NARRATOR: Which one of these men is a mercenary? Is it this man? This man? Or this man?

Answer: They are all mercenaries. Surprised? They don't look like the popular image of mercenaries, do they?

Perhaps you were thinking of people like this. That's exactly the point. The popular image of a soldier of fortune is in need of a touch-up.

ADM. JACK SHANAHAN (USN, Ret.): I'm Vice Admiral Jack Shanahan, director of the Center for Defense Information.

The past few years have seen increased prominence given to the reemergence of an old phenomenon -- the existence of mercenary organizations working solely for profit. The modern twist is that rather than being ragtag bands of adventurers, paramilitary forces or individuals recruited clandestinely by governments to work in specific covert operations, the modern mercenary firm is increasingly corporate.

The existence of such groups poses new and complex challenges for military planners, but it also holds out possibilities for peace, as well. This episode explores the impact and ramifications of today's corporate mercenaries.

NARRATOR: Although most people think of war as being the ultimate expression of state power, the use of mercenaries has been a fact of life throughout most of recorded history. Mercenaries have been used in virtually every corner of the globe. While they may not be the world's oldest profession, they are a very close second.

Mercenaries have been used from ancient times to the present. The end of the superpower confrontation took the lid off of many regional conflicts. After experiences like Somalia, the United States and other developed nations have become reluctant to send their forces on humanitarian intervention missions. Thus, leaders have been turning more and more to the private sector -- modern mercenaries.

While employment may be temporary, the number of potential employees is nearly infinite. Post-Cold War global military downsizing continues to create a glut of professional military experts and soldiers. For example, the world's military forces fell from 28.3 million in 1987 to 23.5 million in 1994. Basic economics explains that high demand dictates a high price. Hence, private security firms continue to emerge around the globe.

While mercenaries like to call themselves "private security" or "military advisory firms," they are marketing military battlefield skills, which either help improve a client's military forces or are used as a substitute for regular military forces.

Prof. HERBERT HOWE: The mercenary's usually considered to be a foreign soldier fighting for a cause outside of his country primarily for pay.

NARRATOR: Professor Herbert Howe is a professor at the Georgetown University School of Foreign Service. He has closely studies Executive Outcomes, which is arguably the world's best known private mercenary firm.

Prof. HOWE: Executive Outcomes has fought for the governments of Angola and Sierra Leone. It claims not to fight for any insurgency. In other words, as a stabilizing influence for foreign governments, not a destabilizing influence. And this goes against the traditional concept of mercenaries as a destabilizing, destructive force in the Third World.

NARRATOR: Created in 1989, Executive Outcomes, or EO, for short, is an incorporated private security group registered in Great Britain and South Africa. EO maintains it only works for legitimate businesses and governments, or at least those recognized by the United Nations. EO is not afraid of publicity.

DAVID ISENBERG: One of the interesting things about them, of course, is that they are very public, which wasn't the case 20 to 30 years ago. Nowadays, they have public relations staffs, marketing videos. They have web sites. They have people who will go out to symposiums and speak about what they do, and actually compete for government contracts.

NARRATOR: David Isenberg is a senior research analyst at the Center for Defense Information and author of the recently published report, "Soldiers of Fortune Ltd.: A Profile of Today's Private Sector Corporate Mercenary Firms."

MR. ISENBERG: I see a different type of mercenary, if you will, than the type you had 20 to 30 years ago. Nowadays, a type of combatant you will find in a mercenary firm is probably someone who spent many, if not most, of their professional career as a part of a regular military establishment. Many of these firms are founded by retired officers and have experienced noncommissioned officers as their employees.

NARRATOR: Professor Howe acknowledges EO's abilities.

Prof. HOWE: Executive Outcomes went into Sierra Leone, where the government was really being pressed by a pretty nasty rebel group called the Revolutionary United Front, and it looked like the government was going to fall. Executive Outcomes came in. It secured the capital, made it safe for the government; went out to the mining areas, made those safe; and then increasingly put the RUF on the defensive, to the extent that RUF, which looked like it was going to win the war, had to sign a peace settlement. Free and fair elections were held and a democratic government came in.

Over the roughly three years that EO was in Angola, they received $40 million a year. That included weapons procurement. That was a much smaller price than the Angolan military budget, and yet it was Executive Outcomes that largely turned that war around.

NARRATOR: By many accounts, EO conducted itself well in Sierra Leone. It worked closely with aid agencies and government officials in returning children to civilian life who had been dragooned into the conflict. It assisted in civilian resettlement for displaced persons and provided security, logistics and intelligence to humanitarian groups.

Prof. HOWE: And some people will point to the Sierra Leone case as being an example of where a private foreign security force actually helped the democratization process.

NARRATOR: Yet, the security provided by EO has not lasted. Robberies and killings still take place. Most importantly, earlier this year, a coup organized by the Sierra Leone military overthrew the elected government.

