Public Employee Press

Part of a series on the war
War on Terror, Inc.
Contractors outnumber troops in Iraq

“War is a racket. It is possibly the oldest, easily the most profitable, surely the most vicious.”
— Major Gen. Smedley Butler (1881-1940)

By GREGORY N. HEIRES

Iraq is a textbook case of the perils of privatization.

Cronyism, government corruption, profiteering, no accountability and rampant waste are the classic problems with privatization.

By gunning down 17 unarmed Iraqi civilians in September, mercenaries from the private security company Blackwater USA showed that in wartime, you have to add murder and mayhem to that list.

Private contractors now outnumber the U.S. troops that occupy the oil-rich Mideast country. More than 180,000 civilian contractors, including some 30,000 mercenary soldiers, are part of our war effort. U.S. military personnel in Iraq total 160,000, according to U.S. Defense Dept. figures.

Privatization has political benefits for the White House: It hides the true number of troops from the public and avoids the need for a draft, which multiplied opposition to the Vietnam War. “We are in the midst of the most privatized war in the history of our country,” testified Jeremy Scahill, author of “Blackwater: The Rise of the World’s Most Powerful Mercenary Army,” in a May congressional hearing. With the end of the Cold War, the Defense Dept. downsized the military and began contracting out interrogation, convoys, personal security, construction, interpreting and food services.

Privatizing military services was one of Vice President Dick Cheney’s priorities as defense secretary during the 1990-91 Gulf War. What’s different today is the second army of private security personnel. The current ratio of civilian to military personnel is unprecedented, according to Geoffey S. Corn, who teaches national security law at South Texas College of Law in Houston.

Also unprecedented is the cost and the waste. The U.S. government pays Blackwater $1,222 per day for each “protective security specialist,” which adds up to $446,000 per year; a top Army sergeant makes from $51,000 to $69,350 a year.

With deep ties to the Republican Party, the firm has used the Iraq war to expand into a global mercenary army. From 2001 to 2007, the value of its federal contracts skyrocketed from $1 million to more than $500 million.

Blackwater Chief Executive Officer Erik Prince has donated at least $300,000 to Republican political candidates. His sister Betsy, former Republican chair in Michigan, gave at least $250,000. Chief Operating Officer Joseph Schmitz was inspector general of Bush’s Defense Dept., where he oversaw the greatest increase in military contracting-out in U.S. history, with$42 billion paid to 77 private contractors in 2005.

Contractors are exempt from the U.S. Code of Military Justice and, under a law enacted early in the occupation, they cannot be prosecuted in Iraq. When an allegedly drunk Blackwater soldier killed one of the Iraqi vice president’s bodyguards last Christmas Eve, the firm quickly sent him out of the country and fired him.

Privatizing the military is part of a broad plan to privatize Iraqi government services and hand over the public sector to private companies. When L. Paul Bremer III became the U.S. administrator after the invasion, his first official act was to lay off 120,000 civil service workers in a move that has been criticized for crippling the government.

Over the past six years, companies like Bechtel and Halliburton have made billions of dollars in profits on the nearly $50 billion spent on reconstruction. Bechtel was kicked out of a project to build a children’s hospital after the cost mushroomed from $50 million to $169 million. The U.S. Justice and Defense departments are probing waste and fraud in $6 billion worth of Iraq contracts.

The crown jewel, of course, is the oil industry. A proposed law and 30-year contracts — opposed by the Iraqi oil workers’ union — would in effect privatize oil production by requiring “production sharing” between the government oil company and U.S. and British energy companies.

What’s happening in Iraq, says Naomi Klein, author of “The Shock Doctrine: The Rise of Disaster Capitalism,” is a “drive to privatize every aspect of the government.”