All right, my friends, welcome back to Anti-War Radio, Chaos 92.7 FM in Austin, Texas.
Our next guest is Paul VerKuyl.
He's a professor of law at the Benjamin N. Cardozo School of Law at Yeshiva University in New York.
He's the former CEO of AAA.
He's the co-author of Administrative Law and Process and Regulation and Deregulation.
His newest book is called Outsourcing Sovereignty, Why Privatization of Government Functions Threatens Democracy.
Welcome to the show, Paul.
Thank you.
It's very good to have you here.
I admit I haven't read the book, but I watched the speech you gave about it.
It's very interesting stuff.
Okay.
And I'll go ahead and get this off my chest.
First of all, it's not necessarily, you know, a debate we need to have the whole show.
I want to know about, you know, your point of view on all this.
But I just want to go ahead and set the record straight here.
And this is something you referred to in your speech.
The difference between privatization and privatization, it seems like one should be spelled differently than the other.
One is when government ceases to do something and turns the responsibility over to free people in the marketplace.
The other is when government hires a private company to carry out its government function.
These are really entirely different concepts, right?
Sure.
I don't know.
I guess we need the amount of work it does.
And in the other, it's just transferring the amount of work it does from the public to the private sector through contracting.
Right.
I think we need to start spelling one with a Z and one with an S or something.
So we know that these are different things, because a lot of times you'll hear, particularly, I guess liberals will say, oh, yeah, here's your libertarianism is Blackwater.
You know, that's the free market in operation somehow.
You're right.
All right.
So now what your book is about is the latter kind, the government contract and the not government giving up responsibilities, but simply hiring them out and the different dangers to us.
And I guess I'll just ask you, what do you think are the primary dangers overall of heading this way?
Well, I think the big risk for us in this use of private security contractors and not just contractors generally, I have no problem with that.
It makes a lot of sense for government to have some functions performed by private contractors, obviously.
But when it comes time to military functions, then those are the ones that government must preserve itself.
The main threat is a lack of accountability and oversight, which is really what's happened as a result of some of the incidents that Blackwater and others have happened to them in Iraq.
When we talk about accountability, that's my major concern.
And I think when I say accountability, I mean accountability to the people, right, the people, the government, after all, is dependent upon in our democratic system, the people assuring themselves that things that are going on are proper.
And that gets lost when we delegate duties to private contractors who are not effectively overseen by the government.
Right.
And this would be the kind of thing where Congress should perform the same sort of oversight functions that they would on executive agencies, but they just really don't, basically, right?
That's right.
I mean, that's a good analogy.
If Congress delegates power to the executive branch to use an agency, then the agencies are themselves government employees or officers of the United States, and they can be overseen through normal channels of congressional oversight, hearings, budget hearings, and such as that.
And the executive branch itself has responsibility under the Constitution to make sure those actors are performing faithfully.
The clause in the Constitution is that the president must take care that the laws are faithfully executed.
And that's fine when they're government employees.
When they're contractors, it's stretched very far.
Well, you know, it's interesting because, I don't know, I've always wondered, you know, how we draw the line at this.
I thought for, I don't know, a few days until I thought about it a little bit more that the military-industrial complex just has way too much influence in actually determining the policy, as we've seen with Bruce Jackson and the guys from Lockheed creating organizations to come up with excuses for expanding NATO, excuses for invading Iraq just so they can sell their planes, and that kind of thing.
And so I thought for a day, well, they ought to just, you know, Boeing and Lockheed and all those, they ought to just nationalize those.
If the government needs weapons, they ought to be government agencies that make them.
But then, of course, somebody's got to mine the ore out of the ground.
Somebody's got to turn the ore into steel and sell it somewhere along the line anyway.
So, you know, at some point, you know, there's got to be a line drawn in there.
I'm just not sure where you put it.
No, and that's not easy.
I don't think for a minute some of this is easy.
But let me offer my distinction.
Sure, Lockheed used to make military equipment only, right?
And that was fine.
We don't need to make those public functions, building equipment.
