Burgeoning Contract Industry May Get More Controls

The use of private contractors in conflict zones like Iraq and Afghanistan has hit unprecedented levels. A civilian force of more than 120,000 people is in Iraq. But as the private contracting industry has exploded in the past few years, there has been little oversight.

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The use of private contractors in conflict zones has hit unprecedented levels. More than 120,000 civilian contractors are in Iraq alone. They do everything from work in mess halls to provide armed protection for VIPs. And even though the private contracting industry has exploded during the Iraq war, there's been virtually no oversight. Now efforts are underway to gain control over a business that flourishes in times of war.

NPR national security correspondent Jackie Northam reports.

JACKIE NORTHAM: On March 31st, 2004, there was grizzly news out of one of the most dangerous cities in Iraq.

Unidentified Man #1: It was another bloody day in Iraq today. Four American security contractors were killed in the city of Fallujah.

Unidentified Woman #2: An angry crowd gathered and attacked the vehicles.

Unidentified Woman #3: The bodies of the dead were dragged around town. They were mutilated and two of them were left hanging from a bridge.

NORTHAM: The four men who were killed in Fallujah that day were hauling kitchen equipment to a U.S. military base. They were all civilian contractors with North Carolina-based Blackwater U.S.A. The families of the four men sued Blackwater claiming the company did not live up to promises to provide the men with adequate equipment before going into Fallujah. The families' lawyer Daniel Callahan.

Mr. DANIEL CALLAHAN (Attorney): They only had a driver and a navigator. So they did not have the rear gunner with a large powerful machine gun in the back. They didn't have the armored vehicle. And they weren't even so much as given a map. They were not given an opportunity to inspect the routes in advance. And all these things are promised.

NORTHAM: Blackwater says it should be immune from any civil litigation because it and the men were working under contract for the Defense Department and so should be shielded from lawsuits, much as the U.S. military is protected from suits. Marty Strong(ph), a vice president with Blackwater, says any compensation for the families has to come from the U.S. government through the Defense Base Act.

Mr. MARTY STRONG (Vice President, Blackwater): When it comes to doing contracts for the U.S. government involved in areas of conflict where there's a potential risk to life and limb, the Defense Base Act is the governing issue.

NORTHAM: But military lawyers say the act doesn't address the families' claims that the four men were not given enough or the proper equipment. Blackwater has fought this lawsuit hard. It launched a $10 million countersuit. It brought in high profile lawyers including Ken Starr, the special prosecutor who investigated President Bill Clinton. Callahan, the lawyer for the families of the four men killed in Fallujah, says there is a lot riding on this case because it could set a precedent for handling future lawsuits.

Mr. CALLAHAN: They are trying to show that - don't come after Blackwater. We're too big, we're too bad, and you won't win. And you know what, they have a lot of political muscle.

NORTHAM: This case has moved far beyond the courtroom. It became the focus of a House Oversight Committee hearing earlier this year. Family members of the men killed in Fallujah sat along with representatives from the Army, Blackwater, and several other major contracting firms. The hearing, which was intended to air the families' concerns, also exposed many other problems in the contracting industry. Henry Waxman, the chairman of the House Committee on Oversight and Government Reform, tried to sort out what he called the murky world of subcontracting.

Representative HENRY WAXMAN (Democrat, California): Blackwater was providing security services under a contract with a Kuwaiti company called Regency. And that Regency was itself a subcontractor for ESS Support Services Worldwide, which in turn was a subcontractor for other contractors such as KBR and Fluor Corporation. The Fluor Corporation disputes this and the Defense Department doesn't seem to be sure what's going on.

NORTHAM: In fact, at that hearing a spokesperson for the Army couldn't even say how many contracting companies were working in Iraq. These issues have led to calls for more transparency in the contracting industry. Doug Brooks, the president of the International Peace Operations Association, a trade group for contractors, says a lack of transparency isn't necessarily the fault of the contractors.

Mr. DOUG BROOKS (President, International Peace Operations Association): Oftentimes the clients, which is to say governments, like to control the message going out. And they will tell the company essentially, you know, if there is a media contact or something, it should come through us, which would be State Department or Department of Defense.

NORTHAM: There's no central database, no single organization to keep track of facts and figures, and so the most basic questions regarding civilian contractors cannot easily be answered. What roles do the contractors play? What nationalities? How much is it costing the American taxpayer? And how many contractors have been killed? One of the most vexing questions is what legal framework do the civilian contractors fall under?

Mr. PETER W. SINGER (Senior Fellow in Foreign Policy, Brookings Institution): They fall into a legal vacuum, a legal gray space.

NORTHAM: Peter W. Singer, a senior fellow with the Brookings Institution and author of the book "Corporate Warriors," says there are concerns about accountability, especially regarding the heavily armed security contractors.

Mr. SINGER: First, they are not part of the military. They are not part of the chain of command. They aren't wearing uniforms. At the same time though, they are not traditional civilians. They are participants by shape or form within a military operation. So they're not just accompanying the force, they're there operating.

NORTHAM: One of the last things Paul Bremer, the head of the Coalition Provisional Authority, did before leaving Baghdad in mid-2004 was grant civilian contractors immunity from prosecution under Iraqi law. A civilian contractor working for the defense department or other U.S. agencies who commits a felony would fall under a law known as the Military Extraterritorial Jurisdiction Act, or MEJA. Singer says there's problems with this.

Mr. SINGER: MEJA was not designed for war zones. It was designed for things like a family member committing a crime on a U.S. military base.

NORTHAM: And Singer says there's little enforcement of MEJA. Over the past three years, the Department of Justice has indicted or prosecuted only three cases. This lack of active enforcement has raised concerns that contractors can act with impunity, and that maybe why Senator Lindsey Graham, a Republican from South Carolina, tucked an amendment into the 2007 defense bill that said civilian contractors fall under the military legal system, known as the Uniform Code of Military Justice. But is it possible to try civilians under a military system?

Mr. JOHN HUDSON (Dean, Franklin Pierce Law Center) I think you probably could. I just don't think that you should.

NORTHAM: John Hudson, the dean of Franklin Pierce law school and a former Navy judge advocate general, says that criminal offenses, court systems and punishments are significantly different under civilian as opposed to military law. Hudson says the military justice system is narrowly focused to try to maintain order and discipline in the service.

Mr. HUDSON: To then take that system and say, okay, now we are going to use it for a bunch of civilians, over whom we have no control, by the way. You know, they're not part of the military chain of command. They don't report to the commanding general. They report to somebody back in Virginia. You could do that, but it's going to change in a very fundamental and important ways the Uniform Code of Military Justice.

NORTHAM: The Pentagon says its lawyers are, quote, "ironing out the details of the new law." Hudson says urgent action must be taken to control the flourishing contracting industry, because it's likely that military and civilians will be next to each other on the battlefield well into the future.

Jackie Northam, NPR News, Washington.

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