Pay Any Price (10 page)

 

Of course, the Blue brothers and General Atomics have also been doing their best to curry favor in Washington. In 2006, for example, the Center for Public Integrity found that General Atomics had spent more than any other company to pay for the travel of congressional staffers.

Yet the Blue brothers do not see themselves as being on the federal dole. In 2011, Linden Blue coauthored a blistering critique of Barack Obama's free-spending ways—even as government contracts to General Atomics were soaring to new heights. In a column published by the conservative Hudson Institute, Blue complained that “many people, far too many people, believe the role of government is to care for them.”

Since General Atomics is privately held, the precise figures for the profits earned by the firm—and the wealth generated for the Blue brothers—are not publicly known. But the real costs to the nation of its dependence on General Atomics cannot be measured only in dollars. America's moral standing has been severely damaged by the Obama administration's addiction to drone warfare.

Compared to George W. Bush, in fact, Barack Obama has had a love affair with drones. By 2012, the CIA had conducted six times more drone strikes in Pakistan during the three years of the Obama administration than the agency had conducted under the entire eight years of George W. Bush, according to the Bureau of Investigative Journalism, a British journalism group that has reported extensively on American drone campaigns in Pakistan and other countries. By May 2013, there had been a total of 368 American drone strikes in Pakistan since 2004, killing between 2,541 and 3,533 people, according to the journalism group. Those figures include between 411 and 884 civilians—with somewhere between 168 and 197 children among them. The vast majority of the drone strikes—316—have been conducted during the Obama administration.

The Obama administration acknowledged in 2013 that four American citizens had also been killed in drone strikes overseas, including some who were not intended targets. That admission highlighted the fact that the government was choosing the targets of its drone strikes with secret standards of evidence. There was no legal due process provided to the intended targets, even for American citizens.

As the drone strikes have intensified under Obama, international opinion has finally begun to turn against them. In late 2012, for example, a researcher affiliated with the United Nations launched an investigation of the civilian casualties caused by the American drones. “The exponential rise in the use of drone technology in a variety of military and nonmilitary contexts represents a real challenge to the framework of established international law,” said Ben Emmerson, the UN's special rapporteur on human rights and counterterrorism. In October 2013, Emmerson issued a report that identified thirty-three incidents in Afghanistan, Yemen, Pakistan, and other nations in which drone strikes resulted in civilian casualties. The new scrutiny of drones from the United Nations could be the first sign that international restrictions on the use of drones in combat may someday be imposed, much like the limits on chemical weapons or those that have been sought on cluster bombs.

 

More troubling is the resentment against the United States that the drone strikes have stoked in the Muslim world. Many experts warn that anger will mean that the numbers of Islamic extremists will keep growing much faster than the drones can kill them.

That is particularly true since the Obama administration has been employing drones to target suspected militants far beyond the al Qaeda leaders who were the program's original targets. McClatchy Newspapers reported in 2013 that U.S. intelligence reports showed that drone strikes in Pakistan had been used to kill a wide range of Afghan and Pakistani militants, some of whom belonged to groups that didn't even exist at the time of the 9/11 attacks. A number were low-level militants with no identified affiliation. McClatchy also determined that the U.S. intelligence reports it had reviewed revealed that U.S. drone pilots were not always sure whom they were killing.

The International Crisis Group, an independent nonprofit organization, warned that drone strikes were a short-term fix that could not solve the fundamental political problems fueling militancy in Pakistan's northwest frontier region. Pakistan needs to end the second-class status of its tribal areas but is unwilling or incapable of doing so, and America isn't pushing for political reform, the group observed. “Drone strikes alone will not eliminate the jihadi threat in Pakistan's Federally Administered Tribal Areas,” the group said in a 2013 report. “Extension of Pakistani law and full constitutional rights to the region is the only long-term solution.”

The drone campaign is already having a deep political impact in Pakistan, where it has become an issue of national sovereignty. But it is increasingly seen as a human rights issue as well. In late 2012, Imran Khan, one of Pakistan's most famous celebrities, a cricket star turned politician, led thousands in a protest march against the drones. The march was so large it had to be blocked from entering Waziristan by the Pakistani Army. “The drones are inhumane,” Khan said. “Are these people not humans?” he pleaded. “These humans have names.”

