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Price is Right and Prince is Wrong: Holding Blackwater Accountable

October 1, 2007

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The Bush-Cheney war in Iraq is a full-employment act for mercenaries and a high-margin business for war profiteers. What are we going to do about that?

Did you know America has well over a quarter million people serving in Iraq and Afghanistan? The US has more private military contractors on duty in Iraq (180,000) than we have soldiers stationed there (+130,000).

An astounding 1000 contractors have perished on our behalf. If we add the casualties among the private contractors to the official US troop casualties that the Defense Department does report, the US count would instantly jump by 25%. Over 13,000 contractors have been injured, a human toll also omitted from the Pentagon tallies.

From largest to smallest, the top three private military contractors in use by the US in Iraq and Afghanistan are Blackwater USA (great mercenary name, by the way!), Dyncorp, and Triple Canopy.

The Bush-Cheney administration is clearly expanding the use of private contractors in Iraq for all kinds of work—from transport to guard duty—in order to reduce the official number of US service men and women stationed there.

We pay between 4 and 10 times more for each private contract employee than we do for each soldier getting a government paycheck. A private mercenary may earn $600 a day or more, but may have no health insurance through his employer.

Private guards hired with our tax dollars by one particular private military contractor, Blackwater, are at least twice as likely to use deadly force as guards from its competing firms. Especially when Blackwater’s guards kill innocent Iraqi mothers and children in our name, this trigger-happy group inflames the distrust the average Iraqi might heap upon all Americans, undermining the conditions in which our enlisted men and women must work.

The guards hired by Blackwater are not employees of the firm. Rather, the guards sign independent contractor employment agreements with the firm. I strongly recommend the October 2007 Harper’s Magazine article dissecting Blackwater’s independent employment contract.

Blackwater appears to provide no health insurance to those whom it knows will be in harm’s way. This ‘arm’s length’ relationship allows the firm to shield itself somewhat from actions the contractor guards might take, or that guards might suffer from.

The Blackwater employment contract also contains a “waiver of jury trial” clause that forces a dispute between the firm and a contractor—whose family might sue for wrongful death—to be settled in private mediator, out of the view of a public court.

The total value of the Pentagon contracts awarded Blackwater is now about $2 billion. Not bad for a security firm barely ten years young. One traditional rationale for defense spending—however outrageous the amount—was its trickle down effect on local economies. Sure that $100 toilet seat is expensive, but there’s jobs in Connecticut involved!

A private security contractor like Blackwater is not a capital-intensive business. Blackwater is like a consulting business where I charge you for my time and materials plus mark-up. It is a labor-intensive business and a cost-plus business (for whatever hard goods it does buy or reimburses its subcontracting guards for buying). It requires comparatively little upfront investment.

A traditional defense contractor, who builds submarines or invents better night-vision goggles, invests in years of research and development, and builds factories or extensive infrastructure that itself stimulates the local economy.

Blackwater did not have any such heavy start up costs. Instead, its founder, Erik Prince, a former Navy SEAL and millionaire, invested hundred of thousands of dollars of in Republican campaign contributions. The wealthy Prince family is well-connected to GOP politics. Prince also invested in phones and computers, and a few hundred people to keep the books as the contracts rolled in.

According to the New York Times, Blackwater has only 550 full time employees at its North Carolina headquarters. North Carolina’s state courts may not pursue Blackwater since its contractors currently fall outside their legal jurisdiction. Blackwater has an 6,000 acre training center in the tidewater town of Moyock, North Carolina.


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Arguably, Blackwater stimulates the local economy when it buys lunch for its office workers and trainees. But Blackwater has now also drawn the attention of the state’s courts in the wrongful death suit brought by the families of four Blackwater contractors who suffered grisly deaths in 2006 in Fallujah. Blackwater argues that the state case brought by the survivors is pre-empted by federal law, and that federal law says no court has jurisdiction over such claims.

If you want to examine a return on investment, try this ROI: spend less than $1000 per full time employee on political contributions to elect an administration that will steer contracts your way worth $3.6 million per employee. Subtract those pesky cost-plus subcontract fees that you deduct from your pre-tax balance sheet anyway for the guys and gals actually toting the guns and driving the Hummers in Baghdad. Pay rent on the office building and the voice mail system. And reinvest a smidgeon of your remaining net operating profit in the next campaign election cycle to keep the system titled your way.

Congressman David Price from the Raleigh-Durham area is chair of the House Subcommittee on Homeland Security. He happens to be a former college professor who taught political science and is an author of a terrific book on how Congress works. In full disclosure, I worked on that book with him and know David to have lots of common sense.

Price has introduced a contractor bill, H.R. 2740, that deserves our full-throated support. The bill has two key new rules for private military contractors that would lift the curtain on what happens and who may be held accountable.

