War Inc. – A $300 Billion Dollar Business By William Bowles

18 May 2003

‘Mercenaries are outlawed under Article 47 of the Geneva Convention. In December 1994 the United Nations General Assembly adopted Resolution 49/1150 urging all nations ‘to take the necessary steps and to exercise the utmost vigilance against the menace posed by the activities of mercenaries’. The UN International Convention Against the Recruitment, Use, Financing and Training of Mercenaries has been signed or ratified by twenty-one countries.’ – http://www.globalpolicy.org/security/issues/sheppard.htm

Big Bucks

To give you some idea of the money involved in privatizing war:

‘Since 1994, Pentagon contracts signed with just 12 companies totaled more than $300 billion, according to records examined by the Center for Public Integrity’s International Consortium of Investigative Journalists (ICIJ), but such contracts are notorious for add-ons. Moreover, notes Bolton’s directive, ‘Units that depend on contractor personnel …allocate precious resources to ensure their security and subsistence.’ – http://www.sandline.com/hotlinks/4contractors.htm

Up until the late 19th century, almost all wars were fought with mercenary armies but WWI changed all that. Once war became industrialised and seriously large-scale, relying on relatively small armies, hired from countries far and wide, was no longer practical, nor was it politically acceptable given the appeals to ‘patriotism’ emanating from the ruling classes in order to persuade people to be slaughtered in the vast numbers modern war demanded.

So it wasn’t until relatively recent times that we saw the re-emergence of mercenary forces. Not surprisingly, they have their origins in three countries, England, apartheid South Africa and the US. Indeed the ‘father’ of contemporary mercenary companies is Executive Outcomes (‘disbanded’ in 1998 but reformed as Lifeguard and more than likely as part of Sandline International, of which more below). Set up in 1993 by Tony Buckingham and Simon Mann, Executive outcomes (EO) worked in Asia, Africa and South America. Most of its personnel were hired from South Africa.

But the history goes back to the 1960s, when psychopaths like Colonel Bob Denard staged mercenary battles in Africa for the highest bidder.

‘The Cold War created and promoted the new brand of mercenary in much the same manner as the US did the Taliban…. Along with Denard, the names that became lore were Jacques Schramme and ‘Mad’ Mike Hoare.’

‘Both Denard and Hoare were critical to the wild-dog reputation of the mercenary in the 1960s – they razed what they couldn’t take, plundered what they could, and left post-colonial Africa in tatters. Hoare’s 5 Commando was contracted to Moishe Tshombe in the copper-rich Katanga province of Zaire – [where] they brutalised the people. In his last, and defining, mission in 1981, Hoare botched the attempt to bring the Seychelles government to its knees…. Through those decades, British Army Training Teams (BATTs), comprising Special Air Service (SAS) veterans fortified with engineers and intelligence, were hired out to Third World governments…. These were the years when the ‘Hearts and Minds’ counterinsurgency technique currently in operation in Afghanistan (of blind butchery leavened with handouts of food, medicines and Hershey bars), was perfected.’

‘PMCs [Private Military Companies] trained the militaries of 42 nations and took part in more than 700 conflicts, which ranged in size from the tiny fiasco of the Mali takeover to the Congolese carnage. Executive Outcomes (EO), which became defunct as a mercenary organisation in 1998, kept the peace for years in Sierra Leone pitted against the Revolutionary United Front (RUF), a fact that taught the UN the value of outsourcing some of its more coldblooded work.’ – http://www.dyncorp-sucks.com/afgan_mercs.htm

But perhaps the most important moment came when president Ronald Reagan sanctioned and financed the use of mercenaries (the so-called freedom fighters) against the Sandinista government of Nicaragua, with the formation of the Contras, which in turn had its roots in the covert war against Cuba made infamous by the abortive Bay of Pigs Invasion in 1961. The Contra war was financed in part with sales of cocaine (the infamous guns for drugs scandal that led to the Iran-Contra affair). In turn, the experiences of the Contra war set the scene for the proxy war waged by the US against the USSR in Afghanistan, only this time, the various tribal factions became the ‘benefactors’ of millions of dollars of military hardware and finally, when private contractors were engaged as ‘go-betweens’.

