Mercenary Boom in Iraq Creates Tension at Home and Abroad

[Sasha Lilley <sashalilley@xxxxxxxxx>]

By Aaron Glantz
Special to CorpWatch

Kirkuk, Iraq -- Mamand Kesnazani reclines in his
high-backed leather chair and puts his feet on top of
his desk inside the main security gate of Iraq's
northern oil field. The former fighter for Jalal
Talabani's Patriotic Union of Kurdistan (PUK),
Kesnazani came to Kirkuk the same day as the American
Army last April. He's been guarding the oil field ever
since.

"I've had a lot of bosses this year," Kesnazani says
as he orders a round of dark Iraqi tea. "First it was
the PUK, then the US Army came with Kellogg, Brown and
Root. That's Dick Cheney's company," he says smiling.
"Now the company has changed again to a British
company called Erinys."

Kesnazani is a peshmerga -- which means "ready to die"
-- a name that has become the accepted name for the
Kurdish fighters in northern Iraq who battled Saddam
Hussein's army for decades. Security jobs like those
at Northern Oil are technically open to all Iraqis,
but those staffing this checkpoint estimate 95% are
peshmerga.

Kesnazani has not even bothered to change his uniform.
He still wears the checkered black and white headscarf
and sharwal (baggy pants) typical of peshmerga
fighters, but most of his cohorts are clad in the
smart blue and gold uniform of Erinys Iraq. They look
every bit the part of private security guards.

These men are on the frontline of the burgeoning
security business in Iraq, easily the fastest growing
business sector in the country because of the growing
sophistication and effectiveness of the insurgency.
The majority of the jobs go to Kurds because of their
unswerving hatred of Saddam over the years, or to
mercenaries from other countries like Britain to South
Africa, who are neutral players in what some see as a
growing civil war. This boom may be heightening ethnic
tensions in Iraq while causing a recruitment strain on
security forces in other countries.

Favoritism Towards Kurds?
Four o'clock in the evening in Kirkuk and two dozen
American soldiers are doing their part to secure the
city. The US military is performing a regular search
of the local offices of the Kurdistan Community Party.
A dozen American soldiers with machine guns and body
armor are searching the building, while another dozen
station themselves outside -- some allowing Iraqi
children to play with their automatic weapons. The
commanding officer Lt. John Frazee says his troops
found five Kalashnikovs -- the self-defense limit set
by American authorities.

Who's Behind Erinys?

Erinys $80-million contract, awarded by the occupation
authorities last summer to provide security for Iraq's
vital oil infrastructure, has become a controversial
lightning rod within the Iraqi Provisional Government
and the security industry, according to Pulitzer-prize
winning journalist Knut Royce of New York Newsday.

Soon after this security contract was issued, the
company started recruiting many of its guards from the
ranks of Ahmed Chalabi's former militia, the Free
Iraqi Forces, raising allegations from other Iraqi
officials that he was creating a private army.

Chalabi, 59, scion of one of Iraq's most politically
powerful and wealthy families until the monarchy was
toppled in 1958, had been living in exile in London
when the U.S. invaded Iraq. The chief architect of the
umbrella organization for the resistance, the Iraqi
National Congress (INC), Chalabi is viewed by many
Iraqis as America's hand-picked choice to rule Iraq.

The security contract technically was awarded to
Erinys Iraq, a security company also newly formed
after the invasion, but bankrolled at its inception by
Nour USA, which was incorporated in the United States
last May, according to David Braus, the company's
managing director. Nour's founder was a Chalabi friend
and business associate, Abul Huda Farouki. Within days
of the award last August, Nour became a joint venture
partner with Erinys and the contract was amended to
include Nour.

An industry source familiar with some of the internal
affairs of both companies said Chalabi received a
$2-million fee for helping arrange the contract.
Chalabi, in a brief interview with Newsday, denied
that claim, as did a top company official. Chalabi
also denied that he has had anything to do with the
security firm.

Yet the INC is deeply connected to Erinys. For example
founding partner and director of Erinys Iraq is Faisal
Daghistani, the son of Tamara Daghistani, for years
one of Chalabi's most trusted confidants. She was a
key player in the creation of the INC which received
millions of dollars in U.S. funds to help destabilize
the Saddam Hussein regime before the U.S. invasion
last year.

And Farouki's businesses received at least $12 million
in the 1980s from a Chalabi-controlled bank in
Washington, D.C. The Jordanian government says that
bank was part of a massive embezzlement scheme
perpetrated by Chalabi on the Petra bank he owned in
Amman. When the bank collapsed in 1989, it cost the
Jordanian government $200 million to reimburse
depositors and avert a collapse of the country's
entire banking system.

Jordanian authorities have complained that much of the
funds they claim were siphoned off the Amman bank
ended up at Petra International. By May 1989, three
months before Jordan seized Petra Bank, the bankrupt
Farouki companies owed Petra International more than
$12 million, court records show.

A separate contract for $327 million with Nour was
cancelled for the appearance of conflict of interest.

He says he generally finds Kurdish groups comply with
instructions from American soldiers. "This area is
better than Baghdad because it is Kurdish," he says.
"Kurds are less likely to make trouble. They're less
likely to be terrorists."

Full: http://www.corpwatch.org/issues/PID.jsp?articleid=10288

=====
Sasha Lilley
Producer, Against the Grain
Pacifica Radio's KPFA
510 848-6767 ext 209
www.againstthegrain.org

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