Private security contractors in America: 400 years and counting

by J. Michael Waller / Serviam / September-October 2007.

The soldier-turned-private-contractor arrived in Virginia in shackles and leg irons. A war hero who fought an Islamic army, he had left the military with a sense of mission and adventure. Now he was part of a private, government-chartered company to lead security operations in an inhospitable part of the world.

Some of the spoiled, pasty-faced civilians in the venture saw him as a threat. Perhaps overly impressed with their own high posts and fancy titles, or maybe simply out of snobbery toward a man of such a rough background, they accused him of flouting the law and betraying his government. They thought him too dangerous to be trusted with weapons. A few even wanted him executed.

The officer in charge dismissed the unproven allegations, and a government-backed secret order, unsealed in Virginia, showed the leadership’s confidence in him. Falsely accused, the private soldier was freed.

The story could be that of a private security contractor (PSC) in Iraq or Afghanistan. But it happened in 1607. The PSC who arrived in chains was Captain John Smith, founder of the first permanent English settlement in America.

Smith reconnoitered the James river and selected a safe location for the settlement he named for his king: Jamestown. Building a fort, training a security force, and alternately befriending and battling the native tribesmen, Smith learned the languages and ways of the local people. He ably protected the investment of the self-proclaimed merchant-adventurers of the Virginia Company of London. He carried out his pledge to protect the interests of his government. Under his leadership, his company would build a civilization.

Four hundred years later, PSCs find themselves in a position similar to Smith’s: front-line professionals who take great personal risk to serve their country as entrepreneurs, widely admired yet reviled at the same time.

To some of today’s critics, PSCs are a menace to society and even to American democracy. Private security contractors, they argue, have no place in American history.

The state of Massachusetts disagrees. The state seal bears the image of the arm of a PSC brandishing a sword. The arm and sword, according to an official National Guard history, is that of Captain Myles Standish, guardian of the pilgrims. (See “Myles Standish, PSC.”)

Privately capitalized companies ran the early American colonies and usually financed their self-defense forces on their own, though legal authority still came from the British government. Essentially, the crown outsourced the defense of the colonies to the colonists themselves. Often poorly trained and equipped, the colonists and their Indian allies in southern New England faced a dangerous threat from the Pequot tribe of Connecticut and the region was plunged into the Pequot War of 1636.

Still, the crown left the colonists to fend for themselves. The aftermath of the Pequot War forced the Massachusetts Bay Colony to organize the loosely formed, locally based militias into three English-style regiments—North, South, and East—under a centralized command. That order, from December 17, 1636, marks the founding of what is now the U.S. National Guard.

The 101st Engineer Battalion of today’s Massachusetts National Guard is a direct descendant of the East Regiment. Other lineal descendants from the early regiments are the 101st Field Artillery and the 181st and 182nd Infantry of the Massachusetts National Guard. In July 2007, members of the 181st deployed to Iraq (see sidebar, “National Guard Observes 370th Anniversary”).


As Benjamin Franklin would often observe in the years predating the American Revolution, the colonists and colonial investors, not the British government, generally bore the costs of recruiting, staffing, training, equipping, and financing the colonial self-defense forces.

America likely would not have won its independence without heavy reliance on private security contractors and other for-profit suppliers.

With war approaching in 1775, a prominent southern plantation owner, businessman, and land speculator volunteered to take action of his own if the Continental Congress, of which he was a member, failed to fund a standing military. He offered to build a thousand-man army at his own expense. A former officer in the Virginia militia who fought for his king against the French, the businessman instinctively trusted the private sector’s ability to provide solutions when the government could—or would—not. Impressed by his character and sense of command, the Continental Congress commissioned him as a general to lead what would become the United States Army. The entrepreneur-general, of course, was George Washington.

Since few American colonists had been officers in the British military, Gen. Washington had to turn to foreign professionals, both volunteers and paid contractors, to staff, train, and even lead his army. Officers from a half-dozen or more nations poured in, with Benjamin Franklin, the U.S. envoy to France, personally recruiting the more senior ones for the cause (see sidebar, “Prominent PSCs of the American Revolution”).

Private warships help defeat the British

Unable to build a navy that could take on the fleet of the British Empire, the Continental Congress authorized the commissioning of private warships. On April 3, 1776—three months before the signing of the Declaration of Independence—Congress ordered the printing of “blank commissions for private ships of war and letters of marque and reprisal.” The blank documents would be signed by the Congress’s president and distributed to the colonial legislatures and other committees to be filled out “and delivered to the persons intending to fit out such private ships of war for making captures of British vessels and cargoes.” The Congress then legislated how the private warships, their owners, captains, and crew would be registered and regulated, with the owners posting bond to guarantee compliance with the law.

Private warships, known as privateers, became one of the first federally regulated industries in the nation.

From the government’s perspective, the purpose of privateers was to disrupt enemy shipping, damage the enemy’s economy, raise revenue, and divert the enemy navy. The privateer owners were businessmen. Some overstepped their bounds and even preyed on the innocent, but most were patriotically minded and considered themselves part of the war effort.

The presence of privateers substantially supplemented American forces and power. According to the U.S. Merchant Marine, during the six years of the American Revolution, the Continental Navy consisted of only 64 vessels with privateers adding another 1,697. The Continental Navy had an arsenal of 1,246 guns aboard its boats and ships; the privateers had 14,872. The Continental Navy captured 196 enemy ships compared to the privateers 2,283.

During the war, Washington, who paid close attention to his business affairs while serving as general, invested in at least one privateer. On November 14, 1777, he wrote his stepson, John Parke Custis, concerning the sale of one of the vessels: “It is perfectly agreeable, too, that Colonel Baylor should share part of the privateer. I have spoken to him on the subject. I shall therefore consider myself as possessing one fourth of your full share, and that yourself, Baylor, Lund Washington, and I are equally concerned in the share you at first held.” Baylor was Washington’s former aide de camp and an escort of Martha Washington; Lund Washington was the general’s cousin and business manager.

