AMY GOODMAN: The private security firm Blackwater USA is back in the news. On Tuesday, hours before President Bush’s State of the Union address, one of the company’s helicopters was brought down in a violent Baghdad neighborhood. Five Blackwater troops—all Americans—were killed. Reports say the men’s bodies show signs of execution-style deaths with bullet wounds to the back of the head. Blackwater provided no identities or details of those killed. They did release a statement saying the deaths, quote, “are a reminder of the extraordinary circumstances under which our professionals voluntarily serve to bring freedom and democracy to the Iraqi people.”

President Bush made no mention of the incident during his State of the Union, but he did address the very issue that’s brought dozens of private security companies like Blackwater to Iraq in the first place: the need for more troops.

PRESIDENT GEORGE W. BUSH: Tonight, I ask the Congress to authorize an increase in the size of our active Army and Marine Corps by 92,000 in the next five years. A second task we can take on together is to design and establish a volunteer civilian reserve corps. Such a corps would function much like our military reserve. It would ease the burden on the armed forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them.

AMY GOODMAN: Is the president looking to further outsource war? My next guest writes, “Blackwater is a reminder of just how privatized the Iraq war has become.” Jeremy Scahill is a Puffin Foundation writing fellow at The Nation Institute. He’s author of the forthcoming book, Blackwater: The Rise of the World’s Most Powerful Mercenary Army. He has an op-ed piece in yesterday’s Los Angeles Times, entitled “Are Mercenaries in Iraq?” Joining us now in the firehouse studio, welcome to Democracy Now!, Jeremy.

JEREMY SCAHILL: It’s good to be home.

AMY GOODMAN: We invited Blackwater on; they refused. But, Jeremy, let’s talk first about Blackwater. What is it?

JEREMY SCAHILL: Blackwater is a company that began in 1996 as a private military training facility in — it was built near the Great Dismal Swamp of North Carolina. And visionary executives, all of them former Navy SEALs or other elite special forces people, envisioned it as a project that would take advantage of the anticipated government outsourcing.

Well, here we are a decade later, and it’s the most powerful mercenary firm in the world. It has 20,000 soldiers on the ready, the world’s largest private military base, a fleet of 20 aircraft, including helicopter gunships. It’s become nothing short of the Praetorian Guard for the Bush administration’s so-called global war on terror. And it’s headed by a very right-wing Christian activist, ex-Navy SEAL named Erik Prince, whose family was one of the major bankrollers of the Republican Revolution of the 1990s. He, himself, is a significant funder of President Bush and his allies.

And what they’ve done is they have built a very frightening empire near the Great Dismal Swamp in North Carolina. They’ve got about 2,300 men actively deployed around the world. They provide the security for the U.S. diplomats in Iraq. They’ve guarded everyone, from Paul Bremer and John Negroponte to the current U.S. ambassador, Zalmay Khalilzad. They’re training troops in Afghanistan. They have been active in the Caspian Sea, where they set up a special forces base miles from the Iranian border. They really are the front line in what the Bush administration viewed as a necessary revolution in military affairs. In fact, they represent the life’s work of Dick Cheney and Donald Rumsfeld.

AMY GOODMAN: What do you mean, the “life’s work”?

JEREMY SCAHILL: Well, Dick Cheney, when he was defense secretary under George H.W. Bush during the Gulf War, one of the last things he did before leaving office was to create an unprecedented lucrative market for the firm that he would go on to head, Halliburton. He commissioned [a] Halliburton [division] to do a study on how to privatize the military bureaucracy. That effectively created the groundwork for the absolute war profiteer bonanza that we’ve seen unfold in the aftermath of 9/11. I mean, Clinton was totally on board with all of this, but it has exploded since 9/11. And so, Cheney, after he left office, when the first Bush was the president, went on to work at the neoconservative American Enterprise Institute, which really led the push for privatization of the government, not just the military.

And then, when these guys took office, Rumsfeld’s first real major address, delivered on September 10, 2001, he literally declared war on the Pentagon bureaucracy and said he had come to liberate the Pentagon. And what he meant by that — and he wrote this in an article in Foreign Affairs — was that governments, unlike companies, can’t die. He literally said that. So you have to figure out new incentives for competition, and Rumsfeld said that it should be run more like a corporation than a bureaucracy. And so, the company that most embodies that vision — and they call it a revolutionary in military affairs. It’s a total part of the Project for a New American Century and the neoconservative movement. The company that most embodies that is not Halliburton; it’s Blackwater.

AMY GOODMAN: Explain what you understand happened on Tuesday: President Bush giving his address, the Blackwater helicopter crashing.

