Blackwater – a series of articles


Blackwater, Oil and the Colonial Enterprise


John Nichols


The Nation


September 21, 2007



Blackwater USA's mercenary mission in Iraq is very much in the news this week, and rightly so. The private military contractor's war-for-profit program, which has been so brilliantly exposed by Jeremy Scahill, may finally get a measure of the official scrutiny it merits as the corporation scrambles to undo the revocation by the Iraqi government of its license to operate in that country. There will be official inquiries in Baghdad, and in Washington. The U.S. Congress might actually provide some of the oversight that is its responsibility. Perhaps, and this is a big "perhaps," Blackwater's "troops" could come home before the U.S. soldiers who have been forced to fight, and die, in defense of these international rent-a-cops.


But it is not the specific story of Blackwater that matters so much as the broader story of imperial excess that it illustrates.


If Blackwater, with an assist from the U.S. government, beats back the attempt by the Iraqis to regulate the firm's activities -- as now appears likely, considering Friday's report that the firm has resumed guarding U.S. State Department convoys in Baghdad -- we will have all the confirmation that is needed of the great truth of the U.S. occupation of Iraq: This is a colonial endeavor no different than that of the British Empire against America's founding generation revolted.


But even if Blackwater loses its fight to stay, even if the corporation is forced to shut down its multi- billion dollar, U.S. Treasury-funded operation in Iraq, the brief "accountability moment" may not be sufficient to open up the necessary debate about Iraq's colonial status. The danger, for Iraq and the United States, that honest assessment of the crisis will lose out to face-saving gestures designed to foster the fantasy of Iraqi independence.


It is not enough that Blackwater is shamed and perhaps sanctioned. A Blackwater exit from Iraq will mean little if its mercenary contracts are merely taken over by one or more of the 140 other U.S.-sanctioned private security firms operating in that country -- such as Vice President Dick Cheney's Halliburton.


Whatever the precise play out of this Blackwater moment may be, the likelihood is that the colonial enterprise will continue. That's because, in the absence of intense pressure from grassroots activists and the media, Congress is unlikely to go beyond a scratch at the surface of what is actually going on in Iraq.


The deeper discussion requires that a discussion about the substance that no less a figure than former Federal Reserve chairman Alan Greenspan describes as the reason for the invasion and occupation of this particular Middle Eastern land: oil


The Rev. Martin Luther King Jr. aptly observed that "colonialism was made for domination and for exploitation," and there is no substance that the Bush- Cheney administration is more interested in dominating and exploiting than oil.


Thus, while it is right to pay close attention to the emerging discussion about Blackwater's wicked work in Iraq, Americans would do well to pay an equal measure of attention to the still largely submerged discussion about an Iraqi oil deal that will pay huge benefits to the Hunt Oil Company, a Texas firm closely linked to the administration. How closely? When he was running Halliburton, Cheney invited Hunt Oil Company CEO Ray Hunt to serve on the firm's board of directors. Hunt, a "Bush Pioneer" fund raiser during the 2000 campaign recently donated the tidy sum of $35 million to George W.'s presidential library building fund.


The new "production sharing agreement" between Hunt Oil and the Kurdistan Regional Government puts one of the administration's favorite firms in a position to reap immeasurable profits while undermining essential efforts to assure that Iraq's oil revenues will be shared by all Iraqis. Hunt's deal upsets hopes that Iraq's mineral wealth might ultimately be a source of stability, replacing the promise of economic equity with the prospect of a black-gold rush that will only widen inequalities and heighten ethnic and regional resentments.


The Hunt deal is so sleazy -- and so at odds with the stated goals of the Iraqi government and the U.S. regarding shared oil revenues -- that even Bush acknowledges that U.S. embassy officials in Baghdad are deeply concerned. What Bush and Cheney won't mention is the fact that Iraq's oil minister, Hussain al- Shahristani, says the deal is illegal.


Unfortunately, as with the Blackwater imbroglio, however, there is no assurance that the stance of the Iraqi government is definitional with regard to what happens in Iraq. All indications are that what happens in Washington matters most. And that is why it is so very disturbing that, for the most part, members of Congress -- even members who say they do not want the United States to have a long-term presence in Iraq -- have been slow to start talking about Hunt's oil rigging.


That is why it is disturbing that, for the most part, members of Congress -- even members who say they do not want the United States to have a long-term presence in Iraq -- have been slow to start talking about Hunt's oil rigging.


One House member who has raised the alarm is Ohio Democrat Dennis Kucinich, who in his capacity as a key member of the House Committee on Oversight and Government Reform, has asked the committee's chairman, California Democrat Henry Waxman, to launch an investigation into the Hunt Oil deal.


"As I have said for five years, this war is about oil," argues Kucinich, who is mounting an anti-war bid for the Democratic presidential nomination, declared on the floor of the House this week. "The Bush Administration desires private control of Iraqi oil, but we have no right to force Iraq to give up control of their oil. We have no right to set preconditions to Iraq which lead Iraq to giving up control of their oil. The Constitution of Iraq designates that the oil of Iraq is the property for all Iraqi people."


With that in mind, Kucinich explains, "I am calling for a Congressional investigation to determine the role the Administration may have played in the Hunt-Kurdistan deal, the effect the deal will have on the oil revenue sharing plan and the attempt by the Administration to privatize Iraqi oil."


Waxman has been ahead of the curve on Blackwater, seeking testimony from the firm's chairman at hearings scheduled for early October.


But Waxman needs to expand his focus, and the way to do that is by heeding Kucinich's call for an investigation into the Hunt deal.