But I think that when they get into services and other things like that, you know, now they're working actively on the border with the border fence and border control, then it's a little harder to manage, because services have this ability of really performing actual functions and making decisions, because these are real people.
These are not just pieces of equipment, right?
And that's where it gets harder.
And I pray that the government is not adequately staffed to do many of these jobs, and it's involving too much important work to private contractors and not overseeing them adequately.
I see.
So that's a pretty good distinction to make, I guess, then, hiring out the actual individuals to carry out the government services versus just providing actual good to the government.
Sure.
For sure.
Okay, I can see that.
That's at least somewhere to draw it, right?
Yeah.
I've just, you know, been searching in vain like I have.
I guess the other question really is, how can we expect it to be any different when our government is so vast and has a budget of $3 trillion every year?
That money's got to go somewhere.
And I think it was William S. Lind who, just describing the DOD budget, said, this is the biggest honeypot in the world.
How could it be any other way than private interests are using their influence with Congress to dip their hand in the public till?
Well, you describe, you know, the political reality.
And if you believe, as many do, and I have sympathy with this theory of public choice, it is that there's a market operating in government as well as in the private sector and the same forces are at work.
And so Congress and the White House and others are susceptible to being caught in these situations.
But I do think there's another, there's a limitation here, which derives from the Constitution, which is why I wrote this book, which is to point out and highlight and really warn about the necessity for government to actually govern and not let the government function, the governing function, be handed off to contractors who are, in many respects, free agents, not well supervised.
You know, that's something that you point out in the speech that I saw, was that the Blackwater employees are actually not even employees.
The Blackwater contractors are contractors themselves, so they're not even really overseen by the company they're working for, much less the U.S. Senate or somebody like that.
Well, that's an ironic thing, isn't it?
It turns out that Blackwater, for tax purposes, doesn't want to hire and make people employees, because then they have to withhold taxes and provide benefits and do other things.
So they call their people independent contractors.
That's a very good thing from a tax perspective.
And by doing that, they're almost admitting they don't have control over their people, because if they did, they would become employees, and they would have greater tax liability.
So here we have the circumstance of contracting out to a company that doesn't have employees but has itself contracts out.
So we've got a double contracting out, and by the time you get to the actual person who's operating in the battlefield or in a rock in some fashion, which is certainly out in the community, there's very little control.
And here Blackwater's making all their money off of taxes in the first place.
By the way, Blackwater's folks, in many respects, do good things.
They're taking opportunities as they find them.
So maybe that's smart business for them to do what they're doing, but it's not smart governance.
That's my complaint about it.
Sure, yeah, I absolutely agree with that.
Well, like you said, the public choice thing.
If a businessman can buy a congressman and it's a worthy investment better than spending his money a different way, then that's what he'll do.
Makes perfect sense.
Or not even buy a congressman, sign up, try to bid for a government contract rather than a private one.
I mean, these things are, you know, Scott, they're human nature.
And so everybody has these motivations, and the job of government is to sort of resist these things and to put up, you know, when Madison designed the Constitution, he was worried about checks and balances, because he knew that the human nature is always a danger and you have to account for it.
So these companies aren't, you know, I don't think venal, I just think they're free to take advantage, and we should put protections in to make sure they can't.
To protect ourselves against this problem.
Right.
Yeah, I absolutely agree with that.
That is James Madison, right?
Ambition must be made to check ambition.
Nothing personal.
You're good on Madison.
Yeah.
Oh, I'm a big Madison fan.
Well, I like his Bill of Rights better than his Constitution, but anyway.
As far as accountability, it seems, we talked about, you know, congressional oversight and that kind of thing.
But it's also the matter of criminal prosecution, where we have, for example, Blackwater employees, and it's not only them, we know about members of, employees of CACI or contractors for CACI at Abu Ghraib and other places, but it seems like there's no criminal accountability whatsoever.
The other Scott Horton, the international human rights lawyer from Harper's Magazine, has talked about on this show how the State Department says, well, we're not in charge of that, that's the DOJ's responsibility, and the DOJ says, well, we're not in charge of that, that's the State Department's responsibility.
