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Blackwater: Mercenaries without borders

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the "dogs of war" of financial globalization

By Karel Vereycken "While greed may be good, war is better", comment on DynCorp's financial profits on the stock markets. 

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Part I Prologue 

For many today, the mere term mercenary evokes inevitably the image of individual "soldiers of fortune" and other "dogs of war". But the public generally ignores a far more horrific new reality: the fast growing role of Private Military Contractors (PMC's). With the collapse of the soviet system in 1989, a new reality appeared. If in the past, some wild-eyed killers for rent or "soldiers of fortune" sold their skills to despots and dictators threatened to be kicked out of power, reactionary company owners out for having a militia capable to break strikes often and early or murky secret service special ops gurus, today, it are the "civilized" states, in full daylight, which sign the contracts: the Pentagon, the State Department, the UN, the OSCE, the African Union and even some NGO's and the Red Cross! The scandal of the century that rocks the United Kingdom and the USA, involving huge financial and political corruption around the weapons for oil contracts of BAE Systems with Saudi Arabia, lifted some part of the veil of the fascist policies the international financial oligarchy tries to impose on the world. It is an imperial model inspired by the British East India Company, which with its commercial and financial monopoly and its armies "ruled the waves" of "an empire on which the sun never sets." Today, as yesterday, the game is to unite a giant cartel of financiers, which by allying financial, military, technological and IT power, impose their rule on the resources, peoples and nations of the world. As the pirates of yesterday, the private military contractors perform the dirty jobs of the empire which glory they carry.  A short look at the careers of the current managers of BAE Systems, as well as on their address-books, confirms we are not any longer dealing with a normal corporation, but with a cartel uniting high tech weaponry (BAE Systems, United Defense Industries, Lockheed Martin), with speculative financiers (Lazard Frères, Goldman Sachs, Deutsche Bank), together with raw material cartels (British Petroleum, Shell Oil) with on the ground, SMP's. The private military company DynCorp which trains thousands of policemen around the world, and about which we will talk later, is also nearly a grotesque caricature of the criminal wedding between huge financial speculators and large mercenary corporations. The main shareholder of DynCorp has been for a long time Capricorn Holdings a company directed by Herbert S. Winokur Jr., who's a director at DynCorp and chairman of the financial board of Enron, the Texan energy giant known for a vast energy scam. Early 2007, DynCorp was bought by the investment fund Veritas Capital, directed by Robert B. McKeon, former CEO of Wasserstein Perella Management Partners. His former partner, Bruce Wasserstein, now leads the synarchist bank Lazard Freres... If the fascist BAE cartel has nearly succeeded in deeply penetrating the core of the military industrial complex of the United States, it is the direct result of the limitless anglophilia of Dick and Lynne Cheney, as middlemen of the dangerous cult of neo-conservatives. The BAE scandal reveals to the world the real intentions and policies of this faction. Under the cover of a "revolution in military affaires" (RMA), a systematic policy of privatizations and outsourcing, together with a massive reduction in personnel coupled with the build up of space based "miracle" weapons developed secretly by a tiny elite of professionals, has created the explosion of the "marked" for PMC's. As mad as it appears, this vast military apparatus, used as an instrument of blackmail, would give them the means to impose a "world government" keeping the planet hostage with space-based weaponry, while simultaneously controlling the chaos of world populations with mercenary entities, genetics without ethics, permanent disinformation and mind regulating drugs. This "scientific dictatorship", a dangerous utopia of which dreamed George Orwell in his 1984 and Aldus Huxley in the Return of Brave New World, and largely popularized in comic strips, will become a reality unless we intervene. 

Felix Rohatyn and Middlebury 

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On October 9, 2004, barely weeks before George W. Bush's reelection, a conference took place in Middlebury, Vermont under the auspices of the "Rohatyn Center for International Affairs" on the theme of the "Privatization of National Security" (1) Felix "the fixer" Rohatyn, big shot of the synarchist Lazard Freres-Lehman Brothers banking nexus, a man who was at ITT when that company was backing Pinochet's coup in Chile on September 11, 1973, shared the panel with a group of scholars, editors such as William Dobson, editor of "Foreign Affairs", geopolitical whiz kids, such as Harvard's Michael Ignatieff who thinks America should drop the republic and become "liberal imperial", and a selection of high placed military that travel very often from the Pentagon to the very profitable business of PMC's, an ambiguous name to polish the less brighter label of feudal mercenary companies. Lieutenant General Ed Soyster, for example, appeared on the program as a "Special assistant to the secretary of the Army". In reality, Soyster, former head of D.I.A. (the Defense Intelligence Agency in charge of counter-intelligence operations) between 1988 and 1991, happens to be the current vice-president of Military Professionals Resources Inc. (MPRI), one of the largest PMC's of the world. (2) Seven years earlier, on January 1997, the D.I.A. organized a closed-door symposium, "The Privatization of National Security Functions in Sub-Saharan Africa." According to Ken Silverstein, writing in The Nation of July 28, 1997, "On hand were M.P.R.I. and other U.S. private contractors, as well as Eeben Barlow, head of South Africa's notorious Executive Outcomes (EO), which in the past few years has provided mercenaries to the governments of Angola and Sierra Leone, and Timothy Spicer of Sandline International." (3) One month after the conference, Rohatyn gave his thoughts on the matter in a co-authored article published in the Financial Times, "The Profit Motive Goes to War." Since a decade, writes Rohatyn, a silent revolution is taking place. "In the first Gulf war, the ratio of American troops on the ground to private contractors was 50:1. In the 2003 Iraq war, that ratio was 10:1, as it was for the Clinton administration's interventions in Bosnia and Kosovo. As these figures reflect, key military functions have been outsourced to private companies; both Democratic and Republican presidents alike have steadily privatized crucial aspects of US national security.  For a rough sense of the magnitude of this shift, Halliburton's total contracts in Iraq to date are estimated at $11bn-13bn, more than twice what the first Gulf war cost the US." "In the history of warfare," Rohatyn continued, "sub-contracting and the deployment of mercenaries are nothing new. The British built an empire with contracted soldiers, developing a citizens' army only in the latter half of the 19th century. But there are two major structural differences between the 19th century British and 21st century US empires. First, publicly quoted companies now conduct private military operations. Second, the market for this force is now genuinely global, which raises new accountability and normative concerns." 

