The Internet and Globalization: A View from Buenos Aires

Posted by Joshua Karliner on June 30th, 2008

Almost twelve years ago, when a group of us started CorpWatch, we did so because it seemed then that a few hundred transnational companies were intent on remaking the earth in their image. As we saw it, the corporate version of globalization undermined community, ecology and democracy. At that moment the Internet had just appeared on the scene, and it seemed to us, and to many others, a vehicle through which to build an alternative – a form of grassroots globalization that fostered human rights and environmental rights, and that helped hold corporations accountable across the globe. Thus CorpWatch was born.

In the ensuing dozen years, the corporate encirclement of the earth has only
grown – as has the grassroots response to it in every corner of the planet.
The Internet has boomed and become on the one hand, more corporatized than we might once have imagined and yet also an increasingly powerful tool for building democratic participation and communication (and I’m very proud that CorpWatch is still part of it). This dual nature of the Internet embodies a fundamental paradox of globalization. While globalization seems to concentrate power in the hands of a few in most every realm it touches, it also increasingly interconnects us, interweaving universal values into a multinational tapestry of cultures and politics.

I see this here in Argentina, where I’ve had the good fortune to live for the past year. As numerous people here will tell you, once, this country was so isolated from the rest of the world that a lot of folks were not aware of the magnitude of the horrors unleashed by the military dictatorship between 1976 and 1983. People knew enough and saw enough and felt enough to be afraid, and tens of thousands felt the direct impact as they or their loved ones were arrested, tortured, “disappeared.” But the truth was hard to come by; there was heavy local censorship, and there was no Internet. People abroad knew more about what was going on in Argentina, than many here did.

Today, the country, like most of the rest of the world, is dialed-in, networked to the hilt, totally online. It seems almost unthinkable that something similar could happen here again. There is a strong consciousness of and commitment to human rights, and an understanding of the connection between what Argentina went through, and similar histories and battles elsewhere in the Latin American region and the world. Argentina pulled itself out of the horrors of dictatorship, and as it has re-evolved as a nation, it has benefited in this way from globalization.

At the same time, the country is suffering many of the attendant ills. I asked my twelve year-old daughter what she had learned about the United States from spending a year outside of the country. Her reply was quick and clear – I’ve learned that the US controls the media in the rest of the world. From the mouths of babes...but after all, she learned to speak Spanish, in part, by watching American sitcoms dubbed into Spanish on the local TV. Meanwhile, although the country has reaped significant economic benefit from its agricultural prowess as a giant in the world soy market – the control of this commodity is increasingly in the hands of a few transnational corporations: Cargill, ADM and others. And the country’s forests are suffering as more and more trees are felled to make room for more and more soybeans. These facts will remain true, no matter the outcome of the current conflict between President Kirchner and the country’s farmers.

Finally, globalization and all its contradictions hits home directly for me here in the Buenos Aires neighborhood I’m living in. Once a zone of automechanics and warehouses, Palermo Viejo is today one of the hippest and most popular destinations in this wonderful city. Now known as Palermo Hollywood, it is a barrio in the midst of a vast transformation. Many of our neighbors have lived here for forty or more years – they are old-school butchers, bakers, antique dealers, bar owners. Yet they are increasingly surrounded by trendy boutiques and fashionable restaurants. Many are being squeezed out by big corporate real estate that has entered the scene and is speculating on a series of high-end apartment towers that will forever change the face of this low-slung old time neighborhood. In the midst of it all are a throng of artists, ex pats, and activists organizing for the soul of the barrio.

Don’t get me wrong; it ain’t all bad. To be honest, all the paradoxes and contradictions of the gentrification of this globalizing hub make it an exciting and wonderful place to live (for the moment). I decided to try and document the intersection – the convergence and contradiction – of these various separate realities-the old and the new of Palermo Viejo. You can check out my photo essay on the subject at http://www.palermobuenosaires.blogspot.com.

Josh Karliner is Founder and a board member of CorpWatch.

An Afternoon with L-3 Communications/Titan

Posted by Tonya Hennessey on April 30th, 2008

A funny thing happened on the way to exercising my presumed right, as a shareholder, to attend yesterday’s annual shareholder meeting of private military contractor L-3 Communications, held at the Ritz-Carlton Hotel in Manhattan’s financial district.

