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A Force Unto Itself

A Force Unto Itself
A Military Leviathan Has Emerged as America's 51st and Most Powerful State
William J. Astore March 22, 2016

In the decades since the draft ended in 1973, a strange new military has emerged in the United States. Think of it, if you will, as a post-democratic force that prides itself on its warrior ethos rather than the old-fashioned citizen-soldier ideal. As such, it's a military increasingly divorced from the people, with a way of life ever more foreign to most Americans (adulatoryas they may feel toward its troops). Abroad, it's now regularly put to purposes foreign to any traditional idea of national defense. In Washington, it has become a force unto itself, following its own priorities, pursuing its own agendas, increasingly unaccountable to either the president or Congress.
Three areas highlight the post-democratic transformation of this military with striking clarity: the blending of military professionals with privatized mercenaries in prosecuting unending "limited" wars; the way senior military commanders are cashing in on retirement; and finally the emergence of U.S. Special Operations Command (SOCOM) as a quasi-missionary imperial force with a presence in at least 135 countries a year (and counting).
The All-Volunteer Military and Mercenaries: An Undemocratic Amalgam
I'm a product of the all-volunteer military. In 1973, the Nixon administration ended the draft, which also marked the end of a citizen-soldier tradition that had served the nation for two centuries. At the time, neither the top brass nor the president wanted to face a future in which, in the style of the Vietnam era just then winding up, a force of citizen-soldiers could vote with their feet and their mouths in the kinds of protest that had only recently left the Army in significant disarray. The new military was to be all volunteers and a thoroughly professional force. (Think: no dissenters, no protesters, no antiwar sentiments; in short, no repeats of what had just happened.) And so it has remained for more than 40 years.
Most Americans were happy to see the draft abolished. (Although young men still register for selective service at age 18, there are neither popular calls for its return, nor serious plans to revive it.) Yet its end was not celebrated by all. At the time, some military men advised against it, convinced that what, in fact, did happen would happen: that an all-volunteer force would become more prone to military adventurism enabled by civilian leaders who no longer had to consider the sort of opposition draft call-ups might create for undeclared and unpopular wars.
In 1982, historian Joseph Ellis summed up such sentiments in a prophetic passage in an essay titled "Learning Military Lessons from Vietnam" (from the book Men at War):
"[V]irtually all studies of the all-volunteer army have indicated that it is likely to be less representative of and responsive to popular opinion, more expensive, more jealous of its own prerogatives, more xenophobic in other words, more likely to repeat some of the most grievous mistakes of Vietnam … Perhaps the most worrisome feature of the all-volunteer army is that it encourages soldiers to insulate themselves from civilian society and allows them to cling tenaciously to outmoded visions of the profession of arms. It certainly puts an increased burden of responsibility on civilian officials to impose restraints on military operations, restraints which the soldiers will surely perceive as unjustified."
Ellis wrote this more than 30 years ago before Desert Storm, the invasions of Afghanistan and Iraq, or the launching of the War on Terror. These wars (and other U.S. military interventions of the last decades) have provided vivid evidence that civilian officials have felt emboldened in wielding a military freed from the constraints of the old citizen army. Indeed, it says something of our twenty-first-century moment that military officers have from time to time felt the need to restrain civilian officials rather than vice versa. Consider, for instance, Army Chief of Staff General Eric Shinseki's warning early in 2003 that a post-invasion Iraq would need to be occupied by "several hundred thousand" troops. Shinseki clearly hoped that his (all-too-realistic) estimate would tamp down the heady optimism of top Bush administration officials that any such war would be a "cakewalk," that the Iraqis would strew "bouquets" of flowers in the path of the invaders, and that the U.S. would be able to garrison an American-style Iraq in the fashion of South Korea until hell froze over. Prophetic Shinseki was, but not successful. His advice was dismissed out of hand, as was he.
Events since Desert Storm in 1991 suggest that the all-volunteer military has been more curse than blessing. Partially to blame: a new dynamic in modern American history, the creation of a massive military force that is not of the people, by the people, or for the people. It is, of course, a dynamic hardly new to history. Writing in the eighteenth century about the decline and fall of Rome, the historian Edward Gibbon noted that:
"In the purer ages of the commonwealth [of Rome], the use of arms was reserved for those ranks of citizens who had a country to love, a property to defend, and some share in enacting those laws, which it was their interest, as well as duty, to maintain. But in proportion as the public freedom was lost in extent of conquest, war was gradually improved into an art, and degraded into a trade."
As the U.S. has become more authoritarian and more expansive, its military has come to serve the needs of others, among them elites driven by dreams of profit and power. Some will argue that this is nothing new. I've read my Smedley Butler and I'm well aware that historically the U.S. military was often used in un-democratic ways to protect and advance various business interests. In General Butler's day, however, that military was a small quasi-professional force with a limited reach. Today's version is enormous, garrisoning roughly 800 foreign bases across the globe, capable of sending its Hellfire missile-armed drones on killing missions into country after country across the Greater Middle East and Africa, and possessing a vision of what it likes to call "full-spectrum dominance" meant to facilitate "global reach, global power." In sum, the U.S. military is far more powerful, far less accountable and far more dangerous.