That inquiry should begin with two fundamental questions:


Who runs Iraq -- the Iraqis or their colonial overlords in Washington?


And, if the claim is that the Iraqis are in charge, then why is Ray Hunt about to start steering revenues from that country's immense oil wealth into the same Texas bank accounts that have so generously funded the campaigns of George Bush and Dick Cheney?





Blackwater Down


October 10, 2005

The Nation


The men from Blackwater USA arrived in New Orleans right after Katrina hit. The company known for its private security work guarding senior US diplomats in Iraq beat the federal government and most aid organizations to the scene in another devastated Gulf. About 150 heavily armed Blackwater troops dressed in full battle gear spread out into the chaos of New Orleans. Officially, the company boasted of its forces "join[ing] the hurricane relief effort." But its men on the ground told a different story.

Some patrolled the streets in SUVs with tinted windows and the Blackwater logo splashed on the back; others sped around the French Quarter in an unmarked car with no license plates. They congregated on the corner of St. James and Bourbon in front of a bar called 711, where Blackwater was establishing a makeshift headquarters. From the balcony above the bar, several Blackwater guys cleared out what had apparently been someone's apartment. They threw mattresses, clothes, shoes and other household items from the balcony to the street below. They draped an American flag from the balcony's railing. More than a dozen troops from the 82nd Airborne Division stood in formation on the street watching the action.

Armed men shuffled in and out of the building as a handful told stories of their past experiences in Iraq. "I worked the security detail of both Bremer and Negroponte," said one of the Blackwater guys, referring to the former head of the US occupation, L. Paul Bremer, and former US Ambassador to Iraq John Negroponte. Another complained, while talking on his cell phone, that he was getting only $350 a day plus his per diem. "When they told me New Orleans, I said, 'What country is that in?'" he said. He wore his company ID around his neck in a case with the phrase Operation Iraqi Freedom printed on it.

In an hourlong conversation I had with four Blackwater men, they characterized their work in New Orleans as "securing neighborhoods" and "confronting criminals." They all carried automatic assault weapons and had guns strapped to their legs. Their flak jackets were covered with pouches for extra ammunition.

When asked what authority they were operating under, one guy said, "We're on contract with the Department of Homeland Security." Then, pointing to one of his comrades, he said, "He was even deputized by the governor of the state of Louisiana. We can make arrests and use lethal force if we deem it necessary." The man then held up the gold Louisiana law enforcement badge he wore around his neck. Blackwater spokesperson Anne Duke also said the company has a letter from Louisiana officials authorizing its forces to carry loaded weapons.

"This vigilantism demonstrates the utter breakdown of the government," says Michael Ratner, president of the Center for Constitutional Rights. "These private security forces have behaved brutally, with impunity, in Iraq. To have them now on the streets of New Orleans is frightening and possibly illegal."

Blackwater is not alone. As business leaders and government officials talk openly of changing the demographics of what was one of the most culturally vibrant of America's cities, mercenaries from companies like DynCorp, Intercon, American Security Group, Blackhawk, Wackenhut and an Israeli company called Instinctive Shooting International (ISI) are fanning out to guard private businesses and homes, as well as government projects and institutions. Within two weeks of the hurricane, the number of private security companies registered in Louisiana jumped from 185 to 235. Some, like Blackwater, are under federal contract. Others have been hired by the wealthy elite, like F. Patrick Quinn III, who brought in private security to guard his $3 million private estate and his luxury hotels, which are under consideration for a lucrative federal contract to house FEMA workers.

A possibly deadly incident involving Quinn's hired guns underscores the dangers of private forces policing American streets. On his second night in New Orleans, Quinn's security chief, Michael Montgomery, who said he worked for an Alabama company called Bodyguard and Tactical Security (BATS), was with a heavily armed security detail en route to pick up one of Quinn's associates and escort him through the chaotic city. Montgomery told me they came under fire from "black gangbangers" on an overpass near the poor Ninth Ward neighborhood. "At the time, I was on the phone with my business partner," he recalls. "I dropped the phone and returned fire."

Montgomery says he and his men were armed with AR-15s and Glocks and that they unleashed a barrage of bullets in the general direction of the alleged shooters on the overpass. "After that, all I heard was moaning and screaming, and the shooting stopped. That was it. Enough said."

Then, Montgomery says, "the Army showed up, yelling at us and thinking we were the enemy. We explained to them that we were security. I told them what had happened and they didn't even care. They just left." Five minutes later, Montgomery says, Louisiana state troopers arrived on the scene, inquired about the incident and then asked him for directions on "how they could get out of the city." Montgomery says that no one ever asked him for any details of the incident and no report was ever made. "One thing about security," Montgomery says, "is that we all coordinate with each other--one family." That co-ordination doesn't include the offices of the Secretaries of State in Louisiana and Alabama, which have no record of a BATS company.

A few miles away from the French Quarter, another wealthy New Orleans businessman, James Reiss, who serves in Mayor Ray Nagin's administration as chairman of the city's Regional Transit Authority, brought in some heavy guns to guard the elite gated community of Audubon Place: Israeli mercenaries dressed in black and armed with M-16s. Two Israelis patrolling the gates outside Audubon told me they had served as professional soldiers in the Israeli military, and one boasted of having participated in the invasion of Lebanon. "We have been fighting the Palestinians all day, every day, our whole lives," one of them tells me. "Here in New Orleans, we are not guarding from terrorists." Then, tapping on his machine gun, he says, "Most Americans, when they see these things, that's enough to scare them."

