By the time President Obama announced the withdrawal of Ameri­can troops from Iraq, PMSCs [private military and security companies] were in line to collect billions of dol­lars in contracts for at least another five years. They included SOC, Inc. (the firm with the extensive training site in Nevada, whose con­tract to safeguard the Baghdad embassy would bring in nearly $1 bil­lion), Triple Canopy (a five-year $1.53 billion contract for embassy security), ArmorGroup, Control Risks Group, DynCorp, Erinys, and Aegis. And as always, there were many smaller firms working as subcontractors, though these were not listed on the government’s Baghdad Embassy website. What was noted on the site, however, was a rather big caveat: “The U.S. government assumes no responsi­bility for the professional ability or integrity of the persons or firms whose names appear on the list.”

These contracts hardly resembled the feeding frenzy of the Iraq PMSCs surfacing in Iraq, some without track records and many in search of subcontracts. There were, in fact, enough unknown firms with unfamiliar names popping up in Baghdad that some underwrit­ers at Lloyd’s of London were uneasy. Insurers typically demanded that these companies produce what were called security protocols from the military if the companies wanted insurance for operating in unstable environments.

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The Iraqi contracts would cushion some of the top firms during the industry’s transition from wartime. And while the gold rush in Iraq was ending, the pursuit for the next rush of markets had already begun. Where exactly were these markets? Wherever instability threatened development; wherever the military commitments of states exceeded their capacities; wherever preventive war was a rul­ing principle; wherever governments were viewed as incapable of supplying defense and security fast enough in times of sudden con­flict; wherever maritime terrorists threatened the shipping industry; and wherever kings, dictators, or presidents felt endangered by mass protests, such as the nations involved in what became known as the Arab Spring in 2011.

To be sure, there was plenty of work for PMSCs during the Arab Spring, especially protecting companies trying to operate in the midst of the political unrest. For example, in Bahrain, where Aegis had an office in Manama, the capital, the firm, according to its own release, implemented a “crisis management plan” for an unnamed multinational energy company and evacuated 100 or more people.

A few months after the protests abated, the United Nations re­leased a study showing that the use of “mercenaries in armed con­flict” had vastly increased in recent years. Examples included Arab countries during the spring protests. Muammar Gaddafi, it noted, had brought in hired guns from Eastern Europe and from African nations to fight prodemocracy protestors. Although leaders in the PMSC industry argued that the hired guns in the Arab Spring were not the companies that formed the backbone of their industry, there were clearly some mainstream companies acting as brokers of combatants deployed to stop the protests. The U.N. stressed that the presence of private forces, whether employed by companies or self-employed, was growing worldwide without enough control to stop “an on­slaught of human rights problems.”

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But even the United Nations had begun to employ PMSCs. Since its inception, the U.N. had relied on governments to send peacekeepers to guard U.N. personnel in hostile environments. For years, its committees and councils had been critical and watchful of what were often described as “mercenary” operations. What, then, had changed? Mainly, it was the rising number of U.N. relief workers who had been killed or kidnapped in recent years—for example, the Taliban killing five U.N. employees in Pakistan in October 2009. That year, the former head of diplomatic security for the U.S. Department of State, Gregory Starr, became the U.N. top security official. Starr had been a proponent of PMSCs in both Iraq and Afghanistan, and when pressed by a reporter about the possibility of privatized U.N. forces, he declined to comment. A U.N. spokesman then tried to explain the organization’s intentions, falling back on definitions and nomenclature. “He [Starr] wanted you to know that our understanding of the current usage of the term ‘Private Security Contractors’ typically refers to contractors doing close protection work for movement security, such as Blackwater/ Xe, Triple Canopy, DynCorp, Aegis and many other companies providing this type of service. However, the U.N. doesn’t avail itself of this type of service. We do use some private companies Pakistan.”

