April 2004 - cypherpunks-legacy

Security Companies: Shadow Soldiers in Iraq
by R. A. Hettinga 21 Apr '04

21 Apr '04

<http://www.nytimes.com/2004/04/19/international/middleeast/19SECU.html?th=&…> The New York Times April 19, 2004 Security Companies: Shadow Soldiers in Iraq By DAVID BARSTOW his article was reported by David Barstow, James Glanz, Richard A. Oppel Jr. and Kate Zernike and was written by Mr. Barstow. They have come from all corners of the world. Former Navy Seal commandos from North Carolina. Gurkas from Nepal. Soldiers from South Africa's old apartheid government. They have come by the thousands, drawn to the dozens of private security companies that have set up shop in Baghdad. The most prized were plucked from the world's elite special forces units. Others may have been recruited from the local SWAT team. But they are there, racing about Iraq in armored cars, many outfitted with the latest in high-end combat weapons. Some security companies have formed their own "Quick Reaction Forces," and their own intelligence units that produce daily intelligence briefs with grid maps of "hot zones." One company has its own helicopters, and several have even forged diplomatic alliances with local clans. Far more than in any other conflict in United States history, the Pentagon is relying on private security companies to perform crucial jobs once entrusted to the military. In addition to guarding innumerable reconstruction projects, private companies are being asked to provide security for the chief of the Coalition Provisional Authority, L. Paul Bremer III, and other senior officials; to escort supply convoys through hostile territory; and to defend key locations, including 15 regional authority headquarters and even the Green Zone in downtown Baghdad, the center of American power in Iraq. With every week of insurgency in a war zone with no front, these companies are becoming more deeply enmeshed in combat, in some cases all but obliterating distinctions between professional troops and private commandos. Company executives see a clear boundary between their defensive roles as protectors and the offensive operations of the military. But more and more, they give the appearance of private, for-profit militias - by several estimates, a force of roughly 20,000 on top of an American military presence of 130,000. "I refer to them as our silent partner in this struggle," Senator John W. Warner, the Virginia Republican and Armed Services Committee chairman, said in an interview. The price of this partnership is soaring. By some recent government estimates, security costs could claim up to 25 percent of the $18 billion budgeted for reconstruction, a huge and mostly unanticipated expense that could delay or force the cancellation of billions of dollars worth of projects to rebuild schools, water treatment plants, electric lines and oil refineries. In Washington, defense experts and some leading Democrats are raising alarms over security companies' growing role in Iraq. "Security in a hostile fire area is a classic military mission," Senator Jack Reed of Rhode Island, a member of the Armed Service committee, wrote last week in a letter to Defense Secretary Donald H. Rumsfeld signed by 12 other Democratic senators. "Delegating this mission to private contractors raises serious questions." The extent and strategic importance of the alliance between the Pentagon and the private security industry has been all the more visible with each surge of violence. In recent weeks, commandos from private security companies fought to defend coalition authority employees and buildings from major assaults in Kut and Najaf, two cities south of Baghdad. To the north, in Mosul, a third security company repelled a direct assault on its headquarters. In the most publicized attack, four private security contractors were killed in an ambush of a supply convoy in Fallujah. The Bush administration's growing dependence on private security companies is partly by design. Determined to transform the military into a leaner but more lethal fighting force, Mr. Rumsfeld has pushed aggressively to outsource tasks not deemed essential to war-making. But many Pentagon and authority officials now concede that the companies' expanding role is also a result of the administration's misplaced optimism about how Iraqis would greet American reconstruction efforts. The authority initially estimated that security costs would eat up about 10 percent of the $18 billion in reconstruction money approved by Congress, said Capt. Bruce A. Cole of the Navy, a spokesman for the authority's program management office. But after months of sabotage and insurgency, some officials now say a much higher percentage will go to security companies that unblushingly charge $500 to $1,500 a day for their most skilled operators. "I believe that it was expected that coalition forces would provide adequate internal security and thus obviate the need for contractors to hire their own security," said Stuart W. Bowen Jr., the new inspector general of the