But it’s the privatizing mania of the nineties that really set the ball rolling, opening up the way for a multi-billion dollar business, and it was in places like Saudi Arabia where the open presence of US military forces was politically unacceptable, that we see the contemporary phenomenon of PMCs. With the House of Saud spending billions on the creation of a new army (or National Guard as it’s euphemistically called), private armies came into their own.

It’s not commonly known but in the late 70s, BAE Systems (part-owned by the Carlyle Group) signed a deal with Saudi Arabia to supply what is estimated to be a £40 billion arms deal, although the exact amount has been kept secret. In addition, the US have supplied billions of dollars of aircraft, assault helicopters and missiles. Maintaining this vast arsenal has needed in excess of 50,000 foreign workers, many of them de facto mercenaries, to be permanently based in Saudi Arabia (BAE have over 22,000, the US around 30,000).

The bombing in Saudi Arabia this week (http://www.informationclearinghouse.info/article3374.htm) is just the latest one on Vinnell Corp in Saudi Arabia:

‘Few people know about it because few reporters visit the kingdom. But in November 1995, Islamic radicals set off a bomb in a parking lot next to the four-story building housing Vinnell’s headquarters. Five U.S. soldiers but no Vinnell workers died. A former employee who was there at the time says: ‘To me, that was directed against the United States, no question about it.’ Still, following the attack, there were no calls for Vinnell’s removal.’

Vinnell, now owned by Northrop but before that by TRW Systems and before that by the Carlyle Group, has a lot at stake in Saudi Arabia:

‘U.S. News obtained the Vinnell contracts and modifications since 1994 via a Freedom of Information Act request. The training and construction portions alone amount to $800 million, and the Saudis have spent hundreds of millions more to equip the force. Vinnell has constructed, run, staffed, and written doctrine for five military academies, seven shooting ranges, and a healthcare system, as well as training and equipping four mechanized brigades and five infantry brigades. In sum, it has built the SANG from a hardy but ragtag Bedouin band into a professional force. A former senior Vinnell employee credits the fact that the trainers worked from the ground up, a reflection of the Special Forces philosophy. ‘Lots of us were SF, and I’d say that’s a big reason why the National Guard did so well,’ he says. In fact, when Iraq overran Khafji early in the Gulf War, the SANG’s King Abdul Aziz Brigade recaptured the town.’

Ironically, I got this all this information from Sandline International’s Website of which more below.

Here are some of the other companies that the Pentagon has ‘outsourced’ war to:


‘DynCorp of Virginia, with 23,000 employees, may range even more wide. The company does everything from maintaining Air Force planes to flying helicopters in Colombia…. As of November, DynCorp will be supplying armed bodyguards for Afghan President Hamid Karzai, paid for by the State Department’s office of diplomatic security.’

Dyncorp is now owned by a corporation called Computer Sciences Corporation (CSC) who paid $950 million for Dyncorp. CSC’s clients include the following: General Dynamics, BAE SYSTEMS, Chevron Corp., DuPont, General Dynamics, MIT – Massachusetts Institute of Technology, Nortel Networks, Raytheon, Siemens, U.S. Department of Defense and U.S. NASA Goddard SFC. CSC is one of the top 20 corporations to do work for the US government.

Terrorism Charge

Dyncorp’s president Paul V. Lombardi has been charged with terrorism in US federal court this past February:

‘A class-action lawsuit filed in Washington, DC, on behalf of 10,000 farmers in Ecuador and the AFL-CIO allied International Labor Rights Fund has DynCorp CEO Paul V. Lombardi running scared and lashing back with intimidation tactics.’

See: http://www.narconews.com/dyncorpterrorism1.html for the full story.

Sources say that the PMCs known to have given calls to arms to their permanent personnel and to freelance ‘security experts’ include the Control Risks Group, Dyncorp (which has just started a US Homeland Defence service), Military Professional Resources Inc (MPRI), Sandline International, Armor Holdings, the relatively smalltime Chilport (UK) Ltd, Avient International, the Israeli Grupo Golan and Beni Tal, Rubicon, Strategic Consulting International (a Sandline breakaway) and SAG Service.