Contrary to myth, according to the Naval Historical Center, the U.S. Navy’s “father,” John Paul Jones, was never a privateer, though after the revolution he served as a PSC in the Imperial Russian Navy.

Private warships remained a vital component of American sea power into the early 1800s. They served the United States in the nation’s first foreign war, from 1801–1805, against the Barbary pirates of the Mediterranean, who plundered U.S. merchant ships and sold American crewmen and families into slavery. And they helped defeat the British again in the War of 1812.

While international treaties banned the practice of privateering later in the 19th century, the Constitution (Article 1, Section 8, Paragraph 11) still empowers Congress to grant letters of marque and reprisal to private citizens and companies.

Private intelligence and counterintelligence services

On land, though, the nation continued to rely on the private sector to meet urgent defense needs. Scottish immigrant Allan Pinkerton set up a detective agency in the United States in 1850 and uncovered a plot to assassinate President-elect Abraham Lincoln in Baltimore in 1861. The Pinkerton National Detective Agency had investigative talent and networks that the government completely lacked. With Washington crawling with Confederate spies, and Secretary of State William Seward, who ran counterintelligence at the time, not up to the job, Lincoln hired Pinkerton to lead U.S. counterintelligence. The amount of Confederate espionage in the nation’s capital fell dramatically. Counterintelligence soon was transferred into the Department of War.

Lincoln also hired Pinkerton to set up what he called a “secret service” to gather wartime intelligence against the Confederates in the south, where no federal forces could enter.

The intelligence contractor did just that, placing one of his finest agents, a British-born former New York City police officer named Timothy Webster, into Richmond society. According to a CIA history of U.S. intelligence, Webster became an extremely effective spy, winning the confidence of Confederate leaders. He was ultimately discovered and sentenced to hang. President Lincoln sent a message to Confederate President Jefferson Davis, attempting to save Webster’s life by threatening to hang Confederate spies. But to no avail; Webster died on the gallows.

The CIA history notes that, as with any intelligence service, not all of Pinkerton’s work was accurate or productive. While working for Maj. Gen. George B. McClellan, commander of the Army of the Potomac, Pinkerton tended to overestimate enemy strength, reinforcing McClellan’s tendency to do the same and consequently shy away from fighting. Lincoln fired McClellan after the disastrous bloodbath at Antietam, and Pinkerton resigned in solidarity.

At the time, individual commanders retained their own private assistants and experts. Lt. Gen. Winfield Scott, chief of the federal army during the Civil War, hired a private detective named Lafayette Baker to serve as his intelligence and counterintelligence chief.

President Lincoln even contracted a private intelligence agent on his own, and paid him from his own pocket. The agent, William A. Lloyd, provided Lincoln personally with military intelligence on Confederate positions and fortifications by a pre­arranged and coded correspondence with members of his family. According to the CIA history, Lincoln used this backdoor private intelligence channel to monitor the quality of information he was receiving from his generals.

World War II PSCs: Claire Chennault and the Flying Tigers

PSCs would serve off and on through America’s conflicts, but it was not until World War II that any gained the fame of the Pinkertons. Claire L. Chennault, a retired U.S. Army Air Corps captain, contracted with Madame Chiang Kai-shek in 1937 to help build a modern air force for China. He stayed to help the Chinese fight the invading Japanese. His experience would prove vital to America’s understanding of Japanese air power after the attack on Pearl Harbor in December 1941. His network of airfields in the free parts of China would be instrumental in allowing the United States to run air operations against the Japanese from the Chinese mainland.

Chennault was working for the Chinese nationalist government, and China needed pilots. President Franklin D. Roosevelt favored a plan to support China well before Japan attacked the American fleet in Hawaii. Chennault organized the American Volunteer Group (AVG), popularly called the Flying Tigers, to hire U.S. pilots to fly for the Chinese.

It was easy to get Curtiss-Wright to build P-40Bs for the AVG, but as Chennault recalled in his memoirs, “Personnel proved a tougher nut to crack. The military were violently opposed to the whole idea of American volunteers in China. It took direct personal intervention from President Roosevelt to pry the pilots and ground crews from the Army and Navy.”

The volunteers signed one-year contracts with the Central Aircraft Manufacturing Company (CAMCO) to “manufacture, repair and operate aircraft” in China. It was a lucrative but high-risk venture for the pilots in their uniquely painted warplanes (see photo). With monthly salaries as high as $750—equivalent to more than $10,000 today, according to the Consumer Price Index—plus another $500 bonus for every confirmed destruction of a Japanese aircraft, being a PSC in China was one of the highest-paying military jobs available. With taxes much lower in 1941 than today, the AVG pilots earned more take-home pay than most American PSCs in the present wars.

PSCs Post-Cold War

Anticipating a post-Cold War “peace dividend,” U.S. leaders in the 1990s sharply downsized the military. The Clinton administration planned for PSCs to take up the slack. It planned correctly. PSCs have been flying antinarcotics missions in Colombia and other drug-producing countries for well over a decade. They provided much of the innovation and surge capacity after 9/11. They have been essential to the war efforts in Iraq and Afghanistan, freeing up the troops from non-warfighting tasks and providing extra intellect and innovation.

PSCs might be no more popular than Captain John Smith when he arrived 400 years ago, or the highly paid Flying Tigers when the top brass tried to prevent them from fighting Tojo’s air force. But that’s okay. The contest is not about popularity but about fighting and winning wars, contributing to global stability, and making the world a safer place.