INTERVIEWER: The other day this, was it New York Times article?

GEN. SHOYSTER: Yeah. That Chris Hedges(?) wrote. Yeah.

INTERVIEWER: I might ask you for your response to that.

GEN. SHOYSTER: I'd say yeah, it's (inaudible) issue.

INTERVIEWER: Right.

CAMERAMAN: Okay. We got speed.

INTERVIEWER: Why was MPRI formed?

GEN. SHOYSTER: MPRI was formed by our president and CEO in 1987 with a recognition that there is a great national resource in the retired military community. And if that talent could be brought together we could provide various military expertise in a variety of ways to our government.

INTERVIEWER: What services specifically does that expertise offer?

GEN. SHOYSTER: Military training, doctrine development, and response to numerous studies and requirements that the US government had and has. So we compete for contracts as any other defense contractor does. And we have a wide, wide variety of programs.

For instance, we run the Army's Force Management School at Fort Belvoir. It's really teaching the management of change. We had all gone through that process as new equipment was pouring into the modernization of the US Army, and so we had to develop special staff to handle that because it's a total program that has to consider training, doctrine, changes in logistics, and organization. And so we teach that school for the Army.

We bring together the retired senior officers——colonels and lieutenant colonels——who would otherwise, if the Army ran the school, would be denied their service in the divisions. And so it's a turnkey operation. We provide the program instruction, the course development, the instructors, and then the students show up at the school. And all that is done, of course, under a government official.

INTERVIEWER: In addition to competing for US government, government contracts, MPRI is also competing abroad, is it not? Looking for foreign contracts?

GEN. SHOYSTER: Yes. The company made a decision after the company had grown and had successfully provided the, these services to the US government. We then looked overseas for possibilities of doing similar work.

The first significant contract we had was in Croatia, the concept being that Croatia had a clear goal: They wanted to join NATO partnership for peace. And they recognized that to do that they had to look like other members of the club, that they had to have a democratic army based on democratic principles, subordinate to elected leadership——the things that characterized NATO members.

And so they then made a, a significant leap. They recognized that their experience, long time under Communist principles, that they had to make this change, and they would seek expertise to do that. And so they turned to our company, and we responded with a program that we teach as a part of their normal officer education on democratic values: the role of the officer in a democratic society; how to do planning, programming, and budgeting within this new emerging democracy; their relationship with, with the media; their relationship with their legislature.

INTERVIEWER: You know at the time MPRI got the contract with Croatia, Croatia had been or still was at war with Serbia, was it not?

GEN. SHOYSTER: No. The war had ended. We, we do no operational work at MPRI in terms of any active for two reasons. One, that would be, it's not, not what our company does. You probably couldn't obtain a license to do that work under those conditions. Everything that we do overseas is licensed by the Department of State. So we, we did not enter Croatia until the war was over and began our instruction there in, began our course development there in January of '95.

INTERVIEWER: Of course later that, later that year, as I recall, Croatia mounted an offensive to recapture land that it had lost (inaudible)--

GEN. SHOYSTER: Yes. That, that's correct.

INTERVIEWER: Somebody said the training provided by MPRI was helpful to Croatians in terms of their battlefield skills. Is that a correct assessment?

GEN. SHOYSTER: It is not. It is not for a couple of reasons. One, we don't teach in the battlefield skills. We do that in other places. We didn't, we didn't teach that in Croatia. That's not what we were asked to do.

And the other realization is, for the analysis, is that we went there in January of '95, began instruction in April of '95 because the rest was a course development and so forth to do that. We had one class of about 40 who had graduated in July from the, from the overall course. And the concept that one could go there, or go anywhere, no matter how brilliant your instruction may be, and turn an army around in a month, no, no serious military analyst would ever dream that anyone could do that. So it's a, we had absolutely, gave no instruction in anything strategic: strategic planning, strategic operations, operational bit. Because that's not what we were asked to do.

And as a contractor you do what the contract says. We were not licensed to do that, and the Croatians never asked us to do that. So somehow in the process, because it was a well-coordinated attack, they look for an American footprint, or fingerprint. The only people they could find were MPRI.

We were also accused of having 15 generals over there. We had 15 people over there, one general. And as you can imagine, if you're an analyst and you think you would send in 15 generals to accomplish a task, not very good analysis.

So fundamentally we taught the democracy transition assistance program, not related anything operational there. The credit goes to the Croatian army.

INTERVIEWER: That transition program did what? Teach subordination of military to civil authority?

