Private military corporations, private military firms, private security companies, military services providers, the privatized military industry are all attempts to label the phenomena of private companies offering services on the world market that have normally been duties of national military forces or involve armed security detail for business in unstable regions.[1] Every service caters to security, and the growing need for security in a world wrought with differing economic, strategic, and military interests has provided a marketplace that is rapidly expanding.

These services include risk advisory, training of local forces, armed site security, cash transport, intelligence services, workplace and building security, war zone security needs, weapons procurement, personnel and budget vetting, armed support, air support, logistical support, maritime security, cyber security, weapons destruction, prisons, surveillance, psychological warfare, propaganda tactics, covert operations, close protection and investigations.

The industry is best defined by the services offered, and not by the company in particular. Companies may offer a vast range of services, not all of which, or in some cases, most of which do not fall into the loosely defined category of private military services. Other companies may only offer services in the security and logistics fields with few or any options outside those specialities. Many security companies have been around for quite some time and have adapted to 21st century necessities involving terrorism and business ventures in unstable regions. Others have been recently created to fill the market niche left by downsized militaries coupled with military endeavors in Iraq and Afghanistan. And others concentrate on peacekeeping missions and post-war civil training.

The companies of today are used by governments, corporations, humanitarian groups and NGOs, media personnel, and the UN. Private military contractors are the second largest force in Iraq with over twenty thousand active personnel in the country. The industry is growing with some estimating annual contracts in the $10-$20 billion range and others citing numbers as high as $100 billion. Though a worldwide phenomena, the United States and Great Britain account for over 70% of the world's market for their services.

The single largest issue introduced by the evolution of military services by the private sector is the degree to which corporations are now transcending the power of governments, rising as an influential variable within international and regional diplomacy, and redefining sovereignty in the 21st century. Advocates of the industry claim they are economically efficient and point towards the failure of the UN and the system of world governments to cease violence, genocide and civil war around the world. Those who are cautious of the emerging industry see this market as an encroachment into inherent government functions and question the real economic efficiency heralded as a true result of privatization. And there are, of course, many in between, who see benefits and drawbacks to the variety of services out there now on the world market.

“The mercenaries and auxiliaries are useless and dangerous, and if anyone supports his state by the arms of mercenaries, he will never stand firm or sure, as they are disunited, ambitious, without discipline, faithless, bold amongst friends, cowardly amongst enemies, they have no fear of God, and keep no faith with men,” wrote Machiavelli in The Prince.

As Peter W. Singer says in his book, Corporate Warriors: The Rise of the Privatized Military Industry (ISBN 0801441145), "[T]he monopoly of the state over violence is the exception in world history, rather than the rule. The state itself is a rather new unit of governance, appearing only in the last four hundred years. Moreover, it drew from the private violence market to build its public power."

And as Lt. Col. Tim Spicer says in his book, An Unorthodox Soldier: Peace and War in the Sandline Affair (ISBN 1840183497), "Mercenary soldiering has a long and honorable history...When something is both widespread and long lasting, there must be some fundamental reason for it. In the case of mercenaries, the reasons why they have continued to survive and prosper down the centuries can be reduced to just two: efficiency and technology."

The War on Terror and the 21st Century

The modern private military company has evolved from a hybrid of the wild activities of rogue white officers, and their African recruits, often linked with intelligence agencies running around Africa, and their more legitimate counterparts working under contract from Cold War hero countries. This coupled with the risk advisory services offered to corporations by companies like Kroll, Inc. and CRG and the introduction of more legitimate players from the high ranks of big militaries have come together to offer security to companies doing business in hostile regions and to countries seeking to upgrade their militaries.

The war in Iraq and Afghanistan along with the promised long global war against terror has created a boom in the security and risk advisory market. Trained and experienced military personnel from Special Forces units in the US, UK, Israel and South Africa are retiring to take part. The same is true for the intelligence agencies as companies aiding business ventures in Iraq like GlobalOptions and Diligence see executives on the boards from the CIA, DIA, FBI, the Secret Service, FEMA and MI6.

