Pubdate: Thu, 26 Apr 2001
Source: Washington Business Forward Magazine
Issue: April, 2001
Copyright: 2001 Business Forward Media Inc
Contact:  http://www.bizforward.com
Address: Business Forward Media Inc, Washington Business Forward Magazine, 
1215 Connecticut Ave. NW, Fourth Floor, Washington, DC 20036
Phone: 202-785-2100
Fax: 202-785-2612
Author: Ken Silverstein
Note: This article was followed by position description/advertisement

MERCENARY, INC.?

If You Ran a Third World Country and Your Military Needed Help, Who Would 
You Call? The U.S. Army? The UN? Try MPRI, an Alexandria, VA-Based Firm in 
the Vanguard of the Military Service Provider Movement. It's Big Business - 
And It Just May Be at the Cutting Edge of U.S. Foreign Policy.

Ed Soyster is a retired three-star general and the former director of the 
super-secret Defense Intelligence Agency, but in his conservative brown 
business suit, he looks more like Willy Loman than James Bond. It's a 
chilly Tuesday morning in February, and Soyster has just greeted me at the 
door of Military Professional Resources, Inc. (MPRI), a rapidly growing 
firm based in Alexandria, VA, for which he is the spokesperson.

MPRI's headquarters - located in a five-story office building next to a 
Best Western motel off the George Washington Parkway - appears as 
nondescript as Soyster. The reception-area coffee table is covered with old 
issues of Vanity Fair, Conde Nast Traveler, Food & Wine and other standard 
fare. The firm's name and corporate logo, a golden sword, are embossed on 
the front door. Aside from the vaguely martial insignia, nothing otherwise 
distinguishes MPRI from the thousands of beltway bandit firms that ring 
Greater Washington.

Given the nature of its business, MPRI's low profile probably is not a 
coincidence. Despite this bland facade, MPRI has emerged as the leading 
player in a controversial field that critics call "Mercenary, Inc." 
Defenders prefer the more innocuous "military service provider," arguing 
that these 21st-century exporters of war strategy are a far cry from the 
soldiers of fortune of the past. The firm's mission is to discreetly train 
foreign armies - often ones with atrocious human rights records - that are 
allied with the United States. The industry, though still in its infancy, 
is booming. So much so that last year MPRI was bought, on undisclosed 
terms, by L-3 Communications [ticker: LLL], a nearly $3-billion per year 
New York-based company that manufactures high-tech goods, primarily for the 
Pentagon.

MPRI's corporate ranks are filled with dozens of retired officers. In fact, 
outside of the Pentagon, which is conveniently located just 10 minutes 
away, there are few places where you'll find such a gathering of 
high-powered military men. As we head back to his office, Soyster points 
out the office of MPRI's president, retired General Carl Vuono, U.S. Army 
chief of staff during the Gulf War, and introduces me to another retired 
general, Ron Griffiths, an executive vice president and a former Army vice 
chief of staff. Though he's not in on the day I arrive, Vuono's reputation 
precedes him: He's a meat-and-potatoes military man and former combat arms 
officer who commanded two battalions in Vietnam.

To hear it from Soyster, MPRI sells a product that's utterly conventional. 
In fact, he jokes during my brief tour of the office, the parent firm L-3 
is a publicly traded corporation, "so anyone with a 401(k) retirement plan 
is probably an investor in our company." Of course, most companies don't go 
looking for business in countries rife with war and conflict. During the 
past few years, MPRI has worked with a group of countries that sounds like 
a casting call for next year's edition of Fielding's The World's Most 
Dangerous Places: Bosnia, Colombia, Equatorial Guinea and Nigeria.

