International Security Affects International Trade and Logistics

Introduction

The White House effort to create a firewall, not only for itself, but also for its intelligence agencies and armed forces, leads to policy inversion: a systemic dysfunction in which policy is made at low levels of the operation rather than controlled at high levels, because the lower-level operators have been "privatized" and government officials keep their distance. Lowlife middlemen and brokers pitch such operations to national security managers, and then offer to handle the operations. In the Iran-Contra Affair, negotiations with Iran were often conducted by private arms brokers rather than by American diplomats (Evans, pp: 63).

When you have an interlocutor whose livelihood (and perhaps whose life) turns on the successful outcome of the negotiations, you are likely to wind up with "soft" bargaining in which the interests of the U.S. Government may become secondary to the interests of the go-between. In a situation in which Iran was desperate for American weapons (and satellite intelligence) to bolster its position against Iraq, the bargaining position should have favored the American side. But with negotiators desperate to make deals (to repay a set of particularly nasty investors), the situation resolved time and again in ways that favored Iran. One of the main interlocutors, Manucher Ghorbanifar, was viewed by the CIA as a fraud, because he had failed several lie detector tests, and it issued a "burn" (avoid) notice on him in mid-1984. NSC director "Bud" McFarlane reported to President Reagan that he was a "borderline moron" and "the most despicable character I've ever met." At one point in the negotiations two arms dealers, Richard Secord and Albert Hakim offered the Iranians a nine-point agreement that included a promise of help to release seventeen Da'Wa terrorists from Kuwaiti jails, help in toppling Saddam Hussein, and the exchange of 500 TOW missiles in return for one hostage (Evans, pp: 72).

Since Iran-Contra, the U.S. government has attempted to avoid policy inversion when operations are privatized. In the 1990s in the midst of a conflict between Serbia and Croatia for dominance of what had been Yugoslavia, the United States decided to tilt strongly toward Croatia. Instead of turning the operation over to a new "Enterprise" with only tenuous connections to policymakers under a system of plausible deniability, U.S. officials encouraged Croatia to hire private companies with close links to the U.S. military as consultants. These companies in turn recruited recently retired U.S. military personnel to assist with communications, logistics, and intelligence. The result in 1995 was Operation Lightning Storm, a campaign against the Serbs that led to a negotiated end to the conflict over Bosnia. The activities of these companies were sanctioned by the State Department Office of Defense Trade Controls, and the privatization (which consisted of using retired rather than active-duty U.S. military personnel to assist the Croat forces) allowed State and Defense to provide effective assistance without getting active-duty U.S. forces involved. Nevertheless, operations involving privatization of logistics, training and supply continue to foster a culture of ...