authority. "But the current threat situation now requires that an unexpected, substantial percentage of contractor dollars be allocated to private security." "The numbers I've heard range up to 25 percent," Mr. Bowen said in a telephone interview from Baghdad. Mark J. Lumer, the Pentagon official responsible for overseeing Army procurement contracts in Iraq, said he had seen similar estimates. But Captain Cole said that the costs were unlikely to reach that level and that the progress of reconstruction would eventually alleviate the current security problems. Still, in many ways the accelerating partnership between the military and private security companies has already outrun the planning for it. There is no central oversight of the companies, no uniform rules of engagement, no consistent standards for vetting or training new hires. Some security guards complain bitterly of being thrust into combat without adequate firepower, training or equipment. There are stories of inadequate communication links with military commanders and of security guards stranded and under attack without reinforcements. Only now are authority officials working to draft rules for private security companies. The rules would require all the companies to register and be vetted by Iraq's Ministry of Interior. They would also give them the right to detain civilians and to use deadly force in defense of themselves or their clients. "Fire only aimed shots," reads one proposed rule, according to a draft obtained by The New York Times. Several security companies have themselves been pressing for the rules, warning that an influx of inexperienced and small companies has contributed to a chaotic atmosphere. One company has even enlisted a former West Point philosopher to help it devise rules of conduct. "What you don't need is Dodge City out there any more than you've already got it," said Jerry Hoffman, chief executive of Armor Group, a large security company working in Iraq. "You ought to have policies that are fair and equal and enforceable." Company executives argue that their services have freed up thousands of troops for offensive combat operations. But some military leaders are openly grumbling that the lure of $500 to $1,500 a day is siphoning away some of their most experienced Special Operations people at the very time their services are most in demand. Pentagon and coalition authority officials said they had no precise tally of how many private security guards are being paid with government funds, much less how many have been killed or wounded. Yet some Democrats and others suggest that the Bush administration is relying on these companies to both mask the cost of the war and augment an overstretched uniformed force. Mr. Rumsfeld has praised the work of security companies and disputed the idea that they were being pressed into action to make up for inadequate troop levels. Still, the government recently advertised for a big new contract - up to $100 million to guard the Green Zone in Baghdad. "The current and projected threat and recent history of attacks directed against coalition forces, and thinly stretched military force, requires a commercial security force that is dedicated to provide Force Protection security," the solicitation states. Danger Zones: Rising Casualties and Deal Making The words did not match the images from Iraq. At a Philadelphia conference last week, a government official pitched the promise of Iraq to dozens of business owners interested in winning reconstruction contracts. William H. Lash III, a senior Commerce Department official, said Baghdad was flowering, that restaurants and hotels were reopening. He told of driving around Baghdad and feeling out of place wearing body armor among ordinary Iraqis. In any case, he joked, the armor "clashed with my suit," so he took it off. But the view from Iraq is considerably less optimistic, with contracting companies and allied personnel alike hunkering down in walled-off compounds. "We're really in an unprecedented situation here," said Michael Battles, co-founder of the security company Custer Battles. "Civilian contractors are working in and amongst the most hostile parts of a conflict or postconflict scenario." One measure of the growing danger comes from the federal Department of Labor, which handles workers' compensation claims for deaths and injuries among among contract employees working for the military in war zones. Since the start of 2003, contractors have filed claims for 94 deaths and 1,164 injuries. For all of 2001 and 2002, by contrast, contractors reported 10 deaths and 843 injuries. No precise nation-by-nation breakdown is yet available, but Labor Department officials said an overwhelming majority of the cases since 2003 were from Iraq. With mounting casualties has come the exponential growth of the little-known industry of private security companies that work in the world's hot spots. In Iraq, almost all of them are on the United States payroll, either directly through contracts with government agencies or indirectly through