BILL MOYERS: Welcome to the Journal.

There was good news and bad news about Afghanistan this week. And it was the same news.

That's right. The Senate held confirmation hearings for Lieutenant General Stanley McChrystal, slated to be the next commander of U.S. forces in Afghanistan. Here's how two different news organizations reported his testimony:

The Associated Press headline read, "War in Afghanistan is 'Winnable,'" but the Washington Independent reported that the general had, quote, "painted a bleak picture of the Afghanistan war" and that the United States "needed to show significant progress within '18 to 24 months' or risk the war spiraling out of control."

What we know for sure is that the fighting in Afghanistan is escalating. At least 21 thousand more American troops are going in and the number of private security contractors working for the military there jumped 29 percent in the last three months alone. Get this: there are now more private security contractors in Afghanistan than there are U.S. soldiers. And as of next year, according to new Pentagon documents, the war in Afghanistan will be costing more than the war in Iraq.

It's the job of experienced, knowledgeable investigative reporters to throw a monkey wrench into the spin machine and try to make some sense of all this. They're an endangered species, but one of the best in the business is Jeremy Scahill, who's been digging into Pentagon documents and thick congressional hearings for several years now. He's twice winner of the George Polk Award for special achievement in journalism, and author of this best selling book, Blackwater: The Rise of The World’s Most Powerful Mercenary Army. Jeremy now runs the new website, RebelReports.com Jeremy Scahill, welcome back to the Journal.

JEREMY SCAHILL: It's great to be with you Bill.

BILL MOYERS: How do you explain this spike in private contractors in both Iraq and Afghanistan?

JEREMY SCAHILL: Well, I think what we're seeing, under President Barack Obama, is sort of old wine in a new bottle. Obama is sending one message to the world, but the reality on the ground, particularly when it comes to private military contractors, is that the status quo remains from the Bush era. Right now there are 250 thousand contractors fighting the wars in Iraq and Afghanistan. That's about 50 percent of the total US fighting force. Which is very similar to what it was under Bush. In Iraq, President Obama has 130 thousand contractors. And we just saw a 23 percent increase in the number of armed contractors in Iraq. In Afghanistan there's been a 29 percent increase in armed contractors. So the radical privatization of war continues unabated under Barack Obama.

Having said that, when Barack Obama was in the Senate he was one of the only people that was willing to take up this issue. And he put forward what became the leading legislation on the part of the Democrats to reform the contracting industry. And I give him credit for doing that. Because he saw this as an important issue before a lot of other political figures. And spoke up at a time when a lot of people were deafeningly silent on this issue. I've been critical of Obama's position on this because I think that he accepts what I think is a fundamental lie. That we should have a system where corporations are allowed to benefit off of warfare. And President Obama has carried on a policy where he has tried to implement greater accountability structures. We now know, in a much clearer way than we did under Bush, how many contractors we have on the battlefield. He's attempted to implement some form of rules governing contractors. And it has suggested that there should be greater accountability when they do commit crimes.

All of these things are a step in the right direction. But, ultimately, I think that we have to look to what Jan Schakowsky, the congresswoman from Illinois, says. We can no longer allow these individuals to perform what are inherently governmental functions. And that includes carrying a weapon on U.S. battlefields. And that's certainly not where President Obama is right now.

BILL MOYERS: But many people will say of course, the truth, which is he inherited a quagmire from the Bush administration. What's he to do?

JEREMY SCAHILL: Well, there's no question that Obama inherited an absolute mess from President Bush. But the reality is that Obama is escalating the war in Afghanistan right now. And is maintaining the occupation of Iraq. If Obama was serious about fully ending the occupation of Iraq, he wouldn't allow the U.S. to have a colonial fortress that they're passing off as an embassy in Baghdad. Bill, this place is the size of 80 football fields. Who do you think is going to run the security operation for this 80-football-field-sized embassy? Well, it's mercenary contractors.

BILL MOYERS: So we're supposed to be withdrawing from Iraq. But you're suggesting, in all that you've written, that I've read lately, that we will be leaving a large mercenary force there.