A $100 billion market 

During the March 2003 military invasion of Iraq, US Navy troops were commanding American warships. But at their sides, stood private military personnel to operate some of the most sophisticated weaponry of the world. When the predatory Unmanned Air Vehicles (UAV's), the Hawks, and the Stealth heavy bombers engage in action, their systems are equally operated by PMC's. In Iraq, the role of these PMC's increased even more dramatically in the so-called "post-war" period. In 2003, of $87 billion spent on the war costs, nearly one third, i.e. $30 billions went to PMC's. The U.S. General Accounting Office (GAO) estimated the number of PMC's to be 60 with 25.000 people deployed while it went up to 181 PMC's with over 48.000 people deployed by PMC's in Iraq in 2006, more than four times the number of the 11.000 soldiers of the British contingent!  The "Coalition of the willing" seemed outnumbered by the coalition of the "willing to get rich". Flag officers of the British Army complain nearly daily about the great number of qualified military personnel of her majesty's glorious army on the leave for jobs in the private sector paid generally five to twenty tiles as much as military personnel un the national army. A former commando of the highly trained SAS, Delta Force or other Special Forces can earn up to $1000 a day. Even the Pentagon was obliged in 2004, to stop the bleeding of its own forces by the PMC's, to award an extra $150,000, paid immediately, for those non-commissioned officers willing to serve another six years.  

"Revolution in Military Affairs" 

This "revolution in military affaires" (RMA) described by Martin van Creveld's "The Transformation of War" replacing nation-states by "war-making entities" is on the rise since years, but the magnitude of its dimension takes dramatic and worrisome dimensions now. First, if one steps a little bit back in time, one sees that since the end of the cold war, nearly six million armed forces have been thrown on the labor market having as unique skill their military experience. The giant armies Red Army, the east-German Volksarmee or South-Africa's military forces have been massively shrunken. The US army did not resist to the global trend and reduced its troops from 2.1 million men in arms in 1990 to a mere 1.4 million in 2003, i.e. one third less! It is this massive reduction of the armed forces under Clinton, a downsizing even further increased by the Bush-Cheney administration that lead to the explosion of the private market. Thanks to Donald Rumsfeld, who said that one can outsource "everything except shooting", the PMC's conquered a market of about $100 billions a year which absorbs nearly one fourth of the US defense budget of 2006 that amounted to $439.3 billions. In a typical Orwellian doublespeak, the PMC's created their own lobby to market their business, called the International Peace Operations Association.  

DynCorp, a "state within the state" 