subcontracts with companies hired to rebuild Iraq. Global Risk Strategies, one of the first security companies to enter Iraq, now has about 1,500 private guards in Iraq, up from 90 at the start of the war. The Steele Foundation has grown to 500 from 50. Erinys, a company barely known in the security industry before the war, now employs about 14,000 Iraqis. In many cases companies are adapting to the dangers of Iraq by replicating the tactics they perfected on Special Forces teams. One, Special Operations Consulting-Security Management Group, has recruited Iraqi informants who provide intelligence that helps the company assess threats, said Michael A. Janke, the company's chief operating officer. The combination of a deadly insurgency and billions of dollars in aid money has unleashed powerful market forces in the war zone. New security companies aggressively compete for lucrative contracts in a frenzy of deal making. "A lot of firms have put out a shingle, and they're not geared to operate in that environment," said Mr. Hoffman, the Armor Group chief executive. One security company, the Steele Foundation, recently turned down an $18 million contract for a corporation that wanted a security force deployed within only a few days; Steele said it simply could not find enough qualified guards so quickly. Another company promptly jumped at the contract. "They just throw bodies at it," said Kenn Kurtz, Steele's chief executive officer. Early on in the war, private security contractors came mostly from elite Special Operations forces. It is a small enough world that checking credentials was easy. But as demand has grown, so has the difficulty of finding and vetting qualified people. "At what point do we start scraping the barrel?" asked Simon Faulkner, chief operating officer of Hart, a British security company. "Where are these guys coming from?" When four guards working for a subcontractor hired by Erinys were killed in an attack in January, they were revealed to be former members of apartheid-era security forces in South Africa. One had admitted to crimes in an amnesty application to the Truth and Reconciliation Commission there. "We were very alarmed," said Michael Hutchings, the chief executive of Erinys Iraq. "We went back to our subcontractors and told them you want to sharpen up on your vetting." Troops and Guards: Distinctions Are Hard to Keep For private security contractors, the rules of engagement are seemingly simple. They can play defense, but not offense. In fact, military legal experts say, they risk being treated as illegal combatants if they support military units in hostile engagements. "We have issued no contracts for any contractor to engage in combat," Mr. Lumer, the Army procurement official. What has happened, Mr. Lumer said in an interview, is that the Pentagon has, to a "clearly unprecedented" degree, relied on security companies to guard convoys, senior officials and coalition authority facilities. No one wants regular troops "standing around in front of buildings," he said. "You don't want them catching jaywalkers or handing out speeding tickets." But in Iraq, insurgents ignore distinctions between security guards and combat troops. And what is more, they have made convoys and authority buildings prime targets. As a result, security contractors have increasingly found themselves in pitched battles, facing rocket-propelled grenades, not jaywalkers.. It is in those engagements, several security executives said, that the distinctions between defense and offense blur most. One notable example came two weeks ago, when eight security contractors from Blackwater USA helped repel a major attack on a coalition authority building in Najaf. The men fired thousands of rounds, and then summoned Blackwater helicopters for more. In an interview, Patrick Toohey, vice president for government relations at Blackwater, grappled for the right words to describe his men's actions. At one moment he spoke proudly of how the Blackwater men "fought and engaged every combatant with precise fire." At another he insisted that his men had not been engaged in combat at all. "We were conducting a security operation," he said. "The line," he finally said, "is getting blurred." And it is likely to get more blurred, with private security companies lobbying for permission to carry heavier weapons. "We will keep pressing for that," said Mr. Faulkner, the Hart executive - especially after four of his men spent 14 hours on a roof of their building in Kut fighting off 10 times as many insurgents. Another Hart employee was killed in the assault, his body later dismembered by the mob. "I cannot accept a situation where four of our people are being besieged by 40 or 60 Iraqis, where they're talking to me on a telephone saying, `Who's coming to help?' " Mr. Faulkner said. They are also seeking ways to improve communications with military units. Two weeks ago, a team of private security guards fought for hours to defend a coalition authority building in Kut. They later complained that allied Ukrainian