The title of our session today is "Militarism, Neoliberalism and Capitalism," or is it neoliberalism, capitalism and militarism? Either way it is a lot of isms. I thought that I would try and keep my remarks pretty concrete by talking about a growing trend that demonstrates the nexus of the three- U.S. military power and its brutal projection abroad, the force wielded by U.S. economic power, and the trend towards fewer rules, less regulation, less oversight, less transparency, put simply--the impunity with which economic and military power are wielded.

There are lots of examples of this nexus, but one I have been focused on recently is the rise of private military corporations.

You know, Secretary of Defense Rumsfeld is in Iraq right now, and Reuters reported yesterday that he canceled what was to be a major address to the troops& he said it was because his schedule was too tight, but I wonder if he knew that he would not be facing a friendly cheering hoo-hahing audience. U.S. troops want to come home. More American men and women are being shipped home in body bags from the Iraq desert--victims of sniper attacks, bombs, fire fights, accidents, suicides and the random violence of boredom and hopelessness. Opposition to this war grows even among the yellow ribbon crowd. Our peerless leaders, even Rumsfeld, understand that America is stretched to the breaking point over this war.

There are about 147,000 U.S. troops positioned in the Persian Gulf region, about 10,000 in Afghanistan, and smaller deployments throughout the world. The US government threatens at least one new country almost every day, rotating between Iran, Syria and North Korea (and throwing in Cuba occasionally, just to keep everyone on their toes). At the same time, US troops in Iraq are homesick, scared, bored, and increasingly vocal in their frustration at the string of broken promises from their superiors about when they will be able to go home.

It is hard to find accurate information about how many Americans (much less how many Iraqis) have died in this war.

Iraq Body Count reported that the number of civilian deaths in Iraq ranges from 6,113 to 7,830. Military.com reports that as of August 28 a total of 281 U.S. soldiers have been killed since the start of the invasion-that includes 143 since major fighting was declared "over" on May 1. And estimated 1,212 have been wounded.

Faced with all of this, it is not surprising that an administration headed by a silver spooned business school graduate, and staffed by former CEOs and draft dodgers, would come up with a private sector solution to fill the Pentagon's need for troops on the front line while at the same time protecting themselves from increased criticism about American men and women being killed and injured there.

Private military corporations--or PMCs as they are called--are a perfect private sector solution to a number of prickly problems the White House and Pentagon face as they wage endless war throughout the world--literally in every corner of the war. They dampen domestic opposition to war by removing (or promising at some point to remove) the clarion call of "bring our troops home" and taking troop deaths off the front page. They resolve the issue of compulsory military service, and offer a way around Congressional oversight (which is weak, but better than nothing) of military affairs.

Private militaries are not a new idea. But in the post-Cold War era when massive standing armies can no longer be justified (the United States has cut its military force from 2 million to about 1.4 million in the last ten years), and the post-9-11 world when the administration sees new threats at every turn, all of a sudden private military corporations are a growth industry.

P.W. Singer, a Brookings Institute Fellow who recently authored "Corporate Warriors: The Rise of the Privatized Military Industry," notes that there are some 20,000 employees of private military corporations (PMCs) working as part of the US/UK occupation force in Iraq and the surrounding region. That is one private military employee for every ten soldiers. During the first Gulf War Singer estimates that ratio was 1 to 100.

Twenty years ago there were ten PMCs operating in the United States, now there are more than 30. And recently some have been absorbed into Fortune 500 companies like L-3 Communications (the company of former Iraq administrator Jay Gardner) and Northrop Grumman (which owns the Vinnell Corporation). Between 1994 and 2002, the Pentagon entered into 3,000 contracts with private military firms, for a total of $300 billion in business.

In the last decade, these companies have grown from marginalized and maligned mercenaries to a thriving industry with its own trade association, called the International Peace Operations Association, and more than a $100 billion in annual revenue.

Private employees now fill critical roles for the United States military, teaching high tech warfare skills to communications, performing aerial surveillance, logistical support, battlefield planning and training. Civilians contracted with PMCs fly fighter planes and perform routine maintenance on a wide array of military platforms and weapons systems. They also deliver mail and empty trash cans. At this point, the Pentagon cannot not use PMCs--troops rely on PMCs for maintenance of 28% of all weapons systems.

The Bush administration would like to see that increased to 50%. Washington has wholeheartedly embrace privatization as cheaper, faster and more efficient and has sought to turn over a whole swathe of government operations to private companies. In fact, President Bush's "Competitive Sourcing Initiative" has identified 850,000 federal jobs that could be turned over to the private sector.

And we all know how great the private sector does: Congressman Henry Waxman (D-CA), who is one of our few lawmakers who is taking corporate war profiteering on, says that privatization is " clearly a trend under this administration and it concerns me because often the privatization of government services ends up costing the taxpayers more money rather than less."

But the benefits promised in privatization have not been quick to materialize. Just ask the men of the Calvary Regiment in east Baghdad. Months after their superiors signed $8 million contracts with Kellogg Brown and Root (a subsidiary of Vice President Dick Cheney's former company Halliburton) to provide troop housing; this army unit (and many others) is still living in hot cramped temporary shelters. It turns out that Kellogg Brown and Root can't pay the skyrocketing insurance rates needed to send civilian contractors into the war-zone to erect the housing units.

