Flush with Profits from the Iraq War, Military Contractors See a World of Business Opportunities

By Jeremy Scahill, Indypendent. Posted August 13, 2007.

If you think the U.S. has only 160,000 troops in Iraq, think again.

With almost no congressional oversight and even less public awareness, the Bush administration has more than doubled the size of the U.S. occupation through the use of private war companies.

There are now almost 200,000 private "contractors" deployed in Iraq by Washington. This means that U.S. military forces in Iraq are now outsized by a coalition of billing corporations whose actions go largely unmonitored and whose crimes are virtually unpunished.

In essence, the Bush administration has created a shadow army that can be used to wage wars unpopular with the American public but extremely profitable for a few unaccountable private companies.

Since the launch of the "global war on terror," the administration has systematically funneled billions of dollars in public money to corporations like Blackwater USA , DynCorp, Triple Canopy, Erinys and ArmorGroup. They have in turn used their lucrative government pay-outs to build up the infrastructure and reach of private armies so powerful that they rival or outgun some nation's militaries.

"I think it's extraordinarily dangerous when a nation begins to outsource its monopoly on the use of force and the use of violence in support of its foreign policy or national security objectives," says veteran U.S. Diplomat Joe Wilson, who served as the last U.S. ambassador to Iraq before the 1991 Gulf War.

The billions of dollars being doled out to these companies, Wilson argues, "makes of them a very powerful interest group within the American body politic and an interest group that is in fact armed. And the question will arise at some time: to whom do they owe their loyalty?"

Precise data on the extent of U.S. spending on mercenary services is nearly impossible to obtain -- by both journalists and elected officials--but some in Congress estimate that up to 40 cents of every tax dollar spent on the war goes to corporate war contractors. At present, the United States spends about $2 billion a week on its Iraq operations.

While much has been made of the Bush administration's "failure" to build international consensus for the invasion of Iraq, perhaps that was never the intention. When U.S. tanks rolled into Iraq in March 2003, they brought with them the largest army of "private contractors" ever deployed in a war. The White House substituted international diplomacy with lucrative war contracts and a coalition of willing nations who provided token forces with a coalition of billing corporations that supplied the brigades of contractors.

There's no democratic control

During the 1991 Gulf War, the ratio of troops to private contractors was about 60 to 1. Today, it is the contractors who outnumber U.S. forces in Iraq. As of July 2007, there were more than 630 war contracting companies working in Iraq for the United States. Composed of some 180,000 individual personnel drawn from more than 100 countries, the army of contractors surpasses the official U.S. military presence of 160,000 troops.

In all, the United States may have as many as 400,000 personnel occupying Iraq, not including allied nations' militaries. The statistics on contractors do not account for all armed contractors. Last year, a U.S. government report estimated there were 48,000 people working for more than 170 private military companies in Iraq. "It masks the true level of American involvement," says Ambassador Wilson.

How much money is being spent just on mercenaries remains largely classified. Congressional sources estimate the United States has spent at least $6 billion in Iraq, while Britain has spent some $400 million. At the same time, companies chosen by the White House for rebuilding projects in Iraq have spent huge sums in reconstruction funds -- possibly billions on more mercenaries to guard their personnel and projects.

The single largest U.S. contract for private security in Iraq was a $293 million payment to the British firm Aegis Defence Services, headed by retired British Lt. Col. Tim Spicer, who has been dogged by accusations that he is a mercenary because of his private involvement in African conflicts. The Texas-based DynCorp International has been another big winner, with more than $1 billion in contracts to provide personnel to train Iraqi police forces, while Blackwater USA has won $750 million in State Department contracts alone for "diplomatic security."

At present, an American or a British Special Forces veteran working for a private security company in Iraq can make $650 a day. At times the rate has reached $1,000 a day; the pay dwarfs many times over that of active duty troops operating in the war zone wearing a U.S. or U.K. flag on their shoulder instead of a corporate logo.

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Jeremy Scahill, an independent journalist who reports frequently for the national radio and TV program Democracy Now!, has spent extensive time reporting from Iraq and Yugoslavia. He is currently a Puffin Writing Fellow at The Nation Institute. Scahill is the author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.

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