The men work for ISI, which describes its employees as "veterans of the Israeli special task forces from the following Israeli government bodies: Israel Defense Force (IDF), Israel National Police Counter Terrorism units, Instructors of Israel National Police Counter Terrorism units, General Security Service (GSS or 'Shin Beit'), Other restricted intelligence agencies." The company was formed in 1993. Its website profile says: "Our up-to-date services meet the challenging needs for Homeland Security preparedness and overseas combat procedures and readiness. ISI is currently an approved vendor by the US Government to supply Homeland Security services."

Unlike ISI or BATS, Blackwater is operating under a federal contract to provide 164 armed guards for FEMA reconstruction projects in Louisiana. That contract was announced just days after Homeland Security Department spokesperson Russ Knocke told the Washington Post he knew of no federal plans to hire Blackwater or other private security firms. "We believe we've got the right mix of personnel in law enforcement for the federal government to meet the demands of public safety," he said. Before the contract was announced, the Blackwater men told me, they were already on contract with DHS and that they were sleeping in camps organized by the federal agency.

One might ask, given the enormous presence in New Orleans of National Guard, US Army, US Border Patrol, local police from around the country and practically every other government agency with badges, why private security companies are needed, particularly to guard federal projects. "It strikes me...that that may not be the best use of money," said Illinois Senator Barack Obama.

Blackwater's success in procuring federal contracts could well be explained by major-league contributions and family connections to the GOP. According to election records, Blackwater's CEO and co-founder, billionaire Erik Prince, has given tens of thousands to Republicans, including more than $80,000 to the Republican National Committee the month before Bush's victory in 2000. This past June, he gave $2,100 to Senator Rick Santorum's re-election campaign. He has also given to House majority leader Tom DeLay and a slew of other Republican candidates, including Bush/Cheney in 2004. As a young man, Prince interned with President George H.W. Bush, though he complained at the time that he "saw a lot of things I didn't agree with--homosexual groups being invited in, the budget agreement, the Clean Air Act, those kind of bills. I think the Administration has been indifferent to a lot of conservative concerns."

Prince, a staunch right-wing Christian, comes from a powerful Michigan Republican family, and his father, Edgar, was a close friend of former Republican presidential candidate and antichoice leader Gary Bauer. In 1988 the elder Prince helped Bauer start the Family Research Council. Erik Prince's sister, Betsy, once chaired the Michigan Republican Party and is married to Dick DeVos, whose father, billionaire Richard DeVos, is co-founder of the major Republican benefactor Amway. Dick DeVos is also a big-time contributor to the Republican Party and will likely be the GOP candidate for Michigan governor in 2006. Another Blackwater founder, president Gary Jackson, is also a major contributor to Republican campaigns.

After the killing of four Blackwater mercenaries in Falluja in March 2004, Erik Prince hired the Alexander Strategy Group, a PR firm with close ties to GOPers like DeLay. By mid-November the company was reporting 600 percent growth. In February 2005 the company hired Ambassador Cofer Black, former coordinator for counterterrorism at the State Department and former director of the CIA's Counterterrorism Center, as vice chairman. Just as the hurricane was hitting, Blackwater's parent company, the Prince Group, named Joseph Schmitz, who had just resigned as the Pentagon's Inspector General, as the group's chief operating officer and general counsel.

While juicing up the firm's political connections, Prince has been advocating greater use of private security in international operations, arguing at a symposium at the National Defense Industrial Association earlier this year that firms like his are more efficient than the military. In May Blackwater's Jackson testified before Congress in an effort to gain lucrative Homeland Security contracts to train 2,000 new Border Patrol agents, saying Blackwater understands "the value to the government of one-stop shopping." With President Bush using the Katrina disaster to try to repeal Posse Comitatus (the ban on using US troops in domestic law enforcement) and Blackwater and other security firms clearly initiating a push to install their paramilitaries on US soil, the war is coming home in yet another ominous way. As one Blackwater mercenary said, "This is a trend. You're going to see a lot more guys like us in these situations."


Blood Is Thicker Than Blackwater


May 8, 2006

It is one of the most infamous incidents of the war in Iraq: On March 31, 2004, four private American security contractors get lost and end up driving through the center of Falluja, a hotbed of Sunni resistance to the US occupation. Shortly after entering the city, they get stuck in traffic, and their small convoy is ambushed. Several armed men approach the two vehicles and open fire from behind, repeatedly shooting the men at point-blank range. Within moments, their bodies are dragged from the vehicles and a crowd descends on them, tearing them to pieces. Eventually, their corpses are chopped and burned. The remains of two of the men are strung up on a bridge over the Euphrates River and left to dangle. The gruesome image is soon beamed across the globe.

In the Oval Office the killings were taken as "a challenge to America's resolve," according to the Los Angeles Times. President Bush issued a statement through his spokesperson. "We will not be intimidated," he said. "We will finish the job." Brig. Gen. Mark Kimmitt vowed, "We will be back in Falluja.... We will hunt down the criminals.... It's going to be deliberate. It will be precise, and it will be overwhelming." Within days of the ambush, US forces laid siege to Falluja, beginning what would be one of the most brutal and sustained US operations of the occupation.

For most people, the gruesome killings were the first they had ever heard of Blackwater USA, a small, North Carolina-based private security company. Since the Falluja incident, and also because of it, Blackwater has emerged as one of the most successful and profitable security contractors operating in Iraq. The company and its secretive, mega-millionaire, right-wing Christian founder, Erik Prince, position Blackwater as a patriotic extension of the US military, and its employees are required to take an oath of loyalty to the Constitution. After the killings, Blackwater released a statement saying the "heinous mistreatment of our friends exhibits the extraordinary conditions under which we voluntarily work to bring freedom and democracy to the Iraqi people.... Our tasks are dangerous and while we feel sadness for our fallen colleagues, we also feel pride and satisfaction that we are making a difference for the people of Iraq."

