WikiLeaks XXV: Security Firms in Iraq Making a Killing (Figuratively in This Case)

Iraq private securityAccording to an embassy cable written earlier this year, and released last week by the Guardian as part of its WikiLeaks coverage, private security firms in Iraq’s southern Basra province have been making a figurative killing protecting foreign investors throughout the region.

This isn’t exactly news. Nor is the fact that some private security firms

also offer more comprehensive services, including business intelligence, geopolitical risk management, crisis management, and kidnap/ransom strategies. Typical services in Basrah include armed escort to oil fields, downtown Basrah, or remote construction sites. Most firms boast of employees with military or Special Forces background, and/or energy or engineering expertise. Prices for specific services are hard to gauge, dependent as they are on the number of people assisted, visit location, length of contract, and other services provided.

The cable notes that while “prices for specific services are hard to gauge…they do not come cheap.” To be sure, the prices are staggering:

To escort a single executive for a four-hour, roundtrip from COB Basrah to South Oil Company costs around USD 6,000. (Note: A typical trip would include four security agents, drivers, and three or four armored vehicles. End note.) A day trip to the Port of Umm Qasr and back for two engineers could cost around USD 12,000.

But more interesting than the exorbitant fees charged by the security firms is the cable’s discussion of the changing “composition of the work force of many security companies.” The embassy dispatch cites an anonymous source that notes the Iraqi government’s anxiety around getting ‘“rid of all the white faces carrying guns’ in their streets.” They’re not alone. “Many local security company reps openly acknowledge that a more ‘Iraqi face’ is safer as well, as it draws less attention.”

The cable goes on to note that

Most, if not all, of these security firms are already Iraqi-licensed companies. (Note: While legally they may be Iraqi firms, they are still managed by expats, usually British nationals. End note.) These firms were once largely staffed by expats from the U.K. or U.S. Most of them today have between 70 to 80 per cent local staff. XXXXXXXXXXX country manager XXXXXXXXXXXX said that currently most Iraqi employees are drivers or junior security guards. In the near future, he wants to see them move into full management. Many of the current expat managers and trainers would move into the background areas of training and management. The PRT also expects that new local security companies will be formed.

The cable makes no mention from which ranks these local personnel are drawn. It would be interesting to know what, if any, efforts have been made by private firms to recruit highly skilled fighters from the Saddam Hussein regime, or former militiamen left over from the civil war that tore Iraq apart in 2006-07. Given some companies’ past records hiring former South African death squad operators, Pinochet-era military men from Chile, and thugs from Slobodan Milosevic’s regime in Yugoslavia, you might think that American officials would be curious to know whether former enemy combatants were now being paid to protect Western interests.

And they were. While the Basra office, where the cable originated from, concluded with an optimistic forecast of increasing Iraqification of private security personnel in the region, not everyone was sold. The cable received comment from the Baghdad embassy as well, which noted that

It is too early to be able to gauge whether the security environment in Iraq will allow effective employment of local nationals as members of Protective Security teams supporting private industry activities…

RSO believes that building a labor pool of well-vetted local employees in Iraq’s current environment is difficult. RSO efforts to vet local nationals for employment is labor intensive, often subjective and many times proves to be too difficult for many local national employees to complete successfully. Additionally, USG efforts to train local nationals in Protective Security tradecraft to ensure technical proficiency appears to be intensive in labor and time required, with mixed results.

But perhaps the most jaw-dropping snippet from the cable involves Dick Cheney’s Halliburton, which apparently made no effort to hide its displeasure at being fleeced by private security companies in the country’s southern reaches. In a moment of tragicomic irony, the cable reports that a

Halliburton Iraq country manager decried a “mafia” of these companies and their “outrageous” prices, and said that they also exaggerate the security threat. Apart from the high costs for routine trips, he claimed that Halliburton often receives what he says are “questionable” reports of vulnerability of employees to kidnapping and ransom.

Imagine that.

If you get the sense that Halliburton is experiencing outrage at being beaten at its own game, you aren’t too far off. Of the $31 billion in contracts awarded to the multinational since the American invasion in 2003, hundreds of millions of dollars have been lost in exactly the sort of scams Halliburton later cried foul about when they themselves became victims. According to Politifact,

Government officials have raised many questions about KBR’s fulfillment of its contracts, everything from billing for meals it didn’t serve to charging inflated prices for gas to excessive administrative costs. Government auditors have noted that KBR refused to turn over electronic data in its native format and stamped documents as proprietary and secret when the documents would normally be considered public records. Over the course of several years, the Defense Contract Audit Agency found that $553 million in payments should be disallowed to KBR, according to 2009 testimony by agency director April Stephenson before the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan.

In retrospect, the Halliburton official may have been wise to keep his mouth shut and not attract any more attention to his company’s use of private contractors. Three months after the cable was written, the United States government brought suit against former Halliburton subsidiary Kellogg Brown and Root for use of private security protection in Iraq. KBR charged the bill to the United States Army, a direct violation of its government contract which expressly stipulated that the American military would provide all the company’s security needs in Iraq. In all, some thirty former Halliburton subsidiaries were alleged to have intentionally billed the American taxpayer for services to which they could claim absolutely no entitlement.