And nobody thinks that, or I do, but apparently nobody else thinks that Iraqi courts and that so-called sovereign nation now ought to have jurisdiction.
And so basically, the American contractors in Iraq can commit crimes, and they can't be court-martialed by the military, they won't be prosecuted in court in Virginia or in Iraq or anywhere else, they get to do whatever they want.
That is the current state of the problem.
You're right.
I'm not going to correct some of these things, but the current state, which has to be emphasized, is that they're basically immune from criminal action.
Attorney General's office has been really asleep at the switch on these areas.
They haven't done very much.
There has been this FBI investigation of the Baghdad incident, which killed 17 people in the fall of this year, but nothing's come of that.
So there's that problem.
The Uniform Code of Military Justice, which is now going to be extended, that is one change Congress is making, it's going to be extended to contractors, is also going to be challenged, so we don't know where that stands.
But it's going to take a Justice Department that's serious about enforcement to do something here.
Yeah, and in fact, the other Scott Horton did say that there are plenty of laws on the books, actually, that mandate that the State Department, the Justice Department, and the DOD actually do things about this, it's just they won't.
But that they do have the jurisdiction somewhere, I don't know which laws exactly.
And then there are the civil suits, you may be following those, there are civil suits brought by the survivors of those Blackwater independent contractors who were killed in Fallujah.
That's a civil suit in D.C. and in Virginia.
And then there's a suit by survivors of the people killed in Baghdad at the 17 people, these are Iraqis, who have sued under the Alien Tort Claims Act.
In both of those circumstances, Blackwater is the defendant and is defending on the notion that it's immune from suit, because it's acting as an arm of the government.
Which is an interesting argument, really, because the government hasn't really anointed it to be part of the government, indeed, that's the whole question, isn't it?
Right.
And now, so it wasn't like this in Vietnam, Korea, World War II at all?
Well, we didn't have private security contractors in those days.
Not doing what they're doing now, you know, to be really alongside the military.
We had contractors, but they were mostly in logistical offices or food service or other things that didn't bring them into the conflict so directly.
So this really is a brand new phenomenon for us.
I'm sorry?
A new venture, a new undertaking, beyond anything we've seen before.
Even in the Gulf War, we didn't have this kind of circumstance.
I grew up watching MASH, it was always Clinger peeling the potatoes in the back, not a private company.
That's right.
And, you know, I guess this is a bit beyond the scope of your book, but we could also ask the question of, well, where is it exactly that we are that we're doing these things and how did we get here, you know?
Maybe if we weren't an empire, we wouldn't need a bunch of private security companies working as mercenaries for our government in other people's countries.
Well, this, again, is a political choice we make.
And this is part of the whole Iraq experience, isn't it?
Did we adequately know what we were getting into when we got into Iraq?
And do we not have an obligation, do our leaders not have an obligation to make sure that people are informed when we go in forward, if not before, certainly after?
That's another dimension of democracy.
So as long as we assume, as I assume we will, a kind of leading role in foreign policy in the world, we've got to confront these problems, we've got to fix them.
So we have a society that's organized well and driven by democratic principles and leadership.
Now something else that you brought up in the speech is how the same trend toward hiring out government jobs is taking place all across America in domestic capacity as well.
And I want to save homeland security for a minute, because I'm sure that's kind of its own whole conversation there.
But you mentioned NASA and the EPA.
And now with NASA, I guess it's just a given that you need all these outside private contractors to do the space program, that government employees aren't going to be able to pull that kind of thing off.
But what are they privatizing at the EPA?
Well, the areas there which are harder to identify, I must say, but I'm beginning to get a fix on them, are contractors who basically do a lot of the intellectual work at EPA.
In other words, they get contracted assignments maybe to write rules or to draft statements and regulations.
And the government official, and they may be sitting right next to the government official, I mean, they're in the same place.
And the government official shares, if you will, shares his or her power with contractors.
You don't know how much is...
We really don't know how much is done by the private contractor versus the public official.
At the end of the day, of course, the public official has to sign off, at least in the form of a rubber stamp.
