Privatizing Government Services

December 8, 2017 – Volume 27, Issue 43
Do business-run public services save taxpayers money? By Reed Karaim

Short Features

Blackwater Founder Urges Trump to Privatize Afghan War
Should Airport Security Be Privatized — Again?

Critics warn contractors’ behavior “has really poisoned the well.”

Early this year as President Trump weighed his options for the Afghan conflict, two of his top advisers, Steve Bannon and Trump's son-in-law Jared Kushner, met with two businessmen who had a proposal for what to do next: privatize the war.1

The businessmen — Erik Prince, founder of Blackwater Worldwide, a security contracting firm that had been heavily involved in Iraq, and Stephen Feinberg, who owns DynCorp International, a major military contractor — proposed contracting the war out to a 5,500-person private force. This force, made up mostly of former Special Operations troops, would work closely with the Afghan military but report to an appointed American “viceroy” who would answer only to the U.S. president. Their proposal included setting up a 90-plane private air force to assist in the fight against the Taliban, the extremist movement trying to topple the Afghan government.2

The idea seems to have little support in government, but it is not out of line with recent practice. During the United States’ 16-year involvement in Afghanistan and 14 years in Iraq, the U.S. military has increasingly relied on private contractors to help fulfill its mission.

A U.S. security contractor working with the Army's 10th Mountain Division patrols in Ghazni (AFP/Getty Images/Dibyangshu Sarkar)  
A U.S. security contractor working with the Army's 10th Mountain Division patrols in Ghazni, Afghanistan, on May 19, 2013. (AFP/Getty Images/Dibyangshu Sarkar)

At the end of last year, the U.S. military employed 25,197 contract personnel in Afghanistan, compared with 9,800 uniformed U.S. military personnel there. While the contractors included people working in a wide variety of support positions, more than 3,000 were security personnel.3

In March 2011, when the U.S. military had a large presence in Iraq and Afghanistan battling Islamist insurgents, the Defense Department had 155,000 contract personnel in the two countries, compared with 145,000 uniformed service members.4

Prince's proposal, nevertheless, attracted considerable criticism from U.S. military analysts and was reportedly unpopular with Trump's military advisers, including Defense Secretary James Mattis and National Security Adviser H.R. McMaster. They are said to fear that a private force would be more expensive than Prince predicted and would be resisted by regional allies.5

Molly Dunigan, associate director of the defense and political sciences department at the RAND Corp., a research institute in Santa Monica, Calif., says the United States has relied on private contractors to support its military since the American Revolution. But the use of armed security contractors who can end up in firefights and other deadly situations is new, she says.

Military officials say they must rely more heavily on contractors because Congress and the executive branch have capped the number of uniformed personnel, leaving the military shorthanded in Iraq and Afghanistan.6 Dunigan and others, however, say the expanded use of private security personnel can cause problems because of training and command-and-control issues.

“There are issues in terms of contractors operating in a counterinsurgency environment and how they interact with locals,” Dunigan says. “They're typically perceived as part of the American force, but they don't necessarily abide by the same doctrines or the same norms of behavior.”

Private contractors’ behavior was at the center of a highly controversial incident during the Iraq War when Blackwater personnel opened fire on civilians in Nisour Square in Baghdad, killing 17 people. Iraqis were enraged, and the government demanded that Blackwater leave the country.7 The four guards involved in the shooting later were found guilty of murder, manslaughter and weapons charges in U.S. courts, although part of the sentences were later overturned.8 (Private security contractors have been connected to several other incidents that outraged the populace in Iraq and Afghanistan, including the shooting of civilians under questionable circumstances and cases of torture and sexual abuse.)9

Prince sold Blackwater in 2010 and is not directly involved in security contracting. But in a Wall Street Journal opinion piece and several interviews, he has said a private force would be more effective than a traditional military force in Afghanistan.10 He compared the idea to the East India Company, a private trading firm that at times maintained its own army and helped Britain manage its empire during the 17th, 18th and 19th centuries.