This was a controversial move for the United Nations. Using PMSCs instead of government peacekeepers sent the message, as one former U.N. peacekeeping official said, that “we care about you, but not to the point of risking our own boys.” But U.N. Secretary-General Ban Ki-moon told the press in early 2010 that the U.N. “will have to turn to the private sector to protect its people.” That year, the United Nations had contracted a subsidiary of a London-based PMSC to provide several hundred Nepalese Gurkhas to guard U.N. officials in Afghanistan. And humanitarian organizations were re­porting that U.N. peacekeepers had been “quietly turning to private security, particularly in hazardous stations like Somalia and Afghan­istan.” Private-sector support allowed the U.N. to continue its work in environments that were becoming more and more dangerous, as U.N. officials acknowledged.

In 2010, the U.N. spent $75.7 million for “security services,” a 73 percent increase from 2009. That figure rose to $113.8 million in 2011. And in 2012 the total cost for U.N. private security contracts would go even higher, to $124.3 million—an increase of about 300 percent since 2009. In a report entitled “Contracting Insecurity: Pri­vate Military and Security Companies and the Future of the United Nations,” the Global Policy Forum, which monitors international organizations, including the United Nations, noted the difficulty in defining “security services” and cautioned that the U.N.’s statistics were “not an exact reflection of reality.” However, the figures none­theless showed a “rapid increase in the use of security service firms.”

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A far bigger market, however, and one of the fastest-growing businesses for PMSCs, was maritime security, which received an immense boost from the U.S. State Department. In late October 2011, U.S. Secretary of State Hillary Clinton sent a memo asking diplomats to promote “the use of privately contracted armed security personnel on merchant vessels to deter or prevent pirating off the Horn of Africa.” For the shipping industry, this was a momentous and surprising endorsement of PMSCs. Clinton, after all, had been a strong critic in 2008 of the use of PMSCs in Iraq and Afghanistan. Some of the same players in both wars were entering the burgeoning marketplace for maritime security.

The maritime memo drew little attention in the mainstream media, but the use of armed security on ships had been intensely debated in the shipping industry, which had been reluctant to place armed guards on board. Now the U.S. State Department was not only endorsing the action but encouraging it. This was a major victory for companies like Aegis that were strong in maritime security, and also for the former Blackwater, now called Xe Services and soon to be renamed Academi, which even had a 183-foot vessel outfitted for disaster response and maritime-security training. With the focus on the Gulf of Aden, one of the busiest shipping lanes in the world, this was very big business. Also benefiting—especially if armed security did in fact deter piracy—would be the insurance industry, which had been tightly linked to the private security business since the indus­try’s beginnings. Curbing piracy would save lives and would also save the shipping industry’s insurers millions of dollars.

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Once again, the government was stepping aside and allowing the private sector to sail right in. And it wasn’t just off the coast of Somalia. In early November, Andrew J. Shapiro, the assistant secre­tary of state in the Bureau of Political-Military Affairs, spoke to the Defense Trade Advisory Group to explain the State Department’s thinking. “With so much water to patrol it is difficult for interna­tional naval forces in the region to protect every commercial vessel.

encouraging countries to allow commercial ships transiting high-risk waters to have armed security teams on board. The reason for this is simple: to date no ship with an armed security team aboard has been successfully pirated. We believe that the expanded use of armed security teams by commercial vessels is a major reason why we have seen a decline in the number of successful pirate attacks this year. Therefore, we have recently demarched countries to permit the use of privately contracted armed security personnel on commercial vessels. And we are also working with industry and transit countries to make it less onerous for privately contracted security personnel to transit foreign ports with weapons intended for the self-defense of ships.”

In America, too, business was picking up for PMSCs. The idea of preventive war at home was seeping into the collective con­sciousness of Americans, echoing that familiar rationale for using private-sector security when governments appeared unable to come through with mandates to safeguard its citizens. Case in point: the Mexican-American border.

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If unstable environments stimulated the market for PMSCs, then the Mexican-American border was a candidate for another bonanza. Capitalizing on such potential in the summer of 2011 was the firm International Security Agency, or ISA. With headquarters in Hous­ton, ISA employed former Special Forces members as well as for­mer police, and told the press that it had done work in thirty-three nations. Its rationale for security work was, as the Texas Tribune described it, “If the government cannot protect its citizens, it’s up to the individual.”

