IRAQ: Boom Times in Iraq for Former Dogs of War

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Old style mercenaries may have played their last hand in the failed coup against Equatorial Guinea, but in Iraq their modern namesakes are making fortunes.

And the big difference is that it is all legal.

No need to try to take over a country to make a financial killing: the U.S-led war on terror has made it a boom time for the Private Military Companies (PMC) which have superseded the one-time dogs of war.

"These companies have gone from nothing to huge in just two years because of Iraq," one well-connected industry insider told Reuters. "The amount of work out there is staggering."

Estimates of the numbers of private security contractors in Iraq range up to 30,000 or more because there is no central register and as private armies they write their own rules.

It makes them the second largest group in the country after the 130,000-strong U.S. Army contingent.

"I estimate that there are at least 20,000 private security contractors operating in Iraq. It is an industry that has done very well in 2004," said Charles Heyman of Jane's Consultancy.

It is a far cry from the mercenary bands who rampaged across post-colonial Africa under the leadership of the likes of "Mad Mike" Hoare, "Black Jacques" Schramme and Bob Denard.

"These are not individuals like Mike Hoare or Bob Denard. These are quoted companies," Heyman said.

They also make the failed putsch to oust oil-rich Equatorial Guinea's President Teodoro Obiang Nguema Mbasogo -- who himself came to power in a coup -- something of a throwback.

Former British special forces officer Simon Mann, who has denied any link to the alleged plot, was jailed in Harare this month for seven years for trying to buy arms in Zimbabwe.

A further 65 suspected mercenaries were sentenced to 12 months on related charges.

Former British Prime Minister Margaret Thatcher's son Mark, a neighbour of Mann's in the plush Cape Town suburb of Constantia, has denied charges that he helped bankroll the failed coup. He is due to appear in court in November.

Police are looking into allegations that some of the coup's financiers might have been based in Britain.

"It is increasingly difficult to mount an operation of this sort. It didn't work in Fiji, it didn't work in the Comoros and it didn't work in Equatorial Guinea," the industry insider said.

"This was a rogue operation that taints the whole PMC sector. This has put back the PMC case by years."

The change began with Executive Outcomes, the first of the true PMCs manned largely with former South African and British special forces soldiers -- including Mann -- which went out of business in 1998.

Executive Outcomes and Tim Spicer's similar operation Sandline made money through the 1990s by mounting government-financed security operations in Angola and Sierra Leone.

However, their tactics and growing public profile -- including Sandline's involvement in a Papua New Guinea coup attempt in 1997 -- put them out of business.

But others have poured into the gap left by their demise and hugely enlarged by the invasions of both Afghanistan and Iraq.

Spicer's latest incarnation Aegis Defense Services has just landed the biggest contract ever handed out by the U.S. government to a PMC worth -- by some estimates -- $300 million over three years to guard oil installations in Iraq.

In doing so he has created a 14,000 strong private army in a country riven by an insurgency.

"Private Military Companies are beginning to resemble the mercenary bands of the medieval era in that they are being subcontracted to do government work," Heyman said.

Spicer is by no means alone in an industry desperately trying to clean up its image to the extent that it even has a lobby group based in the United States: the International Peace Operations Association.

A string of other legitimate PMCs including Blackwater USA, the Steele Foundation, Kroll Inc and Britain's Hart are in Iraq.

But not all are legitimate and quality is variable.

"There are plenty of hired guns out there -- mainly from East Europe -- willing to kill regardless. That is the mercenary underworld," the industry insider said.

And not everyone is happy.

"There is a huge rage from professional soldiers on the ground doing a harder job for a fraction of the money," Heyman said. "An added trouble is that these people are operating outside the military law. Many are simply out of control."

Alex Vines, head of the Africa desk at the Royal Institute for International Affairs, said governments had to learn the lessons of the uncontrolled proliferation of the PMCs in Iraq.

"This can't go on indefinitely. I hope the governments will learn the lesson that they can't simply subcontract security. But I fear there isn't the depth of thoughtfulness going into this that there should be."

And while you can take the dogs of war out of Africa, it is far harder to take Africa out of the dogs of war.

"The potential profits out there are bloody huge. We are talking here of billions of dollars. It is all about oil," said one former mercenary who insists he has now gone straight.

"It is very easy to set up, even with self-funding. There are contracts out there even now."


AMP Section Name:War & Disaster Profiteering