By BILL SIZEMORE AND Joanne Kimberlin
The Virginian-Pilot

On May 1, 2003, President Bush stood on the deck of the aircraft carrier Lincoln under a “Mission Accomplished” banner and declared: “Major combat operations in Iraq have ended.”

But it was just the beginning for private military companies and their missions in Iraq.

U.S. government agencies coming in to rebuild the shattered country expected a benign environment. Instead, they found a cauldron of violence. As insurgent attacks steadily escalated, millions of dollars were diverted from reconstruction to security, opening up a huge new market for the private military industry.

One of the first companies to jump in was Blackwater USA.

Executives of the North Carolina-based company landed a meeting with Paul Bremer III, the diplomat chosen by Bush to head the Coalition Provisional Authority, Iraq’s interim government.

“Nobody had really figured out exactly how they were going to get him from D.C. and stand him up in Iraq,” Blackwater President Gary Jackson said. “The Secret Service went over and did an assessment and said, ‘You know what? It’s much, much more dangerous than any of us believed.’ So they came back to us.”

In August 2003, Blackwater was awarded a $21 million no-bid contract to guard Bremer, and U.S. agencies have been tapping the Blackwater well ever since. The company now has about 1,000 contractors in Iraq – the most it has ever had.

Other players also have rushed in to meet the demand. Last month, the government estimated that there were at least 180 security companies operating in Iraq with more than 48,000 employees – the largest private military deployment in history.

In the first Gulf War 15 years ago, the ratio of private contractors to troops was 1 to 60; in the current war, it’s 1 to 3.

In fact, the private sector has put more boots on the ground in Iraq than all of the United States’ coalition partners combined. One scholar, Peter Singer of the Brookings Institution, suggests that Bush’s “coalition of the willing” would be more aptly described as the “coalition of the billing.”

Those bills are in the billions and rising.

Blackwater alone has won $505 million in publicly identifiable federal contracts since 2000, according to an online government database. About two-thirds of that amount was in no-bid contracts.

The bulk of those are with the State Department, which has used the company to guard its ambassadors in Iraq since Bremer’s provisional government was disbanded in mid-2004.

Federal regulations allow agencies to bypass competitive bidding in cases of “unusual and compelling urgency” – which just happens to be Blackwater’s stock in trade.

“When there is a crisis,” Jackson said, “they have a tendency to call us first.”

Why does Blackwater get so much federal work? Company officials say it’s because of their strong track record. The organization’s high-level political connections certainly don’t hurt.

Blackwater declined to discuss the particulars of its work in Iraq, but Brian Leventhal, a State Department spokesman, said the company’s contracts were awarded under “emergency conditions.” Competitive bids were sought in May and are now being reviewed, he said.

The mushrooming presence of private security contractors on the battlefield is uncharted territory, spawning a difficult set of questions about conflicting objectives, poor coordination and lack of accountability.

As the United States and the global community struggle for answers, Blackwater – once again – finds itself in the middle of the fray.

In Iraq, Blackwater’s security teams stepped into a world that has been widely compared to the Wild West.

In defense-speak, it’s a “complex battle space,” shared by a dizzying array of players: military forces, government agencies, humanitarian groups, contractors, insurgents and Iraqi civilians just trying to get through the day.

When Marine Col. Thomas X. Hammes did a stint in Iraq in early 2004, he encountered them all. Hammes was assigned to help set up bases for the newly reconstituted Iraqi armed forces. On several occasions, he crossed paths with Blackwater convoys escorting Bremer.

They did a professional job, he said, but they used “very aggressive” tactics in protecting the “principal” – security lingo for the VIP under guard, also known as the “package” or “egg.”

“I was in an Iraqi army civilian vehicle at the time so we were treated as Iraqis” by the Blackwater contractors, Hammes said in an e-mail interview. “… The very act of guarding a principal – forcing his convoy through traffic, keeping all Iraqis away from the vehicle – irritated the Iraqis.”

Blackwater accomplished its mission: keeping Bremer alive. But, Hammes said, it did nothing to help further the larger U.S. goal of winning Iraqi hearts and minds.

