08/10/2006 10:06 pm ET Updated May 25, 2011

Mercenary Jackpot: US Pays Blackwater $320 Million in Secretive Global 'Security' Program

While the Bush Administration calls for the immediate disbanding of
what it has labeled "private" and "illegal" militias in Lebanon and
Iraq, it is pouring hundreds of millions of dollars into its own
global private mercenary army tasked with protecting US officials and
institutions overseas. The secretive program, which spans at least
twenty-seven countries, has been an incredible jackpot for one heavily
Republican-connected firm in particular: Blackwater USA. Government
records recently obtained by The Nation reveal that the Bush
Administration has paid Blackwater more than $320 million since June
2004 to provide "diplomatic security" services globally. The massive
contract is the largest known to have been awarded to Blackwater to
date and reveals how the Administration has elevated a once-fledgling
security firm into a major profiteer in the "war on terror."

Blackwater's highly lucrative "diplomatic security" contract was
officially awarded under the State Department's little-known Worldwide
Personal Protective Service (WPPS) program, described in State
Department documents as a government initiative to protect US
officials as well as "certain foreign government high level officials
whenever the need arises."

A heavily redacted 2005 government audit of Blackwater's WPPS contract
proposal, obtained by The Nation, reveals that Blackwater included
profit in its overhead and its total costs, which would result "not
only in a duplication of profit but a pyramiding of profit since in
effect Blackwater is applying profit to profit." The audit also found
that the company tried to inflate its profits by representing
different Blackwater divisions as wholly separate companies.

The WPPS contract awarded in 2004 was divided among a handful of
companies, among them DynCorp and Triple Canopy. Blackwater was
originally slated to be paid $229.5 million for five years, according
to a State Department contract list. Yet as of June 30, just two years
into the program, it had been paid a total of $321,715,794. When
confronted with this apparent $100 million discrepancy, the State
Department could not readily explain it. Blackwater's two years of
WPPS earnings exceed many estimates of the company's total government
contracts, which the Virginian-Pilot recently put at $290 million
combined since 2000. Six years ago the government paid Blackwater less
than $250,000.

"This underscores the need for Congress to exercise real oversight on
the runaway use of secret companies that have strong connections to
the Bush Administration, for clandestine services all over the world,"
says Illinois Democrat Jan Schakowsky, a leading Congressional critic
of private military companies.

"This whole business of security is just insidious," says former
Assistant Defense Secretary Philip Coyle, who worked at the Pentagon
from 1994 to 2001. "The costs keep going up and there is no end in
sight to what you can spend. What happens is you keep raising the
threat levels to require more actions and more contracts to overcome
these imaginary threats. It's an endless spiral."

In soliciting bids for the 2004 global contract, the State Department
cited a need born of "the continual turmoil in the Mid East, and the
post-war stabilization efforts by the United States Government in
Bosnia, Afghanistan and Iraq." It said the government "is unable to
provide protective services on a long-term basis from its pool of
special agents, thus, outside contractual support is required." Former
Assistant Defense Secretary Coyle, now with the Center for Defense
Information, believes the privatization of security duties
historically fulfilled by US Marines and other active-duty military is
directly related to the Iraq occupation. "Obviously the military could
do it, but indeed the Administration is looking for places to get more
troops for Iraq," Coyle says.

While the WPPS program and the broader use of private security
contractors is not new, it has escalated dramatically under the Bush
Administration. According to the most recent Government Accountability
Office report, some 48,000 private soldiers, working for 181 private
military firms, are deployed in Iraq alone. Blackwater, now one of the
most prominent and successful companies providing soldiers in Iraq,
was relatively unknown until March 31, 2004, when four of its
contractors were ambushed and killed in Falluja [see Scahill, "Blood
Is Thicker Than Blackwater," May 8]. In the days and weeks that
followed, company executives hired ultra--connected lobbyists and were
welcomed by powerful government officials as heroes, allowing the firm
to solidify its role in the Bush Administration's foreign policy

Since 2003 Blackwater has held the high-profile job of guarding senior
US officials in Iraq, including all three occupation-era ambassadors.
The vaunted WPPS contract was awarded at the end of Paul Bremer's
tenure in Baghdad. Blackwater, which did not respond to repeated
requests for comment, refuses to divulge where its forces are deployed
under the program. WPPS documents say contractors may be dispatched
almost anywhere, including on US soil. The State Department says
explicitly there is a "long-term" need for these "protective
services." Schakowsky says she will request a formal explanation from
the department of the WPPS contract: "We need to know why the Bush
Administration keeps writing blank checks to Blackwater and others,
while it keeps Congress and the American people in the dark."

Jeremy Scahill, a correspondent for Democracy Now!, is a Puffin
Writing Fellow at The Nation Institute. Researcher Garrett Ordower
contributed to this story. Scahill can be reached at: