Civilian Warriors: The Inside Story of Blackwater and the Unsung Heroes of theWar on Terror (37 page)

Today, having seen no appreciable shift in the “
transparency and accountability needed for good governance
” that President Obama had pledged to achieve, there are many who remain skeptical about how the new contracting gold rush will play out in Iraq and, soon, in Afghanistan, when U.S. troops withdraw from that theater by the end of 2014. “
We’re very, very worried
,” Dov Zakheim, a member of the Commission on Wartime Contracting, told Congress. “I can give you the worst-case [scenario]. The worst case is you have another Nisour Square thing, which is to say . . . everything spins out of control.”

My wild ride with Blackwater came to an end in December 2010. Six months after I put it up for sale, Xe Services was purchased by USTC Holdings, a Los Angeles–based investor consortium led by private equity firms Forté Capital Advisors and Manhattan Growth Partners.

Soon after, a headhunter recruited Ted Wright, then the president of a business unit at enormous contractor KBR, to be Xe’s new CEO. He quickly began remaking Blackwater in that company’s image, changing more than 80 percent of the instructors we’d had in Moyock and moving the company’s Tysons Corner offices inside the Beltway, to Arlington, Virginia. He hired a New York–based public relations firm to rebrand the company again: Xe Services became
ACADEMI.
Wright said the company’s new goal
was to be more “boring.” For a while, it seemed as if every time I opened the newspaper, he was ripping me or the previous management team.

Nonetheless, some of ACADEMI’s strategic moves have seemed like familiar steps along the trail we originally blazed.
Under Wright, the company has expanded
its training programs across Mexico, Africa, and Central Asia, and taken on a $17.6 million contract to provide intelligence analysis for the Department of Defense’s Counter-Narcoterrorism Technology Program in Afghanistan.

Then, in May 2012,
ACADEMI quietly bought out International Development Solutions
, the firm Xe partnered with in order to win the West Bank portion of State’s latest WPS contract. Getting back in the department’s good graces will require changing “the culture” of the company, Wright told AOL’s
Defense
blog at the time—though he also acknowledged the same difficulties we ran into. In telling the site that all ACADEMI contractors would have to sign a new corporate code of conduct, for instance, he posed this hypothetical about a worker overseas: “
He’s got a gun in his hand
, he’s doing a dangerous job—how do you control him? I can’t. He’s 8,000 miles away. What I can do is give him a code of conduct.”

I nearly shouted at my computer screen when I read that. “Blackwater’s men
all
signed codes of conduct!” I wanted to yell. “It was the size of a
book
!”

How much Wright’s particular paperwork will rein in that handful of contractors who make bad decisions remains to be seen. But if and when Wright can convince State to embrace the current incarnation of Blackwater, the new CEO imagines the company heading right back to where the previous ownership left off: “
I think eventually, we’re going to get a license
,” he told the
Wall Street Journal
. “We’re going to do business in Iraq.”

•   •   •

I
n truth, I think it’s a smart plan. Government clients would be wise to accept them. The situation on the ground in Iraq—and in similar
war zones around the world—is crying out for innovations by private enterprise. Blackwater clearly proved how well entrepreneurs can fill gaps in military capabilities. What the U.S. government needs to do now is incorporate PMCs for jobs far beyond mail carriers and bodyguards. It’s the surest way to bring sanity back to our defense spending.

The
United States spent more than $800 billion
for the nine-year Iraq War, for instance, yet the idea of success there seems as intangible as ever. Within days of the United States withdrawing its troops at the end of 2011, Shia prime minister Nouri al-Maliki arrested the bodyguards protecting his vice president, Tariq al-Hashemi, a Sunni; al-Maliki accused them of
spearheading a Green Zone car bombing
intended to assassinate him. Al-Hashemi, wanted in connection with the plot, fled to Turkey—at which time his fellow Sunni lawmakers boycotted the Iraqi parliament for a month. By late 2012,
al-Hashemi had been sentenced in absentia to death by hanging
.Al-Maliki had drawn closer to the Shias in the hornet’s nest that is the Iranian capital of Tehran.

