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20. Pentagon Increases Private Military Contracts

Sources:

FORTUNE, 3/3/03
Title: “The Pentagon’s Private Army”
Author: Nelson D. Schwartz

CORPWATCH.ORG, March 20, 2003
Title: “Halliburton Makes a Killing on Iraq War”
Author: Pratap Chatterjee

THE LONDON OBSERVER, April 13, 2003
Title: “Battle for Iraq: Scandal-hit U.S. Firm Wins Key Contracts”
Author: Antony Barnett

Faculty Evaluator: Tom Lough Ph.D.
Student Researcher: Josh Sisco

President Dwight Eisenhower’s final remarks upon vacating the White House were “Beware the military-industrial complex.” With the war on Iraq, the government rapidly increased the already growing privatization of much of its military operations. Staffed largely by ex-military and Defense Department officials, private companies – such as Kellogg, Brown & Root, DynCorp, Cubic, ITT, and MPRI – have been aggressively snatching up government contracts. One estimate, cited by Nelson Schwartz in Fortune magazine, says that 8%, or $30 billion, of the Pentagon’s total budget for 2003 will go to private companies. Following 9/11, the Defense Department released a study that concluded, “Only those functions that must be performed by the Defense Department should be kept by the Defense Department. Any function that can be provided by the private sector is not a core government function.” The U.S. military has contracted with private military companies on everything from kitchen and laundry duty to domestic recruiting efforts.

Kellogg, Brown & Root (KBR) is a subsidiary of Halliburton, the energy company formerly headed by Vice President Dick Cheney. By the time Cheney left Halliburton for the vice presidency, the company had extensive involvement with the Pentagon. While Secretary of Defense for Bush Senior, Cheney awarded Halliburton a $3.9 million contract to “study and then implement the privatization of routine army functions.” Retired Admiral Joe Lopez, former commander in chief for US forces in Southern Europe, as well as Cheney’s aid under the elder Bush, is now the Senior Vice President at KBR and responsible for military contracting.

KBR was given a 10-year contract entitled Logistics Civil Augmentation Program (LOGCAP). This is a “cost-plus-award-fee, indefinite-delivery/indefinite-quantity service,” – an open ended mandate for privatization anywhere in the world, according to Chatterjee. Whereas it used to take 120-180 days to deploy private companies to foreign military bases, a 72-hour notice is now all that is required. KBR was also given $16 million to build a 408-bed prison for Afghanistan’s enemy combatants in Guantanamo Bay, Cuba.

Last year, DynCorp won a State Department contract to protect Afghan President Hamid Kharzi. The protection force consists of former members of Delta Force and other elite military units. DynCorp, in conjunction with several other companies such as Airscan and Northrop Grumman, receives roughly $1.2 billion a year to spray suspected coca fields in Columbia.

This past April, DynCorp was also awarded a multi-million dollar contract to build a private police force in post-Sadaam Iraq. Potential officers do not need to speak Arabic and must be a US citizen and a current or former police officer, according to the London Observer. Private police provided by DynCorp working for the UN in Bosnia were accused of buying and selling prostitutes, including a 12-year-old girl. Others were accused of videotaping the rape of one of the women. Ecuadorian peasants are suing the company, alleging that chemicals sprayed over Columbia spread into Ecuador killing legal crops and children. DynCorp has been accused of destroying legal crops, and serious human rights violations.

UPDATE BY PRATAP CHATTERJEE: War profiteering has risen to an all time high under the Bush administration. For the first time in history one in ten people deployed during a war was a private contractor. From building the tent cities, to maintaining the fighter jets and training the troops in live-weapons fire, private companies made a killing in the in the invasion of Iraq. What is even more significant is that the vice-president of the United States has directly benefited from these contracts in his former job (he gets compensation of $180,000 a year from the company) and his staff continues to receive advice from his company.

Since Corpwatch and the San Francisco Bay Guardian broke the story that Halliburton had stationed employees in Uzbekistan to run United States military bases in April 2002, the value and number of the company’s war machine contracts have vastly expanded. As the first bombs rained down on Baghdad, thousands of employees of Halliburton were working alongside U.S. troops in Jordan, Kuwait and Turkey under a package deal worth well over a billion dollars. In addition the company has contracts to support troops in Afghanistan, Djibouti, and Georgia in the former Soviet Union.

Cheap labor is a primary reason for outsourcing services, says Major Toni Kemper, head of public affairs at one of the Turkish bases. “The reason that the military goes to contracting is largely because it’s more cost effective in certain areas. I mean there was a lot of studies years ago as to what services can be provided via contractor versus via military personnel. Because when we go contract, we don’t have to pay health care and all the another things for the employees, that’s up to the employer.”

For more information check out http://www.corpwatch.org.

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