What kind of War Profiteers are there?

There are many ways to profit from a war. Some may say that even peace campaigns profit from it! The war profiteers we are talking about here are companies having strategies to make a killing from armed conflicts.

Conventional army suppliers Three main categories are distinguished here: arms traders, equipment suppliers, and companies offering services to armies.

Arms traders must not be forgotten.

War is not for them just a market which consumes their wares, but also free advertising for their products. The main companies these days are Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics in the USA; and BAE Systems, Thales and EADS in Europe.

Other suppliers also make profit from wars or from a specific war. There is no doubt, for instance, that Caterpillar, the US bulldozer company, would never sell that much equipment to the Israeli army if there were not the conflict between Israel and the Palestinians which involves house demolitions and the erection of the apartheid wall.

Logistics and services to armies are key aspects of any military operation. Nowadays, it is mostly controlled by multinational companies who bid for the contracts.

When PWC Logistics wins contracts with the US army for heavy lift transportation (up to $1.5 billion in 5 years) or food supply (up to $14 billion in 4 years), it has everything to do with the war in Iraq and Afghanistan.

The net profit of the company jumped from $32 million to $336 million between 2002 and 2004.

Sodexho (catering and services) may not in a sense be war profiteers for providing food and so on to 55 US Marine Corps bases; but they definitely are when supporting the French army and UN's KFOR in Kosovo, NATO in Kabul, and the US forces in South Korea - as well as supplying the 379th Expeditionary Contracting Squadron in Qatar. "In one year, due to global issues [ie the war in Iraq...], the market grew strongly," says Andrew Leach, Sodexho Defense Services managing director. With long-running conflicts having an effect on military personnel, who are not happy to stay away from home for so long, Sodexho has - with the US Marine Corps - created the Messhall Academ-ie in order to prepare civilians for military life and help keep them following orders as their posting goes on and on.

Privatising the army Private companies also now provide services which were traditionally core army activities, in particular in security - such as technical systems, intelligence services and security personnel.

The latter are the modern version of mercenaries. Integrated technological systems are provided by arms trade companies--such as Thales, Lockheed Martin, Northrop Grumman - as well as by information technology companies such as Analytical Services Inc, Computer Sciences Corporation and Electronic Data Systems Corporation.

Other companies specialise in intelligence, and their technological systems can come with intelligence specialists or security/counter-terrorism specialists (most of them being retired from governmental intelligence services or commando units).

For instance, the US Army's Intelligence and Security Command has awarded a contract worth as much as $155 million to CACI International Inc to provide technology to help commanders in the field to collect intelligence and to interrupt enemy communications and intelligence systems. Corporate Watch discovered that such private employees worked as interrogation experts at Abu Ghraib prison. Even Paul Bremmer's safety in Iraq was not assured by the US army but by Blackwater Security staff. And a company such as Vinnel Corporation is in charge of training the Saudi National Guard.

Most of these companies providing security and training staff to the armed forces also offer their services to other companies working in regions at war.

PSC Defense Systems Ltd (of the Armor Group) protects BP Amoco interests in Columbia. That protection includes selection and maintenance of armaments for the host country.

According to Moscow Defense Brief (January 2005), this is how BP finances arms to the Colombian army. In Angola, Air Scan - which is connected with PSC Defense Systems - has a contract with Texaco Chevron to protect local oil deposits from insurgents in that country's Cabinda enclave. On top of private security and other security-related services, some companies also offer to seek out and neutralise mines and ammunition left after the war. You can presume that this service is specifically provided for economic purposes, not humanitarian ones.

Destruction? Reconstruction!

Once the bombs have destroyed the infrastructure, companies are hired to rebuild the country. In this game, Halliburton--and its subsidiary Kellog, Brown and Root - have won the prize in Iraq. This infrastructure also includes the detention centres where the US army holds prisoners. Bechtel (construction and engineering) is not a loser either, with a first $680 million contract followed by a $1.8 million one to be shared with Parson and Horne Engineering. Halliburton also got $900 million from US government contracts in other parts of the world such as Afghanistan and the Balkans. In Afghanistan, the French company Alcatel is one of the main telecommunications system providers.

The concrete manufacturing company Lafarge bought up all the factories of that kind in Serbia.

Because of the urgency of rebuilding war-torn infrastructure, the contracts are often overpriced, thus encouraging many companies' interest in getting into this market.

Programmes & Projects

Add new comment

This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

7 + 5 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.