Translated material
War on outsourcing
The rise of military contracting
While in Russia the state is actively taking over profitable assets, the American government is voluntarily transferring activities that were considered the prerogative of the state to private business - contracting companies, which during the years of the presidency of George W. Bush became the fourth estate.From 2000 to 2006, the volume of federal contracting more than doubled, and the number of employees of private companies performing government contracts exceeds the number of government employees. From private companies, the giants of the contracting business are gradually turning into quasi-state agencies: state contracts make up 90-95% of their business activity. Thus, SAIC (Science Applications International Corporation), a little-known company with a staff of 44 thousand employees - more than the Departments of Labor, Energy and Housing combined - has current government contracts worth $13.6 billion.
When a contractor is given a function that, by definition, is a state monopoly (the use of military force), a completely new system of relations arises between him, the armed forces and business. How is the “privatization of war” happening in America and what are its likely consequences? How will this affect the ability of the United States to defend its national interests and respond to emerging challenges around the world?
The rise of military contracting
The number of American military contingent in Iraq is 160 thousand people. At the same time, about 180 thousand employees of private American companies work there on contract. BearingPoint is assisting the US State Department in developing Iraq policy, including preparing agendas and taking minutes of meetings. The Big Three military contractors - DynCorp, Blackwater, Triple Canopy - won a billion-dollar contract in 2006 to guard American embassies around the world. Kellogg, Brown and Root (KBR) signed $7.2 billion in contracts to support the U.S. military globally. Over the next five years, the Defense Intelligence Agency has allocated nearly a billion dollars to private contractors to collect and analyze intelligence information.
Military contractors joined the “global war on terrorism” a few days after the tragedy of September 11, 2001. Then-CIA Director George Tenet and Director of the CIA Counterterrorism Center Cofer Black promised President George W. Bush to find and neutralize Osama Bin Laden and the leaders of the Taliban. However, as a result of severe internal purges imposed by Congress and public opinion, the CIA did not have enough operatives with the necessary training. And the management had to turn to time-tested cohorts - contractors, mostly former intelligence officers.
Within a few weeks, a group of 64 operatives was created and sent to Afghanistan, whose functions were to “form” the forces of “intermediaries”, that is, buying and maintaining the loyalty of local field commanders, collecting operational data, conducting interrogations, and searching for Bin Laden and his henchmen. Experts say the work of the CIA and special forces in Afghanistan ushered in a new era of joint operations between the US military, intelligence, paramilitary services, local militias, mercenaries, civilian contractors and non-profit organizations not seen since Vietnam and Laos.
However, military contracting (“military contracting,” “outsourcing” and “privatization” are similar concepts, and in the context of this article they are interchangeable. - V.K. ) is not a new phenomenon. Thus, during the Bosnian War in the spring of 1995, the Serbian formations, despite a significant advantage, faltered, unable to withstand the pressure of the Croats, who suddenly began to attack according to all the rules of NATO tactics and strategy. According to persistent rumors, the Croatian operation "Storm" was planned by the American company Military Professional Resources Incorporated (MPRI), although the latter denies any involvement.
Around the same time, the South African firm Executive Outcomes rescued the government of Sierra Leone from rebels. In Angola, more than 80 military contractor companies were involved in the 1990s. The customers were not only governments, but also large corporations. For example, to guard its facilities in Colombia, the British oil monopoly British Petroleum hired a battalion of local military personnel, whose combat training was provided by the British ArmorGroup.
Military contracting includes not only services directly related to combat operations, but also logistics and logistics supplies that are inseparable from military operations.
There are three categories of private military contractors.
“Suppliers” provide training and private security services in conflict zones. Their actions (according to the charter) are purely defensive (Blackwater, Triple Canopy, Executive Outcomes).
“Consulting” firms provide the client with retired senior officers with strategic knowledge, administrative abilities and operational experience. Consultants are not directly involved in armed conflicts (MPRI).
Logistics support companies (KBR, Halliburton) provide supply, logistics and support functions, and their employees are civilian builders and engineers with combat zone experience. Thus, military contractors include both heavily armed security guards and unarmed civilian engineers.