GEN. SHOYSTER: Yes. I mean that, that's a, that's a major part, the concept of civil military relations and where the army fits. They, they have an emerging democracy they're working through, and they wanted to make sure that their military, which was gonna be important to them, had, fit into their concept of the, of the country. Much like we did, the struggles. We wrote the Constitution and trying to figure out what to do with a, with a, with a military force. And we've done it successfully.

And one of the reasons I think they came to us as opposed to some university who could teach the same courses was the credibility that we brought, credibility in terms of we were practitioners of those principles. And we were also combat veterans who could begin the process of inculcating new ideas to a group of combat officers who, who'd grown up under a different system. So I think it was, it was the credibility that we brought as soldiers relating to other soldiers that allowed us to begin this process of inculcating these ideas.

This program is, continues as we're into our third year there. And we've, we're doing other work there as well of assistance to them. But that program continues because they recognized as we did that inculcating these ideas, which started, that inculcation started with me when I was 18 and continued for the next 35 years, that it was not a short time program. And so we continue that.

INTERVIEWER: You mentioned that all of MPRI's overseas work is fully licensed by the US State Department. Can you take a moment to describe how that licensing process works? Does it, does the government come into play at, at the point you first think of competing for a contract, or after you've heard back from the prospective, or where exactly does the government come in?

GEN. SHOYSTER: Yes. The, the work that we do normally falls under the provisions of the International Trafficking and Arms Regulations (the ITAR), and that process is a simple one. The individual contractor, in many cases it's aimed at the transfer of technology, a concern about equipment transfer, but also military services are included.

So the government does not enter into the process at all until the company applies for a license to conduct certain specific training. And in our case we, we work with the customer, develop exactly what is required, submit a very detailed program which explains that program, who it's for, conditions, and so forth, and we apply that through routinely in a very fixed process. And the State Department has the responsibility for that licensing. They then staff that throughout, depending on the work required, throughout the other departments of government and issue the license or fail to issue the license.

INTERVIEWER: Have they ever failed to issue a license for any contract that you've been competing for?

GEN. SHOYSTER: They have, they have not. We have some licenses working now. But they're very carefully, very carefully scrutinized. They have authorized us to do things under only certain conditions that we, we ask, or have the, the other country must meet certain conditions. So it's a, it's a very detailed and thorough process but routinely done. There're, there're many of these licenses issued every week.

INTERVIEWER: General, a lot of the work that MPRI does in terms of training sounds similar to the sort of training traditionally offered by the US government through its IMET(?) or expanded IMET program. If that's true, why does the US government not do it directly? Why does it go to the private sector to provide the same services that it has been doing for decades itself?

GEN. SHOYSTER: Well there're are two parts to that, I think. One is that first of all the IMET programs, which are excellent programs, we recommend to any of our customers that they get all the IMET that they can because that's a government provided, that's a free service. Of course, we're a private contractor so they elect as to what they can get from the IMET program and what our services may provide. We like to think that we could complement the work done by an IMET program because the IMET program provides things that we cannot.

For instance, one of the key parts of that is it provides entrance into US school systems so that the foreign officers can attend US schools. It also provides mobile training teams. They normally come for a short period of time, present excellent instruction, and so that program is separate from ours. If, if a country elects then for additional expertise, and one characteristic that may be different is that we go and we stay. We go with the customer. We don't necessarily provide a US solution. We work with them to consider their resources, their culture, to develop a program that will assist them in getting to the goals that they have set.

And so, for instance we've been in Croatia for three years, developed subsequent programs, worked very closely with the customer. The nature of IMET is it's usually a shorter-term engagement, and so the programs are not in competition in any way. And it, it really is up to the customer.

INTERVIEWER: What's your response to those who assert that oftentimes the US government encourages a foreign country to turn to a private sector firm such as your own because if the US government did it it would be politically unpopular and might raise popular discontent. But if it's not a government program, if it's one just conducted by a private sector firm, then it's out-of-sight-out-of-mind, doesn't raise political controversy.

GEN. SHOYSTER: I don't, I don't know of cases where that's been done. We, we have the, I, I can talk about Bosnia, for example, which is a little different case. But normally our association with the government, it's not a question of we can't provide or we don't wanna provide it, would you turn to a private company. We have not experienced that.

An exception where a private company was used is the train and equip program in Bosnia. That program was a sidebar to the Dayton Accords. In order to get the combatting elements to sign up for the Dayton Accords, there was a promise made that the federation, the combination of the Muslim Bosniac army and the HBO (the Croatian army in Bosnia), they would be brought together and provided equipment and training to bring them up to a level of to deter war, hopefully, or to defend their territory with, against the Bosnian Serbs.