The company swiftly rose to international prominence: Journalists were flooding Blackwater with calls, and military types were clamoring to sign up for work. "They're angry...they're saying, 'Let me go over,'" Blackwater spokesman Chris Bertelli told the Virginian-Pilot ten days after the killings, adding that applications to work for Blackwater had increased "considerably" in that time. "It's natural to assume that the visibility of the dangers could drive up salaries for the folks who have to stand in the path of the bullets," he said. A day after the killings, Prince enlisted the services of the Alexander Strategy Group, a now disgraced but once powerful Republican lobbying and PR firm. By the end of 2004 Blackwater's president, Gary Jackson, was bragging to the press of "staggering" 600 percent growth. "This is a billion-dollar industry," Jackson said in October 2004. "And Blackwater has only scratched the surface of it."

But today, Blackwater is facing a potentially devastating battle--this time not in Iraq but in court. The company has been slapped with a lawsuit that, if successful, will send shock waves through the world of private security firms, a world that has expanded significantly since Bush took office. Blackwater is being sued for the wrongful deaths of Stephen "Scott" Helvenston, Mike Teague, Jerko Zovko and Wesley Batalona by the families of the men slain in Falluja.

More than 428 private contractors have been killed to date in Iraq, and US taxpayers are footing almost the entire compensation bill to their families. "This is a precedent-setting case," says Marc Miles, an attorney for the families. "Just like with tobacco litigation or gun litigation, once they lose that first case, they'd be fearful there would be other lawsuits to follow."

The families' two-year quest to hold those responsible accountable has taken them not to Falluja but to the sprawling Blackwater compound in North Carolina. As they tell it, after demanding answers about how the men ended up dead in Falluja that day and being stonewalled at every turn, they decided to conduct their own investigation. "Blackwater sent my son and the other three into Falluja knowing that there was a very good possibility this could happen," says Katy Helvenston, the mother of 38-year-old Scott Helvenston, whose charred body was hung from the Falluja bridge. "Iraqis physically did it, and it doesn't get any more horrible than what they did to my son, does it? But I hold Blackwater responsible one thousand percent."

In late 2004 the case caught the attention of the high-powered California trial lawyer Daniel Callahan, fresh from a record-setting $934 million jury decision in a corporate fraud case. On January 5, 2005, the families filed the lawsuit against Blackwater in Wake County, North Carolina. "What we have right now is something worse than the wild, wild west going on in Iraq," Callahan says. "Blackwater is able to operate over there in Iraq free from any oversight that would typically exist in a civilized society. As we expose Blackwater in this case, it will also expose the inefficient and corrupt system that exists over there."

Scott Helvenston was a walking ad for the military. He came from a proud family of Republicans; his great-great-uncle, Elihu Root, was once US Secretary of War and the 1912 Nobel Peace Prize-winner. Scott was tall, tan and chiseled and, by all accounts, a model soldier and athlete. At 17 he made history by becoming the youngest person ever to complete the rigorous Navy SEAL program. He spent twelve years in the SEALs, four of them as an instructor, and then tried his luck with Hollywood. He trained Demi Moore for her film G.I. Jane and did a few stints on reality television. In one, Man vs. Beast, he was the only contestant to defeat the beast, outmaneuvering a chimpanzee in an obstacle course. Once the cover boy on a Navy calendar, he also had several workout videos.

If it had been up to Katy Helvenston, her son wouldn't have been in Iraq at all. "We had argued about him going over there," she recalls. "I believe that we should have gone into Afghanistan, but I never believed we should have gone into Iraq, and Scott bought the whole story about Saddam Hussein being involved with Al Qaeda and all that. He believed in what he was doing." He also had a financial motivation. In early 2004 Helvenston was between jobs and was eking out a living with the stints on reality TV, the movie consulting and the fitness videos. "It was good money, but it was never enough," his mother remembers. He was divorced but continued to support his ex-wife and two children. His mother says he took the job with Blackwater because the company offered short-term, two-month contracts, and Scott viewed it as an opportunity to turn his life around. "He said, 'I'm gonna go over there, make some money, maybe make a difference. I'll only be away from my kids for a couple of months.' That's why he chose Blackwater," she recalls.

Helvenston arrived for training at Blackwater's North Carolina campus around March 1, 2004. The man heading the training was Justin McQuown, nicknamed Shrek, after the green ogre movie cartoon character. According to the suit, McQuown lacked the credentials of Helvenston and other ex-SEALs. "During training, McQuown would often improperly instruct the class or provide erroneous information, tactics or techniques," the suit alleges. "On occasion, Helvenston would attempt to politely assist McQuown by offering his expertise on the correct manner of the particular training exercise. The fact that [McQuown]...was being exposed infuriated him." Scott's mother believes, based on Scott's e-mails and conversations with contractors who served with her son, that McQuown feared that Scott might replace him at the company.

After the training session, Helvenston got on a plane to Kuwait, where he touched down on March 18. It seemed like an ideal situation for him, as two of his friends from his days on the reality TV show Combat Missions were helping to run the Blackwater operations: John and Kathy Potter. When Helvenston set off for the Middle East, his family thought he was going to be working on Blackwater's high-profile job of guarding the head of the US occupation, Paul Bremer. At $21 million, it represented the company's biggest contract in Iraq. As it turned out, Helvenston was slated to carry out a far less glamorous task. John Potter had recently teamed Blackwater up with a Kuwaiti business called Regency Hotel and Hospital Company, and together the firms won a security contract with Eurest Support Services (ESS), guarding convoys transporting kitchen equipment to the US military. Blackwater and Regency had essentially wrestled the ESS contract from another security firm, Control Risk Group, and were eager to win more lucrative contracts from ESS in its other division servicing construction projects in Iraq. Unbeknownst to Helvenston, this goal would drive a series of events that would ultimately lead to his death.