forces had not responded to their calls for help. Even routine encounters between allied forces and private security teams can be perilous. Mr. Janke, the security company executive and himself a former Navy Seal, said that in a handful of cases over the last year, jittery soldiers had "lit up" - fired on - security companies' convoys. No one was killed, but standard identification procedures might have prevented those incidents, Mr. Janke said. Sorting out lines of authority and communication can be complex. Many security guards are hired as "independent contractors" by companies that, in turn, are sub-contractors of larger security companies, which are themselves subcontractors of a prime contractor, which may have been hired by a United States agency. In practical terms, these convoluted relationships often mean that the governmental authorities have no real oversight of security companies on the public payroll. In other cases, though, the government insists that security companies abide by detailed rules. A solicitation for work to provide security for the United States Agency for International Development, for example, contains requirements on everything from attire to crisis management. "If a chemical and/or biological threat or attack occurs, keep the area near the guard post clear of people," the document states, adding in capital letters, "Remember, during the confusion of this type of act, the guards must still provide security for employees or other people in the area." The words are emphatic, but empty. Government contracting officials and company executives concede that private guards have every right to abandon their posts if they deem the situation too unsafe. They are not subject to the Uniform Code of Military Justice, nor can they be prosecuted under civil laws or declared AWOL. Scott Earhart said he left Iraq because he was disgusted at the risks he was asked to take without adequate protection or training. Mr. Earhart, 34, arrived in Iraq in October to work as a dog handler for a bomb-detection company hired by Custer Battles. A former sheriff's deputy in Maryland, he said that there were not enough weapons and that his body armor was substandard. "If you didn't get to the supply room in time you wouldn't have a gun," he said. Mr. Earhart said the breaking point came when he was asked to drive unarmed to Baghdad from Amman, Jordan. "I felt my safety was in jeopardy," he said. Mr. Battles, of Custer Battles, said that it had taken longer than expected to get weapons shipments, and that the company had had "growth issues, like everybody else." But, he emphasized, "under no circumstances did we let people out into the field without proper equipment." Clearer Rules: Search for Standards, Even a Philosophy For more than a decade, military colleges have produced study after study warning of the potential pitfalls of giving contractors too large a role on the battlefield. The claimed cost savings are exaggerated or illusory, the studies argue. Questions of coordination and oversight have not been adequately resolved. Troops could be put at risk. Several senior American commanders in Iraq and Kuwait, or who have recently returned, expressed mixed feelings about the use of private security companies. "The key thing is there are many requirements that are still best filled with combat units that can call on gunship support - Apache and Kiowa Warriors overhead - medevac, and just plain old reinforcements," one senior Army general wrote in an e-mail message to The Times. "Our task is to outsource what MAKES SENSE given the enemy situation." In an unusual reversal of roles, the push for industry standards is coming from security executives themselves. In Washington, Pentagon lawyers are reviewing the rules governing security companies. At the same time, coalition authority and Iraqi officials are drafting operating rules for the private security companies. The draft rules urge the use of "graduated force" - first shout, then shove, then show your weapon, then shoot. And they spell out when the guards may use deadly force. But they do not cover precisely how security operators will be screened and trained. For now, companies are often writing their own rules and procedures for Iraq. "It's an industry that if it's not careful could easily blend into what is usually referred to as war profiteers or soldiers of fortune or mercenaries," "It is a very ill-defined operating space right now," Mr. Battles said. "We draw the lines." Custer Battles went so far as to hire an expert in military ethics, Paul Christopher, who taught philosophy at West Point. Mr. Christopher is helping the company define its place and policies in the chaos of Iraq. "He's the anti-Rambo," Mr. Battles said. "This is a deep thinker." Eric Schmitt contributed reporting from Washington for this article. -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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[wearables] mobile phone exploits: bluejacking and remote monitoring
by R. A. Hettinga 21 Apr '04