Bechtel, the San Francisco services giant, is a great example of why private companies do not always do a better job than government contractors. In mid April the US Agency for International Development granted Bechtel an initial 18-month contract worth up to $680 million to repair power generation facilities, electrical grids, water and sewage systems and airport facilities as part of the rebuilding effort in Iraq. As criticism about the secretive nature of the bidding process mounted, USAID officials responded that Bechtel is the best company for the job. But it only takes a quick glance at the company's track record to contradict these claims. But soon after Becthel arrived, it said its initial estimate of $680 million was too low, that it would cost them at least 24 times that to do the job. That is more than $16 billion.

This must have sounded familiar to the people of Boston who we promised a sunken highway through down town for $2.5 billion in 1985, only to be slammed with a bill for $14.6 billion and a bill unfinished hole in their city. And they are not alone. The state of California is still paying for Bechtel's big boo boo at a San Diego nuclear power plant. The company installed one of the reactors back to front.

Yeah. The private sector does great work. It is so much more efficient.

With these and countless other examples it becomes clear that Bechtel did not win the Iraq construction contracts because of its stellar work record, but because of its star-studded board of directors and other political connections. Jack Sheehan, a senior vice president at Bechtel, is a member of the Defense Policy Board, an advisory board that enjoys close relationships with the Pentagon and the White House. Another senior vice president, Daniel Chao, serves on advisory board of the US Export-Import Bank. And just two months before the war, President Bush appointed Riley Bechtel, the 104th richest man in the world and the CEO of Bechtel, to his Export Council where he is now offering advice about how to create markets for US companies overseas.

Clearly, PMCs are not more efficient and they not cheaper. But they do serve a purpose at a time when Americans are critically conscious of what the war is costing in terms of lives and blood, bringing in private military personnel seems like one way of dampening opposition to war in the United States.

As the administration faces growing opposition to the war from military families and the troops themselves, and the deaths of US military personnel in Iraq is the top news on every channel, one group being targeted by the armed Iraqi resistance is escaping mainstream media attention. Civilians working for private military corporations in Iraq and elsewhere are being killed, but it is not creating a media storm or demonstrations in the street.

On 5 August an American civilian, working for Kellogg Brown and Root (a subsidiary of Halliburton), was killed in Iraq as he drove his mail truck near Tikrit. There was very little coverage.

In May of this year the Vinnell compound in Saudi Arabia was bombed in a terrorist attack. Nine employees were killed and scores more injured. There was very little coverage. Vinnell is a subsidiary of military contractor Northrop Grumman and is under contract to the US army to provide training services to the Saudi Arabian National Guard.

This strategy has worked in the past. In the last ten years, eight DynCorp employees have been killed in Colombia and many more have been taken hostage. These stories rarely make the evening news. A former US military officer, speaking off the record with the Dallas Morning News about the role of private military contractors in Colombia, emphasized this lack of attention to casualties as a major benefit of outsourcing military operations. He said that the "exposure risks for Uncle Sam" are greatly reduced when private contractors instead of US troops are used. "The life is certainly just as important, whether it's a contract employee or a soldier. But exposure-wise, whoa, it's much less... If something goes wrong, it's important for Washington to be able to say, 'there wasn't a soldier killed.'"

Daniel Nelson, a former professor of military-civilian relations at the Department of Defense's Marshall European Center for Security Studies, notes that private military corporations help the administration "create what we used to call 'plausible deniability'" about controversial missions.

In the US it is pretty easy to deny the use of private military corporations when even Congress has no idea how many PMCs are operating where and what they are doing. The Pentagon is authorized to sign contracts with PMCs for up to $50 million without seeking Congressional approval, and without even notifying Congress. Because so many different departments are signing contracts all the time, the Pentagon itself does not know how many PMCs it has on contract at any given moment.

The Times Picayune reported in early August that because of the overlapping contracts and multiple contracting offices the Pentagon cannot keep track of how much money they are spending on private military contractors. White House Budget Director Joshua Bolten recently admitted that he could not even estimate the costs of keeping troops in Iraq for fiscal year 2004, which begins on 1 October.

So, this is not a good deal for the American people, for soldiers in the war zones, for the peace movement, or for anyone else, for that matter. But it is a good deal for the companies involved--DynCorp, MPRI, Kellogg Brown and Root, etc. And they are so intertwined with power in this country as to be wholly indistinguishable, and if they profit from war, war we will have&.

In light of this, we have our work cut out for us. In the streets of Cancun, in the boardrooms, and corporate palaces of the powerful, in our homes and with our buying power, by withholding the portion of our income taxes that is the fire that fuels the injustices that we detest and oppose, with our bodies, our vision, our dreams and our lives and with our votes, we must oppose this powerful nexus of militarism, capitalism and neoliberalism, and create the alternative in its shell. Not easy work, but life work, work worth doing and possible together.

=====================
Frida Berrigan
Senior Research Associate
World Policy Institute
66 Fifth Ave., 9th Floor
New York, NY 10011
ph 212.229.5808 x112
fax 212.229.5579

The Arms Trade Resource Center was established in 1993 to engage in public education and policy advocacy aimed at promoting restraint in the international arms trade.

To sign up for our monthly email Updates, please contact Frida Berrigan.