According to former Blackwater officials, Blackwater, Regency and ESS were engaged in a classic war-profiteering scheme. Blackwater was paying its men $600 a day but billing Regency $815, according to the Raleigh News and Observer. "In addition," the paper reports, "Blackwater billed Regency separately for all its overhead and costs in Iraq." Regency would then bill ESS an unknown amount for these services. Kathy Potter told the News and Observer that Regency would "quote ESS a price, say $1,500 per man per day, and then tell Blackwater that it had quoted ESS $1,200." ESS then contracted with Halliburton subsidiary KBR, which in turn billed the government an unknown amount of money for the same security services, according to the paper. KBR/Halliburton refuses to discuss the matter and will not confirm any relationship with ESS.

All this was shady enough--but the real danger for Helvenston and the others lay in Blackwater's decision to cut corners to make even more money. The original contract between Blackwater/Regency and ESS, obtained by The Nation, recognized that "the current threat in the Iraqi theater of operations" would remain "consistent and dangerous," and called for a minimum of three men in each vehicle on security missions "with a minimum of two armored vehicles to support ESS movements." [Emphasis added.]

But on March 12, 2004, Blackwater and Regency signed a subcontract, which specified security provisions identical to the original except for one word: "armored." Blackwater deleted it from the contract.

"When they took that word 'armored' out, Blackwater was able to save $1.5 million in not buying armored vehicles, which they could then put in their pocket," says attorney Miles. "These men were told that they'd be operating in armored vehicles. Had they been, I sincerely believe that they'd be alive today. They were killed by insurgents literally walking up and shooting them with small-arms fire. This was not a roadside bomb, it was not any other explosive device. It was merely small-arms fire, which could have been repelled by armored vehicles."

Before Helvenston, Teague, Zovko and Batalona were ever sent into Falluja, the omission of the word "armored" was brought to the attention of Blackwater management by John Potter, according to the families' lawyers. They say Blackwater refused to redraft the contract. Potter persisted, insisting that his men be provided with armored vehicles. This would have resulted in Blackwater losing profits and would also have delayed the start of the ESS job. According to the suit, Blackwater was gung-ho to start in order to impress ESS and win further contracts. So on March 24 the company removed Potter as program manager, replacing him with McQuown, who, according to the families' lawyers, was far more willing than Potter to overlook security considerations in the interest of profits. It was this corporate greed, combined with McQuown's animosity toward Scott Helvenston, which began at the training in North Carolina, that the families allege played a significant role in the deaths of Helvenston and the other three contractors.

Scott Helvenston and his team were to deploy to Iraq on March 29. But late on the evening of March 27, McQuown called Helvenston and told him that he needed to pack his things immediately, that he would be leaving at 5 am with a completely different team. According to the lawsuit, "It was virtually unheard of to take a single person, like Scott Helvenston, and place him on a different group with whom he had never trained or even met." Helvenston resisted the change. Several other contractors stepped forward, offering to go in his place. McQuown refused to allow it.

Later that night, according to Scott's mother, McQuown came up to Helvenston's hotel room. "He was told at that time that he was not going to be doing security for the ambassador, Paul Bremer, and he was going to escort a convoy of trucks to pick up kitchen equipment. And Scott says, 'You're nuts,' you know, he says, 'I'm not goin' in there to Falluja. You're out of your mind. That's not what I was hired to do.' And at that point McQuown apparently told him that if he didn't do it, he would be fired immediately. He would have to reimburse any monies that had been paid to him, and he was on his own to get home. Well, that left Scott no choice. So the next morning they were off."

The night before he left, Helvenston sent an e-mail to the "Owner, President and Upper Management" of Blackwater, subject: "extreme unprofessionalism." In this e-mail, obtained by The Nation, he complained that the behavior of McQuown (referred to as "Justin Shrek" in the e-mail) was "very manipulative, duplicitive [sic], immature and unprofessional." He describes how his original team leader tried to appeal to Shrek not to reassign him, but, Helvenston wrote, "I think [the team leader] felt that there was a hidden agenda. 'Lets see if we can screw with Scott.'" Those were some of the last words Helvenston would ever write.

Callahan says that if Blackwater and McQuown had done in the United States what they are alleged to have done in Iraq, "There would be criminal charges against them." What happened between McQuown and Helvenston was no mere personality conflict. "Corporations are fictional entities--they only act through their personnel," explains Miles. "You need to show intent. You need to put a face on these acts. With regard to the wrongful death of these four men, that face is Justin McQuown of Blackwater." The company refused to comment on the case, but McQuown's lawyer, William Crenshaw, told The Nation there are "numerous serious factual errors" in the lawsuit, saying, "On behalf of Mr. McQuown, we extend our sincerest sympathies to the families of the deceased. It is regrettable and inaccurate to suggest that Mr. McQuown contributed in any way to this terrible tragedy."

On March 30, 2004, Helvenston, Teague, Zovko and Batalona left Baghdad on the ESS security mission. The suit alleges that there were six guards available that day, but McQuown intervened and ordered only the four to be sent. The other two were kept behind at Blackwater's Baghdad facility to perform clerical duties. A Blackwater official later boasted, the suit says, that they saved two lives by not sending all six men.