But a lot of the intellectual work of government, which maybe should be kept in-house, because these are the people that have to have not only the institutional memory, but the intellectual qualities to keep our government running well, is being dissipated.
And I think that's a problem generally in the civilian side of government caused by a lack of personnel and an inability of government to add people on the civil side of government.
Well, I guess I just have to imagine that the contractors that they're hiring must come from the industries that they're regulating.
Oh, there's a lot of that.
You know, a lot of back and forth.
People go into government.
They're political appointees.
They may come from these contracting shops and come in and run the agency and perhaps participate in contracting out.
You know, I mean, there are rules about it.
I'm sure they don't violate rules about conflicts of interest directly, but there is a kind of tendency here to replicate who you are and to expand the number of contractors.
And of course, I guess it's always been the case that the regulations are written by the regulators pretty much one way or another.
That's right.
Now, I want to ask you about the Department of Homeland Security and the privatization of their resource.
I guess I don't even know how many agencies that combine together to make this thing.
But there are people who have already written about the rise of what they call the security industrial complex, where we already have so many companies domestically, you know, besides Blackwater, who are combining their interests with the Department of Homeland Security and getting all this grant money.
We have, I guess, all the high tech virtual fence on the border and all that kind of thing.
Can you, I guess, describe how extensive you found the privatization of Homeland Security functions?
I am looking at a GAO report, you know, about the Government Accountability Office of October 17, 2007.
Okay, so that was when David Walker was still in charge.
That's good, right?
Yes, running the Department of Homeland Security.
And they say there are 117 instances of work cited, which were contracted out, many of which were the GAO-believed inherent government functions, which should not have been contracted out.
So their conclusion was that there is a risk, they say a risk, that government decisions may be influenced by, rather than independent from, contractor judgments.
That's a quote from the first page of the report.
So in English, what exactly are they saying there?
What they're saying is we're losing, the agency's losing control of decision making if it contracts out inherent functions, which are those functions involving discretion and the exercise of control.
And that they're not sensitive to the idea that they're contracting out functions they ought to keep in-house.
Okay?
And so now how many of this, I wish I could give you an assessment throughout government, that's a very hard figure to come by, I don't think GAO would have it.
But let's assume that these are not isolated instances and that increasingly contractors in all agencies are doing jobs that the agency should be doing themselves.
How much of that is in dollars?
It's easier in the military because in the DOD budget you can identify in one place.
But it's very hard in the civilian side.
But it's significant, I'm sure.
I don't think anyone would quarrel with that.
Have you noticed that anybody in Congress who's interested in these topics, is this something that maybe one or two members of the House have sort of made a pet project of theirs, keeping track of this kind of trend in privatization of government services?
Yes.
I mean, I think if you look at David Price, you know, Democrat from North Carolina, congressman, who's been doing, he's the one making the military, the contractors subject to UCMJ or MEJA.
He's been very good and he's the chairman of an important committee.
If you look in the Senate, there's this new Senate bill that was introduced and among the sponsors was Senator Clinton, which is seeking to forbid the use of PSCs in Iraq and Afghanistan.
Just eliminate them.
Now, that's a pretty bold statement and, you know, I don't know that it's the kind of thing that really could happen, whether it could get the votes.
But those are two indicators that there's, and I think Henry Waxman's committee has been very active in this area, too, exposing a lot of these things.
So there's a lot of interest.
Oh, well, that's good news.
It definitely is worrisome for the reasons that you point out.
And as you said, it's sort of brand new territory.
Pretty much.
You know, that's why it's good for us to be talking about it and to build some momentum on the other side because all the forces are working against us, you know, a lot of which you've discussed.
All right, folks, that's Paul Verkuyl.
He is a professor of law at the Benjamin N. Cardozo School of Law at Yeshiva University in New York.
He's the former CEO of AAA.
Hey, thanks.
I got a couple of good toes from you guys.
He's the author of Administrative Law and Process and Regulation and Deregulation.
The newest book is called Outsourcing Sovereignty, Why Privatization of Government Functions Threatens Democracy.
Thanks very much for your time today, Paul.
Very good.
