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Published on March 2nd, 2016 | by David Isenberg

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When Crime Pays for Private Military Contractors

by David Isenberg

Everyone has heard the old cliché that crime pays. But criminals are not the only ones who make the money. Those fighting the criminals—police and law enforcement of all types, the judicial system—also make money. These public sector institutions make a lot of money. But it’s not just the public sector that makes a profit off crime. So does the private sector, including the prison industrial complex, which has been increasingly outsourced to the likes of Corrections Corporation of America and GEO Group.

Few segments of crime make more money than the drug trade. So it should come as no surprise that the private military security contracting industry (PMSC) has managed over the years to establish a sizable, growing, and oft-overlooked role in the efforts to combat narcotics.

After all, nothing could be more attractive to private corporations than the current scenario, where the federal government is willing to spend nearly endless amounts of money on a virtually futile endeavor.

For example, consider the news from early February that a number of major logistics contractors won parts on a major Pentagon counterdrug contract:

The Counter Narcotics and Global Threats Operations and Logistics contract is a seven-year award, with the potential for two option years. Under this contract vehicle, 15 companies will be vying for any number of task orders that could be up for bid as federal agencies determine their counter-narcotics needs. Agencies can issue task orders up to a value of $975 million.

Contractors that stand to benefit are some of the same major league firms that have worked in Iraq and Afghanistan, like CACI International Inc., DynCorp International, and Triple Canopy.

Triple Canopy alone was awarded a seven-year, multiple-award indefinite delivery/indefinite quantity contract by the Air Combat Command Acquisition Management and Integration Center for operations and logistic support services.

Old Counterdrug Strategy, New Bottle

The current Counter Narcotics Operations and Logistics contract is the latest version of a far bigger award that was broken up into multiple pieces as the Obama administration shifted federal acquisition practices to put more awards in the hands of small businesses. It also sought to eliminate organizational conflicts of interest in which a company can both help the government formulate the requirements and bid on programs where it helped fashion the requirements.

This operations and logistics part of the contract is one of four programs under the predecessor umbrella contract in the Counter-Narcoterrorism Technology Program Office. The other three awards include one for program management work, one for training and support services, and the Command, Control, Communications, Information, Detection & Monitoring (C3IDM) program.

Under the Operation and Logistics contract, 15 companies (nine large and six small) will be tasked with providing a number of services that span the globe. They will help build facilities that house shooting ranges to train local police forces that combat the drug trade and will help with the procurement and delivery of items including night-vision goggles and vehicles. Work will be performed globally with a period of performance to be complete by January 28, 2025

The effort to privatize the war on drugs is not new, but it has largely gone unnoticed. A 2014 article in Third World Quarterly on PMSC use in the drug war noted:

The role they have played in supporting the US-led war on the drugs has largely gone under the radar, both literally and figuratively. While there is a general awareness that contractors have been utilised in places like Colombia in an effort to stem the flow of narcotics, these cases have received far less consideration. This may be partly because of the limited amount of information available. In 2010 a subcommittee of the Committee on Homeland Security and Governmental Affairs held the first ever hearing on counter-narcotics contracts in Latin America. To the surprise of the senators the representatives from both the Department of State and the Department of Defense had trouble providing simple facts and figures. It was discovered that State lacks a central database to compile all contracts, while Defense admitted—without any sense of irony—that it had to spend another $50,000 on contractors to compile the requested information. That State and Defense are unable (or unwilling) to provide basic data about their use of contractors in counter-narcotics hardly inspires confidence in the likely level of oversight taking place.

Plan Colombia

Speaking of Colombia, the article noted that “the drug war in general, but Colombia in particular, was the testing ground for the use of military contractors.”

As with the use of contractors instead of regular military forces in Iraq and Afghanistan, the use of contractors in the drug war also enabled the U.S. government to minimize public attention paid to the scope of the U.S. effort,.

For example, DynCorp, first began operating in Colombia in 1988, even though its presence was not officially acknowledged until 1994.

In 1991 it was awarded a five-year contract for $99 million, which was extended on a yearly basis for three more years, and in 1998 it won a 5-year, cost plus award fee contract for some $170 million.13 The contract included the notable proviso that ‘mission deployments may be made to any worldwide location, including, potentially, outside of Central and South America’.

The use of PMSC also deflects public concern when people are killed.

At least 14 US citizens employed as contractors were killed from 1997 to 2003. In one failed mission in 2003 a surveillance flight undertaken by contractors working for two subsidiaries of Northrop Grumman (a major PMSC) crashed in Caquetá Province. Fuerzas Armadas Revolucionarias de Colombia (FARC) fighters killed two survivors, and took three US contractors hostage, who were held captive until they were freed in 2008. Incidents such as this received very limited media attention as they involved contractors, which gave the USA much greater freedom of action. As General Nistor Ramirez, formerly second-in-command of the Colombian Army, put it: ‘imagine if 20 American troops got killed here. Plan Colombia would be over.

A Dyncorp subcontractor pilot died in 2013 when his plane crashed in Colombia during a counter-narcotic spray operation.