Frustrations in Iraq spilled into the streets as supporters launched new waves of sectarian violence. The prospect of civil war there still looms large on the horizon—I suspect Sunni radicals won’t stop until al-Maliki is gone—raising the possibility that international forces could be drawn
back
into the quagmire. It’s hard to argue that the United States “won” anything of real value in the conflict, and that’s important for more than just discussions of strategy.

One doesn’t have to have launched a business to understand that while the military has made great strides in minimizing the human toll of conflict, the Pentagon’s sense of fiscal responsibility has gone in exactly the opposite direction. The United States pours out more on defense—
almost $700 billion a year
—than
the next nineteen countries combined
,
some 40 percent of which goes to overhead costs
. Some estimates peg the secretive
number of American military bases abroad
at 900 (
others suggest it’s closer
to six hundred),
with
American troops stationed in some 150 countries
. And that doesn’t include another $80 billion spent each year by government intelligence organizations.

I still regularly see examples of misguided big-war thinking today: In the decade after the attacks of 9/11, for instance, the DoD
added a hundred new admirals and generals
to its ranks—bringing the total to nearly a thousand. The
Navy now has more admirals (331
as of May 2012, according to the U. S. Naval Institute)
than ships for them to command (282
). And in 2010, then defense secretary Robert Gates said that an internal DoD review found that “
in some cases the gap between me and an action officer
may be as high as thirty layers.” (
Newsweek
pointed out that in 1948, when the Cold War began, the secretary of defense had a deputy and a
three-man staff that oversaw fifty employees
. Gates’s twenty-six political appointees ran a staff of three thousand, and he was a defense secretary who
reined in
excesses.)

Since 1995, the Government Accountability Office has designated the DoD’s financial management “high risk,” thanks to weak oversight that “adversely affect[s]
DoD’s ability to control costs
; ensure basic accountability; anticipate future costs and claims on the budget; measure performance; maintain funds control; prevent and detect fraud, waste, and abuse; [and] address pressing management issues.” An organization with
twenty-five hundred lines in its budget
can’t react and adapt to changing dynamics in Iraq, Afghanistan, or anywhere else. Pentagon spending has morphed into a crushing burden on the national budget that will only worsen until politicians—mostly Republicans—finally acknowledge they have to explore cheaper, better, smarter ways of using not only our military, but also the multinational peacekeeping alternatives.

We’re clearly not there yet: In 2013, a wave of automatic cuts commonly known as “sequestration” went into effect, aiming to whack back defense spending that more than doubled in the decade after 9/11 (
from $294 billion to $716 billion
). California Republican
representative Howard “Buck” McKeon, the chairman of the House Armed Services Committee, warned the
upcoming cuts would be “crippling
.” Former defense secretary Leon
Panetta predicted it would be “doomsday
.” In reality, the Pentagon’s $34 billion budget cut meant that 650,000 civilian DoD employees were initially
scheduled to take eleven unpaid furlough days
in 2013—which was eventually cut to six. Otherwise, the hysteria was clearly overblown.

And that only underscores the obvious. Slashing the defense budget—by 40 percent or more—should be a key component of any future budget agreements. The government needs to seriously tighten belts across the board, and that includes Pentagon spending. If those committee members would like a starting point for where to cut, how about choirs and sports sponsorships?

According to a 2012 bipartisan initiative between Representatives Jack Kingston, a Georgia Republican, and Betty McCollum, a Democrat from Minnesota, the
Pentagon has spent more than $1.5 billion on military music
over the past four years, including choirs and bands. The representatives added that the DoD is planning to
spend $388 million on 140 military bands
and
more than 5,000 full-time professional musicians
in 2013.

Additionally, they pointed out, the
Pentagon will spend more than $70 million in taxpayer money
this fiscal year to sponsor NASCAR and IndyCar teams, professional bass fishing, and ultimate fighting. A May 2012
USA Today
article detailed that “in fiscal year 2012, the National Guard [was] contacted by more than 24,800 individuals
interested in joining because of the racing sponsorship
.” Of those, only twenty were qualified candidates. None joined.

That sounds like typical DoD inefficiency to me. In everything we did, Blackwater demonstrated how an organization could achieve a maximum return on investment. We filled contracts the way auto manufacturers run production lines—the way I read about in
The Machine That Changed the World: The Story of Lean Production
by James Womack, Daniel Jones, and Daniel Roos. We created a linear flow in
which “materials,” or contractors, came in one end, were processed, then came out the end as a finished product delivered to the customer.