So that program, it was decided, would be done by a private contractor, and I think for a number of reasons. First of all, the US was there as a part of NATO to separate the three elements. We were there, in fact, to support two of those elements in this, in this approved federation. And also, so there's, I think that's a valid consideration for the government. But the reality is that to provide the kind of training and expertise that we can provide versus the government is for instance we have 200 people in Bosnia. They are senior officers and senior noncommissioned officers. If you took the same expertise from the active divisions, you would considerably degrade their readiness to provide the same level of experience. So these are cases where certainly the US Army could do it. It would degrade their readiness to provide the same number of colonels, command sergeant-majors, and so forth, that we have in country.

So each one, each country presents sort of a unique both business opportunity and response in terms of the US government.

INTERVIEWER: In the case of Bosnia it seems that the skills that you're teaching there are probably somewhat different from those in Croatia, perhaps.

GEN. SHOYSTER: Yes.

INTERVIEWER: More battlefield-oriented--

GEN. SHOYSTER: Absolutely.

INTERVIEWER: --(inaudible) doctrine--

GEN. SHOYSTER: Yes.

INTERVIEWER: --the maintenance of weapons systems. So it's fair to characterize these as battlefield skills, then.

GEN. SHOYSTER: Yes. Well, we're--yes, absolutely. We're teaching a total military training program. We've established a school to provide individual training for officers and noncommissioned officers. We've established a, a simulation center to train battalion and brigade staffs and also for leader development. We're developing a combat training center where they'll have ranges and so forth and, and, and maneuver room. We conduct unit training for the individual units so they can bring all this together. And we teach the new equipment training.

So in, in Bosnia, again a specific contract with specific tasks, authorized by the State Department. We in fact teach battlefield skills. Those battlefield skills required for defensive operations, we teach the hasty defense, the deliberate defense, movement to contact, counterfire. I think there's another part but it's all defensive-oriented. Likewise the army is organized to be a defensive army. And you do that by the, the kind of support and so forth that is provided.

So the, the army that we're developing there will be an army that we hope will be able to deter war because they'll have the capability of defending their country against anyone who was, would have, have to pay a great cost. And if that doesn't work, then hopefully they can defend their country.

INTERVIEWER: What is your reaction to those who allege, and there was a New York Times article about this recently, that the defensive skills you've been teaching there could be used to enable the federation of the Bosnian Muslims and Croatians to transition to the offensive to undertake an attack at some future time?

GEN. SHOYSTER: Well, it would be hard to say that if you can use a, a tank defensively that you couldn't use it offensively. I would tell you, though, that, at least in the training of the US Army, an entirely different set of skills are taught for offensive operations, and entirely different organization is provided to the US Army. And so the military analysts who thinks that, think that that's an easy leap, he's never gone from the defense on to the offense.

INTERVIEWER: Now this contract in Bosnia was recently renewed for a second year, was it not?

GEN. SHOYSTER: Yes, that's correct. Um hmm.

INTERVIEWER: And when you got the original contract you were competing against other US contractors?

GEN. SHOYSTER: Yes, against other US contractors. It was a competitive process that went on, according to The Washington Post, for 17 weeks. For me it seemed longer.

INTERVIEWER: You mentioned earlier that you had various license applications pending. Your overseas work thus far seems to have been in Europe. Have you, or would you likely seek, work in other regions of the world?

GEN. SHOYSTER: Yes. Certainly from a business standpoint we, we think our, we would like to meet needs of other countries. And we are marketing and working in other parts of, working, marketing in other parts of the world.

INTERVIEWER: Um hmm. What potential other sorts of situations might you offer training for? Some firms offer training to state security forces to help professionalize them or combat domestic disorder, civil crimes, drug trafficking, etc. Is that, is any of that within the possible bailiwick of your--

GEN. SHOYSTER: We, we have not been asked anywhere to provide those specific services. We would certainly look at whatever the requirement would be to see if we could in fact provide those services within all the consideration of businesses, all the considerations the principles of the company, and all the considerations of the licensing process.

INTERVIEWER: Rightfully or wrongly, wrongfully, there has been a good bit of attention in the past few years to the old phenomena of what is called private sector military advisory terms. MPRI is generally put into that category. So are other firms like Executive Outcomes of South Africa or Sandline of the United Kingdom. Do you see any similarity between your firm and those?

GEN. SHOYSTER: Well, I can really only talk about MPRI, which I know, and what, and what we do. The other, there are a number of firms internationally that offer certain services. We don't see them particularly as competitors. We think we're a, a unique company with our US origins, with the kind of skills that we have available and the company it can offer. So we, we are, we think we're a unique company.

