U.S. Congressional Wartime Commission Targets Armed Contractors

On June 21 Jerry Torres, whose company provides translators and armed security guards in Iraq, was invited to testify before the Commission on Wartime Contracting (CWC). The bi-partisan body was created by the U.S. Congress in early 2008 to investigate waste, fraud and abuse in military contracting services in Afghanistan and Iraq.

The CEO of Torres Advanced Enterprise Solutions failed to show up for the hearing.

Torres is a relatively small player in an enormous and growing industry of private contractors, who are assuming more and more functions that used to be carried out by the U.S. military, and who are, some charge, assuming inherently governmental functions.

Today, every U.S. soldier deployed to Afghanistan and Iraq is matched by at least one civilian working for a private company. All told, about 239,451 contractors work for the Pentagon in battle zones around the world. Roughly one in five is a U.S. citizen, two out of five are natives of the country at war, and the remaining workers are from third countries, according to a census taken by the Pentagon's Central Command in the first quarter of 2010.

Torres, a former Green Beret, one of the elite Army Special Forces, is now a businessman and part of that army of private contractors. In 2007 the 7th annual "Greater Washington Government Contractor Awards" named him "Executive of the Year."

His empty chair sat in front of a witness table that bore a placard with his name and those for representatives of three other companies working in Iraq -- Virginia-based companies DynCorp and Triple Canopy, alongside UK-based Aegis who attended the hearing.

In January Torres's company had dispatched hundreds of Sierra Leonian armed security guards to protect Forward Operating Base Shield, a U.S. military base in Baghdad. "This Commission was going to ask him, under oath, why his firm agreed in January to assume private security responsibilities at FOB Shield with several hundred guards that had not been properly vetted and approved," said Michael Thibault, one of the co-chairs of the commission and a former deputy director of the Defense Contract Audit Agency.

"This Commission was also going to ask Mr. Torres why he personally flew to Iraq, to FOB Shield, and strongly suggested ... that Torres AES be allowed to post the unapproved guards, guards that would protect American troops, and then to 'catch-up the approval process,'" added Thibault.

Instead, Torrres's lawyer informed the commission staff that the former Green Beret was "nervous about appearing."

The failure of a contractor to appear for an oversight hearing into lapses highlighted the entrenched reliance on private contractors in Afghanistan and Iraq that has led to numerous abuses from alleged fraud to the killing of innocent bystanders.

Currently, the Pentagon and the State Department employ some 18,800 armed "private security contractors" in Iraq and another 23,700 in Afghanistan to protect convoys, diplomats and other personnel, and military bases and other facilities at a cost estimated to run into billions of dollars a year.

Inherently Governmental

The Commission on Wartime Contracting hearings on June 18 and 21 was attempting to step back and ask basic questions about whether using private armed security in war zones usurps "inherently governmental" functions and if not, how contracting could be done better.

This thorny question of what constitutes an "inherently governmental" function, and what can be turned over to contractors was singled out by President Barack Obama. In March 2009 he ordered the Office of Federal Procurement Policy (OFPP), a department within the White House's Office of Management and Budget, to come up with an answer.  More than a year later, a preliminary draft document has been issued that is narrowly focused on the issue of whether or not the contractors are making decisions that affect "national sovereignty"

The trend of using non-military personnel to conduct and support war has accelerated in the past decade and is part of a broader trend in government. President George W. Bush, for example, initiated a controversial program known as A-76 that forced selected government agencies to prove that they were more efficient than the private sector or "outsource" their work. By some estimates, as many as half the staff members at all U.S. government civilian agencies are now temporary and even long-term specialists contracted from the private sector.

The Pentagon caught the outsourcing bug when former Defense Secretary Donald Rumsfeld ordered that the March 2003 invasion of Iraq be conducted with no more than 150,000 troops. Almost by default and with little guidance, the military turned over as much as possible to private contractors.

John Nagl, president of the Washington, DC-based Center for a New American Security, submitted a report to the commission hearings that explained Rumsfeld's move to privatize formerly governmental functions. "Simple math illuminates a major reason for the rise of contractors: The U.S. military simply is not large enough to handle all of the missions assigned to it."

The bulk of this outsourced workforce consists of low-wage workers from South and Southeast Asia who perform menial tasks such as cooking and cleaning up after the troops. But such critical military tasks as the protection of senior diplomats and supply convoys as well as military bases and reconstruction projects are also turned over to armed men (and a few women) who work for private companies with exotic names like Four Horsemen and Blue Hackle.