‘Other contract personnel from RONCO Consulting Corp. are at work digging up the tens of thousands of mines that litter Afghanistan.’

‘In the Balkans, armed ITT Industries contractors provide security for the U.S. troops still there.’

‘[A]nother firm called Airscan conducts aerial surveillance.’

‘Two large companies, the 700-employee MPRI and Cubic, with 4,500 workers, are providing military advice and general staff training to help former Soviet bloc countries refashion their militaries so they can qualify to join NATO. Both of them have also built simulation centers for clients including Croatia, Bosnia, and Bulgaria. Colombia is host to a baker’s dozen of contracted firms, mostly hired to stem the flow of cocaine and heroin from the war-torn country.’


This is from MPRI’s Website

‘Corporate senior management includes: General (Ret.) Carl E. Vuono (President), General (Ret.) Ronald H. Griffith (Executive Vice President), Joe Wolfinger (Senior Vice President / General Manager of The Alexandria Group), Colonel (Ret.) Stephen E. Inman (Chief Financial Officer), General (Ret.) Crosbie Saint (Senior Vice President / General Manager of the International Group), and Lieutenant General (Ret.) Jared L. Bates (Senior Vice President / General Manager of the National Group).’

‘MPRI draws the line at trigger-pulling or targeting work. MPRI spokesman Ed Soyster, a retired U.S. Army general, says: ‘We are in the force development business,’ which primarily involves desktop exercises, command staff instruction, and civil-military relations. Its most comprehensive work was in Bosnia, where it essentially built an army from scratch in the mid-1990s–with the U.S. government’s blessing. Indeed, it was part of the Dayton Accords peace negotiations. MPRI has considered revising its policy against bearing arms but only because the U.S. government asked if it would help secure American embassies in Somalia and elsewhere. This, Soyster says, would have involved a high likelihood of hostilities. The former was rendered moot when the embassy was instead evacuated, and MPRI decided the work was too hazardous. While insurance and image concerns have kept MPRI away from frontline jobs, others like Armor Group currently have U.S. government contracts to secure embassies in Thailand, Congo, and Uganda.

Executive Outcomes

The connection between Executive Outcomes (EO) and Sandline International is murky. When EO folded in 1998, it appears that they continued operation, effectively under the cover of Sandline who had sub-contractedd work to EO in Angola.

‘EO was registered in the UK in September 1993 by Simon Mann, a former troop commander in 22 SAS specializing in intelligence and South African director of Ibis Air, and Tony Buckingham, an SAS veteran and chief executive of Heritage Oil and Gas. The Heritage Oil and Gas board of directors includes former Liberal Party leader David Steel, and Andrew Gifford of GJW Government Relations, an influential parliamentary lobbyist. The company, originally British, now registered in the Bahamas, is associated with a Canadian oil corporation, Ranger Oil. Both companies had drilling interests in Angola, a country that since the mid 1970s was torn by civil war between the Marxist MPLA government and UNITA rebels who were covertly assisted by the South African special forces.’

Plaza 107 and its links to Executive Outcomes

‘The Diamond Dogs’

‘This commercial enterprise has given EO its nickname; ‘the diamond dogs of war’. A recent United Nations report noted that once a firm like EO is able to establish security in an area ‘it apparently begins to exploit the concessions it has received by setting up a number of associates and affiliates’ which engage in ‘legitimate’ businesses. Such firms thus acquire ‘a significant, if not hegemonic, presence in the economic life of the country in which it is operating’.

One of the Plaza 107 group firms is Branch Energy (BE), an English corporation which registered in the Isle of Man, a tax haven, in April 1994. EO is a major shareholder in BE, with 6o per cent of BE Angola, 40 per cent Of BE Uganda, and 40 per cent Of BE Sierra Leone. In June 1996 BE merged with Carson Gold, controlled by Canadian mining magnate Robert Friedland, to form Diamond Works Inc. This company, which has prospecting rights in Congo, Namibia, Botswana and Senegal, and is now the second largest concession holder in Angolait, was recently awarded the Alto Kwanza diamond exploration concession in Bie Province, covering an area of more than 18,ooo sq. km. In July 1996 the Sierra Leone government awarded the company a twenty-five-year lease to the Koidu diamond fields in the Kono region ‘liberated’ by EO. Diamond Works has contracted Lifeguard [EO by another name], another SRC subsidiary, at US$6o,ooo a month to protect its diamond fields in Sierra Leone.