INTERVIEWER: Well, having looked at their, the literature of some of those other firms, they say they offer military training as well. Is it a matter of their offering training at a different skill for smaller units, not being able to offer the training on the larger level that MPRI does that distinguishes your firm from theirs?

GEN. SHOYSTER: I, I can't really say because I'm just not that familiar as, with the other firms as to what they offer.

INTERVIEWER: Okay. A lot of people, a lot of analysts say at the current time, the international order evolving as it is from a Cold War era to something else yet undefined, that the world is still in flux. What role generally overseas do you see MPRI playing in that evolving international order?

GEN. SHOYSTER: I don't think that any private company is gonna play a significant role in, in an emerging order. We will hopefully play a specific role for selected countries to provide the expertise they need to reach their goals. We don't set international goals or involve. We, we respond to the goals and needs of a, of a particular country.

INTERVIEWER: Um hmm. And you only deal with national governments so that there are only overseas clients that the firm would do business with?

GEN. SHOYSTER: Yes. Recognize establish governments. I mean that, that's also the principle of MPRI, but it's also a requirement, I'm sure, by the licensing process. I, I, I don't know of anyone else that we would work for.

INTERVIEWER: Okay. What would you say is the split between your overseas work and the work for the US government?

GEN. SHOYSTER: It's a, it's a, it's a very balanced program. The, the concept of the company, of course, was to work for our own government. That was a very successful growth and we, we continue to grow in, in, in that area, and at the same time we've established a solid base internationally. So it's, it's pretty well balanced in the firm.

INTERVIEWER: Somewhere close to 50-50 then?

GEN. SHOYSTER: Yes. Um hmm.

INTERVIEWER: Okay. Can you tell us just a little bit more about the specifics of what was taught during the Croatian democracy transition assistance program?

GEN. SHOYSTER: Yes. I, I mentioned fundamentally the, that program. But it, it includes training of officers in the, in basic officer leadership skills and an understanding of where they fit into a democratic society. So we, we emphasize that. We teach general management, training management. We teach how to do planning, programming, the budgeting process, which is, which is new to them.

And also an assistance in developing a noncommissioned officer corps. As you know, the Eastern Bloc characteristically did not have a what we would term a professional noncommissioned officer corps. They had a, an officer corps highly vested down at the lowest levels, and then they brought in conscripts. They saw the Western armies, recognized the importance of our noncommissioned officers, and so we're assisting in developing that kind of professionalism and long-term growth and capability for their noncommissioned officers.

INTERVIEWER: There've been some who said that the cause basically, when you get right down to it that what MPRI offers, along with other firms, is something unique in terms of war fighting skills that, even though that's often somewhat intangible given that, given the importance of its ultimate consequences, that it should be subject to a heightened level of scrutiny. Do you think it should get more scrutiny? And assuming it was, how would you like to see that done, vested in some transnational organization or rely solely on the current mechanisms of the national government where you're headquartered at?

GEN. SHOYSTER: Well, I think the process, in the case of the United States firms, the licensing process is a very thorough control mechanism as such. Also, the company itself is very transparent. I mean I don't know of anything that can't be known by anyone.

I have talked probably to three to four hundred members of the press. Our operations are visited by United States military attaches, I mean our schools and what, and what we're doing. In some case we have a specific ambassador, in the case of Bosnia, appointed to oversee the program. So I think from an oversight standpoint and from, specifically, a licensing process, there are very, very adequate controls.

I think the most important thing is, in fact, to ask those questions, to look at the, to look at the company. And as I've said, we are a transparent company in terms of exactly what we do, who we are. And I think that, that's important. I think it's being pretty well done.

INTERVIEWER: It seems to me one of the distinctions between your firm and other firms is that MPRI, unlike Executive Outcomes or Sandline, will never be in a position where its personnel are on the ground in a war zone actually firing weapons, as has been the case, say, with Executive Outcomes. Is, is that fair?

GEN. SHOYSTER: That is, I can't speak for Executive Outcomes, but no one in MPRI has ever carried a gun nor will we ever carry a gun. There're every reason for that that you can think of.

It would not be a very good business practice. I don't know how you'd manage liability and all those things associated with. It would so be in such contrast to the principles of this company. And any licensing, I'm sure, for that type thing we've never even thought about it. It would be very difficult to obtain. So MPRI is, is not involved in, has not been involved and will not be involved in anything that, that might be called operational.

INTERVIEWER: Mike, let's take just a moment.

CAMERAMAN: Okay.

INTERVIEWER: I think I'm coming down to the end.

I believe MPRI has also done work for the Swedish and Taiwanese governments. Can you tell us what happened there?