I was one of a group including a translator, Marwan Mawiri, who worked for a year and ½ for Titan, now an L-3 subsidiary, in Iraq. Marwan has witnessed first-hand numerous problems with the way interrogation and translation contracting is being handled in Iraq – a practice that may be putting at substantial risk the national security and lives of the Iraqi people, of U.S. and multinational troops, officials and contractors, and of the United States itself.

The problem is clear: inadequate and downright bad vetting and hiring practices for analysts, interrogators and linguists. Indeed, the U.S. military has recently cancelled Titan’s translation contract due to poor practices along with waste, fraud and abuse.

What is also crystal clear is that the war in Iraq can neither be won, effectively prosecuted, nor competently withdrawn from until these problems are solved and until proper oversight is in place.

If people hired to translate in critical battlefield and other situations are not even fluent in at least Arabic and English; if screeners monitoring the entry and exit of people to U.S. military bases at times have no more qualification and training than having been a baggage screener at a U.S. airline (see CorpWatch’s new report: "Outsourcing Intelligence in Iraq"); if interrogators are not qualified, experienced and trained to the highest standards possible, how can we ensure that we avoid future travesties due to bad intelligence? Such as the bad intelligence around the supposed Iraqi weapons of mass destruction program (which was, of course, Bush/Cheney and neocon-driven, not L-3-driven), that got the U.S. into this war in the first place? (And remember, even when U.S. soldiers start coming home from Iraq, large numbers of private contractors will stay, making proper oversight all the more crucial.)

It turned out that L-3’s management wasn’t so happy to see us, and that my co-worker, Pratap Chatterjee and I, were supposed to have received a certain admission ticket to attend the meeting. The same went for our companions from the Iraq Campaign 2008 – a major coalition to oppose the war, which is now taking on private military contractors as part of their broader campaign on the high cost U.S. taxpayers are paying for the war in Iraq – and Foreign Policy in Focus, who were holding proxies. Funny that.

Looking out at the Statue of Liberty from the hotel lobby downstairs, where we gathered to figure out how to proceed, I pondered the damage this war has done to the liberties of so many Iraqi people, and to so many U.S. liberties and values that I hold dear. Like respect for human rights, compliance with the Geneva Conventions around torture, appropriate security that is handled with skill and integrity. I wasn’t surprised that L-3/Titan didn’t want to hear our message; though I sincerely hope some of the shareholders, managers, directors, staff and financial analysts do take the time to read our report and to talk to current and former contractors like Marwan. We didn’t go in malice.

We went in genuine concern over business operations that, while they may be earning a pretty profit for large shareholders, pose a genuine reputational risk to the company for future liability. And are causing harm on the ground, to real people. We challenge L-3 Communications to become a truly ethical leader in business practices, not just in products and sales. Surely the sixth-largest U.S. defense industry company (according to their website) has the intelligence to recognize bad practices and the ability to change them for the better.

Or are we simply destined for years more, as Huffington Post blogger Charlie Cray put it, of companies and investors milking a “Baghdad Bubble as a result of the Bush administration's refusal to hold them accountable”?

As the meeting ended, and the muckety-mucks began leaving the Ritz-Carlton to be chauffered away in their Lincoln Town cars and limousines, we gave these decision makers another opportunity to take a copy of CorpWatch’s report, or even to talk to us directly. The vast majority kept their blinders on and marched resolutely past.

Suddenly we saw General Carl Vuono (ret.). Vuono is former chief of staff of the U.S. Army, and long-time president of private military consulting firm MPRI, which is now also an L-3 subsidiary. Pratap and Marwan rushed to try and speak with him, while a reporter and cameraman from Al-Jazeera English filmed and stood at the ready for the general’s reply. The general didn’t want to talk, but you can see some of the footage on YouTube. You can also watch Pratap and Marwan describe their experiences on Democracy Now!, where they were interviewed live this morning.

Pratap gave the general a copy of “Outsourcing Intelligence In Iraq” – maybe he’ll decide to have one of his staffers give it a read. We’d love to talk, and welcome any dialogue with officials of L-3.

The New Business Watergate: Prosecution of International Corporate Bribery is on the Rise

Posted by Philip Mattera on December 18th, 2007

Philip Mattera is director of The Corporate Research Project, an affiliate of Good Jobs First. The Project is a non-profit center that assists community, environmental and labor organizations in researching and analyzing companies and industries. Philip is also author of The Corporate Research E-Letter, and this blog is a re-posting of the November-December 2007 edition.