The four men were, in fact, working under contracts guaranteeing that they would travel with a six-person team. But their personal contracts also warned of death and/or injury caused by everything from "civil uprising" and "terrorist activity" to "poisoning" and "flying debris." In filing its motion to dismiss the lawsuit, Blackwater quoted from its standard contract, insisting that those who sign it "fully appreciate the dangers and voluntarily assume these risks as well as any other risks in any way (whether directly or indirectly) connected to the Engagement."

Reading this, it would seem that Blackwater has a reasonable defense. Not so, say the families of the four men and their lawyers. They do not deny that the men were aware of the risks they were taking, but they charge that Blackwater knowingly refused to provide guaranteed safeguards, among them: They would have armored vehicles; there would be three men in each vehicle--a driver, a navigator and a rear gunner; and the rear gunner would be armed with a heavy automatic weapon, such as a "SAW Mach 46," which can fire up to 850 rounds per minute, allowing the gunner to fight off any attacks from the rear. "None of that was true," says attorney Callahan. Instead, each vehicle had only two men and far less powerful "Mach 4" guns, which they had not even had a chance to test out. "Without the big gun, without the third man, without the armored vehicle, they were sitting ducks," says Callahan.

The men got lost on the evening of March 30 and eventually found a Marine base near Falluja where they slept for a few hours. "Scotty had tried to call me in the middle of the night," Katy Helvenston remembers. "I had my bedroom phone ringer turned off--I didn't get the call, so he left me a message. It mostly was, 'Mom, please don't worry, I'm OK. I'm gonna be home soon and I'm gonna see ya. We're gonna go have fun. I'm gonna take care of you.' You know, just stuff like that, which obviously wasn't true. By the time I got the message he'd already been killed."

Shortly after Helvenston left that message, the men left the base and set out for their destination. Without a detailed map, they took the most direct route, through the center of Falluja. According to Callahan, there was a safer alternative route that went around the city, which the men were unaware of because of Blackwater's failure to conduct a "risk assessment" before the trip, as mandated by the contract. The suit alleges that the four men should have had a chance to gather intelligence and familiarize themselves with the dangerous routes they would be traveling. This was not done, according to Miles, "so as to pad Blackwater's bottom line" and to impress ESS with Blackwater's efficiency in order to win more contracts. The suit also alleges that McQuown "intentionally refused to allow the Blackwater security contractors to conduct" ride-alongs with the teams they were replacing from Control Risk Group. (In fact, the suit contends that Blackwater "fabricated critical documents" and "created" a pre-trip risk assessment "after this deadly ambush occurred.")

The men entered Falluja with Helvenston and Teague in one vehicle and Zovko and Batalona in the other. "Since the team was driving without a rear-gunner and did not have armored vehicles, the insurgents were able to literally walk up behind the vehicles and shoot all four men with small arms at close range," the suit alleges. "Their bodies were pulled into the streets, burned and their charred remains were beaten and dismembered." The men, it goes on, "would be alive today" had Blackwater not forced them--under threat of being fired--to go unprepared on that mission. "The fact that these four Americans found themselves located in the high-risk, war-torn City of Fallujah without armored vehicles, automatic weapons, and fewer than the minimum number of team members was no accident," the suit alleges. "Instead, this team was sent out without the required equipment and personnel by those in charge at Blackwater."

After the killings, Katy Helvenston joined the families of Mike Teague, Jerko Zovko and Wesley Batalona in grieving and in seeking details about the incident. Blackwater founder Erik Prince personally delivered money to some of the families for funeral expenses, and the company moved to get the men's wives and children benefits under the government's Defense Base Act, which in some cases insures those on contract supporting US military operations abroad.

But then things started to get strange. Blackwater held a memorial service for the men at its compound. The families were gathered in a conference room, where they thought they would be told how the men had died. The Zovko family asked Blackwater to see the "After Action Report" detailing the incident. "We were actually told," recalls Zovko's mother, Danica, "that if we wanted to see the paperwork of how my son and his co-workers were killed that we'd have to sue them."

Thus began the legal battle between Blackwater and the dead men's families. In one of its few statements on the suit, Blackwater spokesperson Chris Bertelli said, "Blackwater hopes that the honor and dignity of our fallen comrades are not diminished by the use of the legal process." Katy Helvenston calls that "total BS in my opinion," and says that the families decided to sue only after being stonewalled, misled and lied to by the company. "Blackwater seems to understand money. That's the only thing they understand," she says. "They have no values, they have no morals. They're whores. They're the whores of war."

Since its filing in January 2005, the case has moved slowly through the legal system. For its part, Blackwater is represented by multiple law firms. Its lead counsel is Greenberg Traurig, the influential DC law firm that once employed lobbyist Jack Abramoff. The lawyers for the families charge that Blackwater has continued its practice of stonewalling. While some of that may be legitimate defense tactics, the lawyers argue that the company has actively prevented court-ordered depositions from taking place, including taking steps to prevent a key witness from testifying: John Potter, the man who blew the whistle on Blackwater's removal of the word "armored" from the contract and was subsequently removed.

