According to the Wall Street Journal, US private federal contractors now total more than 7.5 million, which is four times greater than the federal workforce itself. With federal contracting expenditures approaching half a trillion dollars a year, having doubled during this decade, the US national debt has now surpassed $9 trillion for the first time ever. Outsourcing is supposed to save money, but the New York Times found that less than half of the government’s private contactor actions in 2005 were even subject to open competition.
The Wall Street Journal reports that more than 40 cents of every dollar paid by US taxpayers now goes to private contractors, performing functions including oversight, security and tax collection. Even the most secret and politically sensitive govt. jobs, such as gathering intelligence, legal compliance, budget preparation, and counting the votes in elections are increasingly contracted out, despite a law prohibiting the outsourcing of “inherently governmental” duties. The US government spent $43.5 billion on intelligence gathering operations in 2007, of which about 70% was paid to contractors. Private contractors handle sensitive personal data, take minutes at top-level meetings on national security matters, review and oversee the performance of other contractors, and even help the govt. to determine what services it needs from contractors. The largest source of govt. contracting growth has been the burgeoning national security industry, most notably at the Department of Defense and the newly created Dept. of Homeland Security. Christopher Hellman, fellow at the Center for Arms Control and Non-Proliferation, reports that while last year the total US federal budget was roughly $2.8 trillion dollars, $1 trillion of that was spent on security.
According to an October 24th New York Times report, “The Bush administration has doubled the amount of govt. money going to all types of contractors to $400 billion [in 2006; up from $207 billion in 2000], creating a new and thriving class of post-9/11 corporations carrying out delicate work for the government. But the number of govt. employees issuing, managing and auditing contracts has barely grown.” Critics contend that a lack of accountability, and the ensuing fraud and waste engendered by present govt. operations, undermines the core principle that democratic governance is built on a social contract whereby those elected act for the common interests of the people they are supposed to represent.
Vedrørende Blackwater:
Blackwater – a case of lawless disgrace
The September 16, 2007 killings of 17 Iraqi civilians in Baghdad by private security guards of the US govt. provides a useful case study of the pitfalls of outsourcing traditional military and other governmental functions.
A lawsuit filed in US federal court on November 26th on behalf of five Iraqis who were killed and two who were injured during the shootings accuses an estimated dozen Blackwater bodyguards of ignoring a direct order to stay with the official they were assigned to protect, and, under the influence of steroids, going on a crazed shooting rampage in a section of Baghdad known as Nisoor Square.
Investigations by the US military, FBI and also the Iraqi government found no evidence in support of claims by Blackwater employees that they were fired upon and were therefore acting in self-defense. The US Army investigation determined that there was “no enemy activity involved” and described the killings as a “criminal event.” There is also evidence that Blackwater employees tampered with the crime scene in a cover-up effort. Yet Blackwater continues to receive lucrative govt. contracts and the State Dept. reportedly gave bonuses for “outstanding performance” to officials with direct oversight of Blackwater. How can this be?
Blackwater was founded in 1997, but its security division was incorporated in January 2002, just before the US invasion of Afghanistan, which led to its first contract, with the CIA, in April 2002. One of the key players involved in that contract and securing Blackwater’s role as the leading mercenary company of the Bush administration was Buzzy Krongard, then executive director of the CIA. Buzzy, a friend of Blackwater CEO Erik Prince, went to Kabul in April 2002 and said the agency’s new station there was sorely lacking in security. That same month, Blackwater landed a $5.4 million six-month no-bid contract to provide 20 security guards for the Kabul CIA station, and Blackwater was off and running. Erik Prince has made six-digit contributions to Republican candidates and is well-connected with right-wing power brokers, but maintains that these contacts had nothing to do with Blackwater’s growth during the Bush years from a tiny start-up to a billion dollar federal contractor.
Buzzy Krongard’s brother, the top State Department official charged with investigating allegations of fraud, waste and abuse, has the duty to oversee Blackwater. Inspector General Howard Krongard resigned on Jan. 15th amidst charges of perjury and obstruction of justice in impeding investigations of fraud by contractors in Iraq. The chairman of the House oversight committee investigating fraud in Iraq finds that “the State Dept. is acting as Blackwater’s enabler.” Just what is being enabled?
In 2003, Blackwater was awarded a $27 million no-bid contract to provide the bodyguards for US staff in Iraq. A year later, the State Dept. expanded that contract to $100 million. Blackwater now holds a contract worth $1.2 billion. Over the past 4 years, State Dept. spending on private security firms has risen by 400%, to $4 billion a year, yet few officials act to oversee the contracts. Private contractors are paid up to 7 times what US soldiers are paid, yet, according to the Times, “The State Dept. has said that it will continue to rely on contractors because, for now at least, it has no choice… the military does not have the trained personnel to take over the job.” An official inquiry by the Special Inspector General for Iraq reconstruction found that the State Dept. was unable to say what is was receiving for much of the money given to DynCorp (whose employees were implicated in sex crimes committed in the 1990s in the Balkans), the second largest private contractor in Iraq and Afghanistan over the past 3 years.
Ultimately, Blackwater continues to prosper because the State Dept. and the armed forces have become depleted and anemic. The government has ceded so many core military responsibilities to firms like Blackwater and Halliburton that it can no longer afford to fire them. An early 2007 Wall Street Journal report found that due to its increasing tendency to outsource, the US govt. is rapidly losing its expertise and competence in vital areas such as security and defense, leading to what the author calls “the outsourcing of its brain.”
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