21 Apr '04

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Money laundering rules 'will increase costs'
by R. A. Hettinga 21 Apr '04

21 Apr '04

<http://www.bbc.co.uk/caribbean/news/story/2004/04/040415_anguilla-money.sht…> The BBC ----------- RELATED SITES Last updated: 15 April, 2004 - Published 16:13 GMT Money laundering rules 'will increase costs' Criminals are using increasingly sophiscated methods for laundering money Authorities in Anguilla have said proposed international rules to combat money laundering will increase the costs of business transactions. Deputy director of Anguilla's Financial Services Commission Carlyle Rogers said he anticipates the programme will result in greater costs of doing onshore and offshore business. The Paris-based Financial Action Task Force - the financial watchdog of the Organisation for Economic Cooperation and Development - issued the 40-point programme last June. The proposals were designed to keep international law enforcement abreast of increasingly sophisticated efforts by criminals to conceal illegal money flows. The programme lays out broad recommendations for regulating businesses from banks and insurers to gem dealers and real estate agents. Mr Rogers singled out the recommendations that relate to the extension of the due diligence requirements of accountants, law firms, casinos, real estate agents, trust companies and company service providers. He has also questioned the recommendation that calls for the extension of the mandatory reporting of suspicious transactions to authorities by lawyers, accountants and other entities. Anguillan officials say as well as the issue of higher costs banks on the island would come under stricter regulation and scrutiny, in terms of the correspondence banking relationships they have with other financial institutions around the world. Anguilla has recently proposed three new pieces of legislation to bring the island in line with other offshore centres as part of the development of its financial services industry. These include a Mutual Funds Act covering the recognition and registration of offshore mutual funds; an Insurance Act, which provides for the formation of both domestic and captive insurance companies and a Protected Cell Companies Act to offer international clients the opportunity to use protected cell accounts for insurance purposes. -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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<nettime> PlayFair > Sarovar
by R. A. Hettinga 21 Apr '04

21 Apr '04

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Re: Vote Market
by Major Variola (ret) 20 Apr '04

20 Apr '04

At 08:28 AM 4/20/04 +1000, Tim Benham wrote: > >I'm glad someone liked it. The voting thread seemed mainly about achieving >19th century ideals with 21st century technology. But it seemed to me as >coercively non-libertarian to forcibly prevent people from verifiably >revealing their vote as it is to do the opposite. Sometimes you don't want to >be anonymous. The 19th century ideals spell out a threat model. Which you can then design procedures & gizmos to resist. A different model is interesting because it instructs in how attacks & resistance work. BTW, its been argued that if you paid people to vote you'd increase participation. Participation is a good thing in some, but not all, opinions on democracy. You could pay folks for merely voting (eg a govt might do this) or you could pay folks by issue (which receipts make practical for proponents of some issue) which you suggest. >My plan was to let people sell >their vote before the election. I'll leave designing a scheme by which this >can be done anonymously online to the lists crypto-mavens. You could create a prototype market by using absentee voters and certification that the paper vote was dropped into a mailbox by a human attendant. There are legal obstacles. but there are shares that trade at nonzero >prices which pay no dividends, return no capital, and have control locked up. >I've never been able to work this out. The owners obviously 1. trust the controllers for some (possibly finite) amount of time 2. expect to be able to sell shares to others in the future. The difference between this and Ponzi schemes is left to the reader.. but as long as there's no coercion, fraud, or pollution, then "whatever"...

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What Should Freedom Lovers Do?
by R. A. Hettinga 20 Apr '04

20 Apr '04

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PlayFair > Sarovar
by Tim Benham 20 Apr '04

20 Apr '04

RAH> > Date: Tue, 20 Apr 2004 00:59:45 -0400 > From: "Bob Jonkman" <bjonkman(a)sobac.com> > Subject: Re: <nettime> PlayFair > Sarovar > > That seemed short-lived. Both links to the Playfair project at Sarovar are > dead: http://sarovar.org/projects/playfair/ and > http://playfair.sarovar.org/ The search function doesn't come up with > anything either... > > Has there been any further news on this? http://sarovar.org/forum/forum.php?forum_id=474

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ECC'04 -- Second announcement
by R. A. Hettinga 20 Apr '04

20 Apr '04

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Re: Vote Market
by Tim Benham 20 Apr '04