Attorney Marc Miles says that shortly after the suit was filed, he asked the court in North Carolina for an "expedited order" to depose John Potter. The deposition was set for January 28, 2005, and Miles was to fly to Alaska, where the Potters were living. But three days before the deposition, Miles says, "Blackwater hired Potter up, flew him to Washington where it's my understanding he met with Blackwater representatives and their lawyers. [Blackwater] then flew him to Jordan for ultimate deployment in the Middle East," Miles says. "Obviously they concealed a material witness by hiring him and sending him out of the country." Callahan says Blackwater took advantage of the Potters' financial straits to hinder the case against the company. "Potter didn't have any other gainful employment, because many of these men who are ex-military, their skills don't transfer easily into the civilian sector," he says, adding that after Potter was removed for blowing the whistle on the armor issue, the company abandoned him "until they needed him to avoid this subpoena and this deposition and they said, 'We need you and we need you now.' And zoom, off he goes." Blackwater subsequently attempted to have Potter's deposition order dissolved, but a federal court said no.

Blackwater has not offered a rebuttal to the specific allegations made by the families, except to deny in general that they are valid. It has fought to have the case dismissed on grounds that because Blackwater is servicing US armed forces it cannot be sued for workers' deaths or injuries and that all liability lies with the government. In its motion to dismiss the case in federal court, Blackwater argues that the families of the four men killed in Falluja are entitled only to government insurance payments. That's why the company moved swiftly to apply for benefits for the families under the Defense Base Act. Many firms specializing in contractor law advertise the DBA as the best way for corporations servicing the war to avoid being sued. In fact, Blackwater's then-general counsel, Steve Capace, gave a workshop last May on the subject to an "International Super-Conference" for contractors. In the presentation, called "Managing Contracting Risks in Battlefield Conditions," Capace laid out a legal strategy for deflecting the kind of lawsuit Blackwater now faces. That's why this case is being watched so closely by other firms operating in Iraq. "What Blackwater is trying to do is to sweep all of their wrongful conduct into the Defense Base Act," says Miles. "What they're trying to do is to say, 'Look--we can do anything we want and not be held accountable. We can send our men out to die so that we can pad our bottom line, and if anybody comes back at us, we have insurance.' It's essentially insurance to kill."

Given the uncounted tens of thousands of Iraqis who have died since the invasion and the slaughter in Falluja that followed the Blackwater incident, some might say this lawsuit is just warmongers bickering--no honor among thieves. Indeed, the real scandal here isn't that these men were sent into Falluja with only a four-person detail when there should have been six or that they didn't have a powerful enough machine gun to kill their attackers. It's that the United States has opened Iraq's door to mercenaries who roam the country with impunity.

"Over a thousand people died because of what happened to Scotty that day," says Katy Helvenston. "There's a lot of innocent people that have died." While this suit doesn't mention the retaliatory US attack on Falluja that followed the Blackwater killings, the case is significant because it could blow the lid off a system that allows corporations to face zero liability while reaping huge profits in Iraq and other war zones. "Scotty's not going to die in vain," says his mother. "I'm driven and I'm not going to quit. They will be accountable."

Still, Blackwater has friends in high places. It's a well-connected, Republican-controlled business that has made its fortune because of the Bush Administration. Company founder Erik Prince and his family have poured serious money into Republican causes and campaign coffers over the past twenty years. An analysis of Prince's contributions prepared for The Nation by the Center for Responsive Politics reveals that since 1989, Prince and his wife have given some $275,550 to Republican campaigns. Prince has never given a penny to a Democrat. While it is not unheard of for a successful business to cast its lot entirely with one party, it has clearly paid off. Shortly after George W. Bush was re-elected in November 2004, Gary Jackson sent out a mass celebratory e-mail declaring, "Bush Wins, Four More Years!! Hooyah!!"

The White House, for its part, has turned the issue of accountability of Blackwater and other private security companies into a joke, literally. This April at a forum at Johns Hopkins, Bush was asked by a student about bringing "private military contractors under a system of law," to which Bush replied, laughing, that he was going to ask Defense Secretary Rumsfeld, "I was going to--I pick up the phone and say, Mr. Secretary, I've got an interesting question [laughter]. This is what delegation--I don't mean to be dodging the question, although it's kind of convenient in this case, but never--[laughter] I really will--I'm going to call the Secretary and say you brought up a very valid question, and what are we doing about it? That's how I work."




Blackwater Mercenaries Deploy in New Orleans


Jeremy Scahill and Daniela Crespo

10 September 2005

    New Orleans - Heavily armed paramilitary mercenaries from the Blackwater private security firm, infamous for their work in Iraq, are openly patrolling the streets of New Orleans. Some of the mercenaries say they have been "deputized" by the Louisiana governor; indeed some are wearing gold Louisiana state law enforcement badges on their chests and Blackwater photo identification cards on their arms. They say they are on contract with the Department of Homeland Security and have been given the authority to use lethal force. Several mercenaries we spoke with said they had served in Iraq on the personal security details of the former head of the US occupation, L. Paul Bremer and the former US ambassador to Iraq, John Negroponte.

    "This is a totally new thing to have guys like us working CONUS (Continental United States)," a heavily armed Blackwater mercenary told us as we stood on Bourbon Street in the French Quarter. "We're much better equipped to deal with the situation in Iraq."

    Blackwater mercenaries are some of the most feared professional killers in the world and they are accustomed to operating without worry of legal consequences. Their presence on the streets of New Orleans should be a cause for serious concern for the remaining residents of the city and raises alarming questions about why the government would allow men trained to kill with impunity in places like Iraq and Afghanistan to operate here. Some of the men now patrolling the streets of New Orleans returned from Iraq as recently as 2 weeks ago.

    What is most disturbing is the claim of several Blackwater mercenaries we spoke with that they are here under contract from the federal and Louisiana state governments.