Many companies are subsidiaries of larger firms. MPRI and Titan were bought by L-3 Communications which is traded on the NYSE. Defence Systems Limited was bought by Armor Holdings, Inc., renamed ArmorGroup than bought out by its board. Group 4 Securicor is a merger between Group 4 Falck and the Wackenhut Corporation providing services from armed prison guards to guarding embassies to supplying electronic surveillance. Computer Sciences Corporation acquired DynCorp.

Many of these companies, while paid with taxpayer money when working under government contracts, are often registered offshore somewhere, escaping tax on many profits from re-entering the representative, public Treasury.

Other companies provide specialized advice and training for maritime concerns such as Executive Solutions International, LLC (ESI). The threat to port cities where liquefied natural gas comes in on container ships could be severe. Pirating and other attacks on the high seas are a threat in many areas of the world. Companies are developing to meet the security needs of cities and companies subject to terrorist or other attacks on shipments.

The laws surrounding hired soldiers and civilian contractors is not clear and not well defined under international agreements. This is a reason why increasingly the focus is regulation at the national level; e.g. as the licensing mechanisms used by the United States and South Africa demonstrate. Yet many of the hired soldiers are not American; they could be from the country of conflict, or flown in from Chile, El Salvador, or South Africa. Exactly what jurisdiction, aside from their employer, they are under is, according to some commentators, uncertain. [1]

This is true for American contractors as well. Civilian contractors working for Dyncorp in the Balkan wars were implicated by a fellow employee for indulging in a child prostitution and sale ring in the war torn country. [2] Those who turned in the employees were fired, and later the offending employees were fired , however not charged with anything. [3]

Some of the interrogators in the Abu Ghraib crimes were civilian contractors provided by Titan and CACI. They have yet to be charged for any crimes, however they are being sued as are the two companies. [4][5][6] All three companies have continued to receive large wartime contracts from the US government.

In 2006, the US Congress published an official report on US enterprises that had signed contracts with the State Department or the Defense Department so as to carry out anti-narcotics activities as a part of Plan Colombia. Most the private contract enterprises are under the responsibility of the Defense Department, but the largest contract (DynCorp) is in the hands of the State Department. [7]

Points of Interest

The Center for Public Integrity: Making A Killing: The Business of War

"At least 90 companies that provide services normally performed by national military forces but without the same degree of public oversight have operated in 110 countries worldwide." [8]

"Arms dealers have profited from a massive unregulated sell off of low price surplus armaments into the most fragile, conflict-ridden states and failed states. The weapons, mostly from state-owned Eastern European factories, have found their way to Angola, Sudan, Ethiopia, Colombia, Congo-Brazzaville, Sri Lanka, Burundi and Afghanistan where conflicts have led to the deaths of up to 10 million people during the past decade." [9]

"Since 1994, the U.S. Defense Department has entered into 3,061 contracts with 12 of the 24 U.S.-based PMCs identified by ICIJ, a review of government documents showed. Pentagon records valued those contracts was more than $300 billion. More than 2,700 of those contracts were held by just two companies: Kellogg Brown & Root and Booz Allen Hamilton. Because of the limited information the Pentagon provides and the breadth of services offered by some of the larger companies, it was impossible to determine what percentage of these contracts was for training, security or logistical services." [10]

"The International Traffic in Arms Regulations Law (ITAR) requires PMCs to obtain approval from the State Department before selling their services to a foreign government. State's Office of Defense Trade Controls reviews contract proposals to ensure they do not violate sanctions or other U.S. policy. However, PMCs can also sell their services abroad through the Defense Department's Foreign Military Sales (FMS) program, which does not require any licensing by State. Under FMS, the Pentagon pays the contractor for services offered to a foreign government, which in turn reimburses the Pentagon." [11]

Outsourcing the Pentagon

The following is according to the Center for Public Integrity's Outsourcing the Pentagon:

"In April [2002], the Army told Congress that its best guess was that the Army had between 124,000 and 605,000 service contract workers. In October, the Army announced that it would permit contractors to compete for "non-core" positions held by 154,910 civilian workers (more than half of the Army's civilian workforce) and 58,727 military personnel." [12]

