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Former Iraq Security Contractors Say Firm Bought Black Market Weapons, Swapped Booze for Rockets

Newly released documents provide a glimpse into the messy business of creating a private army on the fly in the middle of a war zone.

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"We were forced to turn to the local market even for U.S. government contracts and subcontracts because there weren't mechanisms in place to allow export of weapons in Iraq, yet we had the responsibility to provide services under those government contracts," said one DynCorp official, who declined to be named because of the sensitivity of the topic.

A State Department official acknowledged that the department had been slow to respond to the need to arm the private companies it was hiring to carry guns. Until late 2004, the department's Directorate of Defense Trade Controls blocked most requests for the export of automatic weapons to private firms — the result of a decades-old policy to cut down on international arms trafficking.

When private security companies began requesting weapons to fulfill U.S.-issued contracts, the department was caught off guard, the official said. It wasn't until November 2004 that the policy was changed to grant private security companies export licenses — more than a year and a half after the first such firms were hired in Iraq.

"This was something that the State Department hadn't considered as a possibility" until the requests for licenses started coming in, said the official, who spoke on background per department policy. "What they did was go through a relatively long discussion and decision process to figure out how to deal with the problem."

While the system for importing weapons has improved in Iraq, industry and State Department officials acknowledged that problems remain in Afghanistan.

Partly, this reflects the fact that more groups are at work there. Unlike Iraq, there is a substantial presence of nonprofits and international aid organizations in need of security. Companies buying weapons from local sources continue to run the risk of money flowing to insurgents, one official said.

Afghanistan is similar in one way, however. Just as in the early days in Iraq, there are comparatively few investigators on the ground to watch the billions of dollars now flowing into the country.

"It's an even worse Catch-22 over there," one industry official said.

Aram Roston is an Emmy Award-winning investigative producer at NBC News and the author of The Man Who Pushed America to War: The Extraordinary Life, Adventures, and Obsessions of Ahmad Chalabi (Nation Books), from which this article is adapted.