Blackwater Metamorphoses
By Jody Ray Bennett for ISN
What does a CEO do with one of the world’s most controversial private businesses awash in strenuous litigation and ongoing investigation and whose product is perceived to be threatened by a new US presidential administration? This was the question that long plagued Erik Prince, founder of the notorious private security company, Blackwater Worldwide, who, as of this year, seems to have found an answer: Change the name of the product, scale down operations and resign as CEO.
In mid-February, Blackwater announced that its name would undergo a significant change. Initially, the company was called Blackwater USA, which was later changed to Blackwater Worldwide in October 2007. The company will now be obliquely titled “Xe” (pronounced “zee”).
Prince external pagestated that the name comes from the abbreviation for the element, Xenon: “It's an inert, non-combustible gas.”
Anne Tyrell, the company’s media spokeswoman, external pagesaid that Blackwater “spent over a year searching for a new name before choosing Xe.”
Blackwater’s sub-companies have seen name changes as well. Blackwater Airships, its surveillance service for intelligence gathering, was changed to Guardian Flight Systems; Blackwater Target Systems changed to GSD Manufacturing; and Blackwater Lodge and Training Center has been changed simply to US Training Center.
The company made headlines once again when Prince stepped down as CEO in early March. In an interview he explained that his resignation, in part, was intended to take the spotlight off Blackwater. “Me [sic] not being part of the equation reduces the 'X' on the thing.”
Former vice president of shipping giant DHL, Joseph Yorio, will replace the current president, Gary Jackson, who is retiring. While the CEO seat remains open, Prince has said he would stay on as a chairman.
Big contracts, big fumbles
The scramble to restructure Blackwater’s image and management seems to be an inevitable consequence of its own mistakes and mishaps that in turn spawned a litany of negative press and critical academic analyses.
While the company initially focused on training for domestic security, police and military clients when it began operations in 1997, US government contracts amounting to external pageover a billion dollars since the onset of the war on terror have allowed Blackwater to amass an arsenal of equipment that rivals most other companies in the private security industry. Over the years, the company has acquired several large training facilities across the US, aerial equipment from little bird helicopters to a surveillance blimp, its own patented fleet of heavy military vehicles and access to other business-security services ranging from intelligence gathering to ship vessels used to fight pirates in the Gulf of Aden.
Although the company experienced rapid growth at the onset of the US invasion of Iraqin 2003, Blackwater began to gain attention from media and activists as early as March 2004 after four of its employees were brutally killed and publicly hung from a bridge in external pageFalluja. Six months later, Presidential Airways, Prince’s aviation transportation company, was granted a multi-million dollar contract to cargo troops and supplies into Afghanistan.
After three years of underreported shootings and accidents, it wasn’t until the backlash from the external pageNisoor Square killings that left 17 Iraqi civilians dead in September 2007 that the stage was set to force the company to undergo its most extensive corporate makeover. While the Nisoor Square incident eventually caused Blackwater to lose its license to operate within Iraq, and despite the recent US State Department announcement that its Baghdad contract would not be renewed after May, the Obama administration has external pageagreed to extend the company’s contract for aerial logistics in Iraq until September.
A former Blackwater employee explained to ISN Security Watch that Xe attempted to reapply for WPPS (Worldwide Personal Protection Services) contacts once awarded to Blackwater with nothing more than its new name. After a prompt denial, Xe approached its competitors in Iraq and Afghanistan, DynCorp and Triple Canopy, requesting to conduct the vetting and training of their personnel. DynCorp and Triple Canopy ultimately decided not do business with the company.
“Blackwater/Xe [has] certainly [been] ‘ostracized’ from the industry community and will find it harder in the future to secure new contracts. However, the Blackwater case can be seen as a wake-up call for the entire industry. Companies have realized that responsible behavior may be one of the biggest selling points in the future,” Sabrina Schulz, Ottowa-based consultant in Security Sector Reform (SSR), told ISN Security Watch.
Future operations, future hurdles
Although Xe has stated its desire to drastically scale down armed security operations in warzones and concentrate more on logistics and training, the extent to which it will differentiate from Blackwater remains unclear.
In the face of uncertainty and growing unpopularity, Xe began to actively seek out other lucrative opportunities comparable to the high-dollar contracts it earned in Iraq. After a professional American football player accidentally shot himself in the thigh with a firearm, Xe began to market its services to wealthy professional athletes. Famous American basketball player Shaquille O’Neal has since visited the training center.
“The potential role for [private security companies] in training and support will increase as the US draws down its forces in Iraq. But the role in training - in the US and all over the world will also probably continue to grow - as will roles in intelligence and homeland security,” Deborah Avant, director of international studies at the University of California-Irvine and author of The Market for Force: the Consequences of Privatizing Security, told ISN Security Watch.
According to the former Blackwater employee who spoke to ISN Security Watch, Xe is also currently bidding on a commercial contract to provide on-site security and logistics for external pageSavannah River Nuclear Site in South Carolina. Xe is also attempting to gain contracts offered under the US Department of State external pageAfrica Contingency Operations Training Assistance (ACOTA), a program “designed to improve African ability to respond quickly to crises by providing selected militaries with the training and equipment required to execute humanitarian or peace support operations.” It has recently been reported that the company has external pageopened an office in Nairobi, Kenya.
Nevertheless, Xe will continue to struggle against the mistakes that tarnished the Blackwater name. The renamed company is currently involved in its latest federal external pagelawsuitbrought in San Diego on 20 March. The lawsuit claims that after a 2006 Christmas Eve party, an intoxicated Blackwater security employee randomly murdered Raheem Khalaf Sa'adoon, a security guard for Iraqi Vice President Adel Abdul Mahdi. The suit brought by the murdered guard’s family makes further external pageclaimsalleging that Blackwater/Xe quickly removed the intoxicated employee from Iraq, bribed an Iraqi government official and destroyed documents and other evidence related to this and other shootings.
Where will Xe be in a year from now? The outcomes of its various lawsuits will have an impact on the company’s ability to secure future contracts, even if the company really scales down operations for training, logistics and intelligence services. While it is clear the company is looking for alternative clients to supplement its upcoming contractual losses in Iraq, it is not clear if Xe will truly learn from its mistakes and be able to successfully market a product that conforms to expectations of ethical and responsible behavior.