"In 2003, the IG [Inspector General] reported that out of 113 service contract actions reviewed (with an estimated value of $17.8 billion), at least 98 had one or more problems, including inadequate competition, lack of surveillance, or inadequate price reasonableness determinations." [13]

"The Freedom of Information Act applies to "agency" records. Contractors, in this context, are not "agencies," even where they perform decisional roles. Similarly, government officials are subject to a body of conflict of interest provisions, pay caps, limits on political activity, and labor rules that do not similarly constrain contractors who perform similar, even the same, work." [14]

"Between 1998 and 2003, the Pentagon awarded more than $47 billion in contracts designated for small businesses to companies that have each earned more than $100 million from Defense Department contracts alone during that six year period." [15]

"The homeland security industry is currently the fastest growing sector of the U.S. economy, predicted to grow from a $5 billion industry in 2000 to $130 billion in 2010, according to the Homeland Security Research Corporation, a private California think tank." [16]

Corporate warriors

In 2002, Peter W. Singer wrote the following in "Corporate Warriors: The Rise and Ramifications of the Privatized Military Industry" by Peter W. Singer. (Links to 91K/46 page .pdf file.)

"With the rise of the privatized military industry, actors in the global system can access capabilities that extend across the entire spectrum of military activity-from a team of commandos to a wing of fighter jets-simply by becoming a business partner."? (pg. 1-2)

"Many PMFs operate as "virtual companies." Similar to Internet firms that limit their expenditure on fixed (brick and mortar) assets, most PMFs do not maintain standing forces but draw from databases of qualified personnel and specialized subcontractors on a contract-by-contract basis." (pg. 15)

"The unrestricted access to military services ushered in by the rise of the privatized military industry has clearly enhanced the role of nonstate groups which at one time had been at a disadvantage in a system dominated by states. PMFs provide these groups with new options and new paths to power not imagined until very recently." (pg. 31)

"The ultimate problem with PMFs is that they diffuse responsibility. Questions about who monitors, regulates, and punishes employees or companies that go astray are still to be fully answered. That many of these firms are chartered in offshore accounts complicates the matter further." (pg. 34)

In "Transfering Costs of War to Latin America is Morally, Politically Wrong" in The Miami Herald, January 29, 2005, Geoff Thale observes:

"In El Salvador, the security firms are said to be pleased with the candidates they have found. Many of them served in the Salvadoran armed forces; they are highly motivated, because they are being paid several times what they could earn in the Salvadoran economy; and they are cheap, because even paying five times what an average Salvadoran earns means that the security firms are paying far less than they would have to pay to recruit U.S. civilians to do this work."

"The U.S. military contracts out elements of security operations to U.S. companies, who recruit relatively low-cost Latin Americans to fill the jobs. The contractors keep labor costs down, thus helping their bottom line. The Latin Americans are poor, need the work and benefit from what are -- by their standards -- high salaries."

"Latin America and other less-developed regions shouldn't serve as a cheap labor pool to recruit people for dangerous jobs that are part of the U.S. military mission in Iraq. It may be tempting to pay others to take risks for us. It may be particularly tempting to pay people from foreign countries such as El Salvador, Colombia or Chile, so that we don't experience the human cost of casualties or deaths ourselves. But it's not morally acceptable."

"U.S. military and government officials are attempting to avoid paying the political cost in the United States of the war in Iraq by hiring poor Latin Americans to do part of the fighting and the dying in place of U.S. citizens. Whether one supports or opposes the U.S. war in Iraq, one can agree that it is the U.S. military that ought to bear the burden of fighting a war that the United States initiated. Allies may join in and send their own troops in support if they so choose. But U.S. contractors working for the Pentagon shouldn't be recruiting civilians in Latin America to bear the burden of carrying out a U.S. military mission."

"When a U.S. soldier is wounded or killed in combat, his or her family, neighbors and community feel the weight of the war and ask themselves, Is it worth it? In a democracy such as the United States, it is important for citizens to share the burden related to military action abroad, feel the impact and make the judgment about whether it's worthwhile."