“The Iraqis perceived the armed contractors as being above the law,” he said. “They felt if a U.S. soldier or Marine did something wrong, he might eventually be held accountable for it. They believed contractors would simply fly out of the country…. They don’t seem to be held responsible by any authority.”

Since the start of the war in March 2003, no private military contractors have been charged with – let alone convicted of – a crime in Iraq.

Unlike military personnel, dozens of whom have been charged with crimes in Iraq, private contractors are not subject to the Uniform Code of Military Justice.

Chris Taylor, a Blackwater vice president, said the company doesn’t want its workers subjected to the military justice system because of possible “institutional biases” against contractors.

Under an order issued by Bremer that remains in effect, contractors are also generally immune from Iraqi law for acts performed while carrying out their jobs. Contractors might or might not be covered by civilian U.S. law, depending on which agencies they work for.

According to the Raleigh News & Observer, which reviewed voluntary reports filed with the government during a nine-month period in 2004-05, contractors fired into 61 Iraqi civilian vehicles.

According to a report in the Los Angeles Times, Blackwater contractors fired into a taxi at a Baghdad intersection in May 2005, killing a passenger and wounding the driver. A review by the U.S. Embassy found that two contractors had not followed proper procedures and they were fired, a U.S. official told the newspaper.

Asked about the shooting, Taylor said: “To the best of my knowledge, it didn’t happen.”

Amid the crazy quilt of actors in the Iraq war zone, trigger-pullers on the same side sometimes end up shooting at each other.

A report last year by the Government Accountability Office, a congressional watchdog agency, found many instances of “blue on white” violence: U.S. troops firing on contractors or, less often, contractors firing on troops. In one five-month period in early 2005, there were 20 such incidents reported. They were so frequent that reports weren’t always filed, investigators were told.

Communication appears to be better these days. The GAO reported that there were just 12 incidents of friendly fire filed from June 2005 to June 2006. But relations between the military and private sectors are still rocky.

U.S. military commanders have authority over private contractors within the confines of military installations. One Army officer told the GAO that his unit had barred some security contractors from the mess hall because they insisted on carrying loaded weapons.

Outside the bases, contractors operate independently of the military chain of command – a fact that gives some officers heartburn. Two examples in the GAO report bear strong resemblance to known Blackwater incidents, but the report did not name the companies involved:

– An Army officer said security providers escorted the Coalition Provisional Authority administrator into his squadron’s area of operations without the military’s knowledge, got involved in a firefight and had to be rescued.

– A division commander didn’t know several contractors were operating in his area until he was instructed to recover the bodies after they had been killed.

Taylor said the establishment of regional operations centers in Iraq where contractors can voluntarily coordinate their activities with military commanders has helped smooth out the rough spots.

“As with anything in a conflict zone, there are speed bumps,” he said. “Lessons are learned. This gets better and better all the time.”

The GAO also found that there are no established U.S. or international standards for contractor training, experience, weapons qualifications or other skills. The International Peace Operations Association, a Washington-based trade group of 24 military contractors including Blackwater, agrees standards are needed – with a caveat.

“We’re all for that, but you have to have some flexibility built into the system,” said Doug Brooks, the association’s president. “Most of the work in terms of security is doing things like guarding gates and perimeters. And you really don’t need a James Bond to guard a gate.”

Amnesty International issued a report in May asserting that the United States’ “war outsourcing” has created a “virtual rules-free zone” for contractors. The organization cited a survey of 60 publicly available Iraq military and reconstruction contracts. Not one explicitly required that contractors obey international human rights law.

“There’s a culture of impunity,” said Mila Rosenthal, director of the business and human rights program at Amnesty International USA.

Rosenthal points out that some of the interrogators accused of abuses at Abu Ghraib prison were private contractors. So far, none have been punished.

“It sends the message that you can do whatever you want over there and get away with it,” she said.

No Blackwater personnel were among those implicated in the Abu Ghraib scandal.

