The mercenaries who fight for Britain

Even the military has turned to the private sector for help - from companies that are guilty of ever

In April 2000, shortly before he became vice-president of the United States, Dick Cheney, joined John Spellar, the then UK armed forces minister, and senior civil servants at Ditchley Park in Oxfordshire. As they strolled through the Italianate gardens, they discussed how to hand over the defence of the realm to mercenaries. Not that anyone called mercenaries "mercenaries". Nothing is more likely to mark you out as a Blimp than plain speaking. Today, mercenaries are called "private military companies", and anyone who wishes to get ahead in the "defence community" would do well to remember it.

The commercial possibilities Spellar saw for private military companies were enticing. Cheney could only applaud. "My general impression," he said, "is that our British colleagues are far ahead of us in the US in the extent to which they have adopted changes in culture, attitude and style of operation that are required for successful privatisation efforts."

Thirty years ago, the military looked after itself. Now everything except the "core competency" - fighting and killing people - is being privatised. Education, medical care, naval dockyards and military housing are contracted out or are in the process of being contracted out.

I caught a glimpse of the commercial pressures on the forces when Channel 4 took me to film at an army firing range last year. I thought we would be resented as useless and obstructive civilians (which was just what we were). But the officers bent over backwards to be accommodating. The director said she wanted to film me posing with a gun. The captain supervising us was understandably alarmed, but proffered a rifle nevertheless. "Guns aren't props," I said, and told the director that I would talk to the camera without pointing a gun at the crew, whatever provocation it offered. The captain was relieved. "You'd have given me that gun if I'd wanted it," I said later. He would, he replied.

A financial imperative spurred his natural courtesy. Like officers at all other bases, he was under orders to make money by satisfying the whims of paying customers. After we left, he would be running assault courses for team-building managers and welcoming Tamzin Outhwaite and the cast and crew of Red Cap. Outhwaite would have been an undoubted tonic for the troops, but my friend and his fellow officers thought they had more urgent tasks than playing nursemaid to hacks and actresses - the army was fighting in Afghanistan at the time.

Cheney has been a direct beneficiary of MoD plc. Before the 2000 presidential election, he worked for an American company called Halliburton. It began in the oil business, where firms in which it had stakes did business with Saddam Hussein before moving into military contracts. The corporation received $3.8bn in contracts and subsidies from the US government. Not content with this, Halliburton turned to Arthur Andersen (which was to go down with Enron, after going down on Enron). The creative accountants inflated profits Enron-style by $300m (£190m), according to a lawsuit filed by Halliburton investors. The alleged scam was that the corporation booked bills that were being disputed by customers as money in the bank. The US Securities and Exchange Commission is also investigating - and insisting that its chairman's appointment by the Bush White House in no way affects its inquiry into the second-in-command at the Bush White House.

Cheney led Halliburton's expansion out of oil and into defence. In 1997, it bought the Devonport dockyards in Plymouth and took over Aldermaston. In 2000, the year he praised the MoD's open-handedness at Ditchley, Cheney suffered a mild setback when Halliburton lost the Aldermaston contract after the Health and Safety Executive fined it for a nuclear spillage. Devonport hasn't been an unblemished triumph either. Halliburton's subsidiary Devonport Management Ltd won the £505m contract to build docks for nuclear submarines. According to a National Audit Office report in December, the price is now £933m and no one has a clue what the eventual bill will be when the chronically delayed project is finished. As always when "risk" is passed to the private sector, the taxpayer will have to stump up for all the additional costs.

The Ministry of Defence Police are meanwhile investigating allegations that "several million pounds" have been fraudulently pocketed by subcontractors. In October, Devonport was fined £60,000 by the HSE for exposing 24 workers to asbestos.

Apart from that, Halliburton is doing a splendid job. The record of Cheney's former colleagues so impresses the MoD that it is allowing Halliburton to push at the "core competency" barrier. Within nine months of Cheney patting Spellar on the head for his privatising zeal, Halliburton won a £300m contract to supply trucks and drivers to move tanks to the battlefield. Its employees' status shows the blurring of distinctions between the public and the private and raises a novel question: would the hirelings of an American multinational be British prisoners of war? Sort of, replies the ministry. They would be "sponsored reserves" who could change from civilians to soldiers once battle commenced.

If the government has its way, privatisation will go further. Last year, the Foreign Office published a consultation document which raised the possibility that British mercenaries could become the licensed agents of foreign powers and - why not? - Her Majesty's Government. As I mentioned earlier, it is a solecism to call mercenaries "mercenaries". Traditionally, the Foreign Office said, the word described "soldiers of fortune . . . often disreputable thugs, ready to enlist for any cause or power ready to pay them". Now, said Jack Straw as he released the report, "it is British government policy to outsource certain tasks that in earlier days would have been undertaken by the armed forces". Licensing "may be desirable to distinguish between reputable and disreputable private sector operators".

The Foreign Secretary's definition of reputable gives us an idea of where government policy is going. His consultation document gave an approving name-check to a second firm, DynCorp, eight times. It was among the mercenary companies which "maintain a reputation as respectable organisations".

DynCorp, whose British arm is based in Salisbury, also has an Enron connection. One of the firm's directors, Herbert S "Pug" Winokur, was the chairman of Enron's finance committee. He persuaded the Enron board to create LMJ2, one of the "off- balance-sheet entities" that led the corporation to crash in the biggest bankruptcy in capitalist history. DynCorp provided bodyguards for the new Afghan government and services to US bases in the Middle East. It has been a private arm of the American effort to destroy coca plants in South America; there have been numerous complaints from peasants about sicknesses they have suffered since DynCorp planes dusted the plants with Monsanto's "Roundup" herbicide.

The US government also gave its British division a policing contract in the Balkans. Kathryn Bolkovac, a DynCorp officer, discovered that her colleagues were among peacekeepers and aid workers trading in prostitutes as young as 12. In the Bosnian nightclubs that Bolkovac investigated, girls who refused to satisfy their western customers were beaten by the bar owners, starved for days and gang-raped.

The Foreign Office's "reputable" company fired Bolkovac. At a hearing for her claim of un- fair dismissal last year, an industrial tribunal in Southampton described DynCorp's defence as "completely unbelievable". The official reason for her sacking was poor timekeeping. In reality, it had followed an attack on her from Dennis LaDucer, deputy commissioner of the International Police Task Force in Bosnia. LaDucer said Bolkovac's determination to stop girls getting the same treatment from DynCorp staff as they had received at the hands of the Serbs was "politically naive, unsophisticated, confrontative and self-righteous".

The tribunal heard one possible explanation for LaDucer's enmity: he had been caught in one of Bosnia's most vicious brothels. Awarding her £110,221, the tribunal chairman, Charles Twiss, said: "It is hard to imagine a case in which a firm has acted in a more callous, spiteful and vindictive manner towards a former employee."

The naive may have thought that the verdict would destroy DynCorp's reputation in Whitehall. But as with Halliburton, all that counts is DynCorp's place in the private sector. DynCorp is a commercial enterprise and, self-evidently, worthy of the taxes of a grateful populace. The fact that its staff raped and its management covered up rape is neither here nor there. Within days of the Bolkovac hearing ending, the Ministry of Defence announced that a consortium, which included DynCorp, was the preferred bidder for a contract to supply support services to army firing ranges.

All my comrades in the Iraqi opposition say that Saddam's conscripts will desert as soon as a credible force gets into the country. I hope they are right, because if the British army has to rely on Halliburton and DynCorp, this could be a long war.