As a post-democratic military has arisen in this country, so have a set of "warrior corporations" that is, private, for-profit mercenary outfits that now regularly accompany American forces in essentially equal numbers into any war zone. In the invasion and occupation of Iraq, Blackwater was the most notorious of these, but other mercenary outfits like Triple Canopy and DynCorp were also deeply involved. This rise of privatized militaries and mercenaries naturally contributes to actions that are inherently un-democratic and divorced from the will and wishes of the people. It is also inherently a less accountable form of war, since no one even bothers to count the for-profit dead, nor do their bodies come home in flag-draped coffins for solemn burial in military cemeteries; and Americans don't approach such mercenaries to thank them for their service. All of which allows for the further development of a significantly under-the-radar form of war making.
The phrase "limited war," applied to European conflicts from the close of the Thirty Years' War in 1648 to the French Revolution in 1789, and later to conventional wars in the nuclear age, has fresh meaning in twenty-first-century America. These days, the limits of limited war, such as they are, fall less on the warriors and more on the American people who are increasingly cut out of the process. They are, for instance, purposely never mobilized for battle, but encouraged to act as though they were living in a war-less land. American war efforts, which invariably take place in distant lands, are not supposed to interfere with business as usual in the "homeland," which, of course, means consumerism and consumption. You will find no rationing in today's America, nor calls for common sacrifice of any sort. If anything, wars have simply become another consumable item on the American menu. They consume fuel and resources, money, and intellect, all in staggering amounts. In a sense, they are themselves a for-profit consumable, often with tie-ins to video games, movies, and other forms of entertainment.

In the rush for money and in the name of patriotism, the horrors of wars, faced squarely by many Americans in the Vietnam War era, are now largely disregarded. One question that this election season has raised: What if our post-democratic military is driven by an autocrat who insists that it must obey his whims in the cause of "making America great again"?
Come 2017, we may find out.

Senior Military Men: Checking Out and Cashing In
There was a time when old soldiers like Douglas MacArthur talked wistfully about fading away in retirement. Not so for today's senior military officers. Like so many politicians, they regularly go in search of the millionaires' club on leaving public service, even as they accept six-figure pensions and other retirement benefits from the government. In the post-military years, being John Q. Public isn't enough. One must be General Johannes Q. Publicus (ret.), a future financial wizard, powerful CEO, or educator supreme. Heck, maybe all three.
Consider General David Petraeus, America's "surge" general in Iraq and later head of U.S. Central Command. He left the directorship of the CIA in disgrace after an adulterous affair with his biographer-mistress, with whom he illegally shared classified information. Petraeus has since found teaching gigs at the University of Southern California, the City University of New York, and Harvard's Kennedy School while being appointed chairman of the investment firm KKR Global Institute. Another retired general who cashed in with an investment firm is Ray Odierno, the former Army chief of staff, who became a special adviser to JP Morgan Chase, the financial giant. (Indeed, the oddness of Odierno, an ex-football player known for his total dedication to the Army, being hired by a financial firm inspired this spoof at a military humor site.)
But few men have surpassed retired Air Force General John Jumper. He cashed in by joining many corporate boards, including the board of directors for Science Applications International Corporation (SAIC), a major defense contractor. After five years he became its CEO with a seven-figure salary. Then you have retired general officers who pull down more than $300 an hour (no $7.25 federal minimum wage for them) advising their former subordinates at the Pentagon as "senior mentors."
No one expects generals to take vows of poverty upon retirement. Indeed, those hefty government pensions and assorted other benefits would preclude such vows. But in the post-democratic military world, duty, honor, country has become duty, honor, cash.
For today's crop of retiree generals, no Cincinnatus need apply. Of course, there's long been a revolving door between Pentagon offices and corporate boardrooms, but that door seems to be spinning ever faster in the twenty-first century.
The peril of all this should be obvious: the prospect of cashing-in big time upon retirement can't help but affect the judgment of generals while they're still wearing the uniform. When you reach high rank, it's already one big boys' club where everyone knows everyone else's reputation. Get one for being an outspoken critic of a contractor's performance, or someone who refuses to play ball or think by the usual rules of Washington, and chances are you're not going to be hired to lucrative positions on various corporate boards in retirement.
Such an insular, even incestuous system of pay-offs naturally reinforces conventional thinking. Generals go along to get along, embracing prevailing thinking on interventionism, adventurism, and dominance. Especially troublesome is the continued push for foreign military sales (arms exports) to some of the world's most active war zones. In this way, weaponry and wars are increasingly the business of America, a "growth" industry that is only reinforced when retired generals are hired to lead companies, to advise financial institutes, or even to teach young adults in prestigious schools.