At the same time, military contractors today bear little resemblance to the dashing mercenaries who flourished in Africa in the 1980s and 1990s. Their companies become the target of investments by the richest corporations from the Fortune-500 list. They are well integrated into the establishment, and their leadership positions are occupied by former senior civil servants. Blackwater is the most striking example of the success of the military business. Its founder, then 30-year-old Erik Prince, a former Navy SEALs employee, inherited a huge fortune from his father and in 1999 created a training ground for FBI and police special forces. Business was slow in the early years, but Iraq turned out to be a gold mine: the company received more than a billion dollars in contracts. According to Prince, Blackwater is capable of training 35 thousand specialists per year, and can transfer and deploy a regiment of 1,700 fighters anywhere in the world in 24 hours (however, the military denies such statements as unrealistic). Erik Prince likes to draw a parallel: Blackwater compared to the regular army is like Fedex compared to snail mail, an effective solution for private business against a sclerotic and wasteful government bureaucracy.
Recently, The Prince Group, the holding company of Blackwater Worldwide, founded a subsidiary of Total Intel, which specializes in collecting information for the state and private companies - data on natural disasters, government policies towards business, and legislation of other countries. According to the head of Total Intel, the former director of the CIA's counterterrorism center, Cofer Black, his company "brings the professional skills that have traditionally been honed by the CIA directly into the boardroom of private companies." “Spies for rent” is what critics call them. The financial side of the security business seems attractive. A company employee, depending on the degree of professionalism and level of security clearance, receives from $400 to $1,200 daily. When an employee is paid, for example, $500 per day, the company bills the customer for $1,500. $500 is spent on overhead, leaving $500 in net profit per employee per day. The work consists of protecting high-ranking officials, local and American, including Afghan President Hamid Karzai, employees of the US Embassy in Baghdad (there are about 2 thousand people), as well as escorting cargo, protecting oil pipelines and other critical infrastructure, training Iraqi police, collecting intelligence information, aerial surveillance.
True, the period of the “gold rush” of the security business is gradually subsiding: an average of 600-700 dollars a day turned into more than 400, more attractive for citizens of third world countries than for Americans. Ancillary work and "static" security have previously been performed by Filipinos, Pakistanis, Malays, Indians, Chileans and contractors from other third world countries. For comparison: in 2003, DynCorp paid $105,000 a year for service in East Timor, $90,000 in Bosnia, and $89,000 in Kosovo.
At the same time, the life of a military contractor is subject to the same dangers as the life of regular military personnel, but the state does not provide insurance and does not cover the cost of treatment in the event of injury. A daily wage of $500 may seem high, but since there is no such thing as a working day in a war zone, it can come down to $25 an hour. For more than three months in a row, security guards in Iraq have been trying not to work to avoid mental illness. In the event of the death of a contractor, recipients are paid, according to the order of the Ministry of Defense, insurance of only $65 thousand (compared to $250-400 thousand for military personnel). The tragic incident in Fallujah in March 2004, in which four American guards were mauled by a mob, highlighted not only the dangers, but also the numerous violations of guard duty conditions.
It turned out that instead of the six people required by the contract, four escorts were sent on the mission, sent from different teams and never working together, without preparing and working out the route for the required 24 hours, without maps of the area and without the machine guns and armored vehicles provided for in the contract. Behind these violations was the typical desire for private business to reduce costs.
Political and economic inevitability
The development of military contracting was a natural consequence of the end of the Cold War and reflects the Anglo-Saxon approach to government and business management. Already in the mid-1980s, when a huge flow of information began to flow from the Soviet Union in the wake of perestroika, American agencies had to resort to the services of freelance specialists to process it.
Back in the early 1980s, reductions in military budgets and the size of the armed forces forced us to look for new ways to provide military functions. Privatization was initiated by Margaret Thatcher. The first to be contracted out were logistics and logistics functions. In the United States, the first Logistics Civilian Augmentation Program (LOGCAP) was launched in 1985, allowing the Army to hire a variety of firms to provide a wide range of services, such as electrical power, water treatment, construction, rehabilitation, maintenance, transportation, catering, and laundry. etc. In 1992, Richard Cheney, then US Secretary of Defense, commissioned Brown and Root (today called Kellogg, Brown and Root) to study the situation with the use of private military contractors in conflict zones. And in 1995, Cheney, as you know, headed the parent company Halliburton, which he led until returning to government service in 2000.