Chevron has recently been spending heavily on a public relations campaign titled “the Power of Human Energy” to depict itself as a leader in environmental and social responsibility. This image-burnishing effort faced a setback last month when the company was forced to pay $30 million to settle federal charges that it made illegal kickback payments to prewar Iraq in connection with crude oil purchases under the United Nations Oil-for-Food Program.

Chevron is just one of dozens of corporations that have been caught up in a move by the Securities and Exchange Commission and the Department of Justice to step up enforcement of a law prohibiting overseas bribery by U.S.-based corporations. The law—the Foreign Corrupt Practices Act or FCPA—can also be applied to foreign companies with a substantial presence in the United States. There have been reports that electronic and engineering giant Siemens, which recently paid a fine of around $300 million in a global bribery investigation by a German court, may soon be hit with FCPA charges as well.

The rise in FCPA enforcement emerged just as the prosecution of the wave of accounting scandals starting with Enron was winding down. In fact, the limited reforms enacted in response to those scandals—especially the Sarbanes-Oxley Act—have helped bring to light much of the information on which the recent FCPA cases are based. Business apologists who hoped that the public was forgetting about corporate crime now have to deal with new reminders of the sleazy aspects of commerce.

THE “BUSINESS WATERGATE”

It is often forgotten that the Watergate scandal of the 1970s was not only about the misdeeds of the Nixon Administration. Investigations by the Senate and the Watergate Special Prosecutor forced companies such as 3M, American Airlines and Goodyear Tire & Rubber to admit that they or their executives had made illegal contributions to the infamous Committee to Re-Elect the President.

Subsequent inquiries into illegal payments of all kinds led to revelations that companies such as Lockheed, Northrop and Gulf Oil had engaged in widespread foreign bribery. Under pressure from the SEC, more than 150 publicly traded companies admitted that they had been involved in questionable overseas payments or outright bribes to obtain contracts from foreign governments. A 1976 tally by the Council on Economic Priorities found that more than $300 million in such payments had been disclosed in what some were calling “the Business Watergate.”

While some observers insisted that a certain amount of baksheesh was necessary to making deals in many parts of the world, Congress responded to the revelations by enacting the FCPA in late 1977. For the first time, bribery of foreign government officials was a criminal offense under U.S. law, with fines up to $1 million and prison sentences of up to five years.

The ink was barely dry on the FCPA when U.S. corporations began to complain that it was putting them at a competitive disadvantage. The Carter Administration’s Justice Department responded by signaling that it would not be enforcing the FCPA too vigorously. That was one Carter policy that the Reagan Administration was willing to adopt. In fact, Reagan’s trade representative Bill Brock led an effort to get Congress to weaken the law, but the initiative failed.

The Clinton Administration took a different approach—trying to get other countries to adopt rules similar to the FCPA. In 1997 the industrial countries belonging to the Organization for Economic Cooperation and Development reached agreement on an anti-bribery convention. In subsequent years, the number of FCPA cases remained at a miniscule level—only a handful a year. Optimists were claiming this was because the law was having a remarkable deterrent effect. Skeptics said that companies were being more careful to conceal their bribes, and prosecutors were focused elsewhere.

Any illusion that commercial bribery was a rarity was dispelled in 2005, when former Federal Reserve Chairman Paul Volcker released the final results of the investigation he had been asked to conduct of the Oil-for-Food Program. Volcker’s group found that more than half of the 4,500 companies participating in the program—which was supposed to ease the impact of Western sanctions on Iraq—had paid illegal surcharges and kickbacks to the government of Saddam Hussein. Among those companies were Siemens, DaimlerChrysler and the French bank BNP Paribas.

THE REBIRTH OF FCPA PROSECUTIONS

The Volcker investigation, the OECD convention, the Sarbanes-Oxley law and other factors together breathed new life into FCPA enforcement. Stricter internal controls mandated by Sarbanes-Oxley have made it more difficult for improper payments to be concealed, prompting numerous companies to self-report FCPA violations in the hope of receiving more lenient treatment.