Prof. HOWE: Executive Outcomes did very well militarily in Sierra Leone, pushing RUF to sign a peace agreement. But then several months Executive Outcomes left Sierra Leone, the RUF, along with the Sierra Leone military, this last May, staged a coup. And now the suffering in Sierra Leone has been probably worse than during the war.

So, some critics of Executive Outcomes will say, 'Hey, here is this South African mercenary group, comes in, kills some of the Sierra Leonean citizens, makes a fair amount of money for it or for its related mining companies, then it leaves the country and the situation becomes even worse.'

NARRATOR: Professor Howe also wonders about the impact of the connection between mercenary firms and other commercial companies in the private sector.

Prof. HOWE: There's a flip side, however. And that is that a number of these companies are very closely tied to international mining companies. And the big question is, could there be kind of a Faustian pact being signed between these governments who want to save themselves and the resources of the country. In other words, are these governments being saved, but at a much bigger price, and that is very cheap concessions, perhaps, to international mining companies? And some critics of Executive Outcomes will say, 'Hey, it's these foreigners with the one-two punch that have the power in Angola or in Sierra Leone rather than the actual government itself.'

NARRATOR: David Isenberg, however, thinks having a connection to a private sector firm may have a positive impact on a mercenary group.

MR. ISENBERG: All those other industries or firms, like any other, are out to make a profit, they're out to do business. Bad publicity is bad for their business. They don't want to be associated with a firm which is accused of carrying out a massacre or going out and raping, doing other battlefield atrocities. So, one can imagine that those firms which are hiring those groups are saying, 'Look, you know, we don't want any bad press. You got to be careful what you're going to do or we're not going to hire you.'

NARRATOR: Professor Howe thinks the relationship between EO and commercial firms may serve as an incentive to create more mercenary groups.

Prof. HOWE: These nations, these governments have less patronage, have less support from the West than they did during the Cold War. So, there's the belief that these states are increasingly going to turn not to the US or to France, but to private security companies to ensure their stability.

NARRATOR: Yet, given EO's battlefield record, there are likely to be many clients, both states and private companies for its services. In 1994, the Angolan government hired EO to help subjugate the UNITA forces of Jonas Savimbi.

Executive Outcomes workers were flown in to help train the Angolan military and assist in combat. Suffering only 20 fatalities, EO decisively ended Angola's three-year civil war by forcing Savimbi to negotiate. It is worth noting that EO conducted direct military operations, killing hundreds of enemy combatants.

EO founder and former director, Eben Barlow, acknowledged that, "We were on occasion forced into a position where we had to take action to defend ourselves and, if threatened, we'd carry out preemptive strikes."

Not all mercenary firms are like EO. At this time, it is unique both in terms of the number of people it can put in the field and the weapons that it uses.

Prof. HOWE: I think when you look at private security groups in Africa, you can think in a sense of three layers. One layer is that of training, and maybe perhaps guarding economic installations, fairly benign operations. The second might be combat support. For example, ferrying troops up to the front in transport helicopters. And then the third layer is actual combat.

Executive Outcomes is an incredible -- what we call "force multiplier." It can do all three of those. Most other organizations can do only one or perhaps two of the three.

NARRATOR: If EO represents the "boots on the ground" end of the mercenary spectrum, the other end is represented by a firm called MPRI. MPRI stands for Military Professionals Resources Inc. Headquartered in Alexandria, Virginia, it claims to be "the greatest corporate assemblage of military expertise in the world." Founded in 1987 by eight former United States senior military officers, MPRI says it only operates in areas approved by the US State Department.

MPRI has very close ties to the US Government. Several former high-ranking US military officers are employees of MPRI.

LTGEN ED SOYSTER: 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.

NARRATOR: Ed Soyster is a retired US Army lieutenant general and a vice president for International Operations at MPRI.

LTGEN SOYSTER: The difficulty with the term "mercenary" is that no one can define. The United Nations has 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.

NARRATOR: He also emphasizes that MPRI is not a fighting force.

LTGEN SOYSTER: No one at MPRI has ever carried a gun, nor will we ever carry a gun. There's 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. It would be in such contrast to the principles of this company.

NARRATOR: MPRI is best known for its work in recent years in training military forces in Croatia and Bosnia. In March 1994, the Pentagon referred the Croatian defense minister to MPRI. Since then, about 15 MPRI employees have been training the Croatian army so that it can provide national security and meet defense needs as Croatia makes the transition into a democratic society.

In May 1996, MPRI landed its highest profile assignment to date. The firm was granted a contract to train the military forces of Bosnia. Currently, 185 MPRI personnel participate in the US-supervised "Train and Equip" program. The program's objective is to integrate and build up the Bosnian army of Muslims and Croats against the Serbs.

The Train and Equip program hopes to establish the military balance required for an enduring peace in Bosnia. MPRI runs a school and battlefield simulation center and is helping construct a large military firing range.