“We've fought for the last 15 years with the First Infantry Division model, now we should fight with an East India Company model and do it much cheaper,” Prince told Fox News.11

Although Trump has expressed doubts about the U.S. approach to the war, he decided to follow the recommendation of his military advisers and announced in August he would send more U.S. troops to Afghanistan. According to administration officials, about 4,000 additional troops were to join the 8,500 U.S. military personnel already in the country.12

Prince, however, says he thinks Trump eventually will turn to a private force. “Whether it's six months or a year, I don't think the president wants to go into the [2018 congressional elections] with thousands of American soldiers at risk,” he said.13

But David Sedney, a former deputy U.S. ambassador to Afghanistan, said Afghans would “never accept” privatization of the U.S. military forces there because past experience with private security personnel created “political toxicity.” Afghans have said private security personnel in Afghanistan have acted as if they were above the law.14

“Bad behavior on the part of private security companies has really poisoned the well,” he said.15

— Reed Karaim

[1] Mark Landler, Eric Schmitt and Michael Gordon, “Trump Aides Recruited Businessmen to Devise Options for Afghanistan,” The New York Times, July 10, 2017, https://tinyurl.com/y8ft5rc7.

[2] Jim Michaels, “Trump White House weighs unprecedented plan to privatize much of the war in Afghanistan,” USA Today, Aug. 8, 2017, https://tinyurl.com/y8olr96x.

[3] Heidi Peters, Moshe Schwartz and Lawrence Kapp, “Department of Defense Contractor and Troop Levels in Iraq and Afghanistan: 2007–2017,” Congressional Research Service, April 28, 2017, https://tinyurl.com/lch975o.

[4] Moshe Schwartz and Joyprada Swain, “Department of Defense Contractors in Afghanistan and Iraq: Background and Analysis,” Congressional Research Service, May 13, 2011, https://tinyurl.com/yab8sxpl.

[5] Rosie Gray, “Erik Prince's Plan to Privatize the War in Afghanistan,” The Atlantic, Aug. 18, 2017, https://tinyurl.com/y83vdlzh.

[6] Peters, Schwartz and Kapp, op. cit.

[7] Amit R. Paley, “Iraq Demands Expulsion of Contractor Blackwater, Compensation for Killings,” The Washington Post, Oct. 15, 2007, https://tinyurl.com/yb7ku9us.

[8] Matt Apuzo, “In Blackwater Case, Court Rejects a Murder Conviction and Voids 3 Sentences,” The New York Times, Aug. 4, 2017, https://tinyurl.com/y7pgz9e6.

[9] Moshe Schwartz, “The Department of Defense's Use of Private Security Contractors in Iraq and Afghanistan: Background, Analysis, and Options for Congress,” Congressional Research Service, Sept. 29, 2009, https://tinyurl.com/ybez6mu2; James Glanz and Andrew Lehren, “Use of Contractors Added to War's Chaos in Iraq,” The New York Times, Oct. 23, 2010, https://tinyurl.com/ybr7szeu.

[10] Erik D. Prince, “The MacArthur Model for Afghanistan,” The Wall Street Journal, May 31, 2017, https://tinyurl.com/yav8j77d.

[11] “Blackwater Founder: Ironically ‘The Left Loved The USSR’ 30 Years Ago,” Fox News Insider, May 17, 2017, https://tinyurl.com/mu2qjza.

[12] David Nakamura and Abby Phillip, “Trump announces new strategy for Afghanistan that calls for a troop increase,” The Washington Post, Aug. 21, 2017, https://tinyurl.com/y9bdrj8g.

[13] Steven Nelson, “Erik Prince believes Trump will eventually privatize Afghanistan War,” Washington Examiner, Nov. 6, 2017, https://tinyurl.com/y77ldkgj.

[14] Paul Tait, “Afghanistan orders ban on private security firms,” Reuters, Aug. 17, 2017, https://tinyurl.com/y778jhol.

[15] Nelson, op. cit.

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Backers see cost savings and better security, but foes fear a lack of accountability.

Airport security screening has a unique history that illustrates the constant back-and-forth pull between public and private operations of government services.

Before the Sept. 11, 2001, terrorist attacks, private contractors conducted passenger screening at airports. Then, 19 hijackers boarded four commercial airliners carrying box cutters, which they used to take control of the planes and crash them into the World Trade Center in New York City and the Pentagon near Washington, D.C. A fourth plane crashed in rural Pennsylvania. In all, nearly 3,000 people were killed.

Within weeks, Congress voted to create the Transportation Security Administration (TSA), which today has more than 44,000 federal security officers who continue to provide airport screening.16

But discontent with the federalized service, particularly the long lines at some airports that critics blame on the TSA, has led to repeated calls to return the responsibility to private contractors. The push to reprivatize airport security comes from conservative think tanks, such as the Heritage Foundation, along with some senior Republican lawmakers, including Rep. Michael McCaul, R-Texas, head of the House Committee on Homeland Security, and Rep. Darrell Issa, R-Calif.17

Privatization foes, however, say private airport security did not work well before 2001 and would not work well again because, the opponents contend, these contractors focus on the bottom line over security.

