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How a nice Quebec firm found itself in a war zone Print
Montreal-based Garda claims to be the world's fifth-largest private security company, writes Don Butler.
 
Don Butler - The Ottawa Citizen - June 04, 2007

When five Britons were abducted in Baghdad last week, Canadians may have been surprised to learn that four of them worked for Garda World Security, a Montreal-based security firm.

Though insurgencies in Iraq and Afghanistan have spawned a multibillion-dollar private security industry, most of the firms operating in those countries are American or British.
Critics view private security companies as heavily armed modern-day mercenaries with few ethical boundaries. Blackwater, a U.S. private security firm that has rapidly become one of the largest, has been especially controversial.

Which raises a question: What's a nice Canadian firm doing in a place like this?

Until quite recently, Garda had no presence in the world's conflict zones. But since November 2005, it has been on a phenomenal acquisition tear, buying no fewer than 16 firms in Canada, the United States and Britain.

It now bills itself as the world's fifth-largest integrated security company, with 50,000 employees and annual revenues of more than $1.4 billion.

In a recent interview with the Montreal Gazette, Garda President and CEO Stephan Cretier said the company has 1,800 personnel providing security to diplomats, aid workers and companies in Iraq and Afghanistan. Another company official said last week that 5,000 Garda employees work in the Middle East.

Mr. Cretier, a 43-year-old former minor-league baseball umpire who founded the company in 1995 with a $25,000 mortgage on his house, says his goal is to make Garda one of the world's top three private security firms.

If recent history is any guide, he might do it. Just four years ago, Garda's annual revenues were below $10 million. Then in 2003, Quebec's giant credit union, the Mouvement des caisse Desjardins, sold Garda the armoured security business it had purchased from Brinks in the 1980s, handing the company a 70-per-cent share of the Quebec market overnight.

The caisse deal kickstarted Garda's remarkable growth. A slew of acquisitions followed, culminating in the $450-million purchase of California-based ATI Systems International Inc. in February. Garda is now the second-largest cash-handling company in North America, trailing only Brinks.

Garda staff also screen passengers and baggage at 28 Canadian airports, guard offices and stores -- the firm is Canada's largest supplier of security guards -- and handle property inspections and insurance reports.

But it was the purchase of Virginia-based Vance International in November 2005 that gave Garda its entree into the dangerous but lucrative world of international security.

Among its clients were the U.S. military and major American corporations such as Shell Oil, Visa, Coca-Cola and McDonald's. "This client list is a bit of a fantasy for a CEO like me," Mr. Cretier gushed at the time.

Last December, Garda added London-based Kroll Security International, known as KSI, to its portfolio.

Garda then merged KSI and GSS Global, a British investigation and security company it bought in February, with the British operations of Vance to create a new global group known as GardaWorld. It's this arm of Garda that operates in high-risk markets such as Iraq.

One KSI contract that GardaWorld assumed was with Bearingpoint, a U.S. firm providing economic reform advice to the Iraqi government. GardaWorld personnel were providing security for a Bearingpoint consultant when they were kidnapped last week.

Garda's decision to plunge into these perilous waters probably wasn't too difficult; there's a great deal money to be made.

"It's a major growth business," says Alan Bell, president of Globe Risk Holdings, a Toronto security firm that operates in Iraq and Afghanistan.

"I would say that 60 per cent of the companies in Iraq and Afghanistan didn't exist before 9/11. And they're now multimillion-dollar companies. Some are even billion-dollar companies because of Iraq."

"It's a feeding frenzy out there," agrees John Thompson, a security expert at the MacKenzie Institute in Toronto. "All these companies are growing quite rapidly, and they're making a lot of money."

The U.S. Government Accountability Office estimated last year there were 181 security firms with 48,000 employees in Iraq alone. Other estimates put the total number of private contractors above 100,000.