JEREMY SCAHILL: Absolutely. In fact, you're going to have a sizable presence, not only of U.S. forces, certainly in the region, but also in Iraq. These residual forces — I mean, Bill, you remember, during Vietnam, the people who were classified as military advisors. Or analysts. And, in reality, the U.S. was fighting an undeclared war. So, in Iraq, I think that we've seen reports from Jim Miklaszewski, NBC News' Pentagon correspondent. He's quoting military sources saying that they expect to be in Iraq 15 to 20 years in sizable numbers. Afghanistan, though, really is going to become Obama's war. And, unfortunately, many Democrats are portraying it as the good war.

BILL MOYERS: Let me show you a snippet of what he said in Cairo on Thursday. Take a look:

PRESIDENT OBAMA: Make no mistake. We do not want to keep our troops in Afghanistan. We seek no military bases there. It is agonizing for America to lose our young men and women. It is costly and politically difficult to continue this conflict. We would gladly bring every single one of our troops home if we could be confident that there were not violent extremists in Afghanistan and now Pakistan determined to kill as many Americans as they possibly can. But that is not yet the case.

JEREMY SCAHILL: Well, I mean, we have two parallel realities here. We have the speeches of President Obama. I'm not questioning his sincerity. And then you have the sort of official punditry that's allowed access to the corporate media. And they have one debate. On the ground though, in Afghanistan and Pakistan, you hear the stories of the people that are forced to live on the other side of the barrel of the gun that is U.S. foreign policy. And you get a very different sense. If the United States, as President Obama says, doesn't want a permanent presence in Afghanistan, why allocate a billion dollars to build this fortress-like embassy, similar to the one in Baghdad, in Islamabad, Pakistan? Another one in Peshawar. Having an increase in mercenary forces, expanding the US military presence there.

BILL MOYERS: Walter Pincus is an old friend of mine, an investigative reporter at The Washington Post for, you know, 30 or more years now. A very respected man. He reported in The Washington Post last fall that these contracts indicate how long the United States intends to remain in Afghanistan. And he pointed, for example, to a contract given by the Corps of Engineers to a firm in Dubai to build — to expand the prison, the U.S. prison at Bagram in Afghanistan. What does that say to you?

JEREMY SCAHILL: Right. Look, we have President Obama making it a point, regularly, to say, "We're going to have Guantánamo closed by early next year." The fact is that, at Bagram, we see an expansion. They're spending $60 million to expand that prison. You have hundreds of people held without charges. You have people that are being denied access to the Red Cross in violation of international law. And you have an ongoing position, by the Obama administration, formed under Bush, that these prisoners don't have right to habeas corpus. There are very disturbing signals being sent with Afghanistan as a microcosm. Not to mention these regular attacks that we're seeing inside of Pakistan that have killed upwards of 700 civilians using these robotic drones since 2006. Including 100 since Obama took power.

BILL MOYERS: Some people have suggested that the increasing reliance on military contractors in Afghanistan underscores the fact that the military is actually stretched very thin. General McChrystal said, this week, he admitted that he doesn't even know if we have enough troops there to deal with the situation as it is now. Does that surprise you?

JEREMY SCAHILL: No. It doesn't surprise me. Because this is increasingly turning into a war of occupation. That's why General McChrystal is making that statement. If this was about fighting terrorism, it would be viewed as a law enforcement operation where you are going to hunt down criminals responsible for these actions and bring them in front of a court of law. This is turning into a war of occupation. If I might add, about General McChrystal, what message does it send to the Afghan people when President Obama chooses a man who is alleged to have been one of the key figures running secret detention facilities in Iraq, and working on these extrajudicial killing squads. Hunting down, quote unquote, "insurgents," and killing them on behalf of the U.S. military. This is a man who's also alleged to have been at the center of the cover-up of Pat Tillman's death, who was killed by U.S. Army Rangers.

BILL MOYERS: But he apologized for that this week before Congress.

JEREMY SCAHILL: Well, it's easy to apologize when your new job is on the line. It's a different thing to take responsibility for it when you realize that the mistake was made, or that you were involved with what the family of Pat Tillman says was a cover-up.

BILL MOYERS: You know, you talk about military contractors. Do you think the American people have any idea how their tax dollars are being used in Afghanistan?

