or injured on the job. Those statistics suggested that for every four American soldiers who die in Iraq, a contractor is killed.
By the end of June 2007, the number of contractors killed in Iraq reached 1,001. But these numbers were likely understated, for the data only showed the number of cases reported to the Labor Department, not the total number of injuries or deaths that occurred. The Department broke down 776 contractor deaths by company, leaving out almost a fourth for unspecified reasons, and did not include all companies whose employees or contractors have died in the war.
A report by the U.S. Government Accounting Office in April 2005 found that monitoring of civilian contractors in Iraq was so poor that there was no way to determine how many contractors are working on U.S.-related security and reconstruction projects in Iraq or how many had been killed.
At the end of January 2005, a quarterly report sent to Congress by the inspector general appointed to audit U.S.-funded work in Iraq found that at least 232 civilians had been killed while working on U.S.-funded contracts in Iraq, and the death toll was rising rapidly. It cited U.S. Labor Department statistics showing that companies had filed 232 compensation claims under the Defense Base Act for workers killed there, an increase of 93 percent in the fourth quarter of 2004.
In this sense outsourcing is advantageous for the administration. For example, it allows the administration to push costs that would otherwise be incurred by Veterans Affairs not just off the books but out of government altogether, at least for now. Although those costs may be hidden in the short term and deferred in the middle term, they will have to be borne eventually. But instead of being addressed in a comprehensive, cost‐effective way, the problems will be diffused and the burdens carried by individual families and communities. Think of the long‐term social costs associated with the veterans returning from Vietnam, but without the government and social service available to veterans. Those services have rarely been as generous as Vietnam veterans deserve, but at least we had a framework and means for providing such services.
Some say that contractors, motivated perhaps by profit, deserve less than the troops. But had it not been for contractors, we would have needed more troops. So we would have had to pay the price one way or the other. However, part of the reason for using contract workers in Iraq was to avoid the political ramifications of calling up and paying for the number of troops that were actually needed.
At most, contractors who are killed get an obituary buried in the back pages of their hometown newspaper, based on a press release by their employer, or perhaps a brief mention by a government spokesman if the contractor’s client was a U.S. government agency.
Numbers like these tend to confirm the view long held by many observers of the industry that one reason government likes to turn to contractors is that it lowers their political costs. Bluntly put: if you are not on active duty in the U.S. military‐even if you were for 10 to 20 years previously‐and even if you are contributing to the war effort, nobody beyond your immediately family cares if you get killed.
Who works for these firms? PMCs are employing personnel from numerous countries around the world, not only the United States. Contractors come from Bosnia, Britain, Nepal, Chile, Ukraine, Israel, South Africa, New Zealand, Australia, and Fiji, not to mention those who served in the French Foreign Legion, to name just some countries. It is globalization in action. Though they are doing a wide variety of tasks in Iraq, the common link is helping, in one way or another, to provide security. Personnel from one country who are recruited by a company in another country to work in yet another country are called third‐country nationals (TCNs). The Pentagon says that 30 percent of contract personnel in Iraq are so‐called TCNs.
Let’s turn to oversight for a moment. It is simply inarguable that proper monitoring of contracts was woefully deficient in the first few years of the U.S. occupation of Iraq. And it still leaves much to be desired. A Government Accountability Office report released in March 2008 said that the Pentagon relies too much on contractors who often work alongside their government counterparts, cost more, and sometimes take on responsibilities they are not supposed to. The report said that as the government’s workforce has shrunk, its demand for services has mushroomed and procurement deals have become more complex and hard to manage. That has forced agencies to hire more contractors. In 2007 the Defense Department spent $158.3 billion on services, a 76 percent increase over the past decade and more than what it spends on supplies, equipment, and major weapons systems.
The GAO looked at the Army Contracting Agency’s Contracting Center of Excellence (CCE), which does procurement for 125 divisions at the Pentagon. It found that 42 percent of the Army’s CCE procurement specialists are contractors, up from 24 percent in fiscal 2005. The report said that relying so much on contractors creates “the risk of loss of government control over and accountability” for government programs.
Some companies early on argued that greater care should be taken in vetting the qualifications of their employees. Back in September 2004, ArmorGroup, the London‐based company, published a white paper arguing that companies offering armed guards abroad should be vetted under the 2001 Private Security Industry Act. At that time only companies offering services within the United Kingdom were covered by the law.
Christopher Beese, director of ArmorGroup International, said, “It seems extraordinary that the doorman for a nightclub, catering for a particular clientele in a particular part of town may have to be vetted and licensed, when the same man can be equipped with a rifle and an armoured vehicle and be engaged to protect diamond concessions for a foreign regime in clear breach of public interest and perhaps even in contravention of human rights, but needs no such regulation.”
