Democrats have been in control of the Pentagon — and the CIA — for the better part of two years. So why are we still giving Blackwater contracts — contracts that may have been funneled through as many as 30 “shell” companies, according to the New York Times?
The C.I.A.’s continuing relationship with the company, which recently was awarded a $100 million contract to provide security at agency bases in Afghanistan, has drawn harsh criticism from some members of Congress, who argue that the company’s tarnished record should preclude it from such work. At least two of the Blackwater-affiliated companies, XPG and Greystone, obtained secret contracts from the agency, according to interviews with a half dozen former Blackwater officials.
The U.S. Senate Armed Services Committee (Levin and McCain, chair and ranking member) has nothing on its web site about the investigation or web of Blackwater companies.
Back Story
Blackwater is a poster child for government largesse:
Blackwater USA is a private security corporation founded in 1996 by Erik Prince, the multi-millionaire son of billionaire Edgar Prince. Erik, an ex-Navy SEAL, saw a business opportunity as the Clinton Administration began outsourcing security services for US diplomats abroad, and when his father died and the family sold his businesses, making Erik even richer than his Trust Fund, he bought a huge piece of land in Virginia and built a state-of-the-art training ground for mercs and security personnel. Blackwater munched along for the first 5 years training SWAT teams and elite SEAL teams, with Erik using his own money to keep it going during the long slack times.
[Blackwater] spent its first three years struggling for an identity, paying staff with an executive’s credit card and begging for customers.
But in 2000, in the fallout from the terrorist attack on the destroyer Cole, Blackwater found its future: providing security in an increasingly insecure world.
[…]
In March [2006], Fast Company business magazine, under the heading “Private Army,” named Blackwater President Gary Jackson No. 11 in its annual “Fast 50” list of leaders who are “writing the history of the next 10 years.” It made special note of the company’s estimated 600 percent revenue growth between 2002 and 2005.
The company has deep political ties: Prince and his family made more than $325,000 in political donations from 1997-2007, and Prince was a White House intern under President George H.W. Bush. Moreover, in 2007 its executives included Joseph Schmitz, former Pentagon inspector general. Former CIA executive director, A. B. “Buzzy” Krongard, served as an unpaid adviser to Blackwater’s board. Two former executives with CIA’s counterterrorism center (CTC) signed on: chief of operations, Enrique “Ric” Prado, and Cofer Black, director. So did Rob Richer, second-in-command of the C.I.A.’s clandestine service.
The connections have paid off in more than $1.5 billion in Pentagon, CIA and State Department contracts from 2002-2009. To understand the enormity of this sum of money, in 2001, Blackwater’s federal contracts were $736,906 — less than a million dollars.
Timeline : Controversy
In March 2004, four Blackwater contractors were ambushed and killed in Fallujah. The following year, the families filed a wrongful death lawsuit against Blackwater, in part to try to find out what happened that fateful day. In 2007, a North Carolina judge ordered the families and Blackwater into arbitration. In 2008, a federal appeals court held that the dispute must be handled by private arbitration, per the employee contract.
Blackwater denies the allegations and [filed] a $10 million counterclaim. It says the families violated employment contracts that prohibit the men or their estates from suing the company.
In September 2007, the company was involved in a shooting of 17 unarmed civilians (killing 14) in Iraq’s Nisoor Squar. The shooting brought it under media investigation; the Pentagon was already investigating six other incidents. The company’s “incident rate” was “at least twice” that of DynCorp International and Triple Canopy, the two other primary contractors. An October 2007 Congressional report “called Blackwater an out-of-control outfit indifferent to Iraqi civilian casualties.” A federal judge has dismissed the case, but Vice President Biden said an appeal is planned.
In 2008, “prosecutors charged five of the company’s contractors — but not Blackwater itself — with manslaughter and weapons violations.” In January 2010, a federal judge tossed the case, “[citing] repeated government missteps in the investigation, saying that prosecutors built their case on sworn statements that the guards had given with the idea that they would be immune from prosecution.”
In January 2009, Iraq said it would not renew the company’s license. In March, Blackwater reorganized as Xe Services (pronounced like the letter “z”).
Two Blackwater contractors were charged with murder “in the shootings of two Afghans after a traffic accident,” AP reported in January 2010. And Secretary of Defense Gates admitted that Blackwater was operating in Pakistan after having previously denied it.
Then in February 2010 we learned:
Employees of the CIA-connected private security corporation Blackwater diverted hundreds of weapons, including more than 500 AK-47 assault rifles, from a U.S. weapons bunker in Afghanistan intended to equip Afghan policemen, according to an investigation by the Senate Armed Services Committee.
[…]
As a result of Blackwater’s disregard for U.S. military restrictions on contractor firearms, four employees of Paravant — which held a subcontract from defense giant Raytheon to train Afghan soldiers — under the influence of alcohol opened fire on a car carrying four Afghan civilians on May 5, 2009, wounding two. That incident, occurring less than two years after Blackwater guards killed 17 Iraqi civilians in Baghdad, prompted the committee’s investigation.
[…]
In 2007, company employees came under federal investigation for improperly shipping hundreds of weapons to Iraq, some of which are believed to have been sold on the black market and acquired by a Kurdish terrorist group.
In April 2010, five former Blackwater officials came up on weapons and obstruction charges.
In June 2010, Iraq expelled 250 former Blackwater employees. Also in June, Prince said he was selling the company.
Last month, Xe agreed to pay $42 million to “settle alleged export violations.” In late 2009, news reports suggested fines of millions for “unlicensed arms shipments to Iraq.” The company’s defense: “failures of paperwork and timeliness while supporting the United States and its allies, not nefarious smuggling or aid to enemies.”
The State Department said that because the firm had taken steps to tackle the causes of its violations, it will not be considered ineligible for future contracts.
State is providing a waiver despite the fact that in 2006 and 2007 Blackwater had failed to meet terms of its contract and had billed the State Department for travel not covered by contract.
New Contracts
Yet despite this track record, the Obama Administration is still feeding Blackwater public money.
The Pentagon had planned to award Blackwater with $1 billion contract to train the Afghan police force, but in March the GAO blocked the contract because “other companies were unfairly excluded from bidding on the job.”
Xe Services, the new name of Blackwater, was poised to win one portion of a much larger group of contracts, shared among five corporations, that could earn the companies more than $15 billion over five years.
Next, the Administration succeeded in awarding Xe $220 million in two separate contracts for security services in Afghanistan. Leon Panetta, the head of the CIA, defended the new contracts, saying Blackwater had “cleaned up its act.”
But there’s more:
The company has four forward operating bases in Afghanistan and Prince has boasted that Blackwater’s counter-narcotics forces have called in NATO airstrikes.
At least two sets of contracts are through dummy companies: Paravant and the United States Training Center. The Afghan contracts should come as no surprise: Blackwater has been in Afghanistan since 2002.
Here’s the big question: what does it take to lose a Pentagon contract?
Known for gnawing at complex questions like a terrier with a bone. Digital evangelist, writer, teacher. Transplanted Southerner; teach newbies to ride motorcycles. @kegill (Twitter and Mastodon.social); wiredpen.com