Creating distance

The July 3, 2003 cover feature, Soldiers of Good Fortune by Barry Yeoman for The Independent Weekly makes the following assertions:

"Private military corporations become a way to distance themselves and create what we used to call 'plausible deniability,'" says Daniel Nelson, a former professor of civil-military relations at the Defense Department's Marshall European Center for Security Studies. "It's disastrous for democracy."

"The lack of oversight alarms some members of Congress. "Under a shroud of secrecy, the United States is carrying out military missions with people who don't have the same level of accountability," says Rep. Jan Schakowsky (D-Ill.), a leading congressional critic of privatized war. "We have individuals who are not obligated to follow orders or follow the Military Code of Conduct. Their main obligation is to their employer, not to their country."

"An analysis shows that 17 of the nation's leading private military firms have invested more than $12.4 million in congressional and presidential campaigns since 1999."

"In 2001, according to the most recent federal disclosure forms, 10 private military companies spent more than $32 million on lobbying." More recently, "the ten largest contractors in the nation spent more than $27 million lobbying the federal government in the last quarter of 2009," according to a review of lobbying records. "The massive amount of money used to influence the legislative process came as the White House announced it would ramp up military activity in Afghanistan and Congress considered appropriations bills to pay for that buildup" [17].

"Federal law bans U.S. soldiers from participating in Colombia's war against left-wing rebels and from training army units with ties to right-wing paramilitaries infamous for torture and political killings. There are no such restrictions on for-profit companies, though, and since the late 1990s, the United States has paid private military companies an estimated $1.2 billion, both to eradicate coca crops and to help the Colombian army put down rebels who use the drug trade to finance their insurgency."

"The Pentagon has become so dependent on private military companies that it literally cannot wage war without them. Troops already rely on for-profit contractors to maintain 28 percent of all weapons systems."

"There are some weapons systems that the U.S. military forces do not have the capability to do their own maintenance on," concedes David Young, a deputy commander at the Defense Contract Management Agency."

Accountability

Lt. Col. Tim Spicer makes the following remarks in his book, An Unorthodox Soldier: Peace and War and the Sandline Affair:

"Another frequent allegation about PMCs is that they are "not accountable." Not accountable to whom? World opinion? Outside politicians? I can only speak for Sandline, but we are always accountable, to our own policies and ethos and to our client government, with whom we always have a binding contract."? (pg. 24)

"[T]he majority of legitimate PMCs are quite capable of continuing to operate and grow without the introduction of a regulatory regime. PMCs will accept external regulation if it is manageable and adds to their commercial aspirations and operational effectiveness. [ ] I would suggest that since PMCs operate in an international setting and in high-risk, volatile situations, the sort of heavy-handed regulation employed in other areas of public concern might not be entirely appropriate." (pg. 27)

"Any PMC must adhere to the law of armed conflict, as defined by the Geneva Convention, and show a respect for human dignity and human rights. Although our operatives are always enlisted in the forces of the governments who employ us, not least to ensure a clear chain of command, if one of our people were told, for example, to attack a village, an action which would unnecessarily endanger innocent lives, he would not do it." (pg. 53)

Trade association view

Doug Brooks, president of the International Peace Operations Association, a representative group for PMCs makes the following statements:

Contrary to various media reports, private security company (PSC) employees in Iraq are not becoming overnight millionaires. Sensational reports of $1500 or even $3500 per day salaries tax free float around in the media, but the reality is far different. Private security professionals with the highest qualifications and suffering the greatest risk may earn as much as $700 per day, far below the sensational salaries many experts have been claiming. [18]

Skilled private contractors in Iraq are doing everything from rebuilding the education system and electrical grids to protecting fledgling democracy efforts. It is critical that the industry spearhead efforts challenging rogue companies and contractors who violate the public trust. [19]

The reality is that every UN or regional peace operation in existence today requires and utilizes the services of the private sector. IPOA members have proven their effectiveness and value in these operations. [20]

In a globalized economy, all transnational companies, whether their focus is manufacturing, mining, transportation or even security, look for employees with the required skill sets from local, regional, and international sources. [21]

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