As a new report forecasts that the 190,000 private
contractors in Iraq and neighboring countries will cost U.S. taxpayers more
than $100 billion by the end of 2008, an under-the-radar Florida court case
suggests that U.S. President George W. Bush a staunch contractor supporter
is preparing to throw security contractors such as Blackwater under
the political bus.
In the Florida case, relatives of three American servicemen killed in the
2004 crash of an aircraft owned by Blackwater Aviation in Afghanistan are suing
the company for damages, based in part on U.S. government reviews that concluded
that errors committed by Blackwater staff were responsible for the deaths.
This week, despite Bush's support for what he has called the critical roles
played by overseas contractors, his administration failed to meet a deadline
for presenting the court with any defense of Blackwater.
The administration's silence has caused consternation for Blackwater and its
supporters. Erik Prince, Blackwater's chairman, told Time magazine,
"After the president has said that, as commander-in-chief, he is ultimately
responsible for contractors on the battlefield it is disappointing that his
administration has been unwilling to make that interest clear before the courts."
Some observers have speculated that the administration's silence can be attributed
to the controversial nature of the contractor issue and a reluctance to address
it during a hotly contested presidential election year.
The Florida battle, which could eventually find its way to the U.S. Supreme
Court, turns on the question of whether Blackwater and other overseas contractors
are subject to U.S. law. That question arises because of a decree issued in
2005 by the then U.S. Iraq administrator, L. Paul Bremer, granting contractors
The Iraqi government claims that Blackwater and other contractors have been
responsible for the deaths of Iraqi civilians and wants to make them subject
to Iraqi law. The U.S. has resisted this move, which is thought to be part
of the ongoing stalemate in negotiations with Iraq over the future status of
U.S. forces in that country.
The White House has also attacked a bill recently passed by the House of Representatives
that would place combat-zone contractors under the jurisdiction of U.S. courts.
It called the measure an unacceptable extension of federal jurisdiction overseas,
and said it would place additional burdens on the military.
Blackwater's argument is that the company should be covered by the same
"sovereign immunity" that protects the U.S. military from lawsuits
because the downed flight in question in the Florida case was under the command
and control of the U.S. military.
Last month, this argument was rejected by three federal judges, who cited
the U.S. government's failure to take a position in defense of Blackwater as
one of their reasons. In their decision to allow the lawsuit to proceed, the
judges ruled, "The apparent lack of interest from the United States
fortifies our conclusion that the case does not yet present a political question."
Lawyers for many major contractors, including DynCorp, Kellogg Brown and Root
(KBR), Blackwater, and others, say a dangerous precedent would be established
if this and similar cases are allowed to go forward. Such a decision, they
say, would open contractors to large money damages and greatly higher risk
insurance costs that could adversely affect their ability to carry out the
jobs the U.S. government has hired them to do.
As the Florida case made its way through the U.S. legal system, a new report
from the Congressional Budget Office (CBO) contends that the cost of having
military personnel provide security services in Iraq might be little different
from the prices charged by private security contractors.
The report said that $6 billion to $10 billion has been spent on security
contractors thus far in 2008 and estimated that about 25,000-30,000 employees
of security firms were in Iraq as of early this year. It estimates that, if
spending for contractors continues at about the current rate, $100 billion
will have been paid to military contractors for operations in Iraq.
The CBO report revealed that about 20 percent of funding for operations in
Iraq has gone to contractors. Currently, it said, there are at least 190,000
contractors in Iraq and neighboring countries a ratio of about one contractor
per U.S. service member. It noted that the U.S. has relied more heavily on
contractors in Iraq than in any other war for functions ranging from food service
to guarding diplomats.
The report also noted that the legal status of contractor personnel is a gray
area of U.S. law, particularly for those who are armed. It said that military
commanders have less direct authority over contractors because a government
contracting officer rather than a military commander manages their contracts.
The CBO review was requested by Sen. Kent Conrad, a North Dakota Democrat
who is chairman of the Senate Budget Committee. In a statement, Conrad said
the Bush administration's reliance on military contractors has set a dangerous
precedent. The use of contractors "restricts accountability and oversight;
opens the door to corruption and abuse; and, in some instances, may significantly
increase the cost to American taxpayers," he said.
The report comes at a time when the actions of contractors in Iraq and Afghanistan
are coming under increased scrutiny. Contractors including Blackwater
and KBR have been investigated in connection with shooting deaths of
Iraqis and the accidental electrocutions of U.S. troops. The Senate Democratic
Policy Committee heard testimony a few weeks ago from a former Defense Contract
Audit Agency (DCAA) contract overseer who was effectively fired because he
refused to authorize $1 billion in unsubstantiated charges from KBR. The Government
Accountability Office released a report that confirmed whistleblower complaints
of DCAA supervisors issuing unsupported findings that were favorable to contractors.
And last week, Government Executive magazine reported that nearly a
dozen former DCAA employees see DCAA as a very troubled agency that is more
concerned with performance goals than actually overseeing contracts.
The death of a U.S. soldier, who was electrocuted in January while showering
in Iraq, prompted a House committee oversight hearing last month into whether
KBR has properly handled the electrical work at bases it maintains. The military
has also said that five other deaths were due to improperly installed or maintained
electrical devices, according to a congressional report.
Contractors' activities have drawn sharp criticism from private watchdog groups,
such as OMB Watch. OMB stands for the Office of Management and Budget, which
prepares and presents the president's budget to congress.
Craig Jennings, OMB's federal fiscal policy analyst, told IPS, "$100
billion is a very large amount of money in fact, Iraq's GDP was just
over $100 billion in 2007. But what staggers my imagination is how sober adults
would be willing to divert such vast sums of America's financial resources
to the bank accounts of private firms whose dealings are opaque to taxpayers
and, for the most part, held unaccountable."
Jennings added, "I think advocates of unaccountable privatization are
beginning to reap what they have sown: defending privatization of warmaking
on such an enormous scale is becoming tenuous. It's hard to paint a picture
of contractors providing taxpayers value when so many instances of contractor
misconduct have found their way into the public's consciousness."
Jennings also called attention to the shortcomings of the military auditing
process. He told IPS, "This magnitude of expenditures on private contractors
is especially striking in light of recent government and media reports of dysfunction
in the DCAA. The protection of the interests of American taxpayers is apparently
suffering a number of impediments."
(Inter Press Service)