Although no one has introduced legislation, Issa reflected the view of privatization supporters earlier this year when he described the airport security system as “broken.” If the United States wants to speed up and improve screening, Issa said, “the solution couldn't be any simpler: Let's get the TSA out of the airport screening business altogether.” Citing various studies, he said private screeners at 22 airports outperformed their public counterparts in terms of efficiency and safety because of better morale and higher employee retention rates.18

New automated security-screening lanes funded by American Airlines and installed (Getty Images/Joe Raedle)  
New automated security-screening lanes funded by American Airlines and installed by the Transportation Security Administration check travelers at Miami International Airport on Oct. 24, 2017. (Getty Images/Joe Raedle)

“Ultimately, allowing private companies to take over administration of our airports’ security, under the TSA's guidelines, would unleash the markets’ power of innovation to improve customer service and undo years of bureaucracy that has squandered billions of dollars dedicated to airport security and done much to make traveling more miserable,” Issa said.

But other analysts say the history of airport security illustrates the dangers of privatizing a service essential to public safety. In a 2007 book, legal scholar Paul R. Verkuil argued the pre-9/11 approach had a fundamental flaw: Security was the responsibility of the airlines, which contracted the work out to private companies.

“Not surprisingly, these contracts went to the lowest bidders,” wrote Verkuil. “As a result, these private security firm employees were poorly trained, lacking language skills and otherwise unqualified (they were sometimes convicted felons).”19

Through the contracting process, Verkuil said, “airlines treated the security functions as a cost control item and forced the quality of services downward. In these circumstances, it should have been no surprise that the airport security system failed in its essential purpose.”20

The TSA's creation was an acknowledgment that for certain government responsibilities, cost and profit calculations cannot be the primary concerns, he said. “The reasons that Congress took this action reflect concerns with public values and inherent government functions, essential considerations that are often left out of the debate over privatization.”

The United States took additional steps to improve security aboard airliners, such as deploying federal marshals on planes, and no U.S. airliner has been hijacked since 9/11. But privatization's advocates say the current system is bloated, expensive and not customer friendly. In Europe, they say, privatized systems do a better job with fewer resources.21

In addition, said Issa, studies show that airport screeners still miss a high percentage of dangerous objects. He added there is no evidence that federalizing airport security has improved security.22 Contracting out screening would “would go a long way to helping improve the experience fliers face at our nation's airports,” he said.23

But Aman Banerji, a program manager who works on privatization issues at the Roosevelt Institute, a liberal think tank in New York, says that while the TSA is badly run, “We're papering over the cracks by pretending that the problems will be fixed by private contractors. I think it's a good example of the way we use bad management as an argument for privatization. In reality, when you look at the way privatization plays out, you just shift from a public monopoly to a private monopoly [for a service]. There's no way that makes government more accountable.”

— Reed Karaim

[16] “House, Senate pass aviation security bill,” CNN, Nov. 16, 2001, https://tinyurl.com/y8mywd4n; “TSA at a Glance,” Transportation Security Administration, https://tinyurl.com/yclwnnqu.

[17] David Inserra, “Time to Privatize the TSA,” Heritage Foundation, July 19, 2017, https://tinyurl.com/y7of7uh3. Keith Laing, “TSA Failures Spark Calls for Privatization,” The Hill, June 9, 2015, https://tinyurl.com/y8pas4fd.

[18] Darrell Issa, “A simple solution to the TSA breakdown,” CNN, May 26, 2016, https://tinyurl.com/hl38s4z.

[19] Paul Verkuil, Outsourcing Sovereignty: Why Privatization of Government Threatens Democracy and What We Can Do About it (2007), p. 58.

[20] Ibid.

[21] Inserra, op. cit.

[22] Thomas Frank, “Most fake bombs missed by screeners,” USA Today, Oct. 22, 2007, https://tinyurl.com/yctzyvtf.

[23] Issa, op. cit.

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Document APA Citation
Karaim, R. (2017, December 8). Privatizing government services. CQ researcher, 27, 1017-1040. Retrieved from http://library.cqpress.com/
Document ID: cqresrre2017120820
Document URL: http://library.cqpress.com/cqresearcher/cqresrre2017120820
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