For Petraeus is not the only retired general to lecture at such places. General Stanley McChrystal, who infamously was fired by President Obama for allowing a command climate that was disrespectful to the nation's civilian chain of command, is now a senior fellow at the Jackson Institute at Yale University. Admiral William McRaven, former head of U.S. Special Operations Command during the era of black sites and deaths by torture, is now the chancellor of the entire University of Texas system. McRaven had no prior background in education, just as Odierno had no background in finance before being hired to a top-tier position of authority. Both of them were, however, the military version of "company men" who, on retirement, possessed a wealth of contacts, which helped make them highly marketable commodities.
If you're wearing three or four stars in the military, you've already been carefully vetted as a "company man," since the promotion process screens out mavericks. Independent thinkers tend to retire or separate from the military long before they reach eligibility for flag rank. The most persistent and often the most political officers rise to the top, not the brightest and the best.
Special Operations: The American Military's Jesuits
As Nick Turse has documented at TomDispatch, post-9/11 America has seen the rapid growth of U.S. Special Operations Command, or SOCOM, a secretive military within the military that now numbers almost 70,000 operatives. The scholar and former CIA consultant Chalmers Johnson used to refer to that Agency as the president's private army. Now, the commander-in-chief quite literally has such an army (as, in a sense, he also now has a private robotic air force of drone assassins dispatchable more or less anywhere). The expansion of SOCOM from a modest number of elite military units (like the Green Berets or SEAL Team 6) into a force larger than significant numbers of national armies is an underreported and under-considered development of our post-democratic military moment. It has now become the regular go-to force in the war on terror from Iraq to Afghanistan,Syria to Cameroon, Libya to Somalia.
As Gregory Foster, a Vietnam veteran and professor at the National Defense University noted recently, this now-massive force "provides an almost infinite amount of potential space for meddling and mission creep' abroad and at home due, in part, to the increasingly blurred lines between military, intelligence, police, and internal security functions… [T]he very nature of [special ops] missions fosters a military culture that is particularly destructive to accountability and proper lines of responsibility… the temptation to employ forces that can circumvent oversight without objection is almost irresistible."
Like the Jesuit order of priests who, beginning in the sixteenth century, took the fight to heretical Protestants and spread the Catholic faith from Europe and Asia in the Old World to nearly everywhere in the New World, today's SOCOM operators crusade globally on the part of America. They slay evildoers while advancing U.S. foreign policy and business goals in at least 150 countries. Indeed, the head of SOCOM, General Joseph Votel III, West Point grad and Army Ranger, put it plainly when he said that America is witnessing "a golden age for special operations."
A military force effectively unaccountable to the people tears at the very fabric of the Constitution, which is at pains to mandate firm and complete control over the military by Congress, acting in the people's name. Combine such a military with a range of undeclared wars and other conflicts and a Congress for which cheerleading, not control, is the order of the day, and you have a recipe for a force unto itself.
It used to be said of Prussia that it was a military with a state attached to it. America's post-democratic military, combined with the proliferation of intelligence outfits and the growth of the country's second defense department, the Department of Homeland Security, could increasingly be considered something like an emerging proto-state. Call it America's 51st state, except that instead of having two senators and a few representatives based on its size, it has all the senators and all the representatives based on its power, budget, and grip on American culture.
It is, in other words, a post-democratic leviathan to be reckoned with. And not a single Democratic or Republican candidate for commander-in-chief has spent a day in uniform. Prediction for November: another overwhelming victory at the polls for America's 51st state.
William Astore, a retired lieutenant colonel (USAF) and professor of history, is a TomDispatch regular. He blogs at Bracing Views.

Erik Prince in the Hot Seat: Blackwater Founder Under Investigation for Illegal Mercenary Biz

March 25, 2016

In a major new exposé, The Intercept has revealed that the Justice Department is investigating Blackwater founder Erik Prince for possible money laundering, ties to Chinese intelligence, and attempts to broker military services to foreign governments. Prince is currently the chairman of Frontier Services Group, an aviation and logistics firm specializing in shipping in Africa. But documents obtained by The Intercept show that Prince has also set up shell companies to offer paramilitary services to at least a half-dozen African nations, including Libya. Both the United States and the United Nations have imposed a series of restrictions on military dealings in Libya. Prince is also suspected of attempting to open Chinese bank accounts to move money for his Libyan associates. As part of its investigation, The Intercept obtained an internal slide presentation showing Prince's private force would operate in Libya for the stated purpose of stopping the flow of refugees to Europe. Prince has also long been interested in raising a private military force to battle Islamic militant groups in a variety of countries. We spend the hour with The Intercept's Jeremy Scahill and Matthew Cole, the reporters behind "Erik Prince in the Hot Seat." "In a lot of ways, Erik Prince is like a Mafia don," Scahill says. "He has been able to avoid any criminal charges against him personally for activities that his companies have engaged in. … Whether or not the U.S. government will actually seriously go after him is still to be seen." Scahill is the co-founder of The Intercept and author of the best-seller, "Blackwater: The Rise of the World's Most Powerful Mercenary Army." His most recent book, "Dirty Wars: The World is a Battlefield," is out in paperback, and his film "Dirty Wars" was nominated for an Academy Award.