The incentive to join up with MPRI, industry watchers say, is money. Though 
the firm does not disclose the pay of its top officers, analysts say they 
expect all ranks make more than their U.S. military equivalents. But 
Soyster resists the notion that MPRI employees are rolling in cash - he 
says a colonel actually makes less if he teaches an ROTC course for MPRI 
than he made before retiring, but could make more than his U.S. Army 
counterparts if he is posted overseas for the firm. In any case, Soyster 
says, there's not much incentive for servicemen and women to quit and join 
MPRI, since the bump in pay is not dramatic, and because, like any 
contracting business, the work can be uncertain.

"We had about 30 COLONELS over there, five divisions' worth. The U.S. Army 
can't send those kind of NUMBERS." --MPRI'S ED SOYSTER

The Pentagon and the CIA have long used private contractors for a variety 
of tasks, from building base infrastructure to assisting with covert 
operations. But today's scenario differs greatly from past practice. MPRI 
and other private military companies (PMCs) are not CIA cutouts but huge 
corporations with diverse interests. Their work is implemented not by 
CIA-trained foreign locals, but by high-ranking U.S. military officers 
fresh out of the armed forces.

Driving the proliferation of PMCs are the huge cutbacks in the number of 
U.S. armed forces personnel following the end of the Cold War. Between 1985 
- - the height of the Reagan-era military buildup - and 1999, troop levels 
have fallen by an average of 30 percent, thereby stretching the Pentagon's 
ability to carry out certain tasks. "Private companies augment our ability 
to provide foreign training," explains retired Lieutenant General Larry 
Skibbie, now at the National Defense Industrial Association. "We'll see 
more and more of this as we continue to cut back on our uniformed forces."

Indeed, PMCs are effectively an arm of foreign policy. Before offering 
military assistance to foreign governments, PMCs must apply for a license 
from the State Department's Office of Defense Trade Controls, which 
oversees the emerging field. "License requests are very carefully 
reviewed," says an official at SAIC, a San Diego-based firm (with 14,000 
employees in Greater Washington and 41,000 worldwide) that dabbles in PMC 
work. "Even when you're just at the talking stage, there is a very high 
level of scrutiny." SAIC, by the way, also spawned a historically 
significant technology company: Network Solutions, the firm that once held 
exclusive rights to Internet domain name registration.

Critics charge that the use of private military contractors allows the 
United States to pursue its geopolitical interests without deploying its 
own army, this being especially useful in cases where training is provided 
to regimes with dubious human rights records. And if a contractor's 
employee gets killed overseas, it doesn't provoke nearly as much political 
uproar as does the death of an American soldier. "It's foreign policy by 
proxy," Dan Nelson, a professor at the George C. Marshall European Center 
for Security Studies in Garmisch, Germany, and a former visiting scholar at 
the U.S. Department of State and the Department of Defense, says of the use 
of PMCs. "Corporate entities are used to perform tasks that the government, 
for budgetary reasons or political sensitivities, cannot carry out."

Multinational corporations, particularly those operating in countries where 
governments exert little control over their territory, are also turning to 
private contractors for help. In Africa, a number of U.S. and European PMCs 
stand guard at mining sites, oil fields and other economic installations. 
(Unlike some PMCs, MPRI does not perform guard duty for corporate clients, 
but only works for governments). "Companies need to protect their assets 
and shareholder value," says Michael Grunberg, an official with Sandline, a 
prominent British PMC. "It's like posting a guard at the bank."

There are just a few dozen American PMCs, and few of those dominate the 
business. In Saudi Arabia, a subsidiary of TRW called Vinnell trains the 
National Guard, which is deemed to be more reliable than the army and 
protects the royal family and strategic facilities such as oil 
installations. Vinnell has about 1,000 employees in Saudi Arabia - many of 
them U.S. Army Special Forces veterans - who are based at five National 
Guard sites. During the Gulf War, Vinnell employees were deployed along 
with Saudi units and got bonus pay for hazardous duty.