JEREMY SCAHILL: Well, I think a lot of people — even though I think there’s been a lot of reporting on it and it’s been out in the public sphere, I think a lot of people still would be surprised to know that the U.S. ambassador in Iraq and U.S. diplomats throughout Iraq and U.S. diplomatic facilities and regional occupational offices are actually guarded by mercenaries. And Blackwater has a $300 million contract to provide diplomatic security. And so, they guard Zalmay Khalilzad and other U.S. diplomats in Iraq.

While what we understand — and, of course, as you know, reports are always very shaky in the early stages — is that a U.S. diplomatic convoy came under fire in a Sunni neighborhood of Baghdad, and a Blackwater helicopter apparently landed to try to respond to that attack, because Blackwater and its “Little Bird” helicopters provide the security for diplomatic convoys, and they got engaged in some kind of a firefight on the ground, and four men from one helicopter were killed. Then another helicopter responded and was brought down, either by fire or it got tangled in some wires.

Four of the five men who worked for Blackwater that were killed were shot in the back of the head, according to reports. And what’s interesting about this is that Zalmay Khalilzad said that he had traveled with the men and then said that he had gone to the morgue to view their bodies. And he said that the circumstances of their death were unclear, because of what he called the “fog of war.” But I think it’s very possible that they were guarding a very senior diplomat, if not Zalmay Khalilzad himself. I mean, we don’t have evidence to suggest that, but the fact that Khalilzad really came out forward and said, These were fine men. I was with them and visited them in the morgue, indicates that it could have been a very serious attack on a senior official.

AMY GOODMAN: What do you think is the actual body count in Iraq of U.S. soldiers? I mean, we count them very carefully, you know, when it surpassed 3,000. This was extremely significant. What really is the number of U.S. military dead?

JEREMY SCAHILL: Military dead is — I mean, I think it’s interesting, because the lines have totally been erased. I would say that we should be counting the deaths of Blackwater soldiers in the total troop count. I mean, I filed over the last year a lot of Freedom of Information Act requests, and one of the ways that we have found to discover the deaths of the number of contractors that have been killed is actually through the Department of Labor, because the government has a federal insurance scheme that’s been set up, which is actually very controversial — grew out of something called the Defense Base Act — and it’s insurance provided to contractors who service the U.S. military abroad. And so, as of late last year, more than 600 families of contractors in Iraq had filed for those benefits.

So I think we’re talking somewhere in the realm of — and these are just U.S. contractors that have rights to federal benefits inside of the United States. Remember, it’s not necessarily Americans that make up the majority of these 100,000 — 100,000 — contractors that are operating in Iraq right now, 48,000 of whom are mercenaries, according to the GAO. So I don’t think it’s possible to put a fine point on the number of troops killed, because the Bush administration has found a backdoor way to engage in an undeclared expansion of the occupation by deploying these private armies.

And at the State of the Union address the other night, Bush announces this civilian reserve corps, which is gaining momentum among Democrats and others. Wesley Clark has talked about it, the former presidential candidate and Supreme Allied NATO Commander. But what that is is another Frankenstein scheme that Cheney and these guys cooked up in their outsourcing laboratory to engage in an undeclared expansion. I mean, on the one hand, we have Bush talking about an official U.S. troop surge. The Army said — a few months ago, when Colin Powell said that the active-duty Army is basically broken, the Army was calling for 30,000 troops over 10 years. Bush then announces in his State of the Union 92,000 active-duty troops over five years, and at the same time, they’re increasing the presence of the mercenaries, increasing the presence of the other contractors, talking about some privatized or civilian reserve corps. This is all an undeclared expansion of the U.S. occupation, totally against the will of the American people and the world.

AMY GOODMAN: Civilian reserve corps?

JEREMY SCAHILL: Right. That’s what they’re calling it. And, you know, I mean, a lot of what has been tossed around about this since 2002 has been envisioning a sort of disaster response, international aid. You know, it’s all very benign-sounding, but the context of it, when Bush announced it the other night, he said we need 92,000 troops and we should develop a civilian reserve corps to supplement the work of the military.

Now, what’s interesting, Amy, is that two years ago Erik Prince, the head of Blackwater USA, was speaking at a military conference. He only comes out of his headquarters to speak in front of military audiences. He does not speak in front of civilians. He’s on panels with top brass and others. He’s very secretive. He gave a major address in which he called for the creation of what he called a “contractor brigade.” And I actually — I can read you what he said. He said — this is two years ago, before Bush called for his civilian reserve corps. Erik Prince, head of Blackwater USA: “There’s consternation in the [Pentagon] about increasing the permanent size of the Army. We want to add 30,000 people.” And they talked about costs of anywhere from $3.6 billion to $4 billion to do that. Well, by my math, that comes out to about $135,000 per soldier. And then, Prince added, “We could do it certainly cheaper.”