The reduction in the size of the army also provoked the release of a huge number of former military personnel into the labor market, who actively contributed to the creation of the military services industry. Some founded companies, others were hired to work for them (by the way, this process was also very active in Russia).
Who in America goes into the military business?
15-20% of personnel come directly from the army. Others range in age from 25 to 50-something years after some time in civilian life, having previously served in Delta units, Navy SEALs, Special Forces, Marines, Army Rangers, FBI, Army troops and, finally, the police. Over 20 years of service, as former special forces soldiers joke, they acquire a ring with topaz, a Harley-Davidson, an ex-wife and the hope of getting a job as a barker at a local supermarket. Therefore, they are grateful to military contractors for the chance to return to the atmosphere of combat camaraderie, serve the country and earn money. Thus, contracting performs a significant social function by facilitating the employment of retired officers.
The conceptual basis for the use of contracting power lies in the traditional Anglo-Saxon and especially republican belief that the smaller the state, the better, and private business can carry out tasks more efficiently. “The best minds are not in government. Business takes them home,” said President Ronald Reagan. The military aspect of the same Anglo-Saxon tradition dictates the compactness of the army and the voluntary nature of its formation. The rapid increase in the complexity and technology of military affairs also requires skills that cannot be taught to conscripts in two or three years.
The “transformation” launched by Pentagon chief Donald Rumsfeld in 2001 had, in particular, the goal of outsourcing everything that goes beyond direct combat operations. Private companies are now engaged not only in logistics, but also in the management of Global Hawks unmanned reconnaissance vehicles, in-flight refueling of Navy and Marine Corps aircraft, and flights of mock enemy fighters during Air Force exercises.
The need for outsourcing has increased significantly with the beginning of the “global war on terrorism”, because in a short time it is very difficult to significantly increase the size of the voluntary army. The most important socio-political function of military contracting is that it allows one to avoid conscription. The introduction of conscription is tantamount to political suicide for any President of the United States. The use of military contractors also makes it possible to somewhat reduce the death toll: since the start of operations in Afghanistan and Iraq, more than 800 contractors, armed and unarmed, have been killed (the number of casualties among regular troops in December 2007 was close to 4,400).
Conventional wisdom states that outsourcing saves money. Indeed, each military member, including salary, pension, social security and lifetime medical care, can cost the state up to $10 million. In addition, in a protracted war, the state has to pay more and more to the military to keep them in service. However, in addition to saving on direct costs, privatizing military functions avoids responsibility for mistakes and political costs: in case of failure, the failure will be blamed on the company. A regular soldier who shoots indiscriminately can provoke an international conflict and bring a wave of indignation to the country. The contractor will simply be fired and criticized, his company risks losing the contract, but its troubles will be limited to that. “Outsourcing of guilt” provided by military contracts is a very useful resource for the state.
Contractors are indispensable when the state does not want to be associated with certain countries, tasks or methods. Thus, the presence of the American military in Pakistan is impossible for many reasons, but the actions of unidentifiable individuals suit both the American and Pakistani sides. Outsourcing interrogations can help avoid scandals like Abu Ghraib. In addition, there is a controversial argument that the war against terrorism cannot be won with the high moral principles of the regular army - you need people who act without much scrupulousness and from whom the state is ready to disown if something happens.
Military contracting in the United States is not a luxury, but a necessity, the only acceptable solution to the critical task posed by politicians to the military.
Private agents of national interests?
In this context, not only the very fact of using military contractors is important, but also the scale of their activities and their role, which has become indispensable in the conditions of modern military tactics and the implementation of US foreign policy. The problems posed by the private military services industry have not yet received widespread publicity or public debate. Even the press devotes much less attention to them than to criticism of the regular army. Some defects of the new system of relations between the state, the army and business have already appeared, others still remain potential.
Unlike regular military or State Department employees, private security contractors in Iraq answer only to their employer. They are not tasked with building democracy and “winning the hearts and minds” of the Iraqis, and they must fulfill their duties at any cost - collateral damage is insignificant. Their rules for the use of armed force are more vague than those of the military. Both of them cannot tolerate each other.
The Private Security Guard Charter begins: “Nothing in these rules limits your inherent right to take such action as is necessary to protect yourself.” For Iraqis, a regular soldier or contractor in military uniform is just an “American”. From the jurisdiction of the Iraqi law, both were bred, and in America no lawsuit against contractors ended with their punishment. As a result, the methods of action and the reputation of the contractors are often contrary to the efforts of the regular army, aspiration for democratization and the actual reputation of the United States.