JEREMY SCAHILL: Absolutely no idea whatsoever. We've spent 190 million dollars — excuse me, $190 billion on the war in Afghanistan. And some estimates say that, within a few short years, it could it could end up at a half a trillion dollars. The fact is that I think most Americans are not aware that their dollars being spent in Afghanistan are, in fact, going to for-profit corporations in both Iraq and Afghanistan. These are companies that are simultaneously working for profit and for the U.S. government. That is the intricate linking of corporate profits to an escalation of war that President Eisenhower warned against in his farewell address. We live in — amidst the most radical privatization agenda in the history of our country. And it cuts across every aspect of our society.

BILL MOYERS: You recently wrote about how the Department of Defense paid the former Halliburton subsidiary KBR more than $80 million in bonuses for contracts to install what proved to be very defective electrical wiring in Iraq. Senator Byron Dorgan himself called that wiring, in hearings, shoddy and unprofessional. So my question is why did the Pentagon pay for it when it was so inferior?

JEREMY SCAHILL: This is perhaps one of the greatest corporate scandals of the past decade. The fact that this Halliburton corporation, which was once headed by former Vice President Dick Cheney, was essentially given keys to the city of U.S. foreign policy. And allowed to do things that were dangerous for U.S. troops. Provide them with unclean drinking water. They were the premier company responsible for servicing the US military occupation of Iraq. In fact, they were deployed alongside the U.S. military in the build up to the war. This was a politically connected company that won its contracts because of its political connections. And the fact is that it was a behemoth that was there. It was the girl at the dance, and they danced with her.

BILL MOYERS: Yeah. The Army hired a master electrician, I read in some congressional testimony, to review electrical work in Iraq. He's now told congress that KBR's work in Iraq was, quote, "The most hazardous, worst quality work he'd ever seen." And that his own investigation, this is not a journalist, this is an employee of the Army, had found improper wiring in every building that KBR had wired in Iraq.

JEREMY SCAHILL: Right. And we're talking about thousands of buildings. And so we've had U.S. troops that have died from electrocution in Iraq as a result of the faulty work of KBR. This should be an utter scandal that should outrage every single person in this country. And, yet, you find almost no mention of this in the corporate media.

BILL MOYERS: Do you get discouraged writing about corruption that never gets cured?

JEREMY SCAHILL: Well, I don't believe that it necessarily doesn't get cured. I think that I'm very heartened by the fact that we have a very vibrant independent media landscape that's developing right now. You know, to me, I once put on the tagline of an article that I wrote early on in the Obama administration that I pledge to be the same journalist under Barack Obama that I was under President Bush. And the reason I felt that it was necessary to say that is that I feel like we have a sort of blue-state-Fox culture in the media, where people are willing to go above and beyond the call of partisan politics to give Obama the benefit of the doubt. This is a man — it's time to take off the Obama t-shirts. This is a man who's in charge of the most powerful country on earth. The media in this country, we have an obligation to treat him the way we treated Bush in terms of being critical of him. And, yet, I feel like many Democrats have had their spines surgically removed these days, as have a lot of journalists. The fact is that this man is governing over a policy that is killing a tremendous number of civilians.

BILL MOYERS: You mentioned drones a moment ago. I was impressed to hear our new commander of our troops in Afghanistan admit this week that the United States cannot go on killing civilians. He said, in fact, this is creating a dangerous situation for our own country.

JEREMY SCAHILL: Well, that — I mean, on the one hand, that those words are true. I think that the fact is that when you are killing civilians, in what is perceived to be an indiscriminate way certainly by the people of Pakistan you're going to give rise to more people that want to attack the United States. They view themselves as fighting a defensive war. But never are the statistics cited that come out of Pakistan. Six hundred eighty seven people are documented to have been killed that the Pakistani authorities say are civilians since 2006. In the first 99 days of this year over 100 people were killed. And the fact is —

BILL MOYERS: By American military action?

JEREMY SCAHILL: Right. By American military action with these robotic drones.

BILL MOYERS: 60 Minutes, on CBS News, recently got some very special access to the military. And came out with a report on drones. Let me show you a few excerpts from that.

