SPIEGEL:

Mr. Grunberg, contracts to private military firms (PMF) are not subject to a public bidding process. How is contact typically established?

Grunberg: There are two types of clients. First, there are governments that essentially act as generally contractors and hire PMFs as subcontractors. Washington employs a host of American firms in this fashion. And then there are governments throughout the world that award contracts directly. These are the ones in which we are primarily interested. In most cases, they have heard about us, visited our website, or have worked with us in the past, and they contact us directly. This was the approach recently taken by a Middle Eastern country that hired us to review the security of its entire shipping fleet.

SPIEGEL: How does this differ from Washington's use of private military contractors?

Grunberg: Oh, the differences are enormous. Most importantly, US firms operate with the full support of their government. This approach is at best found in France and Israel, but nowhere else in the world ...

SPIEGEL: ... which is why Sandline has temporarily discontinued all operations?

Grunberg: Correct. We are unable to compete, because 90 to 95 percent of the US companies‘ earnings are covered by the US national budget. This close relationship with the administration provides incredible benefits. Nigeria, which is, after all, a member of the Commonwealth, awarded a military training contract to an American company, MPRI, and not to a British firm, because Washington assumed half of the costs. If there is trouble in Abuja, US politicians, not MPRI managers, will be the ones who fly in and slam their fists on the table.

In fact, when his Angolan counterpart, dos Santos, visited the White House, President Clinton told him: "I would like the American company, MPRI, to take over the training of your military from Executive Outcomes." This is a strategic move for the United States, because Nigeria and Angola are among Africa's most important oil exporters.

SPIEGEL: What about groups that overthrow governments, exile groups and liberation movements? Do you help them, as long as sufficient payment is offered?

Grunberg: This is a risk we would never take. If something of that nature were disclosed, it would be our last contract. Incidentally, such potential clients can find plenty of adventurers in Eastern Europe or South Africa who will do anything for money. Our men would never be willing to get involved in something like that.

SPIEGEL: How do you recruit your forces?

Grunberg: We do not maintain a standing army, of course. We have a small staff of competent experts working for us. For most jobs, we only need small forces, men we almost always know from having worked with them in the past. If we do have a need to use someone from the large pool of candidates we do not know personally - to date, we have received more than 11,000 applications through the internet alone -, we subject him to a rigorous testing process to ensure that he is truly the right man for us and for the job in question.

SPIEGEL: You generally just get on the phone and put together your teams?

Grunberg: Exactly. Since the Iraq war, however, that approach no longer works.

SPIEGEL: Why?

Grunberg: The market has been swept clean. The salaries being paid in Iraq are the highest ever. Top-quality people can command 1200 dollars a day. Small firms, three people in a shack somewhere or in a Washington office, that need 250 trained former commandos and 4,000 local helpers, don't stand a chance. Only a very limited reservoir of well-trained former commandos exists worldwide for such deployment. Nowadays, people we used to pay 400 to 500 dollars a day are telling us: "Sorry, buddy, I'm making a thousand in Iraq."

SPIEGEL: In your opinion, to which of the three main groups into which private military firms can be divided does Sandline belong: military planning and consulting, supply and reinforcement, or active deployment force?

Grunberg: Sandline is the only registered company that publicly acknowledges its involvement in actual military conflict. All of the other tasks that the military is now delegating to private companies - warehouse administration, food service, supply, repair work - has almost nothing to do with military activity. Military services per se, true PMFs like us, are certainly experiencing tremendous demand as a result of the Iraq war. However, it makes no sense whatsoever to equate us, who truly take care of the dirty work with weapons in hand, with all the bean and broccoli suppliers.

SPIEGEL: Can you tell us about any especially risky contracts Sandline has taken on?

Grunberg: No, but they are always those in which our lives are at risk. In Iraq, any security job is potentially deadly. When you are checking a pipeline, protecting a politician or guarding a factory, you are standing with one foot in the grave. Unfortunately, a few PMF employees have already been lost their lives in Iraq.

SPIEGEL: Has Sandline ever experienced a true debacle?

Grunberg: Of course. When we were involved in Papua New Guinea in the late 1990s, we believed that we were operating in full concert with the supreme commander of the military forces. Unfortunately, we did not know that the same general was receiving money from another company. As a result, our supposed ally was having our people arrested the minute they landed.