Garda is not immune to the lure of easy money. In the Gazette interview, Mr. Cretier acknowledged that operating in places like Iraq is risky, "but also more profitable."

And last December, Mr. Cretier told the Financial Post that he was attracted to the Middle East, Africa and other high-risk markets because profit margins are higher than in Garda's traditional security guard and cash-handling operations.

But as Garda painfully learned last week, with the profits come problems. At least 780 private contractors in Iraq have been killed, and more than 7,600 injured. There's also the small matter of corporate image. Critics routinely describe private security personnel in Iraq as mercenaries, with all the unsavory associations that conveys.

"They're not serving their country," observes Scott Taylor, editor and publisher of Esprit de Corps magazine. "They're serving a corporation for a paycheque. That is the definition of a mercenary."

Not everyone agrees. Mr. Thompson says many private security personnel simply provide protection and bodyguard services. "If they were true mercenaries, they'd actually be fielding a fighting force. There's a fine distinction, but it's a valid one."

The image of private security firms has been coloured by companies like Blackwater USA. Founded in 1996 by ex-Navy Seal Erik Prince, who Mr. Taylor describes as a "Bible-thumping zealot," Blackwater operates the world's largest private military base in North Carolina.

Mr. Taylor, who has seen Blackwater in action in Afghanistan, says its personnel are effectively beyond the law. "They're not subject to military discipline and they're not answerable as American citizens to the Afghan authorities."

Clad in caps, sunglasses and flak jackets, armed Blackwater staff move around the country in fast-moving convoys of three SUVs, Mr. Taylor says. "If anyone tries to stop them, it's a shoot-first policy. It's like having Hell's Angels driving around all over your small town."

While Blackwater is most notorious, many private security firms in Iraq and Afghanistan have similar rules of engagement, Mr. Taylor says. "If anybody tries to stop the vehicle, they just drive over them."

Garda has tried to dispel such associations. "We're not going there as soldiers," Mr. Cretier told the Gazette last month. "We hire locals, which is rare. We're perceived differently because we're Canadian."

Garda provides security to the British embassy in Baghdad's Green Zone, and to non-profit groups, including the Foundation for Relief and Reconciliation in the Middle East, a British NGO headed by Rev. Andrew White, the Anglican vicar of Baghdad.

Last month, the foundation gave GardaWorld its inaugural "peace-making prize" for providing free protection for Rev. White, who lives in GardaWorld's Baghdad compound.

In an interview with The Guardian, Rev. White called GardaWorld "an outstanding company. They are very unique in Iraq because they are very serious about trying to promote peace and not just make money."

According to Mr. Bell, Garda is not yet a major player in Iraq. "I was last in Iraq probably three months ago and I never saw any Garda insignia or heard of any Garda projects."

Mr. Bell says his company is the only other Canadian firm operating in Iraq. That's because the American state department, which approves most security contracts in Iraq, effectively blackballed Canadian firms when Canada declined to support the U.S.-led 2003 invasion.

Right now, he says, one of his biggest challenges is recruiting qualified personnel.

"There's just a shortage of decent guys to deploy. Every guy who watches TV thinks he can go out there. I get resumes from 18 year olds who are serving at McDonald's who say they want to go to Afghanistan and kill people."

The private security business has offered huge financial payoffs to those with military backgrounds. Mr. Taylor tells of a former member of Canada's elite JTF2 force who earned $350,000 in 10 months protecting payroll trucks for U.S. contractor Haliburton in Iraq.

While salaries remain decent, they have fallen sharply in the past 18 months, Mr. Bell says. Someone with a special forces training used to command a salary of up to $1,000 U.S. a day. "Now you're lucky if you can get $500 a day."

What's driving down salaries are the sheer number of firms bidding for security contracts and the increasing presence of Iraqi and Afghan security firms. "I can get an Afghan military guy for 75 bucks a month," Mr. Bell says. "For the price of hiring three ex-pats, I can hire 15 guys."
 
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