This is a rush transcript. Copy may not be in its final form.
JUAN GONZÁLEZ: In a major new exposé, The Intercept has revealed that the Justice Department is investigating Blackwater founder Erik Prince for possible money laundering, ties to Chinese intelligence and attempts to broker military services to foreign governments. Prince is currently the chairman of Frontier Services Group, an aviation and logistics firm that specializes in shipping in Africa. But documents obtained by The Intercept show that Prince has also set up shell companies to offer paramilitary services to at least a half-dozen African nations, including Libya. Both the U.S. and the United Nations have imposed a series of restrictions on military dealings in Libya. Prince is also suspected of attempting to open Chinese bank accounts to move money for his Libyan associates. A former intelligence official told The Intercept, quote, "Money laundering for Libyan officials using a Chinese bankthat is the issue that pushed it over the edge."
AMY GOODMAN: As part of its investigation, The Intercept obtained an internal slide presentation showing Erik Prince's private force would operate in Libya for the stated purpose of stopping the flow of refugees to Europe. Libya is one of the main routes for migrants trying to enter Europe from eastern Africa and parts of the central Sahel region. Prince has also long been interested in raising a private military force to battle Islamic militant groups in a variety of countries. The Intercept also reports on internal proposals drafted by Prince and his team for a project code-named Project November aimed at confronting the theft of Nigerian oil, providing VIP protection for Nigerian officials and engaging in counterinsurgency activities.
For more, we're joined by the reporters who broke the story: Jeremy Scahill and Matthew Cole. They're co-authors of the new piece for The Intercept headlined "Erik Prince in the Hot Seat: Blackwater's Founder is Under Investigation for Money Laundering, Ties to Chinese Intel, and Brokering Mercenary Services." Jeremy Scahill is co-founder of the The Intercept. His forthcoming book is called The Assassination Complex: Inside the Government's Secret Drone Warfare Program. His most recent book, Dirty Wars: The World is a Battlefield, is out in paperback, and Dirty Wars was nominated for an Academy Award. He's also author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. And we're also joined by Matthew Cole, the national security reporter for The Intercept.
We welcome you both to Democracy Now! Matthew, let's begin with you. Talk about how you learned and what you found reasons for Erik Prince right now in the hot seat.
MATTHEW COLE: Well, we began withyou know, as I think all good investigative journalism does, with sourcing and tips about what Erik Prince was up to on the continent of Africa. And so, over the last year or so, we've been hearing about Erik Prince's trips and efforts in various countries to try to sell Blackwater-like services to countries that had insurgencies or instability, anywhere that they could get foreigners on the ground to fight Islamic rebels, essentially. And eventually we were able to review a series of documents that show what Prince and a small group of cohorts were trying to do.
And what we found was pretty alarming in terms of a U.S. citizen, a private U.S. citizen and no longer really associated with the U.S. government, going around to countries and trying to exploit either their problems or their fears to present awhat they call turnkey solutions, which is a full spectrum of military services, intelligence, so that the countries that would potentially buy these proposals basically have to do nothing other than write a check, and he would be able to bring in everything from spy airplanes to paramilitary operatives on the ground and his own, you know, personal spying force and hunter killers, if you will. You know, so far, what we've found is that no one has purchased his services, but it didn't stop him from trying and continuing to try to provide those things to as many countries as heanywhere he could and could see a business opportunity.
JUAN GONZÁLEZ: And what about this company that he has been involved with recently, because obviously he supposedly sold out all of his interests in Blackwater years ago? What is this company, and what is its connection to the Chinese?
MATTHEW COLE: Well, he is the chairman of a company called FSG, Frontier Services Group, and that is a publicly traded company in Hong Kong withthat does aviation and logistics, primarily in Africa. And what we understand is thatand what the documents show is that what Erik Prince did was he used his position as the chairman of this publicly held company to gain legitimate access to meetings with African government officials. So he wouldit would allow him to enter the country, come into the room and offer, say, infrastructure or logistics contracts. And then what he would do is he would present his own ideas of what the country needed, and those were services that the company that he was a chairman for, FSG, was not able to provideand without the knowledge of the company itself. They had no idea that he was walking around bringing these proposals in for armed foreigners, for weaponized vehicles, for surveillance aircraftthings that the company that he was chairman for literally didn't have licenses for and didn't have equipment. They didn'tthey didn't have it. And that's where you start to see the discrepancy between what he was trying to do versus whatwhat he appeared to be doing when he arrived in the country versus what he was actually providing. And that was cause of a major concern for the company, and they then went about a series of things to try to separate themselves from their own chairman. And that's where we stand today.
AMY GOODMAN: Now, Jeremy, you've spent years investigating Erik Prince. You wrote your first book, Blackwater: The Rise of the World's Most Powerful Mercenary Army. Explain who he is, his background, and why all of this matters today.