In 2005 the number of FCPA prosecutions started to pick up and reached double digits the following year. This year the number of investigations has reportedly been in the dozens, and the resolved cases have gained higher visibility. Among these have been the following:

    * Three subsidiaries of British oil services company Vetco International  pleaded guilty to FCPA violations in Nigeria and agreed to pay a total of $26 million in criminal fines. This was the largest criminal penalty the Justice Department had ever obtained in an FCPA case.

    * Oil & gas distributor El Paso Corporation settled FCPA charges in connection with the Oil-for-Food Program and agreed to disgorge $5.5 million in profits and pay a civil penalty of $2.2 million.

    * Dow Chemical paid a $325,000 civil penalty to settle FCPA charges relating to improper payments made by an Indian subsidiary in the late 1990s.

    * A subsidiary of oil services company Baker Hughes pleaded guilty to FCPA charges involving bribery in Kazakhstan and paid a criminal fine of $11 million. In related SEC charges, Baker Hughes agreed to pay more than $44 million in criminal fines, civil penalties and disgorgement of profits. This became the new record for FCPA-related penalties.

    * Textron Inc. paid more than $3.5 million to settle FCPA charges relating to kickback payments made by a subsidiary to obtain contracts for the sale of humanitarian goods to Iraq under the Oil-for-Food Program.

    * Industrial equipment company Ingersoll-Rand agreed to pay more than $4.2 million to settle FCPA charges that four of its subsidiaries made kickback payments in connection with the Oil-for-Food Program sale of humanitarian goods.

FOREIGN COMPANIES IN THE FCPA NET

While the recent rash of FCPA cases has drawn little attention in the United States, the Siemens case has generated a major scandal in Europe. Last year, more than 200 police officers participated in a raid of company offices and homes of managers. Prosecutors in Italy and Switzerland joined in the investigation, which focused on suspicious transactions at the company’s telecommunications equipment unit reportedly totaling more than $2 billion.

The outcry over the bribery charges (and separate controversies over matters such as price-fixing) forced both the chief executive of Siemens and the chairman of its supervisory board to announce their resignation. In October the company agreed to a $300 million fine, hoping that the controversy would die down. But in November the Wall Street Journal gained access to the unpublished court ruling in the case, which provided embarrassing details about the payment of bribes in Nigeria, Libya and Russia. Subsequently, Business Week Online reported that FCPA charges in the United States could generate penalties for Siemens much harsher than what it experienced at home.

Siemens is not the only European company whose bribery problems are becoming an issue in the United States. Earlier this year there were reports that U.S. prosecutors have been investigating improper payments by major military contractor BAE Systems (formerly British Aerospace), including some reportedly involving Prince Bandar bin Sultan, former Saudi ambassador to the United States and a close ally of the Bush Administration, as well as other members of the Saudi royal family.

A quarter century after the Watergate investigation revealed a culture of corruption in the foreign dealings of major corporations, the new wave of FCPA prosecutions suggests that little has changed. There is one difference, however. Whereas the bribery revelations of the 1970s elicited a public outcry, the recent cases have generated little comment in the United States. Companies like Chevron pay their fine and go right on using their ad campaigns to present themselves as paragons of virtue. It took years for the reputation of Richard Nixon to recover from the taint of Watergate in the eyes of mainstream observers. Corporate America seems to be able to purchase instantaneous redemption.

Turning Ethnic Pride into Sales

Posted by Amelia Hight

Listen to this as you read . . . "Air Force Ones" by rappers Nelly, Murphy Lee, Ali, and Kyjuan, 2002

According to a recent article in the Wall Street Journal, Nike is tapping into the sway of cultural “influencers” to attract new types of consumers. Traditionally, celebrity athletes have worn Nike shoes in return for lucrative endorsement deals. However, recent charges brought against famous Nike-sporting athletes like NFL star and criminal dog-fighter, Michael Vick, and more recently, track heroine and self-admitted steroid user, Marion Jones, have dirtied this image of the hard-working athlete and further urged Nike to look beyond the sweat-drenched athlete for culturally influential people to wear their shoes. While still focusing on the athlete as the main consumer, Nike is turning to “under the radar” influencers for inspiration. In many cases, this leads to Nike’s white sneaker being painted, embroidered or dyed the colors of a Latin American flag or taking on “cultural signifiers,” often stereotyped symbols meant to represent a certain heritage or ethnicity.