AirScan, a firm based in Titusville, FL, works for the Pentagon, the Air 
Force and a variety of multinational corporations. The company's 
promotional literature says that its "experienced crews, effective systems, 
and complete integration with ground forces" allow AirScan to "accurately 
direct ground personnel to the threat [and provide] observation and 
communication required for successful security operations." AirScan has 
worked for Chevron in Angola, where it served with the local military in 
seeking to protect the oil company's operations against a guerrilla threat. 
More recently, AirScan surfaced in Colombia, where it helps the army and 
Occidental Petroleum protect pipelines from leftist guerrillas who have 
been fighting the government there for nearly four decades.

DynCorp, a company based in Reston, VA, with annual revenues that top $1 
billion, does business with a host of government agencies and has interests 
that range from environmental cleanup and information technology to the 
more murky areas of national security. In Colombia, the company works under 
contract with the State Department in providing pilots, trainers and 
maintenance workers for the Colombian government's vast aerial eradication 
program to destroy drug crops. PMCs aren't supposed to be engaged in combat 
- - but in late February, several DynCorp workers flew into the middle of a 
firefight, landing their helicopter to rescue the crew of a police chopper 
brought down by leftist guerrillas.

DynCorp is also involved on the frontlines of various other Latin American 
drug wars. In the early 1990s, the State Department hired the company for 
the ostensible purpose of maintaining helicopters then on loan to Peruvian 
police. In 1992, three DynCorp employees died when one of those helicopters 
was hit by fire from Shining Path guerrillas while flying over a major 
coca-growing region. Two of the casualties turned out to be former 
covert-ops specialists, including Robert Hitchman, a former Marine Corps 
fighter pilot who worked for Air America (the CIA's airline and covert 
operations front in Indochina during the 1960s). Another of DynCorp's 
near-casualties, though in a far different context, was CEO Dan Bannister. 
He was scheduled to be on the 1996 military flight in the Balkans that 
crashed and killed all aboard, including then- Commerce Secretary Ron 
Brown, but decided at the last minute to skip it. "I am the luckiest man 
alive," Bannister said in press accounts after the crash.

"There's no point in training the QUEEN'S Islanders. To control human 
rights violations you need a well-trained, efficient ARMY." --MPRI'S ED SOYSTER

In business terms, MPRI has shot up through the ranks. When retired General 
Vernon Lewis founded the firm in 1988, MPRI had just three full-time 
employees. Its payroll climbed to 40 in 1992 and 850 today, plus a database 
of some 12,000 retired military personnel who can be called upon to handle 
contract work. Revenues have also soared, from $4 million in 1995 to $70 
million last year.

It was that sort of growth that led L-3 Communications - founded in 1997 as 
a spin-off of 10 electronics manufacturing divisions of Lockheed Martin - 
to swoop in and purchase MPRI. L-3 hasn't done so badly, either: Its 
tripled in size since its founding, and the company's stock price has 
roughly doubled during the past 12 months. The deal was unusual in that L-3 
primarily sells hardware, including flight recorders, control systems for 
satellites and the controlled momentum gyroscope that keeps the 
International Space Station in its orbit, whereas MPRI sells services. 
(Founder Vernon Lewis stepped down as CEO two years ago and became chairman 
of the board. When L-3 bought the company, the MPRI board was phased out, 
and Lewis has had no role with the firm since. He was, of course, a 
shareholder at the time L-3 purchased the company.)

Frank Lanza, L-3's chairman and CEO, believes privatization of military 
services will continue to expand and sees MPRI as a hot property with 
"competitive advantages" that no other training business can match. "It's a 
well-managed company with double-digit profit margins," he says in a phone 
conversation from his New York office. Lanza acknowledges MPRI's military 
training programs are controversial and says that's made him view its 
overseas ventures with caution. "They can't go anywhere without government 
approval, but there could still be negative public opinion," he says. 
"We're sensitive to that and watching it very closely so we don't get 
involved in a situation by accident."