And so, now you have Blackwater, the Praetorian Guard for the war on terror, itching to get into Sudan. You know, something happened last year that got no attention whatsoever. In October, President Bush lifted sanctions on Christian Southern Sudan, and there have been reports now that Blackwater has been negotiating directly with the Southern Sudanese regional government to come in and start training the Christian forces of the south of Sudan. Blackwater has been itching to get into Sudan, and Erik Prince is on the board of Christian Freedom International, which is an evangelical missionary organization that has been targeting Sudan for many years. And there is a political agenda that Blackwater fits perfectly into, whether it’s Iraq and Afghanistan or Sudan.

AMY GOODMAN: And the other connections, Jeremy Scahill, between Blackwater and the Bush administration and the Republican Party?

JEREMY SCAHILL: The most recent one is that President Bush hired Blackwater’s lawyer — Blackwater’s former lawyer to be his lawyer. He replaced Harriet Miers. His name is Fred Fielding, of course, a man who goes back many decades to the Reagan administration, the Nixon administration. He is now going to be Bush’s top lawyer, and he was Blackwater’s lawyer.

Joseph Schmitz, who was the former Pentagon inspector general, whose job it was to police the war contractor bonanza, then goes on to work for one of the most profitable of them, is the vice chairman of the Prince Group, Blackwater’s parent company, and the general counsel for Blackwater.

Ken Starr, who’s the former Whitewater prosecutor, the man who led the impeachment charge against President Clinton, Kenneth Starr is now Blackwater’s counsel of record and has filed briefs for them at the Supreme Court, in fighting against wrongful death lawsuits filed against Blackwater for the deaths of its people and U.S. soldiers in the war zones.

And then, perhaps the most frightening employee of Blackwater is Cofer Black. This is the man who was head of the CIA’s counterterrorism center at the time of 9/11, the man who promised President Bush that he was going to bring bin Laden’s head back in a box on dry ice and talked about having his men chop bin Laden’s head off with a machete, told the Russians that he was going to bring the heads of the Mujahideen back on sticks, said there were going to be flies crawling across their eyeballs. Cofer Black is a 30-year veteran of the CIA, the man who many credit with really spearheading the extraordinary rendition program after 9/11, the man who told Congress that there was a “before 9/11” and an “after 9/11,” and that after 9/11, the gloves come off. He is now a senior executive at Blackwater and perhaps their most powerful behind-the-scenes operative.

AMY GOODMAN: And electoral politics?

JEREMY SCAHILL: Well, Erik Prince, the head of Blackwater, and other Blackwater executives are major bankrollers of the president, of Tom DeLay, of Santorum. They really were — when those guys were running Congress, Amy, Blackwater had just a revolving door there. They were really welcomed in as heroes. Senator John Warner, the former head of the Senate Armed Services Committee, called them “our silent partner in the global war on terror.” Erik Prince’s sister, Betsy DeVos, is married to Dick Devos, who recently lost the gubernatorial race in Michigan.

But also, Amy, this is a family, the Prince family, that really was one of the primary funders. It was Amway and Dick DeVos in the 1990s, and it was Edgar Prince and his network — Erik Prince’s father — that really created James Dobson, Focus on the Family — they gave them the seed money to start it — Gary Bauer, who was one of the original signers to the Project for a New American Century, a major anti-choice leader in this country, former presidential candidate, founder of the Family Research Council. He credits Edgar Prince, Erik’s father, with giving him the money to start the Family Research Council. We’re talking about people who were at the forefront of the rightwing Christian revolution in this country that really is gaining steam, despite recent electoral defeats.

And what’s really frightening is that you have a man in Erik Prince, who is a neo-crusader, a Christian supremacist, who has been given over a half a billion dollars in federal contracts, and that’s not to mention his black contracts, his secret contracts, his contracts with foreign friendly governments like Jordan. This is a man who espouses Christian supremacy, and he has been given, essentially, allowed to create a private army to defend Christendom around the world against secularists and Muslims and others, and has really been brought into the fold. He refers to Blackwater as the sort of FedEx of the Pentagon. He says if you really want a package to get somewhere, do you go with the postal service or do you go with FedEx? This is how these people view themselves. And it embodies everything that President Eisenhower prophesied would happen with the rise of an unchecked military-industrial complex. You have it all in Blackwater.

AMY GOODMAN: Jeremy Scahill, thanks very much for joining us, and I look forward to seeing your book when it comes out. Jeremy Scahill’s forthcoming book is Blackwater: The Rise of the World’s Most Powerful Mercenary Army. Thanks for joining us.