Nike’s most stylistic shoe, the Air Force 1, provides an excellent case in point. A new series of the shoe, called the “Cultura” collection consists of shoes like The Los Angeles Cortez, inspired by “the traditional images of LA street life,” the Handball Aztec Cortez designed to capture “our Aztec heritage,” and the green, white and red Mexican Airforce, which “pays homage to the Motherland.” Nike designers hired well-known graffiti and tattoo artists to create each shoe’s aesthetic appeal. Each year, Nike releases a new Chinese New Year AF1 (check out the Year of the Dog here). And, in previous years, Nike has introduced a series of West Indies Air Force 1s in time for West Indies Pride Days in New York City. Each shoe has the flag of a different West Indies country on its insole. There are also Jamaica, Philippines, and Puerto Rico Air Force 1s. Deemed “ethnic pride sneakers” by bloggers, these shoes bring up interesting issues about identity and consumerism. Through these shoes Nike present a pre-packaged narrative of identity. They tell consumers that it is possible to express ethnic pride by wearing Nike tennis shoes. Effectively, commodifying ethnicity has become a sales strategy for Nike.

However, according to Nike, developing shoes for certain ethnicities is not only about ethnic pride, but also about promoting health. Earlier this year, Nike introduced the Air Native N7, a shoe designed specifically for Native Americans. In addition to its signature swoosh, the shoe features “heritage callouts,” including sunrise and sunset patterns on the tongue and heel, arrowheads and feathers. Nike claims the new shoe is “an effort aiming at promoting physical fitness in a population with high obesity rates.” As one self-described Native American blogger, David Yeagley, summarizes, “American Indians are fat and have funny-shaped feet.” He continues: “Our own Nikes! What an achievement!” and asks, “A shoe designed especially for Indians is going to make us walk more? A national company name lent to Indians is going to inspire us to better health?” Another critic, Sherman Alexie, a Spokane/Coeur d’Alene Indian had the following to say, “The day it was announced, I thought: ‘Are they going to have dream catchers on them? Are they going to be beaded? Will they have native bumper stickers on them that say, ‘Custer had it coming’?”

Apparently the idea behind these specialized shoes is that they will create a buzz that will spread to consumers closer to the mainstream. That's right, Nike is attempting to attract attention from "under the radar" consumers in order to appeal to the mainstream. Buying "ethnic pride" sneakers from Nike might allow someone to feel like they're expressing their ties to a certain culture or identity, but in the end, they're still just products designed to make profits for the biggest footwear company in the world.

One has to wonder if Nike's switch from risky celebrity endorsements to ethnic pride, is really just about creating a positive spin on its image, which has historically also been sullied by accusations of worker abuse in poor country sweatshops.

Book Review: Stolen Without a Gun

By Ian Elwood

Stolen Without a Gun reads like an Anarchist's Cookbook of Corporate
Crime and illustrates well how an international money laundering scheme
works (including how to nest embezzled funds in a series of quazi-legal
Cayman Island bank accounts) while telling the personal tale of Walter
Pavlo, Jr., a convicted white-collar criminal who was busted for
embezzling $6 million while working at MCI Telecommunications in the
mid-1990s.

Pavlo, who served his time is jail and now gives lectures and advice on
the subject of ethics and white-collar crime, is portrayed in the book
as an everyman, without any particular bent to stealing money.

The narrative gives an inside perspective of how a business person could
get wrangled into a high stakes game of money laundering. Pavlo, good at
his job, notices the graft and corruption all around him and sees people
hiding debt in accounts that he knows will never be repaid. Millions of
dollars are being thrown away all around him. All the myths that he
learned in business school, "The corporation as a community run by
thoughtful innovators striving to do good while doing well," are
shattered before him. As he is being groomed by his superiors in the
company and his rise to power begins, he realizes the upper limits of
just how much money he will make in his career at MCI. And it isn't
enough. Plus, his company is being ripped off by delinquent customers
everyday and he is the one responsible when they don't pay up. They are
all getting away with it, why can't he?

The entire scheme is viewed by the perpetrators as nothing more than a
college prank, they justify it by telling themselves that no one will
miss the money, and for a while no one does. They get increasingly bold
and sloppy with their methods and start to go after larger customers
with higher levels of oversight. It is fun to watch the dizzying high
come crashing down as Pavlo realizes that he cannot keep control of all
of the accounts he has been siphoning, and he is running out of shells
to shuffle money under.