GEN. SHOYSTER: Yes. We, we have done very limited work there. It was very early on our international efforts. We provided a seminar on lessons learned in the Gulf War by those who had led the Gulf War. So it was a, it was a short seminar specifically aimed at, at discussing with their staffs the results and lessons learned from the Gulf War.

INTERVIEWER: They had the seminar in both countries?

GEN. SHOYSTER: Yes.

INTERVIEWER: Okay. Let me read (inaudible) for a moment because it kind of gets into a level of cliches. There has been a number of people past couple of years looking at firms like the ones I've mentioned and lumping MPRI in there, and they call these groups private mercenary firms. How do you react to such a characterization?

GEN. SHOYSTER: Well I would say it depends on your definition of a, of a mercenary. If your definition is a, a private company with exceptional expertise who supports their own government forces and overseas governments under license by the United States State Department, I'd sign up for that because that's what we do. The difficulty with the term "mercenary" is that no one can define it. The United Nations have not successfully done it. Other commissions, protocols have not. They've taken different approaches. So it's a difficult term to define. And I've looked at all those definitions as they've tried to do that, and we don't meet any of those criteria. So I don't think we would fall into that.

And I recognize the term is, with its past history, is a term that, that, that comes up, so--

INTERVIEWER: Will it be terminology?

GEN. SHOYSTER: Well it's a, it's a terminology, and some will use it no matter what. And the definition of it, which is important, I mean it's something that really has to be resolved and in terms of, of getting that done from a, from a international standpoint. So far it's been very difficult. But I've read definitions from every commission, and MPRI does not meet them.

INTERVIEWER: Um hmm. Okay. Are you, are you bothered or concerned about the prospect of other private military firms or private sector security advisory firms working for organizations other than recognized governments, transnational corporations? Rogue states, for example? Do you think that could ever be a possibility?

GEN. SHOYSTER: Well I suppose anything is a possibility. I mean the, the important thing for me is that MPRI is not gonna do that.

INTERVIEWER: Do you think that a so-called rogue state would ever seek to employ the services of such a firm?

GEN. SHOYSTER: Oh I, I mean I suppose that's a, I mean that's a hypothetical question. I would think that whatever the firm would be and, and whatever the rogue state would be, I, I suppose that that's a possibility.

INTERVIEWER: Um hmm. Okay. One final question. Do you, insofar as there's a phenomena of private sector or corporate military firms, do you think this is something which is likely to have some staying power? Will we see about the same number or increased number of groups five years down the road? Will we be seeing them possibly more involved in an operational sense in a battlefield? Will they be something turned to (inaudible) simply because existing states either can't finance it or find it politically unpopular or unpalatable to do it with their own militaries?

GEN. SHOYSTER: I don't see private firms, first of all my, my view would be that private firms, unless they're exceptional firms in an operational sense, it would be very difficult. Most operational things almost require a nation state to, to really, to really do. So I think a market in, in that area would be very limited. It's certainly a market that we're not interested in.

I think that the concept of privatization and outsourcing is, is important, particularly in, as forces are reduced and specific skills are needed. And those skills can vary from engineering skills to combat training skills. It will vary with the country. And I think that private firms are probably best equipped to satisfy those kinds of needs, as opposed to putting together out of a, an established force the capability to, to do that.

A private firm can respond very quickly, bring together the expertise that's needed, complete the job, and then--

(END OF SIDE ONE, TAPE B)

--for their contracts in the Balkans. It's a private contract with the government of Croatia. There's no US funds involved at all. The Croatians simply pay us through a, through a US bank that we draw against in a normal contract arrangement. So there's no US money involved in the Croatian project.

In the case of Bosnia, which is a US-led project to satisfy this requirement for train and equip, that money came from donor nations around the world.

INTERVIEWER: Saudi Arabia.

GEN. SHOYSTER: Saudi Arabia, the UAE, Malaysia, Brunei, and, and Kuwait. So that money is, is donated by those nations. They review the program and how it's spent. And that money is transferred in a normal kind of government-to-government relationship. And our contract is with the Bosnian, directly with the Bosnian federation, but the funding is controlled by the State Department.

INTERVIEWER: You never had the, the case where a contract was drafted and, and then signed, and then for reasons beyond your control it was canceled? Such as a case, for example, if Sandline were to attempt to contract with the government of Papua New Guinea.

GEN. SHOYSTER: We, we have not had that experience. The licensing process would allow for that.

INTERVIEWER: Um hmm.

GEN. SHOYSTER: But we just haven't had that experience.

INTERVIEWER: Okay.

(END OF INTERVIEW))