Wall Street bullish on the spoils of war

The global private military industry is changing how nations fight

The creeping military-industrial complex about which President Dwight Eisenhower warned us five decades ago has reached critical mass. In fact, P.W. Singer, a security analyst at the Brookings Institution, suggests that Ike would be flabbergasted by the recent proliferation of privatized military firms and their influence on public policy both here and abroad.

Calling them the corporate evolution of old-fashioned mercenaries, Singer's illuminating new book, "Corporate Warriors," says they provide the service side of war rather than weapons. They range from small consulting firms, formed by retired generals, to transnational corporations that lease out battalions of commandos. There are several hundreds of these firms, operating on six continents, boasting yearly revenues of more than $100 billion.

Operating mostly in the shadows, they have been players in numerous conflicts over the last decade, ranging from Angola to the former Zaire. They helped put down several low-grade rebellions. The governments of Saudi Arabia, Sudan, and Ethiopia have used them to remain in power. So can anyone else with, as Singer wryly adds, sufficient plowshares to beat into swords.

The US military has become increasingly reliant on private contractors for a wide range of support services. Contractors currently handle the logistics for every major American military deployment. They maintain such weapons systems as the B-2 stealth bomber, attack helicopters, and drone reconnaissance aircraft. What's more, President Bush has directed that many of the contracts for postwar reconstruction in Iraq go to US-based firms.

The number of private contract employees being used by the US military in Iraq is nearly 10 times what it was during the 1991 Persian Gulf War. While there were just 10 such firms in this country two decades ago, there are more than 30 today. Many of them are strategically based in northern Virginia, where their lobbyists have ready access to Pentagon officials.

DynCorp is a case in point. As one of the Pentagon's largest contractors in Colombia, the firm provides intelligence, trains Colombian troops, and sprays coca crops to help combat the country's cocaine trade. The State Department hired DynCorp to provide security for Afghan leader Hamid Karzai.

Then there is Halliburton Corp. The hugely profitable concern, which Vice President Dick Cheney headed during his highly profitable hiatus from public service, has handled most of the logistical supplies in the Balkans since the mid-1990s.

Not coincidentally, a Halliburton unit has become a major player in Iraq. One of its divisions, Kellogg Brown & Root, received a major contract to provide a wide range of services from building modular barracks to managing airports.

From 1994 to 2002, the Defense Department had contracts with US-based firms for an estimated $300 billion. Next year, the Pentagon will spend $25 billion on these firms, more than double last year's tab. Corporate consultants will train the new Iraqi military. DynCorp will train the new police force.

While our military has traditionally relied on private contractors, Singer says the wholesale outsourcing of US military services since the 1990s is unprecedented. Underscoring the scope of these services, he raises a red flag about the degree to which the rapidly expanding privatized military industry is driving tactical and strategic objectives.

The centuries-old mercenary trade has morphed into an immensely profitable corporate enterprise, complete with boards of directors, stockholders, and substantial returns on investment. And the post-cold-war period has spawned a slew of former military types with access to global arms bazaars. These latter-day soldiers of fortune are working for firms ready to roll, provided the price is right.

Factor in Sept. 11, with a more amorphous enemy, and one can see why Wall Street is bullish on these proliferating military firms. A Defense Department official summed it up, noting: "The war on terrorism is the full-employment act for these guys." But should it be?

Singer worries that the current rush to privatize runs the risk of cutting crucial corners. For-profit firms, he warns, may be cost-effective, but they are largely unaccountable, with plenty of incentives to pad their payrolls and hide their failures. Government can be notoriously inefficient, to be sure. Even so, its constitutional duty is to provide for the common defense. Those responsible for this fundamental public service, Singer says, should be fully accountable to the public. He's exactly right.

Alan Miller is an editorial writer for the San Diego Union-Tribune.

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