Buying Blackwater
By Jody Ray Bennett for ISN
Earlier this month, Xe Services, LLC, the latest re-branded name of the company that was once known as Blackwater Worldwide, external pageannouncedcall_made that the company was up for sale. The announcement that Xe was seeking new ownership came somewhat as a surprise to industry insiders both in favor of and critical of the company, especially considering Blackwater’s seemingly amazing ability to withstand the yearly toll of accidents, mishaps and misconduct that has since earned it a highly negative reputation throughout the world.
While the specific reason for the decision to sell has not been given, founder, owner and former CEO Erik Prince said in an interview with the external pageAssociated Presscall_made that “Performance doesn't matter in Washington, just politics,” and cited the constant criticism of the company as one factor that moved him to the decision.
But much of the criticism of Blackwater that developed over the years was not unwarranted. Indeed, the external pagetimelinecall_made of the company’s activities that earned Prince millions is generously external pagepeppered with eventscall_made that, in return, earned his company a reputation as an extremely external pagesecretivecall_made, wildly external pageaggressivecall_made, external pageprofit-motivatedcall_made, external pagescandalouscall_made private military that had become too entrenched in US national security.
All 'merc'-andise must go!
With the announcement of the sale, Xe has since external pageopened two retail storescall_made, which could be an attempt to sell off the remainder of its commercial merchandise to the public. At the external pageBlackwater Pro Shopcall_made, one can purchase everything from Blackwater logo-clad hats, t-shirts, pilsner glasses and mousepads to glock holsters, various knives and external pageriflescall_made that can be customized.
Aside from its retail merchandise, however, the fate of Xe’s other companies remain unclear. Prince still owns the external pageUS Training Centercall_made, a collection of three training compounds throughout the US. It also manages Greystone, Ltd, a division of Blackwater external pageusedcall_made to attract foreign clients and recruit foreign personnel. Prince also owns a host of other companies such as Total Intel Solutions, an intelligence-gathering firm, and according to external pageone reportcall_made, also owns “a construction company, Raven Development and Paravant, which has been used as a shell company to win training contracts in Afghanistan.”
A former Blackwater executive told ISN Security Watch that Total Intelligence Solutions was “shut down” sometime at the end of May or beginning of June of this year because it was “not profitable.”
In a Vanity Fair external pagearticlecall_made published last December—a piece regarded by some as a external pageform of graymailcall_made—Prince stated he once entertained the idea of deploying “a ship—complete with security personnel, doctors, helicopters, medicine, food and fuel—[to be stationed] off the coast of Africa to provide ‘relief with teeth’ to the continent’s trouble spots or to curb piracy off Somalia.” The next month, Xe’s only maritime ship, the McArthur, external pagewas put up for salecall_made in Spain at a discount of $3.7 million.
Two months later, Xe external pagesoldcall_made its aviation division, Aviation Worldwide Services, to external pageAAR Corpcall_made for $200 million, “despite a wrongful-death lawsuit filed by families of three soldiers killed in Afghanistan, when one of the company's helicopters slammed into a mountainside in 2004.” A report at external pageMarketWatch.comcall_made noted that “An Army investigation of the crash blamed it on ‘poor navigation and decision-making,’ according to press reports at the time.”
According to a former company executive, Blackwater tried to sell at least one-third of its holdings as far back as 2007 when it was in negotiations with investment giant, external pageCerberuscall_made; eventually talks stagnated and the external pagepurchase never occurredcall_made. Some industry experts, however, are not surprised. In a post on his website’s external pagemessage boardcall_made, journalist and traveler Robert Young Pelton, who was once embedded with Blackwater contractors in Baghdad, commented, “Erik has always been trying to sell Blackwater, even before [external pagethe Nisour Square shootingscall_made] killed that idea.”
“The sale was inevitable,” the former executive told ISN Security Watch, later explaining that once Prince and former CEO Gary Jackson stepped down, leadership and management of the company took a nosedive. Jackson and four other former company executives were external pageindicted last Aprilcall_made on felony weapons charges from a 2008 raid that found the officials had taken part in activities to hide gifts of weapons to the king of Jordan.
“There was no hope it was going to survive,” the former employee told ISN Security Watch, “The business is worth maybe one-fifth of what it once was.” According to the source, Prince’s decision to sell occurred approximately eight months ago when “the bankers started coming around for their money.”
Take the money and run
The former executive went on to explain to ISN Security Watch that Xe’s most likely buyers would include Cerberus, technology giant external pageAECOMcall_made, or even large land developers, one of which has reportedly made an offer to Prince to buy the land upon which the US Training Centers sit.
Since the announcement that Xe was being placed on the market, it was revealed that Prince is planning a move to the United Arab Emirates. Earlier this month, a report by Jeremy Scahill in external pageThe Nationcall_madewrote, “If Prince's rumored future move is linked to concerns over possible indictment, the United Arab Emirates would be an interesting choice for a new home—particularly because it does not have an extradition treaty with the United States.”
Essentially, the UAE would be a perfect place for Prince to move if there were concerns that actions could be taken against him by US prosecutors, external pageor evencall_made to “liquidate major holdings so he can move his money offshore […] in advance of possible external pageclaims by victimscall_made of Blackwater violence.” Blackwater has external pagepreviouslycall_made moved funds offshore through Prince’s Greystone, a “wholly-owned offshore company.”
Prince’s book titled We Are Blackwater was set for release in 2008 but was delayed for unknown reasons. He is external pagereportedly gearing upcall_made to release a book this fall.