About six months later a spokesman for ArmorGroup said: “We are demanding regulation. It is extraordinary that door supervisors have to be licensed but any Joe Public can get a Kalashnikov and work with a security company abroad. This is an issue of accountability, as these companies can be set up so quickly.”
Of course, what constitutes proper vetting is debatable. In March 2006, five years after Mr. Beese’s statement, British Foreign Secretary Jack Straw said that armed U.K. security guards working in Iraq could be checked by the Security Industry Authority, the same body that vets British pub bouncers.
ArmorGroup was hardly the only company concerned about weeding out gunslingers. At a conference at Oxford University in December 2004, Colonel Tim Spicer, chairman of Aegis Defence, and Harry Legge‐Bourke, who runs Olive Security, argued that the security industry should be tightly regulated and new restrictions placed on their operations.
Of course, the big companies also had a self‐interested motive in doing this, namely, eliminating the competition. The smaller security companies took away huge chunks of the pie. When an industry becomes highly regulated, it drives the smaller firms out because of administrative and compliance costs.
The need for better supervision of contractors has been apparent for years. It is not just a matter of law. There are, actually, quite a few laws and regulations governing the use of contractors. The problem is that there are not enough auditors to monitor contracts.
For example, back in late 2004 the Defense Contract Management Agency went on a hiring spree. It needed 200 civilian employees experienced in overseeing contracts and producing items needed by the military services. The agency wanted people experienced in contract management so they could be deployed to various hot spots, including Iraq, 90 days after they were hired.
Although there were not many contractors involved in Abu Ghraib I devoted a chapter to it just because it was so notorious.
What does Abu Ghraib tell us about control over and accountability of PMCs? Though much of the most relevant material is still classified, the bulk of the evidence to date suggests that most of the abuses were carried out by regular military forces. Though several PMC contractors seem guilty of criminal behavior and merit prosecution, it does not appear that the use of translators and interrogators from private firms like Titan and CACI were part of any effort to deliberately avoid oversight. If anything, such efforts came from government agencies like the CIA, which requested the Army to keep certain prisoners off the books, that is, the so‐called ghost detainees.
Abu Ghraib, like the overall slipshod, ill‐planned way the United States prepared for post‐major combat operations, is a reflection of broader policy failings. In short, the Bush administration has tried to fight a war and build a nation on the cheap. It failed to commit the necessary number of trained and qualified personnel and failed to supply the necessary resources required for an occupation force under international law. In such a scenario, failure and criminal behavior by both private and public actors were virtually inevitable.
The CIA and civilian leadership higher up the chain of command in the U.S. Department of Defense (DoD) created and encouraged the culture in which such offenses occurred. In short, Iraq has shown that higher standards of accountability are required in both the public and private sector.
In addition, while Abu Ghraib has shown that certain tasks, such as prisoner interrogation, are too sensitive to be outsourced to the private sector without proper government oversight (because of the potential for human rights violations), it is a sad, current reality that the U.S. military plans to continue using PMC personnel for that task because it lacks sufficient qualified personnel of its own.
In the past some of the primary U.S. laws used to regulate contractors were inadequate. For example, the Arms Export Control Act (AECA) is a key statute in this area, although it is better known for regulating arms sales. The act gives the president full authority to promulgate regulations for this purpose and to designate items as defense articles and defense services by placing them on the United States Munitions List. Any person or organization that manufactures, exports, or imports the goods or services on the list must register with the U.S. government and receive a license for each contract. Criminal penalties can result from a failure to register properly.
But the AECA fails to effectively regulate PMC activities for three basic reasons.
First, it does not provide a mechanism to force presidential compliance. Second, the AECA’s reporting requirements provide inadequate information for Congress to assess private military service contracts. However, if legislation passed in 2007 makes it into law that may begin to change. Finally, the AECA provides only limited public information regarding unclassified contracts that may commit the nation to acts of war.
Because the AECA was drafted primarily to regulate one‐time arms sales contracts, it does not provide adequate mechanisms for ongoing review of a service contract that may last for months or years.
Moreover, the regulations under the AECA provide no ongoing oversight after an export license has been granted. This lack of public information makes it virtually impossible for the public to assess the practice of private military contracting. Such lack of public accountability would be less bothersome if the regulatory
framework guaranteed adequate executive supervision and congressional oversight. But the level of review and inquiry that either branch gives to licensing decisions under the AECA is unclear.
The scarce public information that is available suggests that the current regulatory scheme, while constitutional, does not provide the same safeguards of ongoing executive review, in‐depth congressional oversight, and public accountability that are applied to ventures undertaken by the U.S. military. Yet many of the same dangers to American interests are involved when private contractors do the work. The lack of public accountability is perhaps the most important issue because without it there is no way for voters to evaluate the adequacy of congressional enforcement provisions or oversight.
It is extremely difficult to generalize about private military and security firms. As an industry, or at least, business sector, PMCs have been around for less than 20 years. And although they have attracted growing attention from analysts, scholars, governments, and the general public in the past decade, there are still no agreements on how to define them, let alone categorize them.
