Steve Fainaru, Alec Klein / Washington Post – 2007-07-01 22:57:49

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/07/01/MNGGIQP5051.DTL

The US Military Increasingly Turns to Private Firms, such as Aegis, for Security Services

BAGHDAD (July 1, 2007) — On the first floor of a tan building inside Baghdad’s Green Zone, the full scope of Iraq’s daily carnage is condensed into a 30-minute PowerPoint presentation.

Displayed on a 15-foot-wide screen, the report is the most current intelligence on significant enemy activity. Two men in khakis and tan polo shirts narrate from the back of the room. One morning recently, their report covered 168 incidents: rocket attacks in Tikrit, a cow-detonated bomb in Habbaniyah, seven bodies discovered floating in the Diyala River.

A quotation from Gen. David Petraeus, the top American commander in Iraq, concluded the briefing: “Hard is not hopeless.”

The intelligence was compiled not by the U.S. military, as might be expected, but by a British security firm, Aegis Defence Services Ltd. The Reconstruction Operations Center is the hub of Aegis’s sprawling presence in Iraq and the most visible example of how intelligence collection is now among the responsibilities handled by a network of private security companies that work in the shadows of the U.S. military.

Aegis won its three-year, $293 million U.S. Army contract in 2004. The company is led by Tim Spicer, a retired British lieutenant colonel who, before he founded Aegis, was hired in the 1990s to help put down a rebellion in Papua New Guinea and reinstall an elected government in Sierra Leone. Several British and American firms have bid on the contract’s renewal, which is worth up to $475 million and would create a force of about 1,000 men to protect the U.S. Army Corps of Engineers on reconstruction projects. Protests have held up the award, which is expected soon.

The contract is the largest for private security work in Iraq. Tucked into the 774-page description is a little-known provision to outsource intelligence operations that, in an earlier time, might have been tightly controlled by the military or government agencies such as the CIA. The government continues to gather its own intelligence, but it also increasingly relies on private companies to collect sensitive information.

The deepening and largely hidden involvement of security companies in the war has drawn the attention of Congress, which is seeking to regulate the industry. The House Intelligence Committee stated in a recent report that it is “concerned that the Intelligence Community does not have a clear definition of what functions are ‘inherently governmental’ and, as a result, whether there are contractors performing inherently governmental functions.”

“There is simply not the management and oversight in place to handle this properly, not only to get the best of the market but to ensure that everything is being done,” said Peter Singer, a Brookings Institution senior fellow who wrote a book on private security and has been critical of the lack of government oversight. “It leaves a lot of legal questions that are open or dodged.”

The government has outsourced a wide range of security functions to 20,000 to 30,000 contractors in Iraq; no official statistics have been kept. Contractors protect U.S. generals and key military installations, and have served as prison guards and interrogators in facilities holding suspected insurgents, among other responsibilities.

Aegis’ intelligence activities include battlefield threat assessments, the electronic tracking of thousands of private contractors on Iraq’s dangerous roads, and community projects the company says are designed in part to win over “hearts and minds.” The new contract calls for the hiring of a team of seasoned intelligence analysts with “NATO equivalent SECRET clearance.” According to a summary of their responsibilities, the analysts are to conduct “analysis of foreign intelligence services, terrorist organizations, and their surrogates targeting DoD (Department of Defense) personnel, resources and facilities.”

Much of this is already being done by Aegis. “We’re more of an intel company,” said Kristi Clemens, the company’s Washington-based executive vice president. “We’re not guns for hire.”

Known internally as Project Matrix, Aegis’ U.S. Army contract has multiple aims. The company, for example, runs more than a dozen Reconstruction Liaison Teams in which contractors armed with assault rifles and traveling in armored SUVs visit reconstruction projects to assess their progress and the levels of insurgent activity.

“Their mission is to provide ‘ground truth’ to the Army Corps,” Clemens said.

Aegis has also spent about $425,000 in company money and private donations on more than 100 small charity projects such as soccer fields and vaccination programs. The projects enable the company to build relationships in the communities in which it operates and gather information at the same time.

The company, for instance, spent $1,300 distributing tracksuits to girls’ schools in an area of eastern Iraq where residents routinely pelted Aegis security teams with rocks, according to Justin Marozzi, Aegis’s former director of civil affairs, who now is a London-based consultant. Through relationships forged on the project, the company learned of an insurgent cell that was working out of the governor’s office, he said.

Aegis recently launched a second charity to operate in Iraq and elsewhere called Hearts and Minds. The charity project “goes back to basic counterinsurgency doctrine,” Clemens said. “You need local people on your side.”

Aegis also provides on-demand “threat assessments for the people that travel the battlespace” throughout Iraq, said Robert Lewis, who directs Project Matrix as the company’s chief of staff in Baghdad. One intelligence assessment, developed recently for the Army Corps of Engineers and provided independently to the Washington Post, included a detailed map of previous attacks and analyzed the intent and capabilities of Shiite militias and criminal gangs operating in Basra province.

“There has been collusion with elements of the Basra” security forces “which has increased the capability of the militias,” concluded the report, which was compiled by Aegis’s intelligence officer for the region.

Aegis declined to make its intelligence officials available for comment but said the information is unclassified and is gathered from a variety of open sources, including thousands of private security contractors who operate on Iraq’s roads.

© 2007 Hearst Communications Inc.

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