Private Defense: Export Unknown

by Jody Ray Bennett

27 Jul 2009

Cargo ship on seaport, courtesy of akpt/flickr

Cargo ship on seaport
(cc) akpt/flickr

The failure of US government departments to fully oversee private industry results in threats to its own national security, Jody Ray Bennett writes for ISN Security Watch.

Acting as the ‘investigative arm of the Congress,’ the United States Government Accountability Office (GAO) continues to work hard to uphold its mandate, part of which consists of “establish[ing] standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other nongovernmental organizations.”

The GAO has often been one of the few or only federal agencies to critically address a host of issues regarding the performance of the US government in various federal projects or its relationship with private contractors, much of which fundamentally concern or affect matters surrounding US national security or foreign policy. Accordingly, the GAO has been essential in examining the relationship between the US government and private security companies in Iraq and elsewhere.

More recent GAO reports have investigated the treatment and provision of health care to female soldiers by the US Department of Veterans’ Affairs, released observations on the budget and activities of the US Coast Guard, and compiled information regarding US state royalties from hard-rock mining sites and hazards.

One of the latest and rather embarrassing reports highlighted the failure of the Federal Protective Service (FPS) - the federally employed agency that provides site security for all federal buildings in the US - to catch and apprehend covert GAO operatives who smuggled in and assembled fake explosives in the restrooms of 10 different federal buildings around the US.

In what can be seen as an unofficial follow-up to its 2008 report criticizing the US Department of Defense for failing to establish clear guidelines to track weapon transportation and storage, resulting in the failure to “maintain complete records for about 87,000, or 36 percent, of the 242,000 US-procured weapons shipped to Afghanistan,” the latest from the GAO focuses on private sector involvement in sensitive equipment sales.

In the report, the GAO found that “sensitive dual-use and military technology can be easily and legally purchased from manufacturers and distributors within the United States and illegally exported without detection.”

Sniffer watchdogs

To demonstrate, the GAO established front companies and false identities to purchase sensitive materials from private defense companies before being shipped abroad illegally, without detection from border and law enforcement officials. Some of the materials purchased by the GAO included “night-vision scopes, triggered spark gaps used to detonate nuclear weapons, electronic sensors used in improvised explosive devices, and gyro chips used in guided missiles and military aircraft.”

The report states that the GAO conducted the covert investigation because “terrorists and foreign governments regularly attempt to obtain sensitive dual-use and military technology from manufacturers and distributors within the United States [and] in the wrong hands, this technology poses a risk to U.S. security, including the threat that it will be reverse engineered or used directly against U.S. soldiers.”

Travis Sharp, a military policy analyst at the Center for Arms Control and Non-Proliferation, referred ISN Security Watch to the “incredible 2008 report where a US company headed by a 22-year-old became the main supplier of munitions to Afghan army and police forces, despite the fact that the company’s supplied ammunition was more than 40 years old and rotting.

“This lack of oversight and accountability in US arms shipments certainly has increased the odds that these weapons end up in the hands of Afghan insurgents,” Sharp told ISN Security Watch.

Indeed, this is hardly the first time that private businesses have sold or shipped sensitive materials abroad. In March 2007, ITT Corporation, the leading manufacturer of night vision goggles for the US Army, admitted to providing classified materials to “China and other nations” and was subsequently fined $100 million.

In the same month, the infamous Chiquita Brands International, Inc.was fined $25 million after providing direct payment and assistance totaling over $1.7 million to the right-wing Autodefensas Unidas de Colombia (AUC), a designated Foreign Terrorist Organization (FTO) by the US State Department.

Regulatory meltdown

Because foreign government and nonstate entities request products, services and technologies provided by private companies in the US, private business must ensure that they comply with two specific laws concerning the sales and export of sensitive materials: 1) The 1976 Arms Export Control Act which “assigns State the responsibility to regulate the export of military items included on the U.S. Munitions List” and 2) The 1979 Export Administration Act which “assigns Commerce the responsibility to regulate the export of dual-use items that are included on the Commerce Control List.”

According to Nextgov, “Exporters are required to place their products on one of the two lists, and, if required, obtain a license to export the items. They also are required to electronically notify Homeland Security Department officials when the products arrive at the port of export for inspection.”

In the case regarding the equipment shipped to Afghanistan however, the GAO reported that “Officials from several agencies told the GAO that there is no practical way to ensure that packages leaving the United States that contain export-controlled items can be identified and consistently searched.”

In May 2008, the GAO criticized the security processes of The Customs-Trade Partnership Against Terrorism (C-TPAT), a “public-private antiterrorism partnership that [sought] to make cargo inspections easier and more secure for both the government and international trade companies after 9/11” in order to “secure the global supply chain from terrorists by having international trade companies voluntarily team up with the US government.” At that time, the GAO found that C-TPAT could not verify the security status of approximately 20 percent of its registered corporate membership.

The GAO will undoubtedly continue its efforts to highlight the real and potential security holes and weaknesses in state functions, specifically when it involves military operations abroad. If insurgent groups or terrorist organizations are able to purchase unsanctioned arms and equipment from private companies in the West, might credit be issued to the western free market efficiency paradigm and its seemingly relentless attempt to extrapolate itself at the global level?

Until US security departments heed the findings of its own internal investigatory agencies, private industry may well be able to arm and equip the very terrorist organizations, insurgent groups, and rogue, failing or failed states that are perceived to challenge the national security apparatus of the US and other western interests.

Jody Ray Bennett is a freelance writer and academic researcher. His areas of analysis include the private military and security industry, the materialization of non-state forces and the transformation of modern warfare

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