Much of the public image of PMCs is based on perceptions that are woefully out of date, such as the activities of now‐defunct groups like Executive Outcomes and Sandline. Specifically, many people still think that companies undertake direct offensive combat operations such as Executive Outcomes did in Angola and Sierra Leone, which is simply not the case. They also think that the various PMCs operating in Iraq constitute a cohesive army, second only in size to the American forces there.
What is worth remembering about PMCs in Iraq is that most of what you think you know is wrong. The private security sector there is very diverse. Yes, there are thousands of Westerners carrying arms, but there are also more host nationals, such as Iraqis and third‐country nationals, doing the same. Some PMCs are more low key than others in using force, but, in general, they are more disciplined and experienced than their active‐duty counterparts. And their function varies depending on what the contract calls for. While the common theme for a security contractor is providing security and protection, it can take many different forms, ranging from static security for buildings and infrastructure to security details for officials and reconstruction workers.
The role and impact of private actors in providing security vary significantly according to context. Obviously, in the case of Iraq, the provision of personal security, primarily for people doing reconstruction work but also for protecting infrastructure, has been the top priority, especially given the dangers caused by the insurgency. This has put groups like DynCorp, Triple Canopy, Erinys, Hart Group, Control Risks, ArmorGroup, and Aegis Defence squarely in the public eye.
Though it is not popular to acknowledge it, accountability of and control over private military and security companies have, at least in a few countries, actually been a pressing concern for several years. In South Africa attempts to regulate have been largely legislative. The problem with South African legislation is that the government views PMC activity with suspicion. Since many South Africans working in this sector had their formative military experience in the apartheid era, the government often views them as potential troublemakers, both in other countries and at home.
The United States, in sharp contrast, increasingly views PMCs as part of the total force. Just like the old American Express credit card ad, nowadays the U.S. military can’t leave home without them. Its concerns, bolstered by its experience in Iraq to date, tend to be administrative: how to ensure coordination between theater commanders and PMCs, how to prosecute PMC personnel if they commit a crime, how to ensure common standards for issuing and implementing contracts.
Given this, what might be done to improve the situation? The following suggestions merit consideration.
1. Establish an Army‐controlled Force Protection Command (FPC) for PSCs.
The U.S. Multi‐National Force‐Iraq (MNF-I) should consolidate PSCs into a unified DoD‐backed organization: security companies could be placed directly under the command of a field‐grade officer assigned to MNF-I, with appropriate liaison staff big enough to support the needs and operations of all PSCs. This provisional FPC would be assigned the job of organizing, supporting, and regulating all PSC personnel in Iraq and making them accountable under a commissioned military commander.
2. Standardize the entire FPC force. The FPC could transform the PSC world in Iraq into a unified entity instead of dozens of individual companies guarding their own interests and those of their clients. In fact, in Iraq, the principal client is the U.S. government. All security contracts would be managed and contracted by MNF-I, including those of the State Department. Having these contract forces, MNF-I would oversee and be responsible
for the protection of all U.S. activities in Iraq. Only companies willing to put their men under the FPC chain of command and meet the Army’s standards would be awarded contracts.
3. Dispel the mercenary myth. As long as PSCs operate as commercial entities for commercial reasons of the owners, they will be viewed as mercenaries‐mistrusted by U.S. forces and vilified in the press. A strict military command watching over, directing, and integrated with them will help dispel that myth.
4. End the mass contracting of third‐country nationals (TCNs). Over time most detractors came to regard PSCs as mercenaries, especially those bringing in large numbers of third‐country nationals. TCNs were brought in largely because they would work for low wages and were ethnically distinct from the Iraqis. With the exception of a few companies that have used ex‐British army Gurkhas and United Nations‐trained Fijians for years, the recent trend is to strip third world armies of full battalions in order to be the lowest bidder. It lends a bit of truth to accusations that MNF-I is paying foreign mercenaries.
5. Implement strict accountability. The immunity granted to PSCs by Ambassador Bremer’s CPA Order 17 should be revoked completely. It should not be expected or welcomed by the private security community. To be able to act with complete impunity encourages rogue individuals and unscrupulous entities to enter Iraq with the intent to “get some and get paid” rather than perform the mission professionally. There have been no prosecutions to date of PSCs involved in questionable shootings or even outright murder. A “What happens in Baghdad, stays in Baghdad” mentality blurs the line between the rogues and the professionals.
Finally, Make PSCs an integral part of the strategy, legally. Congress needs to introduce legislation that would essentially force professionalism and transparency on PSCs. This legislation would also place them in a legally binding framework and protect them under the Geneva Conventions. It should also serve as a reminder that they are being paid to represent the interests of the ultimate paying client, the American people. Of course, amending international law is not done easily, so the sooner this is started the better.