It's from July 2003 but very relevant to this thread:
<snip>
When Blackwater opened in 1998, the business of war didn't look like such a sure bet. "This was a roulette, a crapshoot," recalls Jackson, a former Navy seal. During the Gulf War, the Pentagon had begun
replacing soldiers with private contractors, relying on civilian businesses to provide logistical support to troops on the front lines. Blackwater's founders were banking on predictions that the military was eager to speed up the process, privatizing many jobs traditionally reserved for uniformed troops. Their investment paid off:
Since the attacks of September 11, the company has seen its business boom--enough to warrant a major expansion of its training facility this year. "To contemplate outsourcing tactical, strategic, firearms-type training--high-risk training--is thinking outside the box," Jackson says. "Is this happening? Yes, this is happening."
As the U.S. military wages the war on terrorism, it is increasingly relying on for-profit companies like Blackwater to do work normally performed by soldiers. Defense contractors now do more than simply build airplanes--they maintain those planes on the battlefield and even fly them in some of the world's most troubled conflict zones. Private military companies supply bodyguards for the president of Afghanistan, construct detention camps to hold suspected terrorists at Guantanamo Bay, and pilot armed reconnaissance planes and helicopter gunships to eradicate coca crops in Colombia.
They operate the intelligence and communications systems at the U.S. Northern Command in Colorado, which is responsible for coordinating a response to any attack on the United States. And licensed by the State Department, they are contracting with foreign governments, training soldiers and reorganizing militaries in Nigeria, Bulgaria, Taiwan, and Equatorial Guinea.
and <snip>
Because they operate with little oversight, using contractors also enables the military to skirt troop limits imposed by Congress and to carry out clandestine operations without committing U.S. troops or attracting public attention.
"Private military corporations become a way to distance themselves and create what we used to call 'plausible deniability,'" says Daniel Nelson, a former professor of civil-military relations at the Defense Department's Marshall European Center for Security Studies.
"It's disastrous for democracy." more, long but enlightening:
http://www.indyweek.com/durham/2003-07-23/cover.html