The bill would require private military companies to report all instances of the use of deadly force. At the very least, we would know when a weapon is discharged, a burden that has long been commonplace for our police officers here stateside.

Price’s proposed law would also to subject independent military contractors to the jurisdiction of US courts. This clause would close the gap we have now in which a US soldier is subject to US law, but the US-backed mercenary standing next to him is not.

Even as Americans begin to glimpse the staggering sacrifices of our soldiers and their families, we have not yet begun to feel the financial pinch this ongoing war will impose. More significant than our purse is our reputation.

Our prosecution of the war has deeply undermined the respect for American ideas and the credibility of American ways throughout the world. That fall from grace for America and Americans may be Bush-Cheney’s most damning legacy, one that will takes years of good behavior to restore.

This bill would be a small, practical, and accomplishable step in the right direction. We must take it now.

Making Price’s bill a federal law this fall would show both private military contractors and innocent Iraqis and Afghanis that we—the American public—demand that all those acting on our behalf be held to the higher standards of accountability and justice than before. Even if our executive branch is trigger-happy, we citizens are not.

Leo Wiegman

Editor’s note: The author is a former Village of Croton-on-Hudson Trustee who served three terms from 2001 to 2007.

On October 8, 2007 9:54 AM, Leo Wiegman said:

Quick Updates and Ironies: 1. David Price’s bill passed the House by an overwhelming margin last week in a 389-30 vote. The bill would make all private military contractors working in Iraq and other combat zones subject to prosecution by U.S. courts. 2. The White House and a few House Republicans accused Price and the Democratic leadership of rushing the bill. Price and his colleagues had been working on it for over 2 years. 3. One immediate aftermath of the bill’s passage is that the FBI has assumed responsibility for investigating the September 16 killing of Iraqi families by Blackwater guards. In an ironic twist, Blackwater is under contract to guard the FBI investigators in Iraq who would be investigating … Blackwater guards. But the FBI has said it will use US government personnel for its own security detail to avoid any conflict of interest. 4. Barack Obama has proposed revisions to the defense authorization bill in the Senate to reflect the Price language. The Hill—Marty Tolchin’s excellent newspaper—is a good source for Capitol Hill news http://thehill.com/leading-the-news/sen.-obama-presses-bush-on-blackwater-2007-09-25.html
5. Even private military contractors need a lobbyist. The
International Peace Operations Association http://ipoaonline.org/php/ formally endorsed Price’s H.R. 2740 before its passage. No word yet on how IPOA feels about Obama’s proposal to tie new regulations to funding for Iraq and private contractors.

-Leo Wiegman Columbus Day, 10 Oct 2007

On October 7, 2007 12:21 PM, KWilly said:

Yes this was the same liberal media that:

1) In the lead up to the Iraq War, the media was pro-war and refused to ask the tough questions for fear of being “Un-American”. They gave up on asking about the WMD’s that we never found.

2) Is leading us into war with Iran and is refusing to report on stories like this one that was reported in the UK: (http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/09/30/wiran130.xml)

3) Famous Neo-Con Bill Kristol even said this about the so-called liberal media on CNN “The press isn’t quite as biased and liberal. They’re actually conservative sometimes”

Kevin W. Davis

On October 3, 2007 12:05 PM, Leo Wiegman said:

Two quick points:

  1. The global is local in today’s world. Local residents have and are serving in Iraq and Afghanistan. Many Crotonites have relatives and friends on active duty in the armed services. I do. Finally, the huge financial and reputation costs of this war will be paid by all of us regardless of where we live.

  2. The facts I used are the same ones used by conservatives and liberals on this topic. That is because they are the facts.

While liberal media outlets have aggressively reported on Blackwater, the middle of the road and conservative media outlets have pumped out a huge number of similar stories as well—from Newsweek < http://www.msnbc.msn.com/id/21064094/site/newsweek/ > to Wall Street Journal < http://blogs.wsj.com/washwire/ > and Fox News, which has run many Associated Press stories on this topic.

When I wrote this column last week, it was my opinion that Congress should pass David Price’s bill. I say so in the column.

Yesterday Blackwater’s founder, Erik Prince, agreed. Prince testified in Congress yesterday that he too thinks his firms’ contractors should be subject to US law. See the generally conservative WSJournal’s coverage: < http://blogs.wsj.com/washwire/2007/10/03/3238/trackback/ >

I might not have used “Prince is wrong” in the column’s title, if I had known Prince favored passage of the Price. But hindsight is always perfect.

Leo Wiegman

On October 2, 2007 11:00 AM, Devil's Advocate said:

I really wish we could keep the content of this blog focused on Croton. Articles like this really turn me off because it appears to be personal opinion wrapped in “alleged” facts provided by the liberal media.



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