In August 2011, ISA announced that it had received the “required licenses to operate” in McAllen, Texas, on the Mexican border. At the time, ISA President Jerry Brumley told the press: “I love my country. If I were king or emperor of America, I would do exactly what Ronald Reagan did. [Reagan said,] ‘You know what? You hurt an American citizen—I don’t care where you are—and I am coming after you.’ And we’re in America.”

In its presentation to the McAllen business community that summer, ISA showed a newsreel clip of a car chase along the U.S. border that ended with one car in the river. Another clip displayed the devastation following the explosion of car bombs on the Mexican side of the border, and an animated rendering of Glenn Beck telling the audience that drug dealers were tantamount to terrorists and that the government would not and could not protect Americans from the violence they caused. In its corporate slide show, the company then informed potential clients about the expertise of its employees, who were trained in military skills and who, as the ISA president implied, had aggressive rules of engagement. The presentation harkened back to Iraq in 2004 or 2005.

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“Our practice,” said Brumley, “is if someone raises a weapon to me and I feel threatened, with my life or the life of my client, I am taking action. I am not going to lose an American because my rules of engagement say ‘Well, you know, they have to shoot at you [first].’” The Texas Tribune commented, “[The presentation] demon­strates what a military-style ‘cadre’ is, complete with a photograph of a camouflaged soldier raising a weapon and taking aim.”

ISA, according to its website, required its applicants to be “for­mer military with at least four years of service and an honorable dis­charge, a federal law or civilian law enforcement officer with at least two years of service, a security officer with six years of experience or a personal protection agent with more than three years of experi­ence.” Pay scales ranged from $200 a day per agent, to $2,500 a day promotional material, was to stop drug-cartel-instigated violence in the United States before it started—the Wild West version of preven­tive war.

When asked whether it was appropriate to hire private security firms to guard the border and what his concerns for accountability might be, Texas Governor Rick Perry, then a candidate for the Re­publican nomination for president, said, through his deputy press secretary: “Let’s be clear here: It is the federal government’s respon­sibility to protect Americans by securing the international border between the U.S. and Mexico. Since the federal government is not fulfilling that responsibility, it is unfortunate but not surprising that the citizens living along the U.S.-Mexico border feel so unsafe on their own property that they could be looking to hire personal secu­rity.”

Quelling fears along the Mexican border promised to become a profitable business, and it extended beyond the realm of guarding homes, individuals, and businesses. There was money to be made, for example, in the crackdown on immigration. PMSCs could run and sometimes own detention centers. This was a high-growth mar­ket. In 2005, there were 280,000 detentions and by 2011 there were 400,000. The demand was such that the close proximity to the Mex­ican border of some training sites—for example, Playas, only forty miles from the border—meant they could easily be used as future de­tention centers. After all, immigration enforcement had become an­other growing market for PMSCs, especially in the U.S., U.K., and Australia. By 2011, for example, private contractors controlled half of all immigration detention beds in the United States. Although it was a niche market, it was often identified by analysts as one source of potential growth for the PMSC industry. Detention attracted the large multinational firms known for their vast offerings of what were once government services. G4S, with more than 600,000 employees in 125 countries, was one. G4S owned both the British ArmorGroup and the large American security company Wackenhut. It had been one of the corporate participants in the 2008 meetings at Montreux. As part of its immigration work, it was under contract with the U.S. Department of Homeland Security to escort illegal border-crossers back to Mexico.

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But despite the Border Patrol work and immigration-related armed security, PMSCs remained nearly invisible to the American public. That they would continue to have a presence and an influence in Iraq or Afghanistan would have surprised most Americans. But that they would play a bigger role back home, within U.S. borders, would have been more surprising. And yet they were establishing a presence on Main Street. By the fall of 2011, there were dozens of municipalities, counties, and townships in the United States that had hired a private military and security company to train their police forces—often Blackwater. Big cities on the list included Atlanta, Washington, New York City, Chicago, and Los Angeles.

There was no law prohibiting the training of police in military methods. Blackwater figured that out, thus identifying the training of domestic police as a potentially lucrative part of its business, and then cornering the market. In the beginning, the market consisted mainly of the Department of Homeland Security, which was in a hurry to improve local police protection in the event of a terror at­tack. It was quick to utilize Blackwater’s police-training services, funding and supporting police departments nationwide to employ Blackwater. In addition, some municipalities were considering con­tracting PMSCs for special duties, such as patrolling a city’s most dangerous neighborhoods. The theory was that this saved the city proof vests and uniforms.