JEREMY SCAHILL: Right. Well, you know, Erik Prince comes from a very wealthy family in the state of Michigan. His father, Edgar, ran a very successful business making auto parts. In fact, his dad invented the lighting system on the drop-down visors in a car, where theyou know, you pull the visor down, and a light goes on. And that company was really the lifeblood of the community of Holland, Michigan, which is a pretty conservative, Dutch Reformed section of the state of Michigan. And his dad was, in many ways, sort of the king of Holland, Michigan. And his mother is aI mean, I don't know how to say this other than just a fanatical, right-wing extremist, who now is one of the major funders of basically trying to stop gay people from marrying around the country. But his father was a very beloved figure, Erik Prince's, in Michigan, built up this very successful company, and then he died at a pretty young age of a heart attack. He dropped dead in the elevator of his building. And eventually, his wife, or his widow, and the kids decided that they were going to sell the company. So they actually sold it to Johnson Controls in Wisconsin for $1.3 billion, and a part of that money, Erik inherited.
And Erik, you know, very much had daddy issues. He wanted to impress his father and actuallyand live up to his father's reputation. And he did something that, you know, manynot many children of the ultra-wealthy do: He joined the military. And he did a brief stint in the Navy SEALs and then, ultimately, in the late '90s, started what was envisioned originally as a law enforcement training center and shooting range, the Blackwater Training Center. And among the things that they did was they built a mock high school to try to, you know, train law enforcement officials on how to deal with Columbine-like shooting scenarios. They alsobecause of the bombing of the USS Cole off the coast of Yemen in 2000, one of the early contracts Blackwater got was to train sailors and other military personnel on how to defend against a small boat attack against their larger vessels.
And then 9/11 happens. And, in fact, Erik Prince was interviewed on Fox News, on The O'Reilly Factor, about the 9/11 attacks, and he said that, you know, before 9/11, his business was relatively small and focused on training, and he commented that his phone was ringing off the hook. And among the people that he communicated with in the early stages of post-9/11 reality was a guy who was the executive director at the Central Intelligence Agency named Buzzy Krongard, who was an old friend of Erik's father. And it's sort of a chicken-and-egg question of who came up with the ideasand Matthew and I both reported on this over the yearsbut what ended up happening, to make a long story short, is that Erik Prince began providing retired special operations personnel to the U.S. government as a sort of private force that would serve a dual function for the CIA and other agencies. They could deploy these guys without claimingif they got killed, without claiminghaving to claim the fact that U.S. personnel were dying in war zones, but also it gave an incredible flexibility to the Bush-Cheney administration for deniability.
And so, essentially, Erik Prince wanted tohe wanted to join the CIA and was unable to clear the process of it. I mean, there's different stories as to why Erik Prince did not actually become a CIA operative, but he basically then set out to create his own sort of small, privatized version of like a special access program for the CIA. And a number of veterans of the CIA's paramilitary operations, people like Enrique "Rick" Prado, who was a paramilitary operative in Latin America, and others, ended up coming over and working with Blackwater on this program. And they operated in a variety of countries around the world, not only bodyguarding the CIA and U.S. officials in Iraq and elsewherethey were sort of the Praetorian Guard for the occupation of Iraq, guarding Paul Bremerbut they also were involved with the Hunter-Killer program.
And so, Erik Prince largely existed in the shadows until the killing of the four Blackwater operatives in the city of Fallujah in March of 2004, where they were hacked to death and then strung up from a bridge. And Erik Prince really took that opportunity of his company being in the news to really make his presence known on Capitol Hill with Republicans. And he worked with very high-powered Republican lobbyists. He has a very close personal relationship with the Cheney family. And Prince basically became a hero within national security circles in the Republican administration at the time and on Capitol Hill. And that led to very, very large contracts and also contracts with the CIA around the world.
And, you know, Matthew and I talked to several former CIA officers who were saying very critical things about what Erik Prince is doing right now, but all of them said, "You know, look, at the end of the day, hethey kept us safe in these operations." I mean, two Blackwater guys were killed when Forward Operating Base Chapman was attacked by this triple agent from Jordan and blew up a number of CIApretty senior CIA people on Afghanistan. And two Blackwater guys got killed in that operation.
So, you know, Erik Prince then basically viewed himself as having been thrown under the bus by Leon Panetta when he became CIA director. And, you know, some of what Panetta did, I think, was disingenuous. You know, Panetta runs over to Congress very early on in his tenure at the agency and briefs the Intelligence Committee on what he said was basically an inactive assassination program that Blackwater was at the center of, and then tells the members of the Intelligence Committee that they had shut it down. And, you know, what itI talked to people on the Intelligence Committee at the time, and what it seemed like is that Panetta basically was trying to deal with the fact that there was all the torture and sort of extrajudicial activity by the agencythey would say it was judicial activity, because they had all these memos allowing them to torture and stuff. But basically, Panetta tried to put all the garbage on Erik Prince and Blackwater and flush it down the toilet. And so, at that point
AMY GOODMAN: Of course, there was Nisoor Square.