Taylor said the training regimen for his company’s contractors includes instruction in ethics and international humanitarian law. Each contractor is given a 55-page handbook that lays out applicable laws regarding murder, torture, humiliating and degrading treatment, human trafficking and destruction of religious and cultural facilities.

“We constantly reinforce to our people their obligations under humanitarian law,” Taylor said. “When there is chaos and conflict, there will always be a difficult environment.”

Taylor acknowledged that because of his company’s high profile, the margin for error is especially small.

“It does not behoove us to cut corners or break laws,” he said. “Everybody’s looking at us. Because we’re Blackwater, we extra can’t do it.”

Concerns about financial accountability are growing right along with the increased workload being shouldered by private military companies.

The GAO found that none of the major federal agencies operating in Iraq – the State Department, the Defense Department or the U.S. Agency for International Development – has complete data on the cost of using private security providers.

There is wide agreement, even within the industry, that the government is ill-equipped to guard against waste, fraud and abuse. In March, a federal jury found Custer Battles, a Northern Virginia-based security company, guilty of defrauding the Iraqi interim government and ordered it to pay more than $10 million in damages and fines.

“If you’re going to outsource this much, you’ve got to have the oversight capability,” said Brooks, the trade-group spokesman. “We’ve downsized our oversight. We don’t have enough contract officers.”

U.S. Rep. David Price, D-N.C., one of several members of Congress who have taken an interest in the issue, has been trying for a year to get a contractor-oversight bill enacted.

“The administration needs to get its act together on this,” Price said. “There’s been a certain kind of legal twilight zone that these guys have been operating in, and the military commanders have too often, it seems, not known exactly what was going on.”

Congressional frustration boiled over at a hearing in Washington last month when members of a House subcommittee grilled security company spokesmen and government officials for five hours.

Blackwater’s Taylor and representatives of two other companies were peppered with questions about their revenues, contracts, training and hiring practices.

Rep. Jan Schakowsky, D-Ill., said there is an “astonishing lack of accountability for the billions of dollars being spent on private security contractors.”

Rep. Henry Waxman, D-Calif., complained that he asked the Pentagon 18 months ago for a cost accounting of Iraq contracts awarded to Blackwater and three other companies and has been “stonewalled” ever since.

The criticism was bipartisan.

“Some conservatives are starting to wonder if this misadventure in Iraq isn’t more about money for defense contractors than it is about security,” said Rep. John Duncan, R-Tenn.

One exchange with a Pentagon official left Rep. Dennis Kucinich, D-Ohio, incredulous.

“If someone connected with a private contracting company was involved in murdering a civilian,” Kucinich asked, “would the department be ready to recommend their prosecution?”

Shay Assad, a senior contracting official in the Defense Department, replied: “Sir, I’m just not qualified to answer that question.”

“Wow, think about what that means,” Kucinich said. “Private contractors can get away with murder.”

Industry spokesmen say they welcome regulation – up to a point.

At a recent conference in Washington, Blackwater Vice Chairman Cofer Black said his company is “not fly-by-night; we’re not tricksters. We are all for oversight of an industry like ours.”

He also said there are limits to what the company would support. For example, he said, putting contractors under the military chain of command might pose problems when the client is a nonmilitary agency.

Blackwater’s major client in Iraq is the State Department, so that’s where the company gets its marching orders.

“We are responsible to who hired us,” Black said. “You have to leave the dance with the one that brought you.”

In an e-mail interview, Blackwater founder Erik Prince said: “Given the sensational tone of the media coverage our industry receives, it is understandable that there are calls for more regulation.”

In the end, though, an unfettered marketplace is self-regulating, Prince said:

“Those companies or individuals who disregard the moral, ethical, and legal high ground are not long for this industry…. We want to reduce opportunities for abuse without constraining the flexibility that makes our industry so valuable.”

That industry was churning along with little public scrutiny until a Blackwater convoy found itself lost on a spring day in 2004 near a bridge over the historic Euphrates River.

Reach Bill Sizemore at (757) 446-2276 or bill.sizemore@pilotonline.com.

Reach Joanne Kimberlin at (757) 446-2338 or joanne.kimberlin@pilotonline.com.

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