guardian.co.uk,
Paul Harris in New York, Monday 5 September 2011
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| A US homeland security helicopter patrol over New York in 2003. Photograph: US Coast Guard/AFP/Getty Images |
Charles
Smith always enjoyed visiting US troops aboard. Though a civilian, he had
worked for the army for decades, helping to run logistical operations from the
Rock Island arsenal near Davenport, Iowa.
He helped
keep troops supplied, and on trips to Iraq made a point of sitting down with
soldiers in mess halls. "I would always ask them: what are we doing for
you?" Smith told the Guardian.
Smith
eventually got oversight of a multibillion-dollar contract the military had
struck with private firm KBR, then part of the Halliburton empire, to supply US
soldiers in Iraq. But, by 2004, he noticed problems: KBR could not account for
a staggering $1bn (£620m) of spending.
So Smith
took a stand. He made sure a letter was hand-delivered to KBR officials,
telling them that some future payments would be blocked. According to Smith,
one KBR official reacted by saying: "This is going to get turned
around."
A few days
later, Smith was abruptly transferred. The payments he suspended were resumed.
"The emphasis had shifted. It was not about the troops. It was all about
taking care of KBR," he said. Eventually, Smith left the army. When he
told his story to the New York Times, the paper ran an editorial. "In the
annals of Iraq war profiteering, put Charles Smith down as one of the
casualties," it wrote.
What Smith
had blundered into is one of the most disturbing developments of the post-9/11
world: the growth of a national security industrial complex that melds together
government and big business and is fuelled by an unstoppable flow of money. It
takes many forms. In the military, it has seen the explosive growth of the
contracting industry with firms such as Xe, formerly known as Blackwater, or
DynCorp increasingly doing the jobs of professional soldiers. In the world of
intelligence, private contractors are hired to do the jobs of America's spies.
A shadowy world of domestic security has grown up, milking billions from the
government and establishing a presence in every state. From border fences that
don't work to dubious airport scanners, spending has been lavished on security
projects as lobbyists cash in on behalf of corporate clients.
Meanwhile,
generals, government officials and intelligence chiefs flock to private
industry and embark on new careers selling services back to government.
"The
creation of this whole industry is a disaster. But no one is talking about
it," said John Mueller, a professor at Ohio State University and author of
Overblown: How Politicians and the Terrorism Industry Inflate National Security
Threats and Why We Believe Them.
Contractors
form huge parts of the lines of supply for American troops. But they also fly
planes, provide security and take on big infrastructure projects. Next year, as
US combat troops draw down from Iraq, an estimated 5,000 private contractors
will provide security on behalf of the US state department. That's a deployment
roughly the size of an army brigade.
Worldwide,
the ratio of contractors to US soldiers in uniform is about one-to-one. During
Vietnam it was one-to-eight. It has speeded up since 9/11. "In the last 10
years, spending at the Pentagon has shifted enormously to contractors,"
said Pratap Chatterjee, a fellow at the Centre for American Progress and
industry expert.
That shift
has a cost. Incidents of malpractice and fraud by contracting firms – whom
critics call modern-day mercenaries – are legion. One of the most infamous was
the Baghdad battle involving Blackwater that saw 17 Iraqi civilians killed in
2007. But that was just one event. An AP investigation in 2010 looked at
incidents involving more than 200 contractors worldwide that ranged from
drinking to sexual misconduct to a gunfight outside a nightclub in Haiti.
Oversight
of contracting is weak or opaque – and is often contracted out, too. One recent
investigation found $4.5bn of contracts awarded to firms with a history of
problems or which had violated laws. A federal audit found an oil firm had
overcharged the Pentagon by $204m for fuel in Iraq.
A similar
process has hit the intelligence world. An industry has sprung up of
recruitment firms that service the intelligence community. A search on website
IntelligenceCareers.com – headed by former army intelligence officer William
Golden – found highly paid jobs in Iraq and Japan as well as all over the US.
Many required "top secret" security clearance. Of those private firms
with a top secret clearance, more than a quarter came into being since 9/11.
The
benefits are obvious to employees. Pay is higher and some companies have
offered sign-on bonuses or free cars. It is estimated that contractors from
more than 100 firms make up a third of the CIA.
And as the
rest of America suffers recession, this is an economic boom. The US
intelligence budget last year was $80bn, more than twice 2001 levels.
When CIA
agent Raymond Davis was arrested in Pakistan after shooting dead two men in
Lahore it caused a huge diplomatic spat. But what went mostly unrealised was
that Davis, engaged to work in one of the world's most dangerous places, was a
contractor.