Yet, while Plan Colombia may be a strategic failure, measured against the goal of reducing the drug supply to the United States, it has been a big success for PMSCs:

The aid package led to a considerable increase in the number of PMSC operating in Colombia. In 2002 the USA signed contracts with 11 companies to operate counter-narcotics programmes in the country, which had risen to about 25 by 2006. Between 2005 and 2009 the USA spent more than $1.9 billion on counter-narcotics contracts in Colombia, with the majority going to just five companies: DynCorp, Lockheed Martin, Raytheon, ITT and ARINC. Of these DynCorp was by far the largest, receiving some $1.1 billion in contracts in the whole Latin American region. In 2006 the company received $164 million in contracts in Colombia, a quarter of all the aid budget for the country’s military and police that year. Not only was a significant portion of the aid package militarised – at the expense of other socioeconomic and institutional approaches – but much of the money went to PMSC to execute this militarised policy.

The articles observes:

A core argument of this article is that the use of PMSC further entrenches a costly and unsuccessful approach to dealing with drugs. The prohibition regime is now more than 50 years old, and the war on drugs has been officially waged for more than 40 years, yet the flow of narcotics has continued largely unabated.

Yet failure is not cheap. Between 2005 and 2009 the US government spent more than $3.1 billion on counter-narcotics contracts in Latin America.

Beyond Colombia

Colombia is hardly the only country where antidrug work increases contractors’ bottom lines. In 2015, the Guardian reported that Academi, the renamed Blackwater, earned over half a billion dollars from the Pentagon effort to eradicate Afghan narcotics, some 32% of the $1.8 billion in contracting money the Pentagon has devoted to the job since 2002.

And just like security and logistics contractors working in Iraq and Afghanistan, counterdrug contractors have engaged in their share of fraud, waste, and abuse. In 2014, The Washington Post reported that Sen. Claire McCaskill (D-Mo.) called for a review of counternarcotics contracts, after a Pentagon investigation found that Northrop Grumman and one of its subcontractors improperly charged the U.S. government more than $100 million in “questionable” costs.

The report by the Defense Department’s inspector general found $21.7 million in “potentially excessive payments” for overtime from October 2007 to March 2013 by Falls Church-based Northrop and DynCorp. The problems included one employee who billed $176,900 for 1,208 hours in a 12-day period—or more than 100 hours a day.

The inspector general also found that DynCorp, a subcontractor, had 360 employees working on the contract who did not meet the specified labor requirements, leading to $91.4 million in questionable costs.

In one case, a program manager who billed 5,729 hours over a year and a half, totaling $1.2 million, did not have a bachelor’s degree, which was a requirement of the position. Another employee billed 16,270 hours worth $2 million over five years but was qualified for only 161 hours of the work.

This is not a one-off example. A 2010 hearing held by Sen. McCaskill revealed that the Defense Department actually outsourced their audit to a private contractor for the hearing.

A far more scandalous allegation surfaced last year when The Nation reported that according to the Colombian press, “US military soldiers and contractors had sexually abused at least fifty-four children in Colombia between 2003 and 2007 and, in all cases, the rapists were never punished—either in Colombia or stateside.”

This case is back in the news in Colombia because it was included in a report issued by the Comisión Histórica del Conflicto y sus Víctimas—a commission established to write an overview history of Colombia’s armed conflict. …The Comisión Histórica doesn’t name the private security firm involved. The Colombian press, however, identifies DynCorp, a Virginia-based contractor.

Nothing has been legally proven, but if the charges are true it would be a big blow to the already tainted reputation of DynCorp, Several DynCorp employees were involved in a sex-slavery scandal in Bosnia in 1999, and were accused of rape and the buying and selling of girls as young as 12. That sordid story was the subject of the 2010 movie, The WhistleBlower.


About the Author

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David Isenberg is an independent researcher and writer on U.S. military, foreign policy, and national and international security issues. He a senior analyst with the online geopolitical consultancy Wikistrat and is a U.S. Navy veteran. He is the author of Shadow Force: Private Security Contractors in Iraq. His blog, The PMSC Observer, focuses on private military and security contracting, a subject he has testified on to Congress.



2 Responses to When Crime Pays for Private Military Contractors

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  1. avatar John says:

    These outfits are just extensions of the CIA and Pentagon elites.
    The fact is all the players involved are playing both sides of the fields of drugs.
    Both supply and opposition to supply.
    What other properly organised industries does the US have any more?
    Most US manufacturing has been NAFTA’ed out of the country.
    All the US can do is grow service industries, which includes law enforcement and prisons.
    Hollywood and TV products revolve largely around violence and crime, do they not?
    Don’t get me started on how these industries provide resources for zionist advisers too.

  2. avatar Dan Straub says:

    I’ve got a bit of experience in the counter-narcotics business spending some time off the coast of Central & South America on a Fast Frigate (FFG). (Our mission was not entitled “counter-narcotics,” it was called “Combating-Transnational Organized Crime,” but cocaine turned out to be the prime suspect.) Now that the U.S. Navy frigates are no longer in commission, there may be a resource gap…and I have an idea that private security firms are ready and willing to fill that gap.

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