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Let us examine first the case of a large private military contractor DynCorp. Based in Fall Church, Virginia, DynCorp (of which former CIA boss James Woolsey was a shareholder) employs 26.000 people in dozens of countries around the globe. Bought up by Veritas Capital, a major private equity investment firm of the NYSE, DynCorp has become a "state within the state". In charge of providing worldwide protective services for State Department employees, DynCorp is often hired to train foreign police forces. On June 12, 2007, DynCorp appointed Dwight M. Williams, the Chief Security Officer at the U.S. Department of Homeland Security, as its vice-president for security. DynCorp touts itself as an "Internet Corporation".  According to Catherine Austin Fitts, a Republican insider and financial specialist that left the first Bush administration after spending 18 months trying to clean up the $100 billion sized financial frauds (including BCCI, S&L, Iran-Contra and HUD), DynCorp is the information computer system provider to the Securities Exchange Commission (SEC) and provides a substantial amount of computer and information systems for the DOJ and the FBI.  According to some sources, DynCorp, by contract, manages the financial data and other electronic records for more than 30 U.S. government agencies, including the FBI, the State Department, the Department of Justice, the Defense Department, the Drug Enforcement Agency (DEA), the Bureau of Prisons, and the Office of National Drug Policy. Catherine Fitts says that DynCorp uses "the most advanced version of the Prosecutor's Management Information System (PROMIS) software system. Theoretically, they have access to everybody's bank account, onshore and offshore." Reportedly the PROMIS Software has been used to "swipe" the bank accounts of Emmanuel Noriega and Ferdinand Marcos. Who wants more? Behind this aura of governmental imprimatur, far different motives appear. A confidential memorandum from the U.S. Embassy in Haiti dated January 1997 and addressed to the Pentagon, the Joint Chiefs of Staff and the State Department stated that: "Over 300 police officers of the Haitian National Police (HNP) have received specialized training in crowd control.... Embassy officials expect crowd control to be a major HNP task in 1997 as the stagnant economy engenders greater frustration among the populace."  Pratap Chatterjee of CorpWatch wrote that DynCorp's role in another State Department contract looks "designed to circumvent United States law."  Writing about DynCorp's role in Latin America, he wrote that "In the Colombian conflict, Washington has supplied more than 70 Black Hawk and Huey helicopters and other military hardware that are maintained and flown by private contractors. Anxious to avoid the "secret wars" conducted by the Pentagon in Laos and Cambodia in the 1960s, Congress limited the number of US personnel that can operate in Colombia to 400 in uniform and 400 civilian contractors at any given time. US law also requires congressional notification before the government can approve the export of military services valued at $50 million or more. By limiting each individual contract to several million dollars; labeling them peace-keeping missions; employing retired CIA and Special Forces personnel working for private contractors as well as foreign nationals (to whom the 400 person ceiling does not apply), Congress does not have to be notified, making the contracts harder to oversee."  US Representative Janice Shakowsky, an Illinois democrat, told the press: "Is the US military privatizing its mission to avoid public controversy or to avoid embarrassment – to hide body bags from the media and shield the military from public opinion?"  DynCorp is close to a caricature of the East India Company, the criminal wedding of large mercenary companies and great finance capital out for loot and power and war racketeering. DynCorp main shareholder has been over years Capricorn Holdings, a company directed by Herbert S. "Pug" Winokur Jr., who is a director of DynCorp while simultaneously the chairman of the finance committee of Enron's board...Fitts believes one of the reasons why Winokur escaped going to jail for the Enron scam comes from DynCorp's (i.e. Winokur's) control over the government's computer data files... Winukur is also director of the Harvard Endowment Fund, ($25.9 billion with a 19.2% return on investment for 2005), an entity close to the Bush dynasty.  Catherine Fitts notes the interesting fact that "Enron SEC filings indicate that there are about 700 Enron subsidiaries in the Cayman Islands", the world's leading center of the Anglo-Dutch hedge-fund operations and dirty money laundering. Another director of DynCorp is Dudley Mecum, also a director at Capricorn. Mecum is on the board of one of the largest US banks, Citygroup. Early 2007, DynCorp was bought by the investment fund Veritas Capital, directed by Robert B. McKeon, former CEO of Wasserstein Perella Management Partners. His former partner, Bruce Wasserstein, now leads the synarchist bank Lazard Freres. On Veritas' defense and aerospace advisory council sits Richard Armitage, former deputy secretary of state and another shadowy Irangate figure.  Commenting the fabulous results of DynCorp on the NYSE,, cynically commented that "While greed may be good, war is better", and added that "as conflict continues to dominate headlines analysts remain upbeat on military contractors." In other words, if Cheney is impeached and the Iraq war brought to halt, war stock market values will collapse.  

PMC's and "humanitarian aid" 

As we mentioned at the start, the ambiguous double-use of PMC's has permitted them to obtain contracts from "highly respectable" entities such as the State Department, the Pentagon, the EU, the UN, the African Union, the OSCE, NGO's and event the Red Cross. In France, before, "socialist" Bernard Kouchner became the new foreign affairs minister of French President Nicolas Sarkozy, he gave a hint to the integration of private armies in Inflexions, a prominent French Military journal of reference, where he stated that "The major question in effect is undoubtedly not to know if the humanitarian domain has to remain the exclusive one for the NGO's (as if this would have ever been so), but rather to know how a growing number of actors involved in the rescue operations of victims – NGO, UN organizations, civil security, national and transnational military forces, private actors, etc. – can have mandates, approaches and perimeters of actions that answer in the most efficient way, and with the best cost/efficiency ratio the needs of the populations subjected to the crisis's." (4) As one sees here, for Kouchner, the question is not to create a dynamic that outlaws PMC's or makes them unnecessary, but to benefit from the "best cost/efficiency ratio", i.e. the market! To make this package something acceptable to French public opinion, often qualified to be backwardly "thirty years behind vis-à-vis the Anglo-Saxons", certain former French military, eager to set up their own PMC, plead in favor of changing the name of PMC into "Strategic and Operational Support Company". The message is clear: "Sir, la and behold, we're no mercenaries, but serious professionals that work for a handful of dollars." As usual, the revolution of word is in the making. 

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Blackwater: Mercenaries without borders