LTGEN SOYSTER: We're teaching a total military program. We've established a school to provide individual training for officers and noncommissioned officers. We've established 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 manuever room. We conduct unit training for the individual units, so they can bring all this together, and we teach the new equipment training.

NARRATOR: Proponents of the Train and Equip program believe that the sooner Bosnian forces are capable of defending themselves, the sooner international troops can be removed from the region. However, the goal of strengthening Muslim-Croat units in Bosnia to offset the Bosnian Serb forces may have dangerous consequences in a region racked by ethnic tension and civil war.

Military experts assert that an increase of arms and funds to Bosnian forces may lead to renewed violence. Although MPRI is limited to training the Bosnian army in defense tactics, soldiers say there is little distinction between defensive and offensive strategies. But GEN Soyster thinks that such a view is overstated.

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

NARRATOR: GEN Soyster also disagrees with those who say that MPRI was used to train the Bosnian military, as a part of the Train and Equip program, in order to sidestep a public debate in the United States over foreign policy.

LTGEN SOYSTER: 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.

NARRATOR: It is true that regardless of who provides it, nobody can be sure what the ultimate effect of providing military training will be.

MR. ISENBERG: It is possible that the skills they teach a foreign client could someday be used in a sort of boomerang effect, in terms of whoever they teach or whoever they train and advise will have their military skills improved. They will become more deadly on the battlefield. Just like a weapons system, you can't say in the long run who those skills will be turned against.

NARRATOR: Yet another firm is Sandline International, a British-based firm which describes itself as "an international military consultancy company specializing in the provision of advice and problem resolution to legitimate governments and international organizations." It was founded in the mid-1990s by Timothy Spicer.

Sandline's best known operation to date was to try to quell a nine-year armed independence movement in Papua New Guinea. The following scenes were generously provided by Mark Stucke of Journeyman Productions in Great Britain, which has produced an excellent documentary on the subject.

A British firm, Defense Security Systems, informed Spicer that the government was interested in hiring mercenaries to defeat the rebels. Sandline proposed training and providing logistical support to the Papua New Guinea Defense Force in exchange for a stake in a mine.

Although the government denied that Sandline personnel would participate in direct combat, Sandline confirmed front-line participation. When the terms of the contract were leaked to the public, riots erupted. All 50 or so Sandline employees were airlifted from Papua New Guinea. Only Spicer remained to face a judicial inquiry concerning the Sandline contract.

Given the availability of these firms and the continuing demand for their services, efforts to outlaw them seem naive.

Prof. HOWE: There's an increased cry for regulation or prohibition on mercenaries. I don't think, however, that's ever going to happen. Because, in a sense, one man's mercenary is another man's freedom fighter or liberator.

NARRATOR: In fact, attempts to outlaw them have failed, as David Isenberg explains.

MR. ISENBERG: There have been attempts to provide regulation or outright prohibition. There is a convention which was promulgated by the Organization of African Unity which would prohibit the use of mercenaries, but they've only had 12 signatories, so far, and two of those signatories have, in fact, been countries which have hired mercenaries in recent years. So, it's unlikely this will ever be an effective international instrument.

NARRATOR: Although it is unpopular to say, mercenary firms may, in fact, have a useful role to play in the future. Although the total number of wars has dropped in recent years, in certain areas of the world, fierce and savage conflicts still rage.

In many countries, ruling authorities -- or those seeking authority -- try to impose order any way they can. Some, like Liberia, Haiti, Croatia, and Bosnia, have sought intervention by outside states. But many major powers are reluctant, seeing no vital interest to be served by sending their troops to other countries to try to quell an ethnic or nationalist conflict like Bosnia or provide security for a humanitarian intervention, as in Somalia or Rwanda.

Given the lack of effective international peacekeeping forces, it is no wonder that some states turn to mercenary organizations.

MR. ISENBERG: Despite the big amount of publicity that Executive Outcomes combat operations received in Angola, then in Sierra Leone, I don't think we're going to see a growth of private mercenary armies in Africa. But I think these private security groups -- And by the way, there's easily over a hundred of them in Africa at the present time, about 80 in Angola alone. I think they're going to increasingly be used to guard economic installations. I also think there may be a growing field for them with nongovernmental organizations, with humanitarian or relief groups.

NARRATOR: Perhaps the time has come to change our thinking. Mercenaries are likely to continue whether we like it or not. Perhaps we should seek to ensure they work within the framework of international law rather than risk them violating it.

ADM. SHANAHAN: In order to bring transparency to mercenary activity and, thus, reassure states that the presence of a mercenary firm is not a threat to their security, an international register for such firms should be established. Furthermore, mercenary firms should be required to abide by relevant human rights instruments; for example, the Geneva Protocol, Rules of War, and the customary International Humanitarian Law. Documented violations would be cause for penalties, such as fines and suspensions.

For "AMERICA'S DEFENSE MONITOR," I am Jack Shanahan.