The book does a good job of giving a frank perspective on how the
culture of graft and corruption works. The demands to collect money from
his clients are so unrealistically high that Pavlo has no choice but to
bend the rules to make his quota. Corporate won't tell him explicitly to
shirk regulations, but it is understood. Once he sees how easy it is to
break the rules, and that everyone is doing it, there isn't much ground
to cover for him and his buddies to come to the realization that he
could be making money for himself instead of chucking it away into
delinquent accounts.

Stolen Without a Gun is a "How-To" guide for students of the U.S
Racketeer Influenced and Corrupt Organizations Act (RICO) Act and shows
that too often a white collar criminal pushes externalities on their
families and friends; Pavlo loses his wife and two children and his
coworkers end up in jail. In the end the protagonist goes to jail also,
as the cover suggests, and presumably has a change of heart about his
life of crime. But a quote from the last pages of the book suggests
otherwise, "Bottom line, we are...getting what we deserve. We had our
eyes wide open. Our only real regret is that we got caught. Case closed."

Made in the U.S.A.

Posted by Amelia Hight

In a recent decision reported in the Guardian, a federal appeals court ruled that Caterpillar Inc. could not be sued over the death of an American peace activist who was crushed under bulldozers sold to the Israeli Defense Force (IDF). The story of Rachel Corrie, the activist who was crushed by a 60-ton Caterpillar D9 Bulldozer in Rafah, Gaza in 2003 while trying to prevent the razing of a Palestinian home by the Israeli army, achieved widespread media attention. Reports of the IDF’s razing of homes in Rafah were issued by numerous human rights watchdog organizations, including Human Rights Watch. Corrie’s family, along with four Palestinian families of victims killed while their houses were bulldozed, began legal proceedings against Caterpillar in 2005 for selling machines to Israel. Lawyers arguing for the families insisted that the company sold the bulldozers to the Israeli government on a commercial basis and knew, or should have known, that they would be used to demolish homes and kill innocent victims in violation of international law.

Explaining its decision, the court claimed that it could not rule in favor of the bereaved families "without implicitly questioning, and even condemning, United States foreign policy towards Israel." Of course, this is not the first time that U.S. companies have been implicated in mass human rights abuse and not had to answer for their participation. Indeed, U.S. companies have been intimately connected to the human rights abuses of regimes throughout modern history. Near the turn of the millennium, pressure from Jewish organizations finally forced the U.S. to begin looking at the use of slave labor by U.S. corporations (and their subsidiaries) in Nazi Germany.

A court case brought against Ford Motor Co. was dismissed, but Ford admitted that its German subsidiary, Ford-Werke AG, used labor at the Buchenwald concentration camp to build vehicles. Other major U.S. corporations that continued to operate in Nazi-occupied Europe and used slave labor include General Motors, Chase Manhattan Bank and JP Morgan. ''There are things that have to be faced up to,'' alleged Elan Steinberg, World Jewish Congress executive director, ''American companies were collaborating with Nazi Germany at a time when we were at war, because there was an ethos that demanded huge profits at the expense of everything else.''

Modern history is peppered with examples of corporations seeking profit during periods of mass human rights abuse: In the 1970s, the U.S. manufacturing giant, ITT, and others helped overthrow democracy and install the Pinochet dictatorship in Chile (to listen to the Nixon Whitehouse tape that acknowledges this relationship visit GWU’s website, The National SecurityArchive). Numerous companies supported South African apartheid, including U.S. giants IBM, General Motors, ExxonMobil, J.P Morgan Chase, Citigroup, Caltex Petroleum Corporation, Ford Motor Company and the Fluor Corporation. In 2002 a group of South Africans unsuccessfully sued 20 banks and corporations that did business in South Africa during apartheid. The list goes on and on.

Even if these corporations are not held accountable for their role in mass human rights abuse and economic activities are allowed to take legal precedence over human rights, it is of vital importance to recognize the role that corporations play in this abuse. It appears to be the responsibility of the public to put pressure on corporations to consider where they do business and with whom.

Outsourcing Fear

Posted by Robert Young Pelton on October 2nd, 2007

Robert Young Pelton is the author of "Licensed to Kill: Hired Guns in the War on Terror " and the "Guide to the World's Most Dangerous Places." He is also co-founder of http://www.iraqslogger.com . This blog item is about his experiences attending the Congressional hearing into the Blackwater shootings in Iraq written on October 2nd, 2007.

