Tens of thousands of Hurricane Katrina victims remain without homes.
The environment is devastated. People are disenfranchised. Financial resources,
desperate residents are told, are scarce. But at least New Orleans has a Wal-Mart
parking lot serving as a FEMA Disaster Recovery Center with perhaps the tightest
security of any parking lot in the world. That's thanks to the more than $30
million Washington has shelled out to the Blackwater USA security firm since
its men deployed after Katrina hit. Under contract with the Department of Homeland
Security's (DHS) Federal Protective Service, Blackwater's men are ostensibly
protecting federal reconstruction projects for FEMA. Documents show that the
government paid Blackwater $950 a day for each of its guards in the area. Interviewed
by The Nation last September, several of the company's guards stationed in New
Orleans said they were being paid $350 a day. That would have left Blackwater
with $600 per man, per day to cover lodging, ammo, other overhead--and profits.
Shortly after the hurricane hit, Blackwater "launched a helicopter and
crew with no contract, no one paying us, that went down to New Orleans,"
says company vice chairman Cofer Black. "We saved some 150 people that
otherwise wouldn't have been saved. And, as a result of that, we've had a very
positive experience." Indeed. It was only days after the company arrived
that it started reeling in lucrative deals.
According to Blackwater's government contracts, obtained by The Nation, from
September 8 to September 30, 2005, Blackwater was paid $409,000 for providing
fourteen guards and four vehicles to "protect the temporary morgue in Baton
Rouge, LA." That contract kicked off a hurricane boon for Blackwater. From
September to the end of December 2005, the government paid Blackwater at least
$33.3 million--well surpassing the amount of Blackwater's contract to guard
Ambassador Paul Bremer when he was head of the US occupation of Iraq. And the
company has likely raked in much more in the hurricane zone. Exactly how much
is unclear, as attempts to get information on Blackwater's current contracts
in New Orleans have been unsuccessful.
"We saw the costs, in terms of accountability and dollars, for this practice
in Iraq, and now we are seeing it in New Orleans," says Illinois Democrat
Jan Schakowsky, who has been one of Blackwater's few critics in Congress. "They
have again given a sweetheart contract--without an open bidding process--to
a company with close ties to the Administration."
After The Nation exposed Blackwater's operations in New Orleans this past fall
[see "Blackwater Down," October 10, 2005], Schakowsky and a handful
of other Congress members raised questions about the scandal. They entered the
report into the Congressional Record during hearings on Katrina and cited it
in letters to DHS Inspector General Richard Skinner, who then began an inquiry.
In letters to Congressional offices in February, Skinner defended the Blackwater
deal, asserting that it was "appropriate" for the government to contract
with the company. Skinner admitted that "the ongoing cost of the contract...is
clearly very high" and then quietly dropped a bombshell: "It is expected
that FEMA will require guard services on a relatively long-term basis (two to
five years)." Two to five years? Already most of the 330 federally contracted
private guards in the hurricane zone are working for Blackwater, according to
the Washington Post. Another firm, DynCorp, is also trying to grab more of the
action, offering its security services for less than $700 per day per guard.
The hurricane's aftermath has ushered in the homecoming of the "war
on terror," a contract bonanza whereby companies can reap massive Iraq-like
profits without leaving the country and at a minuscule fraction of the risk.
To critics of the government's handling of the hurricane, the message is clear.
"That's what happens when the victims are black folks vilified before
and after the storm--instead of aid, they get contained," says Chris Kromm,
executive director of the Institute for Southern Studies and an editor of Gulf
Coast Reconstruction Watch. "If officials really cared about protecting
the people of New Orleans, they wouldn't be giving millions to scandal-ridden
contractors. They would have given the city money to rebuild their levees to
withstand more than a Category 2 Hurricane. They still haven't done that--and
hurricane season is upon us."
Kromm alleges that vital projects that have "gotten zero or little money"
in New Orleans include: job creation, hospital and school reconstruction, affordable
housing and wetlands restoration. Even in this context, DHS continues to defend
the Blackwater contract. In a March 1 memo to FEMA, Matt Jadacki, the DHS Special
Inspector General for Gulf Coast Hurricane Recovery, wrote that the Federal
Protective Service considered Blackwater "the best value to the government."
While companies like Halliburton may have raked in more profits since
George W. Bush took office, few have seen growth as dramatic as Blackwater's.
The firm has been at the front of the line at the domestic and international
taxpayer-funded feeding troughs and has recently hired some high-profile former
government officials, like Cofer Black, former chief of CIA counterterrorism,
and former Pentagon Inspector General Joseph Schmitz. In March Black represented
Blackwater at a conference in Jordan, announcing that the company was seeking
to broaden its role in even more conflict zones. Blackwater is rapidly expanding
its operations, creating a new surveillance-blimp division, launching new training
facilities in California and the Philippines, and increasingly setting its sights
on the lucrative world of DHS contracts. It is clamoring to get into Darfur
and has also hired Chilean troops trained under the brutal rule of Augusto Pinochet.
"We scour the ends of the earth to find professionals," company president
Gary Jackson told the Guardian. "The Chilean commandos are very, very professional,
and they fit within the Blackwater system." The business magazine Fast
Company recently named Jackson one of its "Fast 50," predicting that
the company and its president are in for "a very strong (and long) decade."
It's hard to imagine that the cronyism that has marked the Bush Administration
is not at play in Blackwater's success. Blackwater founder Erik Prince shares
Bush's fundamentalist Christian views. He comes from a powerful Michigan Republican
family and social circle, and his father, Edgar, helped Gary Bauer start the
Family Research Council. According to a report prepared for The Nation by the
Center for Responsive Politics, in all of Erik Prince's political funding generosity
since 1989, he has never given a penny to a Democrat running for national office.
Company president Jackson has also given money to Republican candidates. For
his part, Joseph Schmitz--the former Pentagon Inspector General turned general
counsel to Blackwater's parent, The Prince Group--lists on his résumé
membership in the Sovereign Military Order of Malta, a Christian militia formed
before the First Crusade. Like Prince, he comes from a right-wing family; his
father, former Congressman John Schmitz, was an ultraconservative John Birch
Society director who later ran for President. Joseph Schmitz was once in charge
of investigating private contractors like Blackwater, but he resigned amid allegations
of stonewalling investigations conducted by his department. He now represents
one of the most successful of those contractors.
Schakowsky charges that the Administration has written Blackwater "blank
checks," saying that the internal DHS review of the company "leaves
us with more questions than answers." She points out that the report fails
to address the major issues stemming from deploying private forces on US streets.
In her testimony this past September, Schakowsky said, "Ask any American
if they want thugs from a private, for-profit company with no official law-enforcement
training roaming the streets of their neighborhoods. The answer will be a resounding
Blackwater's ascent comes in the midst of a major rebranding campaign aimed
at shaking its mercenary image. The company is at the forefront of the trade
association of mercenary firms, the International Peace Operations Association,
which lobbies for even greater privatization of military operations. Blackwater
and its cause have clearly found serious backing in the Bush Administration.
Hiring Blackwater, says Schakowsky, "may be legal, but it is not a good
deal for taxpayers and Gulf region residents in particular." Blackwater's
sweetheart deals, both domestic and international, are representative of how
business has been done under Bush. They are a troubling indicator of a trend
toward less accountability and transparency and greater privatization of critical
government functions. It's time that more members of Congress ask tough questions
about Blackwater and its rapid, profitable rise.