Those
cashing in on the international "war on terror" pale beside the
security boom that is taking place in the US itself. Across America, new
organisations sprang up in the wake of 9/11 as the flow of money was turned on.
Nine days after the tragedy, Congress committed $40bn to fortify America's
domestic anti-terror defences. In 2002, the figure was a further $36.5bn. In
2003 it was $44bn. More than 260 new government organisations have been created
since 2001. The biggest of all is the Department of Homeland Security, whose
workforce is 230,000-strong and awaiting new headquarters in Washington, which
will be the biggest new federal building since the Pentagon. It is rising up on
the grounds of a former asylum.
Since 2003,
the DHS has distributed more than $30bn to state and local governments to spend
on security and counter-terrorism. The Washington Post last year produced an
exhaustive survey called Top Secret America. It revealed there are now 1,271
government organisations and 1,931 private firms related to counter-terrorism,
intelligence or homeland security in some 10,000 locations around the US. In
the Washington DC area, they have built enough new office space to add up to
three Pentagons. A startling 854,000 Americans now hold top secret security
clearances, around 250,000 of them in the private sector.
Among the
things created are Fusion Centres. There are around 70 of them across the US,
set up to allow local law enforcement to collect data on "suspicious
activity". Critics claim there is little for them to do, and point to
mistakes. The North Texas Fusion Centre, for example, once issued a warning of
a "significant" threat posed by a harmless local Muslim civil rights
group. Civil rights activists have also complained they threaten data privacy
laws and bring in military and corporate interests into policing civilians.
"It is odd to create a whole intelligence apparatus in a decade. One that
exists only because of bureaucratic inefficiency and not national security
needs," said David Rittgers of the Cato Institute. What security impact
does he think they have had? "None. We could abolish Fusion Centres
tomorrow. Any intelligent analysis would show we don't need these things."
Airport
scanners are another big business that has sprung up since 9/11. Tech firm L-3
has won nearly $900m in business from the Transportation Security
Administration. L-3's full-body scanners, which cost around $200,000 each, are
being rolled out across the US, boosted by the unsuccessful terror attack in
2009 by a would-be plane bomber who put a device in his underwear. Yet a report
by the Government Accountability Office found that it was "unclear"
if scanners could have detected the bomb. "They have vastly overbuilt the
airport security complex," said Chris Calabrese, a lawyer with the
American Civil Liberties Union.
There is
precedent though. Prior to the body scanners, so-called "puffers"
were tried. They used a gust of air to detect particles on clothing. After
spending $20m, the TSA abandoned the scheme in 2007. Though that pales in
comparison with the $1bn given to Boeing to build a hi-tech wall on the border
with Mexico.
That
scheme, created in part out of a fear of terrorists crossing over, was scrapped
with just 53 miles of it built.
One of the
main reasons for the ongoing gold rush in national security lies on "K
Street" in Washington, the busy downtown thoroughfare is where many
lobbying firms have their headquarters, clustered around the fountain of
national security funding like bees around a hive. "Wherever there is
government money in that amount, there is going to be a swarm of lobbyists.
They are very active players," said Michael Beckel, a researcher at the
Centre for Responsive Politics watchdog.
Spending on
lobbying by the scanning industry has doubled in the past five years. Lobbyists
for the industry pull out all the stops, too: they once rolled scanners into
the Capitol in a bid to persuade lawmakers of their usefulness.
But more
important than the millions spent by businesses involved in national security
is who is doing the lobbying. The border between lobbying firms and the
government departments they seduce is called simply the "revolving
door". A startling eight out of 10 lobbyists for the scanner industry come
from a previous career in government or congress.
Among firms
specialising in intelligence work, the picture is the same. Booz Allen once
hired James Woolsey, a former head of the CIA. Northrop Grumman hired former
NSA director William Studeman. CACI hired Barbara McNamara, an NSA deputy
director. It is the same in the military, where defence firms snap up retiring
generals as advisers and lobbyists. Between 2004 and 2008, a startling 80% of
retiring three- and four-star officers went to work in the private sector.
All of this
could perhaps be understood on grounds of cost. After all, much of the original
justification for contracting and bringing the private sector into national
security was that it was cheaper. But this is not true. A 2008 survey of the
DHS found that contractors made up 29% of staff, but some 49% of the budget.
"By all means spend money on national security, but spend it wisely,"
said Mueller.
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