Private guards operate outside control and reporting, the operations of numerous firms are not coordinated by anyone, and their exact number in Iraq is unknown even to the head of the professional association of military contractors. After the September incident with the participation of security guards from Blackwater, who killed 17 unarmed Iraqis for self -defense purposes, the customer (State Department of the United States) suggested sending his employee to tasks with the group ... of his employee. This measure is obviously invalid and unrealizable: the customer is not interested in finding flaws in the work of his contractor, and the lack of personnel of the State Department in Iraq is about 50%, because the diplomats in the mass order refuse to service in the zone of military operations.
Of the funds allocated for the restoration of Afghanistan, American contractors receive about 90%. The unemployed Iraqis and the Afghans, as before, only remains that there is a terrorist money and grow a poppy. So multibillion -dollar agents for reconstruction do not contribute little to the goals of restoring normal life.
The main stimulus of military contractors is to make money (although an underlying desire to serve the interests of the state is most often present). The credo of a military guard, a work of professional folklore, in an exaggerated form reflects his mentality: “I am a US military contractor. I care about myself, the operatives to the right and left of me and not about anyone. I will always take the opportunity to send regular troops officers and I will do this at every opportunity. I am a goat of the remission of my country, a fighter from whom they will disown, and I like it ... I do this work because it makes it possible to destroy the enemies of my country and finally buy a boat that I always dreamed about ... I will be Work on my terms, and if the conditions become too dumb, I simply find another company that will pay me more. ”
With a closer look, the financial benefit of military outsourcing is not so obvious. Payment of the services of the contractors takes place according to the “Costs plus fixed profit” scheme, a significant part of the state departments and the Ministry of Defense is distributed on an unconditional basis among “authorized” companies, and therefore there is no incentive to reduce costs from the contractors. The main contractor often hires subcontractors, they, in turn, have the right to organize their own network of subcontracts-so the chain of performers can increase to four to five companies, each of which adds its fixed profit. At the same time, responsibility is blurred and quality guarantees are ceased to be provided.
The military in a row provides disposable consumption, high and most often effective, while excluding reports, obligations and any responsibility in case of failure.
Military in a row - Pandora's box?
The potential risks of the new system of relations between the state, military and private business were not fully manifested in full, but some experts are already alarming about the state of monopoly on military functions.
The levers of state control over the military contractors are currently limited by the fact that the legislative base has not been worked out clearly enough, and the main mechanism of the system of retirement and counterweights in the hands of the US Congress does not apply to them. Contractors obey their customers, managers and shareholders, and money for them is the main motivating force. What will this private highly qualified army of military contractors after Iraq and Afghanistan do in search of earnings? Who will become their next customer? Perhaps the governments of other countries. Or maybe large corporations. Protecting their interests and assets, the contractors involuntarily be involved in military conflicts with local formations, capable of developing into local wars. Of the defensive organizations, which they are currently, contractors can turn into offensive ones - then the dividing line between them and the mercenaries disappears.
When private contractors take on the implementation of one of the most confidential state missions - the collection of secret information (while working for private customers) how to avoid the risk of information leakage and violation of the process of making state decisions? These questions are still unanswered. True, a certain optimism inspire the adaptability of the American system to new conditions and the corrective pressure of public opinion.
A military in a row is a mechanism aimed at replenishing the lack of armed forces, and as such it expands the ability of America to respond to threats. The resource is almost unlimited, since it is nourished by the power of the American economy and entrepreneurial initiative, which can also draw on the global market any missing element, such as labor. Therefore, the American administration, despite the connectedness of protracted conflicts in Iraq and Afghanistan, is able to risk and strike at Iran (the American fleet and aircraft have a solid reserve, unlike the Ground Forces and the Marine Corps). And at the same time, there are always enough contractors to engage in combat training of the armies of Georgia, Jordan, Haiti and other countries. The very fact of its existence, the military in a row expands the possibilities of the political leadership of the United States to ensure national interests.
The author thanks for the consultations of Lieutenant General of the Armed Forces of the Russian Federation Nikolai Uvarov and American military analyst Harlan Alleman.
The article was fully published in the journal "Russia in Global Policy."