Another line of analysis suggests that the prime mover in the employment of EO in Sierra Leone came from the South African mining house Gencor. In 1996 Gencor sold its controlling interest in the Australian company Cudgen RZ to another Australian firm, Renison Goldfields Consolidated (RGC). A subsidiary of RGC, Consolidated Rutile Ltd., in partnership with the US firm Nord Resources Group, controls half of Sierra Rutile Ltd, which with an annual production worth US$200 Million a year is the largest rutile mine in the world. The mine was the regional headquarters for EO during their operations in West Africa and when they withdrew Sierra Rutile Ltd. took out a contract with Lifeguard. – http://www.globalpolicy.org/security/issues/sheppard.htm

Sandline Inc.

‘The British government under Prime Minister Tony Blair also has its hired guns. Its most famous or infamous military force for hire is Sandline, Inc. One of the biggest scandals to rock the Blair government in recent memory involves Sandline and its actions in Sierra Leone. While Executive Outcomes was also involved, it was Sandline which was the focus of the scandal. In May 1997, certain general army officers of Sierra Leone seized control and began to murder the opposition. The governments of the world were unable to help stem a murderous rampage. In response, the UN declared an arms embargo with sanctions on Sierra Leone. However, Blair and his Foreign Minister Robin Cook asked Sandline to intervene with its forces with at the very least the tacit approval of the U.S. Department of State. Additionally, International Monetary Funds were used to finance Executive Outcomes’ participation in the project, while the U.S. kicked in an undisclosed amount for operational expenses. Sandline, EO, and a couple of other support organizations, as well as hundreds of locals, were able to overthrow the generals, restoring President Ahmad Kabbah to power.

‘Recently, the connection of the Blair government to Sandline came to light and has rocked the Labour government to its toes. In a recent article in the London Telegraph, journalist Christopher Lockwood recounted documentary evidence which links Sandline, under the leadership of Falklands Island veteran Colonel Tim Spicer, to the shipment of 35 tons of illegal war materiel to forces loyal to President Kabbah. Spicer maintains he was encouraged by the British Foreign Office to carry out this task. The government of Tony Blair tried to cover itself by the ‘ends justifies the means’ rule of thumb. The restoration of President Kabbah to Sierra Leone was deemed the greater good and besides ‘it all worked out.’ The teflon Prime Minister survived and with Kabbah back in power, plus concerned corporate interests more or less safe once again, there was only praise for the British role in the counter-coup. The most significant casualty was the rule of law and the end run around the British Parliament.

‘However, there is a sort of ‘what goes around comes around’ to the story. Shortly after the Sierra Leone affair, Sandline was hired to do a job in Papua, New Guinea. The venture resulted in the capture and arrest of Colonel Spicer, who according to reports, was nearly executed for his efforts. In addition, the current government of Papua, New Guinea, i.e. Bougainville, does not want to pay the money which the former government promised to Sandline. Consequently, Sandline brought suit against the government of New Guinea to recover payment. However, the government of President Bill Skate indicated it will be paid ‘when hell freezes over.’

…Tony Blair and Foreign Minister Robin Cook were rebuked in one of the most scathing verdicts ever issued by a select committee of the parliament. As usual, the Blair government blew it off and, according to journalist Lockwood, the committee was greatly ‘irritated,’ because it had been forced into a long uphill battle to obtain documents and official papers in regard to investigating the scandal. The upshot of the report, couched in harsh and damning language, condemns the mind-boggling incompetence of the Blair government as much as it does the collusion to circumvent the Parliament.’ – http://www.spintechmag.com/9909/da0999.htm

Most amazing of all is that the Pentagon has no idea how many companies it employs to do its dirty business!