I’d picked up that book after Joan and I got home from one trip to Europe. At one point we’d been driving on the autobahn in Germany when a white flash appeared in my rearview mirror. In the blink of an eye, the car blew past us. It was a West German Mercedes S500 moving so fast it seemed ready to take off. Then, suddenly, the driver stood on his brakes: In front of him, a clunky East German Trabant—a car auto critic Dan Neil once described as “
a hollow lie
 . . . constructed of recycled worthlessness”—changed lanes and cut off the Mercedes, nearly causing a massive pileup.

When I later set out to build the training facility, the metaphor from that day was clear to me: What got created under monolithic government control was dramatically inferior to what came from a free-market company whose very survival was pinned to the quality of its work. I told my men to think like Mercedes, and we turned Blackwater into a self-contained machine that could recruit, vet, equip, train, deploy, and support all manner of men to accomplish some of the most difficult missions in the world, all for a fraction of what the DoD typically spent.

The Pentagon is a far larger animal than Blackwater, of course, but that doesn’t mean it shouldn’t be run with an eye toward efficiency. Why fly cargo drops in Afghanistan with expensive bombers that can land only at select improved airstrips? Our durable little CASA C212 turboprops were cheaper and far more practical. Why allow politics to continue to influence procurement? Two decades after the infamous $640 toilet seats of the 1980s, backroom deals are still common. As just one example, in 2009 Republican representative Harold Rogers of Kentucky earmarked funds for “
leakproof” drip pans for Black Hawk helicopters
costing $17,000 apiece—which were made by Phoenix Products, one of his donors’ companies. An out-of-state competitor of the well-connected company estimated those pans should cost about $2,500 each.

When I see advertisements in military trade journals that don’t detail how fast, strong, or lethal a new weapon is, but rather how many congressional districts it’s made in, I know there’s something fundamentally wrong with the system. That reckless procurement process has repeatedly been revised since its introduction in 1971, yet there’s a long way to go. “
With good financial oversight
,” retired vice admiral Jack Shanahan once told CBS News, “we could find $48 billion in loose change in that building, without having to hit the taxpayers.”

I also believe that multinational efforts would benefit from similar innovation. Private contractors would be a welcome alternative to the hundred thousand blue-helmeted United Nations peacekeepers who deployed to more than a dozen locations around the world in 2012,
to the tune of $7 billion
, some
20 percent of which was paid by U.S. taxpayers
.
Less than 150 of those UN troops
are Americans, however; ten thousand of them are from Bangladesh, followed by similar numbers of Pakistani and Indian forces, all of whose home countries treat the international organization almost like a get-rich-quick scheme. The soldiers they send are poorly trained, poorly equipped, and then
billed out for the UN’s flat rate of $1,028
per soldier per month, paid to the home country. I’ve seen those sending nations then pay the soldiers a few dollars a day and pocket the rest.

The costs have spiraled so much, the
UN now pays about $525 million a year
to run its peacekeeping mission in Liberia, which
eclipses the country’s entire $459 million annual national budget
. Elsewhere on the continent, a seventeen-thousand-man UN protection force in the Democratic Republic of Congo
put up little resistance in late 2012
as rebels seized the major city of Goma. Those ineffectual peacekeepers were part of the UN’s MONUSCO program, whose entire mission is to stabilize the Congo—and who can’t seem to deliver results with a $
1.4 billion annual operating budget
.

How successful would entrepreneurs be in replacing those blue
helmets? I remember being a SEAL and hearing about the answer as it was happening.

In 1995, after four years of crushing civil war, the government of Sierra Leone turned to South African company
Executive Outcomes to help battle the Revolutionary United Front
, or RUF. Immediately, two hundred contractors whipped Sierra Leone’s inept military forces into shape, then combined manpower to assault RUF positions. Mineral mining camps that had been rebel strongholds were returned to the government; ten months after Executive Outcomes was hired, RUF agreed to sign a peace accord and cease hostilities. Two hundred contractors brought the war to a full stop. I’ve been told Executive Outcomes charged about $36 million, a fraction of what the UN would have spent.