20 Apr '04

> Date: Mon, 19 Apr 2004 09:19:49 -0700 > From: "Major Variola (ret)" <mv(a)cdc.gov> > Subject: Re: Vote Market > > At 09:25 AM 4/17/04 +1000, Tim Benham wrote: > >I think all this concern about voter coercion is rather overblown. > > Maybe we > > >should ban bank statements because people might be coerced into showing > > them > > >to someone and punished for hiding their money. Receipts might open up > >opportunities for voter coercion but there are mechanisms for > > combatting > > >coercion other than coercive anonymity. > > > >What is missing in this discussion is mention of the benefits which > > would flow > > >from making voter anonymity optional. Non-anonymous voting is a > > necessary > > >precondition for a vote market > > And that is why this list is still worth reading. Innovative > socio-crypto speculation > free of inhibition. I'm glad someone liked it. The voting thread seemed mainly about achieving 19th century ideals with 21st century technology. But it seemed to me as coercively non-libertarian to forcibly prevent people from verifiably revealing their vote as it is to do the opposite. Sometimes you don't want to be anonymous. > > Its interesting to consider what the economic benefits would be to > individual > voters, and the buyers. The bizmodel. How it varies with 'obedience' > to one's vote-employer. Receipts give 100% obedience. No receipts > could > range from 0% to 100% depending on the population's behavior. In > some races, buying 10% obedience in 30% of the population can swing > a race. Yes, but the "optional obedience" model is what we have now, and it's obviously very inefficient. It leads to large amounts of private and common property being squandered in an effort to buy the votes of people who often don't even bother turning up of for work. My plan was to let people sell their vote before the election. I'll leave designing a scheme by which this can be done anonymously online to the lists crypto-mavens. > > How many issues could a voter play, what kind of money > are we talking about? How much to the parties spend on campaigns now? They should be willing to spend more on buying votes, because a bought vote is a much better product. How much they would *have* to spend would depend on the market, but the greater efficiency a vote market would attract more buyers, so it's reasonable to assume that the cost of buying an election would go up. > > The inertia (as in Men w/ Guns, besides insufficient anonymity / > anoncash infrastructure) > in getting such a market set up is large :-) > > Though in one sense, are the price of stock-shares the price of > control-votes in guiding a > private entity? Except confused by the value of the stock as an asset. If a company pays no dividends and returns no capital to its shareholders, then control's the only source of value for the shares. At least that's what my theory tells me (fair value is net present value of income produced by the asset + value of "externalities"), but there are shares that trade at nonzero prices which pay no dividends, return no capital, and have control locked up. I've never been able to work this out. Tim B

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Re: Anonymity vs reputation question
by Major Variola (ret) 19 Apr '04

19 Apr '04

At 05:57 AM 4/19/04 -0400, An Metet wrote: >> Is it possible to have a system where nyms can share reputation without >> divulging the links between them? That would allow the possibility of eg. >> publishing as a "new" identity while still having the "weight" of an >> already established seasoned professional. > >Yes, you can do this, but there are some problems. > >First, what is a reputation? Reputations are in people's minds. Any nym >will have a different reputation with different people. The only way >the new nym could have exactly the same reputation with everyone would >be for it to be explicitly linked to the old nym, defeating the purpose >of switching. Reputation requires authentication so you know you're talking to the same endpoint. It is easily implemented with a PK signature. Normally you assume the IP:port at the other end remains the same endpoint, but MITM attacks show that this is an exploitably false assumption. IPSec fixes this. So reputation is not in people's minds, its something that one can construct by signing documents with the same key. A nym is just a token, a string, a handle. You can make it more by making it persistant across sessions (ie, keep using the same RSA key instead of using ephemeral DH or one-time RSA keys to authenticate a single session.); normally folks do this to accrue reputation as well as for convenience. All you need is the same RSA key used above. You can further concretize a nym by associating it with a human subject to Men w/ Guns. But its not necessary, any more than persistant authentication (reputation) is. You can use a throw-away email account, or public key, for each message, thread, clique, etc. -------- In thinking about how to transfer reputation-credits, is the Adversary watching any movement on that 'account'? To use the credits, someone has to talk to a clearing house (to avoid double-spending) unless the reputation was on a physical bearer-gizmo like a secure card. (Cash or other anon Finder's-Keeper's bearer bling are the preferred funds transfer mechanism for identity-change). I don't see how you can transfer an unforgable token without some online activity xor secure physical implementation.

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