In a major national security speech in May 2013, President Obama finally acknowledged the growing criticism both at home and overseas of his drone policies, and vowed to impose new limits on drone strikes. In addition to vowing to move drone operations from the CIA to the U.S. military, he discussed ways in which he might make decision-making on target selection more open and transparent. But Obama provided few details, and his vague promises left him plenty of flexibility to continue strikes wherever and whenever he sees fit.

In fact, so little changed that in October 2013, Amnesty International and Human Rights Watch both issued reports claiming that U.S. drone strikes were killing far more civilians than the Obama administration was willing to admit, and that the United States' drone campaign was in violation of international law.

 

It is never a good sign for a corporation when its chairman has to write a book to defend the firm's reputation—even worse when the book has to refute charges that the company's personnel were involved in torture. But for J. Phillip London, executive chairman of CACI, a defense and intelligence contractor based in northern Virginia, the war on terror has been a battle of extremes. London has fought for years to cleanse his company's reputation from the stain of Abu Ghraib. In the meantime, CACI and London have also been making loads of money.

CACI is a multibillion-dollar defense contractor and Fortune 500 company. It is best known, at least on the Internet, for its infamous role at Abu Ghraib prison in Iraq. After the U.S. invasion of Iraq, CACI sent contractors to serve as interrogators at Abu Ghraib. One of those interrogators was later caught up in the Abu Ghraib torture scandal that broke in 2004 with the release of graphic photographs of abuse of Iraqi prisoners by American guards. While the low-ranking soldiers involved in the scandal faced punishment from the military justice system, the senior military and intelligence officers who oversaw the prison emerged from the scandal largely unscathed. And so did the outside contractors who worked alongside the military and intelligence personnel inside the prison.

But there was still plenty of bad publicity. And prolonged legal action.

CACI was mired in the Abu Ghraib scandal after an army investigation concluded that Steven Stefanowicz, a CACI contractor working as an interrogator at the prison, had played a role in the detainee abuse. In the army report, Maj. Gen. Antonio Taguba determined that Stefanowicz had “allowed and/or instructed MPs, who were not trained in interrogation techniques, to facilitate interrogations by ‘setting conditions' which were neither authorized [nor] in accordance with applicable regulations/policy. He clearly knew his instructions equated to physical abuse.” Taguba also found that Stefanowicz had made a false statement to investigators about his interrogations and knowledge of abuses.

The involvement of CACI and another contractor, Titan, in the Abu Ghraib scandal raised new questions about outsourcing in the war on terror, and exposed for the first time the degree to which U.S. intelligence was using outside contractors to perform some of its most sensitive tasks. Indeed, the contractors had greater legal exposure to the fallout from Abu Ghraib than did the federal government, which could claim sovereign immunity to avoid lawsuits brought by the victims at Abu Ghraib. Lawyers for those victims skirted the sovereign immunity obstacle by targeting CACI and Titan, turning them into proxies for the government.

J. Phillip London decided to respond to the allegations about Abu Ghraib by going on the offense. Rather than apologize or explain its real role with the U.S. intelligence community, CACI aggressively took on news organizations that wrote about it and Abu Ghraib, and issued statements claiming that the media portrayal of CACI's role was highly inaccurate and biased. In 2008, London even wrote a book, published by a conservative publishing house, that he claimed was designed to correct the record about CACI. It was entitled
Our Good Name.

The CACI counteroffensive didn't stop the press from writing about CACI, and certainly didn't stop legal actions from being brought against the company. After a drawn-out legal process in the U.S. courts, Titan's corporate successor, Engility, agreed in 2012 to pay more than $5 million to former detainees at Abu Ghraib to settle their lawsuit. But CACI showed no willingness to settle and fought on. Its refusal to settle was finally rewarded in 2013, when a federal judge dismissed the Abu Ghraib lawsuit against it, nine years after the prisoner abuse scandal erupted.

