Military Politics and Democracy in the Andes

6. Battalions for Hire: Private Army Contracts in Peru and Ecuador

In this chapter, the discussion shifts from explaining how much sovereignty and police work the armies of Peru and Ecuador have carried out to the question of who benefits from those missions, with a focus on the post-2000 period. In each country, actors other than the national government—especially private companies in the extractive industries—have hired the army for security work, arrangements that have occurred predominantly at the local level. That is, local army commanders make their decisions based, not on technical evaluations of security needs, but rather on how much clients will pay for security. The analysis in this chapter thus identifies a major way in which resources have affected the armies’ behavior. Nevertheless, and as also shown in this chapter, at the local level, as at the national level, a resource maximization approach to explaining military behavior breaks down. Army units perform work for the highest bidder, but only subject to firm constraints: clients’ influence on army units is checked by the army’s mission beliefs and its drive to maintain predictability for patrols on the ground.1 A chapter 6 B Battalions for Hire Private Army Contracts in Peru and Ecuador 166 Military Politics and Democracy in the Andes resource-hungry army units Army units face pressures from army leadership to finance themselves, in a setting of increased government oversight of military financial practices at the national level. The Peruvian army can legally contract its equipment, infrastructure , and services to other state or private actors in return for “resources directly collected” (recursos directamente recaudados, or RDR); these resources are reported as part of the defense budget and, from 2003 through 2005, made up roughly 8 to 11 percent of defense spending (Robles Montoya 2003, 159–61; 2005, 145).2 In interviews, Peruvian army officers said that the military has been more diligent about reporting this income since Fujimori’s departure from office, amid the greater oversight and accountability in state financial practices (reviewed in chapter 2). In Ecuador, in the broader climate of increased oversight of military finances (see chapter 2), national-level deals between the military and clients have been thwarted. Efforts to end military security work done for private sector resources were invigorated in late 2005, immediately after the national press printed an article describing a 2001 contract between the armed forces and private oil companies (discussed below), including details about material benefits the army received in return for its oil security services (El Comercio [Quito] 12/19/05a). As part of a new effort to achieve civilian control of the armed forces, the 2007 defense sector law (see chapter 2) outlawed direct resource exchanges between the military and the private sector. National contracting between Ecuador’s military and private oil companies ended in response to this law. (As of early 2009, however , local deals between army units and private oil companies continued, according to a journalist interviewed who was experienced in reporting on the army and its operations in the north.) Army leaders confronting these pressures at the national level have pushed local commanders to subsidize funds received from the central army budget with outside income. My analysis of these pressures is based on information provided by local army commanders and other officers with direct knowledge about the named units’ finances, gained through their work on those bases. These officers had experienced, firsthand, the mounting demands from army leadership to self- finance base activities. In Peru, an army officer described local army poverty as follows: “The army has its priorities, which include rations for the troops, ammunition, and fuel. But what is not prioritized by the army is electricity, water . . . paper for the of- Private Army Contracts in Peru and Ecuador 167 fice . . . So the units have to come up with this, to make up the difference.” Local commanders throughout Peru have relied on various activities to support their units. Active and retired army officers said that unit commanders have leased their base infrastructure.3 Across the country—for example, in the southern departments of Puno and Tacna, the northern department of Tumbes, and the northeastern city of Iquitos—army units run large plantations that provide subsistence for the unit personnel and generate revenue through sales to surrounding communities. Army engineer battalions are paid for their construction services , particularly roadwork. Units report only some of the income to the generals in Lima in the form of...