JEREMY SCAHILL: And then the Nisoor Square massacre happened in September of 2007. And, you know, I would say that the Fallujah incident brought Blackwater to sort of fame and prominence in the world, and then Nisoor Square brought it to infamy, when they killed 16 civilians in a crowded Baghdad traffic stop. And theresome of the Blackwater guys that did that ultimately were prosecuted and were sentenced to decades in prison, one of them to life in prison.
And so, anyway, but to bring it to the present, Erik Prince continued, actually, to get contracts under the Obama administration, while the Justice Department was investigating Blackwater and the other affiliated companies that Erik Prince owned for a wide range of defense control violations, where they were offering services to the government in South Sudan or other nations without having obtained the proper licensing from the State Department. And in some casesand, you know, Blackwater admitted to doing thisthe State Department would say, "Well, explicitly, we don't want you to do that, and we don't give you permission to do this," and then they would go and do it anyway. But no oneErik Prince was neverno charges were ever brought against him personally.
JUAN GONZÁLEZ: Well, how did that happen? Was that just a question of one agency in the government not knowing what the other was doing, or was thatwas that greenlighted higher up in the administration?
JEREMY SCAHILL: Well, I don't think that there wasI don't think there was political pressure put on the prosecutors in that case. I think it was a different sort ofit was a beast of a different nature. You know, Matthew and I talked to one of the very senior people involved with that prosecution, and he said, "Look, we've got an overwhelming abundance of evidence indicating that this company has committed systematic criminal violations of our defense restrictions, that are in place for our own national security, so that we're not exporting these things to people that potentially could do harm to the U.S. or its interests. And while we're trying to bring this criminal case, the Obama administration and Secretary Hillary Clinton are giving them more contracts. So how do we go in front of a jury and say this is a criminal enterprise, but the new Democratic president and his secretary of state are continuing to award them contracts?" So, basically, they said, "Well, all we really could do was to figure out a way to get Prince to leave those companies as the head and the chief controller of them, and then just levy massive fines against them."
JEREMY SCAHILL: So they paid around $50 million in fines, and then they were able to reconstitute themselves.
AMY GOODMAN: When Blackwater was being investigated and you were putting a lot of pressure through your investigations, Erik Prince left the country.
JEREMY SCAHILL: Heyeah, well, he's always maintained a residence in Virginia. He did relocate to Abu Dhabi in the United Arab Emirates and started up a number of other companies. And that became very controversial when his plan for a private security force for thefor several Emirati governments came to public light. And, you know, one of the reasons whyyou know, remember, this isthe uprisings start in 2011 in the Arab world, and those governments were very nervous. You know, these corrupt monarchies were very nervous that their own status would bewould be confronted, you know, in control of these countries. And Erik Prince was viewed as a guy who could potentially provide them with non-Muslim private soldiers that could, you know, tamp down any rebellion in those countries. And, you know, we understand that Erik Prince fell out of favor in Abu Dhabi and then started looking elsewhere and found himself in negotiations with people with deep connections to the Chinese Communist Party.
JUAN GONZÁLEZ: Well, I wanted to turn to comments that Erik Prince made in 2014 about the self-proclaimed Islamic State. This is Prince on Fox News responding to host Bill O'Reilly's proposal to fight the Islamic State with mercenaries.
ERIK PRINCE: The U.S. military has mastered the most expensive way to wage war. They've proven that in Iraq and Afghanistan. They haven't been that effective there. So finding a cheap, sustainable way that you can keep presence into these areas, to keep pressure on Islamists, to keepto support friends and be that long-term dwell is about the only way you're going to do it. It's as part of American history as apple pie.
JUAN GONZÁLEZ: What about that, Jeremy? A more efficienta more efficient way to do things?
JEREMY SCAHILL: Yeah, I mean, Erik Prince always said that, you know, if you want a package to arrive somewhere, you don't send it through the U.S. Post Office, you use FedEx. And he sort of views hishimself as basically offering the CIA, the Defense Department, the State Department FedEx services that are actually lethal, and not delivering packages, but the package in question would be, you know, either deniable assets or the provision of what are essentially mercenaries that you don't have to count as your fallen in a war zone or you don't have to own if they commit misconduct that you wanted them to commit.
JUAN GONZÁLEZ: And there's also the issue, though, of the accountability then, because it's no longer a government operation, but it's these private outfits, as well.
JEREMY SCAHILL: Yeah, I mean, soldiers are subjected to the Uniform Code of Military Justice. And until very recently, these kinds of private military contractors existed in a total gray zone, where it was unclearshould they be prosecuted under the UCMJ, or do they go into civilian courts? And that's why you saw so few of these guys actually prosecuted for anything.