The difference between a police officer trained to “keep the peace” and a soldier was quite easy to identify. A policeman was legally required to protect and to serve the citizens of the state, to assume innocence unless there was a reasonable suspicion of illegal activity, and to use weapons against a citizen only as a last resort. A soldier was trained to identify enemies and if necessary to kill them while protecting any nonenemies in the vicinity. “I stand ready to de­ploy, engage, and destroy the enemies of the United States of Amer­ica in close combat” was their creed. And although most policemen trained by a private military company would remain dedicated to their oaths to serve and protect the public, there was the possibility of the exception.

Evidence of potential problems bubbled up in autumn 2011 when the Occupy Wall Street movement inspired demonstrations in U.S. cities and towns and on university campuses, as people protested the greed of what they called “the 1 percent” of the U.S. populace. Although there was no direct involvement of PMSCs, as had been the case in New Orleans during Hurricane Katrina when Homeland Security brought in Blackwater, there were clear signs of the mili­tarization trend in policing. The protests began on September 17 in New York with the occupation of a park near Wall Street. These were nonviolent political protesters using their First Amendment rights to express their views, thus inspiring some journalists to refer to “the American Autumn” following “the Arab Spring.” But in early Octo­ber things began to change. In their black full-battle uniforms armed with assault rifles, sometimes even M4s like the ones the military used in Iraq and Afghanistan, some police began to act the way they looked. In Oakland, for example, police kicked and attacked demon­strators, including war veterans, shooting them in the face with tear­gas canisters. An ex-Marine who had spent two tours of duty in Iraq was hit so hard in the head with a police projectile—while he was texting—that he was taken to a hospital in critical condition and for nearly two months lost his ability to speak. As if in a flashback scene from the disaster at Nisour Square, Oakland police threw a “flash­bang grenade” at the people who ran to help the wounded vet.

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In November, a former Washington State peace officer who had earned a Bronze Star and Purple Heart while serving in Iraq teamed up with a lawyer from Arlington, Virginia, to warn in the Atlantic about the consequences of bringing military-style training to domes­tic law enforcement: “When police officers are dressed like soldiers, armed like soldiers, and trained like soldiers, it’s not surprising that they are beginning to act like soldiers.”

It was a potentially shameful situation for the United States, especially when the U.N., the watchdog of human rights violations across the globe, turned its gaze on the nation that considered itself the world’s icon of freedom and human rights. In early December, Frank La Rue, the U.N.’s special envoy for protecting free expres­sion, drafted a memo to the U.S. government demanding to know why it was not protecting the rights of the Occupy Wall Street pro­testors. From his view, as long as they were peaceful nonviolent demonstrators occupying public spaces, the government had an obli­gation to protect their rights and not to exert excessive force against them. What was at risk, La Rue wrote, was America’s credibility as a model democracy.

In late 2011, another affront to democracy was taking shape as the government was outsourcing jobs to design, maintain, and op­erate cybercapabilities for national security. This included devising defenses against cyberattacks, and even orchestrating offensive cybertactics. In what some government officials were calling the cybercontractor complex, there was a shift in 2011 from internal de­fense of the infrastructure to offensive strategies, including cybersur­veillance sometimes aimed at American citizens—a startling reality that would soon be exposed to the world by former private contractor Edward Snowden. Equally unsettling was the fact that a few of the new surveillance systems operated by companies under contract to the United States had customers other than the United States.

For the industry, it meant yet another market to inspire “the incu­bation of new and more powerful capabilities from within the indus­try [of PMSCs],” as a British journalist wrote. At least cybersecurity was not armed security and it was not on the list of usual services offered by most PMSCs—not yet anyhow.

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Excerpted from "The Invisible Soldiers: How America Outsourced Our Security" by Ann Hagedorn. Published by Simon & Schuster. Copyright 2014 by Ann Hagedorn. Reprinted with permission of the publisher. All rights reserved.