The killings by Blackwater’s private security guards on Baghdad’s Bloody Sunday were brutal and unprovoked. Terrified men, women and children were mowed down as they tried to flee from the ferocious gunfire, cars were set on fire incinerating those inside.

I was in Nisour Square, in Mansour district, on the afternoon of 17 September when the massacre took place, and saw the outpouring of anger that followed from Iraqis vociferously demanding that Western, private armies acting violently, but immune from scrutiny or prosecution, should face justice.

But there was always the underlying feeling that this was, after all, Iraq, where violent deaths are hardly unusual. The scapegoat for America’s dependence on private armies appears to be a mid-ranking official who yesterday resigned as the State Department overseer of security contractors.

Richard Griffin made no mention of the Mansour killings or their aftermath in his resignation letter but it came just one day after a study commissioned by Condoleezza Rice found serious lapses in the department’s oversight of private guards. At the same time Congress is moving to put under military control all armed contractors operating in combat zones, an effort the State Department is strongly resisting.

In Iraq, no one expects anything to be done. The widely prevalent view was expressed by Hassan Jabar Salman, a lawyer who was shot four times in the back as he attempted to get away from the American convoy. “This is not the first time they have killed innocent people, and they will do it again, you’ll see,” he said as he sat swathed in bandages at Yarmukh Hospital. “Nothing, absolutely nothing will be done.”

The government of Nouri al-Maliki, which had declared that they would expel Blackwater, was forced to let the company operate again after just three days under pressure from Washington. But, surprisingly, what happened at Nisour Square has not faded.

Blackwater has remained defiant, despite a welter of testimonies contradicting their version of what happened. Others in the industry, however, are much more circumspect, acknowledging that new rules are necessary and the process of self-regulation needs to be tightened up.

People in the industry are keen to stress that not all security contractors behave in the same way.

Blackwater, in particular, had built up a reputation for being trigger happy. However, the industry attracts all manner of oddballs. You could have met some of them at the Mustafa Hotel in Kabul after the fall of the Taliban. There was an Irish bar with a former boxer as head barman, a dancing Osama bin Laden doll, bullet holes in the ceiling and men who lovingly cradled their guns and wore wrap around sunglasses at night. The seats for drinking al-fresco were supposedly from Russian MiGs shot down by the Mujahedin.

But it was not all fun and games, some of the regulars were bad, and possibly mad. One such was Jack Idema, who claimed to be ex-CIA, but was almost certainly a Walter Mitty. That did not stop him from running his own “security company” and setting up an unofficial prison. He was later jailed for torturing people his gunmen had abducted on suspicion of being “terrorists”.

Last week in Kabul, I ran into Mark, whom I last met in Afghanistan in 2001 when he was a serving Royal Marine. He said: “I suppose we should thank George Bush and Tony Blair for what they have done for our industry much as I dislike their policies. And if I was an Iraqi I certainly would not be thanking them. But if you have such an adventurous foreign policy then you need the security contractors afterwards when there is an attempt to bring stability, the armed forces certainly aren’t in a position to do so. The money is still good and I am making use of what I learnt as a Royal [Marine]. I know some people are critical of the private firms, but I would like to think we are helping on reconstruction and winning local trust, although I have met some right nutters and what Blackwater did sounds exactly the kind of thing we don’t want. But, having said that, if something did go wrong I would not want to end up before an Iraqi or Afghan court, knowing how corrupt they are.”

Patrick Toyne-Sewell of Armor Group says: “We believe that Iraq as a market will continue to grow for some time due to the outsourcing by the US government in terms of convoy logistics, in terms of guarding, that will continue. The fact that there are obviously huge oil reserves in Iraq and international companies will go back in once the security situation stabilises a bit more.”

Private armies were not, of course, invented with the Iraq and Afghanistan wars. Numidian mercenaries acted as shock troops in Ramses II’s sack of Kadesh in 1294BC. Hired fighters helped King David drive the Philistines from Israel in 1000 BC. The Thirty Years’ War was largely fought by privately contracted forces, and Britain used Hessian soldiers to fight in the American War of Independence.

Machiavelli, in The Prince, castigated mercenaries as “dangerous, and if anyone supports his state by the arms of mercenaries, he will never stand firm or sure”.

Bob Denard, a notorious French soldier of fortune, who died a couple of weeks ago, epitomised how such use of military efficiency and technology could be used profitably against relatively unsophisticated and untrained forces in Africa.

But the really big money comes when there are open commercial relationships between security companies and Western states. Private companies guard embassies and diplomats, provide security for aid workers and carry out hostage rescue missions.

Andy Bearpark, the director general of the British Association of Private Security Companies, said: “You had people that you and I would call mercenaries who tried to invade Congo and things like that. Around 20 years ago you had people with background in the services saying ‘hang on, I am sure we can make just as much money and more legally and legitimately as others are doing illegally. The real explosion came in 2004.

