Blackwater's Loss May Be Other Mercs' Gain

America's use of corporate mercenaries in Iraq is under renewed scrutiny in the wake of the Nisour Square massacre in Baghdad on Sept. 16. Employees of Blackwater USA stand accused of killing 17 Iraqi civilians.

There is reason to believe that commercial and bureaucratic rivalries played a part in bringing the episode to public attention, after four years in which contractors have routinely shot at Iraqi civilians with impunity.

Blackwater is the main security contractor for the State Department in Iraq. If it is expelled, as the Iraqi government has demanded, the most obvious beneficiaries will be two smaller companies employed by the Department, DynCorp and Triple Canopy.

However, the scale of the work undertaken by Blackwater means that the State Department may have to turn to larger companies to fill the void, including non-U.S. firms.

Current Defense Department contractors may be particularly well-placed to pick up the slack in the wake of moves to give the military a larger role in contract oversight. The largest of these is Britain's Aegis Specialist Risk Management.

Aegis and its chief executive, Tim Spicer, featured heavily in a recent London Times article on the scandal:

"'Doing this job for me is an opportunity to get ahead because of the amount of money that you earn,' one South African security contractor said.

"Insisting that he performed with consideration for the local population, he conceded that not all guards acted in the same way. Noting Blackwater in particular, he said: 'You can't tell those guys anything because they think that they know best.'

"Mr. Spicer defended the industry's role, noting that Aegis, as a contractor to the U.S. Department of Defense, adheres to about 15 layers of regulatory control and constraint to ensure that it is fully accountable."

Aegis is notable for employing a PR agency, which gives it the ability to insert its spin in certain media outlets. It is tempting to read Spicer's contrast between Aegis and Blackwater in that light.

The Times also spoke to Jack Holly, a retired Marine colonel who oversees a number of DoD security contracts as director of logistics for the U.S. Army Corps of Engineers. In a separate interview with the Washington Post, Holly was highly critical of Blackwater:

"Holly said the State Department was partly to blame for what he described as Blackwater's 'heavy-handed, almost arrogant' tactics. 'It's obviously condoned by State and it's what State expects, because they have contract oversight and if they didn't like it they would change it,' he said."

Last month, the Post published leaked military reports that found Blackwater personnel opened fire without provocation and used excessive force against civilians.

The military's intervention, along with that of the Iraqi Interior Ministry, was crucial in undermining Blackwater's version of events. By contrast, the State Department's initial report was written by a Blackwater employee and did not mention civilian casualties.

This situation has fueled support for a proposal by Defense Secretary Robert Gates to centralize contractor oversight under a single military authority.

Yet the military's record of investigating its own contractors is little better than the State Department's.

Aegis came under scrutiny in 2005 when one if its employees, Rod Stoner, released a video taken inside a contractor vehicle that showed members of a security team firing on Iraqi civilian traffic.

The Army's Criminal Investigation Division subsequently "reviewed the facts available concerning the incident to determine if there was any potential criminality that falls within CID's investigative purview," according to a statement issued to the Washington Post. "The review determined that no further investigative effort on the part of Army CID was warranted."

No further details of the investigation were released. It was never clear whether Iraqi civilians involved had been traced or, indeed, whether any witnesses had been interviewed.

Stoner claimed that neither he nor any of the other occupants of the vehicle had been spoken to by investigators. His offer to testify was passed on to the U.S. government by Irish human rights group the Pat Finucane Center but was not taken up.

The Pat Finucane Center has heavily criticized the Aegis contract because of Spicer's military record. The Aegis CEO served as a battalion commander in Belfast in 1992, when two of his soldiers shot dead an 18-year-old civilian, Peter McBride. The Aegis Web site recently suggested the soldiers were wrongfully convicted of murder, prompting a complaint from the dead man's mother, who has also appealed to Iraqi authorities to ban the company from operating in the country.

Aegis currently coordinates all Department of Defense contractors in Iraq, a role that may expand with increased military oversight of firms employed by other parts of the U.S. government. That outcome would represent a bureaucratic victory for the Pentagon over the State Department, and possibly the CIA. It would not solve the problems revealed by the Blackwater affair.