AMY GOODMAN: You know, Erik Prince subsequently spoke at an event for donors to the Maverick PAC, a conservative group with ties to the Bush dynasty, and claimed Blackwater, now Academi, could stop the Islamic State. He said, quote, "It's a shame the [Obama] administration crushed my old business, because as a private organization, we could've solved the boots-on-the-ground issue, we could have had contracts from people that want to go there as contractors; you don't have the argument of U.S. active duty going back in there." Matthew Cole, respond to that and then this broader relationship right nowit's not Academi, it's not Blackwater; you can talk about the latest incarnationand why China matters to the U.S. in this investigation.
MATTHEW COLE: I think, first, the issue about what mercenaries bring or what an American company brings to the table isfrom the standpoint of democracy, is accountability and transparency. War is one of the most, if not the most, important thing that a nation-state, and especially a democracy, engages in abroad, certainly. And so, it's of the utmost seriousness that theyou know, the government, the people who elected that government have some kind of understanding of who in their countrywho represents them abroad and what they're doing.
And what Blackwater, what Erik Prince provideson one hand, he's not wrong. Right? He hasthey are very effective. They are very efficient, I should say, in providing the services that they offer. But the question is, is without accountability or transparency, what do they get away with? When things go wrong, what is the recourse? And what Blackwater has shown historically is that there is very little recourse for when things go wrong. And so, it's a very, very dangerous weapon or tool, if you will, to have Erik Prince or have a mercenary organization operating.
And what he's done now is, by leaving the U.S. government and going and doing it on his own, he has separatedthere's even less connection between accountability and transparency, because thehe's offering his services directly to foreign countries. When things go wrong or when they want to hide, it didn't happen. It's a plausible deniability, is a lot of what happens for governments that would hire his services.
And so, when you bring in the notion of his business ties to China, the issue isyou know, obviously the United States has a very complicated relationship with China, but one of the things that's certainly going on is that, at least on the defense side, whether it's cyberwarfare, whether it's, you know, outPacific growth and reach by the Chinese government in the Pacific region, what you have is kind of a stalemate and a bit of a cold war going on. And the concern would be for Erik Prince to be getting in bed withand certainly, he is an appealing figure for the Chinese government, right? He has a lot of expertise. He has an idea of how toand the ability to go intoin small groups, to go into countries where China may have, for instance, natural resource interests in Africa. Certainly, you know, their investment in the infrastructure in Africa has been massive, as a way to sustain their economy and their growth. And what he is providing them is the ability to protect their investments in places.
And certainly, that would be a concern, and we know it's a concern, for the Department of Justice. We know it's a concern for U.S. intelligence agencies. And again, at the heart of it is accountability and transparency. He's a U.S. citizen. He is still subject to U.S. law. And so, you know, we don'tI think there'sat this point, the question is whether any of what he has done thus far has violated U.S. law or U.S. regulations.
AMY GOODMAN: You asked his lawyer if he's being investigated?
MATTHEW COLE: Yeah, we asked his lawyer
AMY GOODMAN: Victoria Toensing?
MATTHEW COLE: Yes, we asked his lawyer if he's been notified of an investigation.
AMY GOODMAN: Remember, you can't curse on the air. What did she respond?
MATTHEW COLE: And shewell, her response was
AMY GOODMAN: Be careful.
MATTHEW COLE: that neither she nor her client had been notified of an investigation by the Department of Justice. So that was her
AMY GOODMAN: But she did say it was "total [BS]."
JEREMY SCAHILL: Well, I mean, whatwell, her
MATTHEW COLE: She said that theher exact response on that was
AMY GOODMAN: Don't give it exactly.
MATTHEW COLE: No, no, no, but it was in response to a question about money laundering. In fact, over three days of communication, many of the things that we initially submitted to Mr. Prince, her story changed, and her response for her client changed.
MATTHEW COLE: And so, it's actually a little unclear. We can't give one concise answer as to whether she denied certain things. In fact, she denied certain things and then moved back. So, certainly, I think they recognize that a lot of what we presented in the story is quite accurate.
JEREMY SCAHILL: Well, and sheVictoria Toensing is a very well-known Republican commentator and lawyer. And, you know, she and her husband both are attorneys that have represented a lot of interests for the pretty far-right elements of the GOP. But she's also one of the main people that you see going after Hillary Clinton for Benghazi. And when we first spoke to her, she was like indignant at what we were saying that we had evidence on for Prince. But over the course of several days, it went from "He has no idea what you're talking about" to "Oh, yes, he did actually open up a bank account at Bank of China, but it was for a company." And, "Oh, was it for Frontier Services Group?" "I'm not going to tell you what company it was for." We asked Frontier Services Group. "It's not our bank account." "OK, well, what's the bank account for?" You know, and she said, "Well, I don't know. I can'tnow I can't reach my client." "What about his meetings with Chinese intelligence?" "He has no idea what you're talking about." Then, the next time, when we give her more detail on it, she says, "Oh, well, he did meet with them, but it was actually about medevac services." So, you know, it's this evolving thing, and it felt a little bit, I think, to us like a dry run for an alibi for all of these things that we're reporting on.