CACI's aggressive attempts to change the public's narrative about the firm apparently did help with the government, because CACI's work for the defense and intelligence communities continued with little interruption after Abu Ghraib. It has actually grown remarkably ever since. In the immediate aftermath of the scandal, the
Los Angeles Times
reported that the government might ban CACI from further contracts. But by August 2004, just months after the Abu Ghraib scandal erupted, CACI reported sharply higher profits. A company executive told the
Washington Post
at the time that Abu Ghraib had generated “a lot of noise,” but that it had not had a significant impact on CACI's bottom line.

The negative headlines have faded since Abu Ghraib, and CACI has boomed since. By 2012, revenue had surged to $3.7 billion, up from $2.4 billion in 2008. London is almost certainly not as rich as the Blue brothers, but he does own more than 192,000 shares in CACI stock as of 2012, according to the firm's SEC filings. He has thus benefited handsomely from the firm's post–Abu Ghraib resurgence.

 

Robert McKeon was a man of Wall Street, not the Pentagon or the CIA. He was a New Yorker, a graduate of Fordham University who went to Harvard Business School and made it big in private equity, founding his own firm, Veritas Capital. But while he wasn't a creature of Washington, McKeon was smart enough to realize that the war on terror was throwing off cash in a big way. There had to be a play in that. And so Veritas, which had started investing in defense contractors in the 1990s, went after Dyncorp International.

Dyncorp was not a sexy buy, but it had a steady flow of revenue from large government contracts for police training in Afghanistan and other mundane tasks. One of Dyncorp's biggest assets was that it wasn't named Blackwater, and so it stood to benefit when Blackwater became radioactive in Washington.

To be sure, Dyncorp had its share of controversies, and in fact had been in trouble long before Blackwater landed in headlines about contractor scandals. When Dyncorp worked on a State Department contract to handle police training in Bosnia in the late 1990s, its personnel were accused of involvement in sex trafficking—a scandal so rich that it later formed the basis for a movie starring Rachel Weisz. Yet despite its track record, Dyncorp was given contracts to provide police training in Afghanistan and Iraq. In Afghanistan, Dyncorp was caught up in another scandal when its contractors reportedly paid for young “dancing boys” to entertain Afghan policemen, an incident that was described in a State Department cable released by WikiLeaks.

But fortunately for Dyncorp, these allegations of misdeeds by its personnel were overshadowed by Blackwater. After Blackwater's guards were involved in a 2007 shooting incident in Baghdad's Nisour Square in which at least seventeen Iraqi civilians were killed, pressure mounted in Washington for the government to dump Blackwater and give its business to other firms. Dyncorp was there to pick up the pieces.

 

McKeon's private equity firm, Veritas Capital, acquired Dyncorp in a leveraged buyout in 2005.
Forbes
magazine, which provided excellent coverage of McKeon and Dyncorp, later called it “the most lucrative deal of the wars in Iraq and Afghanistan.” (But precisely because Dyncorp was such a sweet deal, it led to a split between McKeon and one of his closest business partners and friends, who accused McKeon of squeezing the partner out in order to keep more for himself, leading to acrimony and lawsuits.)

McKeon was able to ride the surge in spending by the State Department and Pentagon in Iraq and Afghanistan, and then adroitly sold the firm for a huge profit just as the American involvement in Iraq was winding down in 2010. When McKeon sold out to another Wall Street player, Stephen Feinberg of Cerberus Capital,
Forbes
once again lauded McKeon's move, saying that, “for all the talk about Blackwater and Houston oil industry firms connected to Dick Cheney, it took a Wall Street player to truly figure out how to play the war game.”
Forbes
estimated that McKeon reaped a windfall, turning his own $48 million initial investment into as much as $320 million.

Sadly, for whatever reason, it wasn't enough for McKeon. In 2012, just two years after scoring one of the biggest paydays of the war on terror, McKeon committed suicide at his multimillion-dollar Connecticut home. No explanation has ever been made public. In 2013, McKeon's estate began selling off his holdings, offering a glimpse into the glittered world of the oligarchs of the war on terror. McKeon's estate sold two homes in Darien, Connecticut, with a combined price tag of more than $13 million; listed a Fifth Avenue co-op apartment in Manhattan for $11.5 million; and sold a 10,000-square-foot beachfront home in the Hamptons for $60 million.