Lanza's upbeat assessment is shared by industry-watcher Deborah Avant, a 
professor of political science and international affairs at George 
Washington University who is working on a book about PMCs. "Technically, 
MPRI has competitors, but it's got a unique mix of personnel and 
connections," she says. "They pretty much have a corner on their piece of 
the market."

During its early years, MPRI maintained a cool, if not downright 
suspicious, relationship with the press. There are still some areas that 
Soyster prefers not to discuss, but the firm has become increasingly 
accessible to the media. Indeed, given some of the things I've written 
about MPRI in the past - "mercenary" is one of the more polite appellations 
I've used to describe the company - Soyster's very consent to an interview 
was somewhat unexpected. The company makes every effort to be seen as just 
another business entity - its website www.mpri.com is filled with lingo 
that could be pulled off almost any corporate site. It's just that this 
site's "job opportunities" section includes headings like: "Kuwait - Infantry."

As he explains in his office (Soyster apologizes that he can't give me a 
full slideshow presentation in the nearby conference room, as it is being 
used to host the new ambassador to Nigeria, a company client), MPRI has 
three distinct divisions. The National Group, headed by retired Lieutenant 
General Jerry Bates, develops curriculum for the Pentagon's War Colleges, 
tests new military equipment and trains troops to use it, and runs ROTC 
programs at more than 200 universities. Joe Wolfinger, a former deputy 
director of the FBI, runs the Alexandria Group, which was introduced last 
year. It handles training for law enforcement agencies, offers seminars in 
leader development, and conducts background investigations for government 
and corporate clients. The International Group, headed by former General 
Crosbie Saint, who commanded the U.S. Army in Europe between 1988 and 1992, 
handles foreign training programs. Though it generates just 40 percent of 
MPRI's revenues, the International Group has attracted by far the most 
public scrutiny.

"You just know that it's not gonna be the HEAD of the group who gets SHOT, 
but a 21-year-old pregnant woman." --MPRI'S ED SOYSTER

Soyster vehemently objects to the description of MPRI as a "mercenary" 
firm, saying that the work of the International Group is restricted to 
training, education on the military's role in a democracy, leader 
development and strategic planning. "We've all carried guns and used them, 
but we don't do so for MPRI," he states emphatically, adding that company 
employees on assignment overseas dress in business suits, not military 
uniforms. MPRI has even turned down contracts - for example, guarding 
overseas embassies - which would require its staff to carry weapons, for 
fear of bad publicity. "The scenario we're afraid of is that a situation 
gets out of hand and one of our guys has to shoot someone," he tells me as 
he fingers the black gemstone on his 1957 class ring from West Point. "You 
just know that it's not gonna be the head of the group who gets shot, but a 
21-year-old pregnant woman. It's not worth the risk."

With his straight-shooting bonhomie, Soyster is easy to like. He's great 
fun to shoot the breeze with - after all, he's led an interesting career 
and has the stories to back it up. That's probably a key reason why he's 
the go-to guy to tell the firm's story. Soyster says MPRI got its first big 
overseas contract in 1994, when Croatia hired the firm to advise its 
military forces. The company dispatched a team to Zagreb that arrived 
during a period of particularly intense fighting between Croat and Serb 
forces. "The Croatians saw their future with the West, not the East," says 
Soyster, who says MPRI's role was limited to classroom instruction on 
tactics and did not include training in battlefield tactics. "They wanted 
to join NATO's Partnership for Peace program, and we helped them achieve that."

Yet just months after MPRI's arrival, Croatia's army - which until MPRI 
came on the scene had been viewed as bumbling and inept - launched a series 
of bloody and highly successful offensives against Serb forces. Most 
important was Operation Lightning Storm, the assault on the Krajina region 
during which Serbian villages were sacked and burned, hundreds of civilians 
were killed and some 170,000 people were driven from their homes. Soyster 
says that MPRI, like the U.S. government, knew the attack on the Krajina 
would take place and that perhaps half a dozen officers who graduated from 
its training seminars took part in the operation. Otherwise, he insists, 
the company played no role in the Krajina campaign. "It's impossible, no 
matter how good you are, to turn around an army in a few months," he says. 
"But it's a great myth. It's good for our business."