‘There’s much to investigate. For starters, the Pentagon does not even know how many contractors it uses. Last spring, Army Secretary Thomas E. White revived an effort to count all contractors under his purview. A preliminary report to Congress in April guessed that the Army contracted out the equivalent of between 124,000 and 605,000 person-work-years in 2001. Nor is there a reliable count of the contractors who provide ’emergency essential’ services on the battlefront and elsewhere, despite the urging of the Department of Defense (DOD) inspector general a decade ago. In an internal E-mail last fall, one colonel urged that the Army logistics chief review all field systems to see what contractor support they entail. It reads: ‘At the very least, he could count these little beggars in some fashion before they show up on the battlefield and surprise some poor commander with horrific support, real estate and security requirements.’ – http://www.sandline.com/hotlinks/4contractors.htm

‘According to analysts, the US is home to about 20 ‘legitimate’ PMCs (of which the MPRI claims to do about $25 million of annual ‘overseas business’). Today, according to the military monitor, Milnet, the mercenary sector is worth about $60 billion – but it is a figure that would hold true for less than half a day if it were on the NYSE. No other industry’s value fluctuates so wildly or is so dependent on hour-by-hour shapechanging global scenarios as that of private sector martial risk management.’ – http://www.dyncorp-sucks.com/afgan_mercs.htm


‘MPRI’s most important contract to date was the U.S. contract in Bosnia. At an estimated $50 million dollars, the objective of the contract was to integrate and build up the Bosnian army of Muslims and Croats, against the Serbs. The theory behind the effort was, the sooner the Bosnians were capable of defending themselves, the sooner the international troops could leave the region. Critics contend when Western troops leave, the Bosnian army will go to war over territory lost to the Serbs through the 1995 Dayton Accords. The U.S. State Department and Defense Department hired MPRI, allowing the Croats to create a national army which successfully ejected 150,000 Croatian Serb civilians from the country. This success brought lucrative financial contracts from Islamic countries elsewhere. It was with the help of certain Islamic states that funding for participation by the American firm was concluded.’

The US Institute for Peace – ‘Train and Equip’

Much of the funding for these PMCs comes from structures like the US Institute for Peace through its ‘Train and Equip’ programme, which according to its home page:

‘Train and Equip is a U.S.-managed program that provides to the Federation [Bosnia, Croatia, Kosovo] $400 million in military equipment and training pledged by the U.S. and other countries, including Saudi Arabia, Egypt, Kuwait, the United Arab Emirates (UAE), Malaysia, Brunei, Turkey, Germany, and others.

‘Formally initiated in July 1996, the U.S.-managed Train and Equip program has disbursed the bulk of the U.S. contribution– approximately $100 million in defense equipment, including rifles, machine guns, radios and tactical telephones, tanks, heavy artillery, armored personnel carriers, light anti-tank weapons, and utility helicopters.’

Designed to turn the former Yugoslavia into a number of ‘manageable protectorates’, under US control of course, Train and Equip was able to remove:

‘Hundreds of Iranian Revolutionary Guards [who] were deployed to Bosnia; they are no longer there, nor are the mujahideen. A high-level Bosnian official in the Ministry of Defense with direct links to Iran was removed from his post as a result of pressure from the United States and the promise of Train and Equip resources once he resigned.’ – http://www.usip.org/pubs/specialreports/early/dayton_imp/train_equip.html

Dyncorp in Kosovo

‘Annual personnel cost for a total of 6,000 members of the U.S. constabulary and civil police force would total approximately $600 million. This total would be based upon $100,000 total compensation for each officer (grade 14, step 1 on the federal General Schedule, plus benefits), which is equal to the annual compensation received by participants in the U.S. State Department/Dyncorp Civilian Police (CIVPOL) Program. All participants in the U.S. CIVPOL Program receive the same salary and benefits. In addition, annual personnel costs for the 255 members of the judicial teams would total $38 million based on an average of $150,000 in total compensation for each member (GS 15/10, plus benefits). Total annual personnel costs would amount to $628 million.’ – http://www.usip.org/pubs/specialreports/sr71.html

Not bad going, $628 million for policing Kosovo. And according to other documents on the USIP Website, it’s safe to assume that a similar programme will be set up in post-war Iraq. See ‘Establishing the Rule of Law in Post-War Iraq’ http://www.usip.org/pubs/specialreports/sr104.html which is also to be funded by the US Institute for ‘Peace’.

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