LARA LOGAN: Right now, there are dozens of them over the skies of Iraq and Afghanistan, hunting down insurgents every minute of every day. The fight for the pilot is on the video screen. Here a truck full of insurgents in Afghanistan is being tracked by the pilot. When the ground commander gives the order — he first, hitting his target. The trigger is pulled in Nevada, inside these cramped single white trailers of small offices.

COL. CHRIS CHAMBLISS: And that white spot that this guy is carrying is actually a hot gun, so it's been fired and already know that it's been used. We've met positive identification criteria that these are bad guys. And so now we can go ahead and strike these targets.

BILL MOYERS: Now, many people are like that fellow. They say that these drones are new miracle weapons that enable the United States military to kill the bad guys, as he said, without exposing Americans to danger. There's truth in that, right?

JEREMY SCAHILL: Now, I have a lot of respect for Lara Logan, the CBS correspondent. She's really put her neck on the line and been in the thick of battle, and has been injured in battle. But I think that this piece was propaganda. She allowed the military to make claims about the effectiveness of their weapons that are being contested passionately by the people on the ground in Pakistan itself. I recently did an article about Time magazine's coverage of this. They said that the Taliban are using civilians as human shields, and that's why so many civilians have been killed. Their source for that was an Air Force intelligence officer who was allowed to speak on as though it was a Pentagon press release. I think that this is sick, where you turn war essentially into a videogame that can be waged by people half a world away. What this does, these drones, is they — it sanitizes war. It means that we increase the number of people that don't have to see that war is hell on the ground. And it means that wars are going to be easier in the future because it's not as tough of a sell.

BILL MOYERS: You will find agreement on people who say war is hell. But you'll also find a lot of people in this country, America — a lot of Democrats and Republicans, who say Jeremy Scahill is wrong. That we need to be doing what we're doing in Afghanistan because if we don't there'll be another attack like 9/11 on this country.

JEREMY SCAHILL: I think that what we're doing in Afghanistan increases the likelihood that there's going to be another attack.

BILL MOYERS: Why?

JEREMY SCAHILL: Because we're killing innocent civilians regularly. When the United States goes in and bombs Farah province in Afghanistan, on May 4th, and kills civilians, according to the Red Cross and other sources, 13 members of one family, that has a ricochet impact. The relatives of those people are going to say maybe they did trust the United States. Maybe they viewed the United States as a beacon of freedom in the world. But you just took that guy's daughter. You just killed that guy's wife. That's one more person that's going to line up and say, "We're going to fight the United States." We are indiscriminately killing civilians, according to the UN Human Rights Council. A report that was just released this week by the UN says that the United States is indiscriminately killing civilians in Afghanistan and elsewhere around the world. That should be a collective shame that we feel in this society. And yet we have people calling it the good war.

BILL MOYERS: So, step back to that issue of military contractors. You've been writing about privatization and military contractors for a long time. In the large scheme of things what do military contractors represent to you?

JEREMY SCAHILL: Yeah. Well, I think that what we have seen happen as a result of this incredible reliance on private military contractors, is that the United States has created a new system for waging war, where you no longer have to depend exclusively on your own citizens to sign up for the military and say, "I believe in this war, so I'm willing to sign up and risk my life for it." You turn the entire world into your recruiting ground. You intricately link corporate profits to an escalation of warfare and make it profitable for companies to participate in your wars. In the process of doing that you undermine U.S. democratic processes. And you also violate the sovereignty of other nations, 'cause you're making their citizens into combatants in a war to which their country is not a party. I feel that the end game of all of this could well be the disintegration of the nation state apparatus in the world. And it could be replaced by a scenario where you have corporations with their own private armies. To me, that would be a devastating development. But it's on, it's happening on a micro level. And I fear it will start to happen on a much bigger scale.

BILL MOYERS: Jeremy Scahill, thanks for being with me again on the Journal.

JEREMY SCAHILL: It's been an honor Bill.

BILL MOYERS: In just a few minutes we'll have our take on the news of the week with Brooke Gladstone and Jay Rosen. But first, if you value this station, the one you're watching right now, now's the time to pitch in and help it survive these tough financial times. Thank you for pledging.