MPRI's contract with Croatia has been renewed several times, and it still 
has a team in Zagreb today, though its presence there no longer attracts 
much attention. The firm is also at work in neighboring Bosnia, which 
picked MPRI to train its new armed forces after winning independence from 
the former Yugoslavia in 1996. As part of that program - which is overseen 
by the U.S. government but paid for by Saudi Arabia, Kuwait, Brunei and 
Malaysia - MPRI has designed a combat-training center, set up the Ministry 
of Defense, and helped establish an army that Soyster says is designed to 
handle defensive tasks. At the program's peak, MPRI had 230 former officers 
in Bosnia. "We had about 30 colonels over there, five divisions' worth," 
Soyster boasts. "The U.S. Army can't send those kind of numbers."

MPRI is also expanding in Africa, where it is helping implement the 
Pentagon's African Crisis Response Initiative (ACRI), a program designed to 
strengthen U.S. ties to African nations and create an indigenous 
"peace-keeping" force on the continent. Seven nations are participating in 
ACRI - Benin, Ghana, the Ivory Coast, Malawi, Mali, Senegal and Uganda - 
with MPRI's role being to provide leadership training. None of those 
nations has a stellar human rights record.

Elsewhere in Africa, MPRI has a $7-million contract with the U.S. Agency 
for International Development (USAID) to instruct the Nigerian military, 
which ruled the country for almost 15 years before turning power over to 
civilians in 1999. MPRI is also training the new Coast Guard in Equatorial 
Guinea, which recently uncovered huge offshore oil deposits. That country 
is headed by a government that the conservative human rights group Freedom 
House rates, along with countries like Burma, North Korea and Iraq, as 
having one of the world's worst records on political and civil liberties. 
Soyster traveled to Equatorial Guinea last year to kick off MPRI's work and 
has met on five occasions with the president of the country, Teodoro Obiang 
Nguema Mbasogo.

On other continents, MPRI's clients have ranged from the benign - such as 
Sweden, where the armed forces were briefed on the Gulf War - to the 
questionable. In Colombia, for example, MPRI helped the Ministry of 
Defense, in Soyster's words, "reorganize and orient itself toward 
counter-drug operations" on a contract paid for by the Pentagon. Soyster 
concedes that MPRI's clients frequently aren't poster children for 
political freedom, but he says that's exactly the point of working with 
them. "There's no point in training the Queen's Islanders," he says. "To 
control human rights violations you need a well-trained, efficient army. 
Wringing your hands is not going to solve the problem."

He walks over to a bookshelf and pulls out a three-ring binder with seminar 
materials that the company has used to instruct African military officers. 
"Let us all be clear on this point," reads a section of text he points to. 
"The establishment and maintenance of civilian control and oversight of the 
military form the foundation upon which the stability of democracy is 
built." Looking up from the page, Soyster says that he and his colleagues 
at MPRI have devoted 30 years of their lives to a system in which the 
military is subordinate to elected leadership. "That guy over there on the 
wall" - here he points to a picture of former General Douglas McArthur that 
accompanies a framed newspaper story from the 1950s - "had a problem with 
President Truman. As you may recall, the president won." But not all of the 
firm's clients have learned the lesson: In the Ivory Coast, the military 
seized power less than a week after MPRI concluded its instruction, though 
no one suggests there was a link between the coursework and the coup.

For better or for worse, PMCs are here to stay. According to Soyster, MPRI 
has potential deals brewing across the globe, from Poland in Europe to 
Argentina in South America to Bahrain in the Middle East. "You're probably 
not gonna hear people say they're going to MPRI-ize their country the way 
you Hoover your apartment in England," he says while walking me back to the 
front door and heading out to an appointment, "but we are developing a 
pretty good brand name."
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