Standing in line to get into Tuesday's hearing, I found myself in a strange position. In front of me, dark-suited and staid Blackwater executives stood waiting to show moral support for their boss, Erik Prince, while the colorful and animated Pink Ladies behind me ticked off reasons he and his industry should be feared.

The two extremes represent the bookends of public debate on the private security industry. The former military men who run Blackwater view their supporting role in the war on terror as both necessary and good, while human rights activists believe there is something deeply wrong with authorizing private citizens to kill other private citizens.

One of the women waiting in line asked me, "How can we find out what these people are doing?" I suggested she could go to any neighborhood in Baghdad and just ask the locals.

Or better yet--spend a week driving through Baghdad in an unmarked car to see how often convoys blast through intersections, guns bristling from every door, pointed directly at you, giving you mere seconds to get out of the way before the bullets start flying. Feel your own pulse racing as you realize how easily you could have been killed if you'd had your radio a little louder, or hadn't noticed their approach, or hadn't swerved to a stop fast enough.

Companies like Blackwater wield a life-and-death power in Iraq, creating an arrogant misuse of force the United States has put into civilians hands.

I spent time in Sadr City and other areas interviewing the victims of Blackwater and other security companies. Terrified Iraqis, many who did not want to be identified or publicly quoted, told of sudden unexpected encounters with fast moving convoys of SUVs--then death, destruction, or permanent life change as family members were crushed, maimed, killed, or traumatized.

During the time I spent researching my book Licensed to Kill, I realized there were thousands of stories waiting to be heard about excessive force being used on civilians in the name of "security". Not surprisingly, many victims look to a militia to seek some revenge for the transgression in the form of an ambush or IED.

Security companies are reviled; the Iraqis that work for these companies have to cover their faces because they know militias or their neighbors will kill them and or their families.

Military commanders understand that a non-state actor on the battlefield is a wild card--whether death squad, militia or security company. Iraqis know that the undermanned military must rely on contractors to deliver 16 flavors of ice cream, frozen lobster and bullets to the war effort.

The normally timid State Dept, known more for issuing warnings and shutting down embassies when things get rough, has decided that its people must travel the mean streets of Baghdad rather than give in to intimidation. Security contractors are literally the grease that makes our forward-leaning foreign policy in Iraq work.

So when Prince pretends like he is defending the US--justifying violent acts by categorizing it as fighting bad guys--he does it with the support of the State Department, though to the direct determent of the Iraqi civilians those actions terrify and kill.

When Prince testified that his people "acted appropriately at all times," it made me wonder how many killings he investigated from the Iraqi viewpoint. He has a blind spot towards the damage he causes if he thinks that firing a contractor who just murdered someone somehow fixes the problem. "Window or Aisle" instead of "guilty or not guilty" does not enforce any accountability

It is no coincidence that BW has been involved in shootouts with the Iraqi police. They too have seen the destructive force Blackwater has been authorized to unleash on their citizens.

When Prince rattles off the various legal umbrellas he operates under, he conveniently ignores that none of his hired guns have been brought up on any charges for anything-despite clear incidents of malfeasance. Blackwater itself faces no ill consequence for deploying unstable men into the war zone.

"Anytime a contractor is abroad, he can be brought up on charges," is the equivalent of saying speeding is illegal while cars whip by at 80 mph without a cop in sight.

Blackwater is the personification of war as a business, violence as a service, and chaos as a product. Prince recognized the lack of sufficient available US troops and provided a privatized solution. He cannot be faulted for that.

Any corporate master would take the position, like Prince did in front of Congress Tuesday, that his people are perfect, his conduct perfect.

Exposed deceit or corruption at most companies would lead to its own downfall. If it's a monster like Enron, it could conceivably flutter Wall Street for a few days.

But the conduct of companies like Blackwater directly impact US strategic interests.

The obvious polarization of politicians addressing Prince during the hearing indicates that Republicans are willing to bless the use of lethal force by a private individual against the people they are trying to pacify, while Democrats have yet to quite capture what it is about the industry that makes people so nervous.

I say again: Go to Iraq. Talk to the people. Drive in an unmarked car. When an armed convoy pushes you off the road with guns drawn, you'll understand the naked fear that Blackwater sells.