“The growth areas now are Afghanistan and also the Middle East generally - Saudi Arabia, Kuwait, Oman, Jordan, anywhere there’s oil, anywhere there’s risk.

“Our Association… has a charter that members must adhere to and there is a disciplinary procedure. But there are parts of the industry which is in a pretty unregulated environment. It’s very, very difficult to control what these people actually do.”

Companies with government contracts

USPI United States

USPI employs 3,600 people in Afghanistan and holds the largest US government contract there. Based in Texas, the company was founded by Del and Barbara Spier in 1987. Earlier this month it was accused of over-billing the US government by millions of dollars for non-existent employees and vehicles, a claim it denied. In a 2005 report on disarmament in Afghanistan, the Belgian International Crisis Group said the majority of men on USPI’s payroll were associated with private militias. USPI’s headquarters in Kandahar has been hit by a suicide bomb and another suicide bomber targeting a convoy being escorted by USPI personnel killed 15 people andinjured 26.

Olive UK

Olive operates in more than 30 countries. As well as providing security services, it engages in post-conflict reconstruction and aid work, including de-mining and ordinance disposal. Founded in 2001, the company employs around 600 people worldwide, although it also sub-contracts to local organisations. Its actions are monitored by an ethics committee, which has the right to veto any project, and the company supports a number of charitable organisations. Its senior team has worked with UK special forces, the Prime Minister’s office and leading technology companies and investment banks. Olive Group also offers security training to corporations, government and security personnel.

Global UK

Global calls itself a “political and security risk management company”. It was founded in 1988 by former Marine Damien Perl and Charlie Andrews, a former Scots Guards officer. In Iraq they employ many Fijians discharged from UN peacekeeping forces in Lebanon, who are paid considerably less than their western counterparts. “This is a huge salary in relation to Fiji,” says Andrews. The company boasts 93 field-based operational and logistical experts (plus staff) in Kabul and teams in all eight regions of Afghanistan identifying and assessing potential voter registration sites for a forthcoming election. They are active in: Colombia, Sudan, Nigeria, Liberia, Pakistan, Kazakhstan and China.

Blackwater United states

Started in 1997 and began to pick up large-scale government contracts after the election of George W Bush. Founder Erik Prince supported Mr Bush’s campaign and makes regular contributions to the Republican Party. Blackwater is the largest of the State Department’s three private security contractors, providing 987 contractors. At least 90 per cent of its revenue comes from government contracts. Missions conducted by Blackwater Security Consulting have raised significant controversy. Each Blackwater guard in Iraq costs the US government $445,000 (£220,000) per year. The company is under investigation by the US and Iraqi governments after its guards were involved in killing civilians.

Aegis Defence Services UK

Aegis won a $293m (£146m) Pentagon contract in 2004 which has been extended. The company was founded by Lt-Col Tim Spicer, one of whose previous companies, Sandline International, was accused of breaking a UN embargo by selling arms to Sierra Leone. Aegis employs 1,100 contractors in Iraq and initiated an inquiry after a “trophy video” of guards shooting Iraqi civilians was posted on a website. The company said later it was the work of a former employee. The company works, among other places, in the US, Afghanistan, Bahrain and Kenya but most of its work is in Iraq where it has set up a charitable reconstruction-related foundation.

Armor Group UK

Founded in 1981, the company provides bodyguards, convoy escorts and security for British and American embassies. It is also involved in risk management consultancy, mainly in oil and gas, and mine clearance work. The company employs 9,000 people internationally, of which 75 per cent are local. In Iraq, it has about 1,200 employees of which 800 are Iraqis. In Afghanistan, it also has 1,200employees, of which 850 are local. Employees are mostly ex-forces personnel, the majority are British or from the Commonwealth, and the average age is 35-40 and emphasis, it says, is on maturity and reliability. The company operates in 38 countries, with Iraq as the biggest location.

Control Risks Group UK

Operates in 130 countries, more often in consultancy rather than security. It has contracts with the British Government and the American corporations Bechtel and Haliburton in Iraq. The two American companies had attracted criticism for the lucrative US government contracts they have received, but CRG insists that they warn clients about dealing with repressive regimes. It points out that as far back as 1992 it told in a report to the oil company Unocal of the use of forced labour by the Burmese government. CRG has about 700 full-time employees, most are ex-military and ex-police and local nationals.

DynCorp International United States

DynCorp receives more than 96 per cent of its $2bn annual revenues from the US federal government. Based in Virginia,it has provided teams for the US military in Bolivia, Bosnia, Somalia, Angola, Haiti, Colombia, Kosovo and Kuwait. It has also expressed interest in patrolling the US-Mexico border. DynCorp International also trained Afghan President Hamid Karzai’s security guards. The company was also hired to assist with the Hurricane Katrina aftermath. It has been involved in “Plan Colombia” and is training Afghan forces in opium poppy eradication.

© 2007 The Independent