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killing Peter Oborne on the privatisation of security in Iraq and the rise of a new, respectable breed of mercenary Executives from a new type of company are doing the rounds of the institutions in the City this Christmas, softening the market ahead of flotation. They come from AnnorGroup. Some would call ArmorGroup a firm of mercenaries, but the company itself insists that it is a 'private security company' which operates with the full knowledge and approval of the Foreign Office and the US state department, in accordance with internationally recognised guidelines.
The business prospectus sets out the important facts. Turnover last year: $98 million. Clients: 'an established blue chip base'. Employees: at present 7,600 trained personnel in 26 countries worldwide. Profits: booming. They have soared from breakeven in 2002 to $5 million last year, with an incredible $20 million forecast for 2004. Prospects: apparently limitless. Its chairman is Sir Malcolm Rifkind, former foreign secretary and the prospective Tory MP for Kensington and Chelsea, tipped as next Tory leader. Backers hope that ArmorGroup will raise about £20 million on the stock market, valuing the group at about £70 million.
ArmorGroup used to be known as DSL. It was set up in 1988 by Richard Bethel]
(now Lord Westbury) and Alistair Morrison, both former Scots Guards officers and viewed by many as the founders of the modern private military industry. DSL's past connects it with the murky world of mercenary operations. In the early 1990s, according to the Multinational Monitor magazine, it gave the Colombian security services — accused of many human rights violations — lethal military training. It has also worked for BP in Nigeria, and done mine clearance for the United Nations in the Balkans. In 1997 DSL merged with the American riot equipment manufacturer Armor Holdings. But the fit did not work and last year Barclays bank backed a management buy-out.
British mercenaries hope the flotation will signal the moment when private armies turn respectable. There are still plenty of reminders of the old rackety mercenary world. Sir Mark Thatcher, under house arrest in South Africa after the botched coup in Equatorial Guinea, is one of them. The unlucky coup leader Simon Mann, now languishing in a Zimbabwean jail, is another.
But ArmorGroup does not run African expeditions of this kind. Its London flotation is a sign that the mercenaries now wish to he viewed as professionals like accountants and solicitors. Not since declining gentry families dispatched their sons to remedy the family fortunes as condottieri in northern Italy during the 15th century has it been so socially acceptable to enter the private warfare business. Academically subnormal Old Etonians, who might once have looked forward to blameless careers as estate agents, are today pressed into profitable service as security operatives. A generation ago retiring army officers could look forward to lives of genteel poverty as public school bursars or land agents. Now they make fortunes in Iraq and Afghanistan. The huge packages earned by ex-British army mercenaries irritate more conventional colleagues, who claim that it is often the dimmest and most hopeless officers who have made the most money.
The rise of the security industry, though precipitous, is extremely recent. It is part of a wider trend in government towards the privatisation of security. Domestically this has manifested itself in a number of ways, from ubiquitous security guards to parking attendants. Internationally the same phenomenon is at work. Western countries subcontract overseas aid to NG0s, while their representatives employ professional firms rather then leave themselves at the mercy of locally available protection.
The turning point was 11 September, Afghanistan and, above all, Iraq. The decision by the coalition to rely on a relatively light invasion force led to a number of important consequences. it meant that the nation-building strategy, such as it is, was handed over to civilian reconstruction teams. They have not simply been asked to rebuild Iraq, but also to take responsibility for their own safety. This meant that they had no choice but to resort to the private security industty.
This has helped make mercenaries respectable — one reason why alumni met for a conference, sponsored by the Royal United Services Institute, earlier this week in Oxford. Among them were Tim Spicer, the former Scots Guards officer who made national headlines when his company, Sandline, was accused of breaking sanctions and selling arms to Sierra Leone; and Harry Legge-Bourke (brother of the royal nanny Tiggy) whose firm Olive Security has made a financial killing in Iraq. These modern mercenaries want to urge tighter regulation of their 'industry' — perhaps through the new Security Industry Authority, which already deals with wheeldampers and nightclub bouncers — and distance themselves from their reputation as lawless killers, ArmorGroup presented a 'white paper' on the future of private security, arguing that cowboy firms should be driven out.
Tim Spicer said he reckoned that three brigades worth of private security person nel — an estimated 20,000 people were active in Iraq. Spicer has secured the most drool-making private security deals of the lot, a $293 million contract with the United States to run a security operation drawing on techniques used for decades by the British army in Northern Ireland. This contract, which is thought to have made Spicer a very rich man indeed, infuriated American rivals DynCorp so much that it made a petulant formal complaint.
Iraq now teems with former British army officers making their fortune. Global Risk Strategies, co-founded by the former Scots Guards officer Charlie Andrews, employed just two people before the invasion of Afghanistan. Then it received a contract to distribute Afghani banknotes. Global Risk performed the same task in Iraq, and has won other contracts as well. Another private security company (PSC), Erinys, guards the strategically crucial Iraqi oilfield infrastructure. ArmorGroup gets no less than 57 per cent of its global revenues from the Iraqi honeypot.
These firms are doing a reasonably good job, certainly when compared with the US army. There have been no major contract failures, and very few allegations of abuse, Soldiers with long years of experience in the British army do not forget their standards when they leave it. Even so, there is a feeling that the new private armies have hit their limits in Iraq. It is just too dangerous. One operator privately remarked in Oxford that he wouldn't get involved there today, but for the fact that his company was already there. Even the short journey from the airport to Baghdad's Green Zone has become too perilous. When Robert Hill, Australian defence minister, landed at Baghdad airport last week, he was told that it was too dangerous for him to make the journey to the Australian embassy. These perils make it impossible for reconstruction work to be done, and the PSCs are not prepared to risk their lives to make it happen. Some of the private security companies in Iraq are starting to talk of packing their bags.
This is the ancient problem with hiring mercenaries, private security companies, call them what you will. Machiavelli remarked 'they have no other attraction or reason for keeping the field than a trifle of stipend, which is not sufficient to make them willing to die for you'. That is as true today as it was 500 years ago. The ordinary British soldier who pounds the streets of Belfast or Basra for 000 a week is serving his country. The ex-SAS man on £500 a day is there for the cash. As the crisis in Iraq deepens, we may yet learn why wise rulers have normally preferred to rely on standing armies.
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