The Intercept reports that what began as an investigation into Blackwater founder Erik Prince's attempts to sell defense services in Libya and other countries in Africa has widened to a probe of allegations that he received assistance from Chinese intelligence to set up an account for his Libya operations through the Bank of China. The Justice Department is also seeking to uncover the precise nature of Prince's relationship with Chinese intelligence. We get details from Matthew Cole and Jeremy Scahill about what they uncovered in their joint story, "Erik Prince in the Hot Seat: Blackwater's Founder is Under Investigation for Money Laundering, Ties to Chinese Intel, and Brokering Mercenary Services."


This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: Our guests for the hour are Jeremy Scahill, co-founder of The Intercept, and Matthew Cole, the national security reporter for The Intercept, previously an investigative reporter with NBC. Their new exposé is "Erik Prince in the Hot Seat: Blackwater's Founder is Under Investigation for Money Laundering, Ties to Chinese Intel, and Brokering Mercenary Services." And I hope we get, in this hour, to a number of issues, including Matthew Cole's recent piece on one of the Navy SEALs who was involved with the killing of Osama bin Laden. Juan?
JUAN GONZÁLEZ: Yeah, Matthew, I wanted to go back for a second to theto Prince's connections and work in Libya, because Libya is essentially a failed state. There's competing groups claiming to be the actual government, and not to mention all the other insurgent groups. Who was he working with in Libya?
MATTHEW COLE: Well, it's a little murky in terms of who he was working with. What we know about Erik Prince's interest in Libya is that it began early on, almostI believe it began by 2011, whenthe fall of Gaddafi. But by 2013, he was in Libya, had come together with a proposal with a few partners to offer a complete Blackwater service for counterinsurgency. He wanted to bring stability into the East and wipe out the Islamists, who were gaining strength subsequent to Gaddafi's fall.
And initially, he had a difficult time finding the right partners. It was clear, when he was meeting with people, that he didn't trust some of the factions that he was dealing with. I think it washe wasn't familiar with Libyahe's certainly not an Arabist or an expertand had a difficult time trying to figure out who was who. And ultimately what he did was he went after meetings trying to broker a deal with a man by the name of General Haftar, who is now the head of armed forces essentially in Libya, but who has lived in thehe's a dual U.S. citizen, lived in the U.S. for a long time and worked with the agency, the CIA, for many years.
And what he did was, over time, he changed his proposal, and the reason why was because in his offering of a group of European white mercenaries, non-Muslim mercenaries, he didn't get a whole lot of takers. And what he was advised was that if you want to sell this program, what you need to do is give them something that was politically palatable. So what you need to do is you need to offer a solution to a problem that they currently have that they can't seem to control, which was migration, the problem of migrants coming up through well-established, you know, lanes, if you will, routes, to try to get into Europe. And if you provide them with a border solution, that is something that not only will they accept, but you can probably get buy-in of the European Union, because the European Union, of course, is the one who receives the migrants on the other end.
And so, come 2015, last year, where you had this crisis, a refugee crisis, as far as Europe is concerned, and certainly is very evident from the conflicts in the Middle East, they have all of these migrants washing up at their shores, and many of them get there fromleave Libya, regardless of whether they were from Libya. And so, now he's starting to get a little bit more traction, because thehe wasn't offering a mercenary force, he was offering a border control system. And what wasand, in fact, this is part of where our story began, in terms of where we picked it up, because what we were being told was, is that, yeah, he's offering a border service, a border patrol, but what is really his intent is, is to build a mercenary force, and that this is just the fig leaf that allows him to do it, if he can sell this.
There was a second complication, which is that Libyan government, because it's essentially a divided government in a stalemate, something like a civil war, and it is a failed state, they're financially frozen. They have a lot of money sitting in their central bank from all of their oil wealth, $150 to $180 billion, but no one will allow them to spend it, because no one's sure which government is in power, and no one's sure whatif whether the money being spent is legitimate. And so, Erik had this problem, which was he had the Libyans who were interested, but they couldn't pay for anything. And so, the EUpartnering with the EU potentially was a way to get half of it funded from Europe and also to get the Europeans to help free up some of that money. And so, now Erik Prince was offering something, not just a mercenary force; he was acting as a banker. He was a real knight in shining armor for Libyan government officials who were sitting there with no money. And so, what we saw and what we could see fromand what our sources were saying was that what this was, was an opportunity, unlike the other proposals that he was offering, was the ability to be a banker for Libyan officials. And that is what started to get him into some real trouble.
"Let me issue and control a nation's money and I care not who writes the laws. - Mayer Rothschild
"Civil disobedience is not our problem. Our problem is civil obedience! People are obedient in the face of poverty, starvation, stupidity, war, and cruelty. Our problem is that grand thieves are running the country. That's our problem!" - Howard Zinn
"If there is no struggle there is no progress. Power concedes nothing without a demand. It never did and never will" - Frederick Douglass

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