While pay packets of $15,000 a month and more marked the early days of the "war on terror" in 2003, salaries for private security contractors have spiraled down to $1,200 for Peruvians, then $800 for Ugandans. Torres' Sierra Leonian guards are being paid a new low -- $250 a month, or about the same as local Iraqi security guards.

Blackwater's new Afghan contract

Curiously, Blackwater, the most famous private military contractor in Afghanistan and Iraq, was not even invited to sit at the congressional witness table, despite the fact that the North Carolina-based company had been the subject of several investigations into misconduct. (See sidebar.)

Members of the commission noted with astonishment that the State Department had awarded Blackwater a $120 million contract to guard U.S. consulates in Herat and Mazar-i-Sharif in Afghanistan on June 18. (http://www.cbsnews.com)

Asked to explain why Blackwater, which has been banned by the government of Iraq, won the contract, Charlene R. Lamb, deputy assistant secretary for International Programs at the State department, stated that the competitors for the contract, DynCorp and Triple Canopy, weren't as qualified. (Don Ryder of DynCorp and Ignacio Balderas of Triple Canopy disagreed and threatened a formal protest.)

"What does it take for poor contractual performance to result in contract termination or non-award of future contracts?" wondered Thibault.

USAID ducks legal responsibility

The U.S. Agency for International Development (USAID) also drew extended criticism for David Blackshaw's contention that his agency was not legally responsible for the actions of armed guards that accompanied their grantees that are rebuilding schools, hospitals and power plants. "The role of the USAID's SEC's International Security Programs Division is limited to advice and counsel," the AID division chief for overseas security told the commissioners.

Incensed, several commissioners pulled out copies of a May USAID Office of Inspector General report on private contracting. It concluded that that a third of USAID private security contracts in Afghanistan have no standard security requirements.

Commissioner Christopher Shays, a former Republican member of Congress from Connecticut, alleged that USAID was trying to "wash their hands" of any responsibility.

"God forbid something would happen with a violent accident in Afghanistan that would affect our national policy in Afghanistan, and you would try that ridiculous line of argument," said Commissioner Robert Henke, a former assistant secretary for Management in the Department of Veterans Affairs, said. "It won't work."

Refusing to Acknowledge Reality

There are almost as many explanations of what is wrong with the contracting system as there are contractors. Some say that the problem is their poor quality. "Qualified security operatives were available only in limited numbers, so the fly-by-night firms took on virtually anyone who sought employment: military washouts, ex-cons, gunmen fired by other contractors, and the utterly unqualified," wrote Ralph Peters, a retired U.S. Army officer, in the Washington Post. "Many of the Western hires were dysfunctional characters who could make it in neither the military, with its demands for emotional stability and discipline, nor in the civilian world. Even many of the former special-operations personnel hired by firms such as Blackwater either left the military because they ultimately didn't measure up, or simply got out to grab the contractor money."

The reason for this is a system of awarding contracts to the "lowest price technically acceptable" bidder, said commission Co-chair Thibault, an opinion that was supported strongly by the contractors who testified.

Yet others say that the problem is inadequate regulation. "We need smart-sourcing that can restore proper government oversight while harnessing the energy and initiative of the private sector for the public good," says Allison Stanger, professor of international politics and economics at Middlebury College, Vermont, and author of One Nation Under Contract, who testified at the hearings. Some witnesses and experts saw a more fundamental issue: By definition this work should not be handed out to private contractors in a war zone. "Private security contractors are authorized to use deadly force to protect American lives in a war zone, and to me, if anything is inherently governmental, it's that," said Commissioner Clark Kent Ervin, a former inspector general at both the State Department and the Homeland Security Department. "We don't have a definitional problem, we have an acknowledgment of reality problem."

Private security contractors "are performing inherently governmental functions," said Danielle Brian executive director of the NGO Project on Government Oversight. "A number of jobs that are not necessarily inherently governmental in general become so when they are conducted in a combat zone. Any operations that are critical to the success of the U.S. government's mission in a combat zone must be controlled by government personnel."

• 20 Logistics
• 23 Private Security
• 24 Intelligence
• 106 Money & Politics
• 185 Corruption
• 187 Privatization