    Blackwater is one of the leading private "security" firms servicing the occupations of Iraq and Afghanistan. It has several US government contracts and has provided security for many senior US diplomats, foreign dignitaries and corporations. The company rose to international prominence after 4 of its men were killed in Fallujah and two of their charred bodies were hung from a bridge in March 2004. Those killings sparked the massive US retaliation against the civilian population of Fallujah that resulted in scores of deaths and tens of thousands of refugees.

    As the threat of forced evictions now looms in New Orleans and the city confiscates even legally registered weapons from civilians, the private mercenaries of Blackwater patrol the streets openly wielding M-16s and other assault weapons. This despite Police Commissioner Eddie Compass' claim that "Only law enforcement are allowed to have weapons."

    Officially, Blackwater says its forces are in New Orleans to "join the Hurricane Relief Effort." A statement on the company's website, dated September 1, advertises airlift services, security services and crowd control. The company, according to news reports, has since begun taking private contracts to guard hotels, businesses and other properties. But what has not been publicly acknowledged is the claim, made to us by 2 Blackwater mercenaries, that they are actually engaged in general law enforcement activities including "securing neighborhoods" and "confronting criminals."

    That raises a key question: under what authority are Blackwater's men operating? A spokesperson for the Homeland Security Department, Russ Knocke, told the Washington Post he knows of no federal plans to hire Blackwater or other private security. "We believe we've got the right mix of personnel in law enforcement for the federal government to meet the demands of public safety." he said.

    But in an hour-long conversation with several Blackwater mercenaries, we heard a different story. The men we spoke with said they are indeed on contract with the Department of Homeland Security and the Louisiana governor's office and that some of them are sleeping in camps organized by Homeland Security in New Orleans and Baton Rouge. One of them wore a gold Louisiana state law enforcement badge and said he had been "deputized" by the governor. They told us they not only had authority to make arrests but also to use lethal force. We encountered the Blackwater forces as we walked through the streets of the largely deserted French Quarter. We were talking with 2 New York Police officers when an unmarked car without license plates sped up next to us and stopped. Inside were 3 men, dressed in khaki uniforms, flak jackets and wielding automatic weapons. "Y'all know where the Blackwater guys are?" they asked. One of the police officers responded, "There are a bunch of them around here," and pointed down the road.

    "Blackwater?" we asked. "The guys who are in Iraq?"

    "Yeah," said the officer. "They're all over the place."

    A short while later, as we continued down Bourbon Street, we ran into the men from the car. They wore Blackwater ID badges on their arms.

    "When they told me New Orleans, I said, 'What country is that in?,'" said one of the Blackwater men. He was wearing his company ID around his neck in a carrying case with the phrase "Operation Iraqi Freedom" printed on it. After bragging about how he drives around Iraq in a "State Department issued level 5, explosion proof BMW," he said he was "just trying to get back to Kirkuk (in the north of Iraq) where the real action is." Later we overheard him on his cell phone complaining that Blackwater was only paying $350 a day plus per diem. That is much less than the men make serving in more dangerous conditions in Iraq. Two men we spoke with said they plan on returning to Iraq in October. But, as one mercenary said, they've been told they could be in New Orleans for up to 6 months. "This is a trend," he told us. "You're going to see a lot more guys like us in these situations."

    If Blackwater's reputation and record in Iraq are any indication of the kind of "services" the company offers, the people of New Orleans have much to fear.


    Jeremy Scahill, a correspondent for the national radio and TV program Democracy Now!, and Daniela Crespo are in New Orleans. Visit for in-depth, independent, investigative reporting on Hurricane Katrina. Email:



Blackwater pays price for Iraqi firefight


By Daniel Luban


Asia Times


September 19, 2007


WASHINGTON - The Iraqi government announced on Monday that it had revoked the license of one of the most prominent private US security firms operating in Iraq, a decision that is expected to cause friction with US occupying forces, which have increasingly come to rely on private contractors to meet their logistical and security needs.

The decision to revoke the license of Blackwater USA came one day after a Baghdad firefight left eight civilians dead, the latest in

a string of incidents involving private security contractors that have engendered resentment among Iraqis.

The Iraqi government also promised to prosecute those responsible for the deaths, a demand that is likely to become another source of tension with the US and which drives home the legal gray area in which military contractors currently operate.
Abdul-Karim Khalaf, a spokesman for the Iraqi Interior Ministry, said that contractors believed to be Blackwater employees opened fire on civilians in western Baghdad on Sunday, killing eight and injuring 13 more. US officials stated that the incident began when a convoy of State Department vehicles came under small-arms fire, the Associated Press reported.

"We have canceled the license of Blackwater and prevented them from working all over Iraqi territory," Khalaf told reporters. "We will also refer those involved to Iraqi judicial authorities."

But Blackwater USA spokesperson Anne Tyrrell said in a statement late on Monday, "Blackwater's independent contractors acted lawfully and appropriately in response to a hostile attack in Baghdad on Sunday. Blackwater regrets any loss of life but this convoy was violently attacked by armed insurgents, not civilians, and our people did their job to defend human life."

The expulsion of Blackwater contractors could greatly hamper the US military effort in Iraq, which has come to rely on Blackwater to provide security for many leading officials, including Ambassador Ryan Crocker.

But Prattap Chatterjee of CorpWatch told Inter Press Service that even if Blackwater were banned from operating in Iraq, most of its employees could transfer to similar private security firms and the overall security situation for the US would not change much.

"It's hard to police an itinerant group of mobile warriors," Chatterjee said. "Even if Blackwater itself were banned from operating in Iraq, it's likely that its contractors could find work at [comparable firms like] Aegis or Triple Canopy."

The Associated Press reported that US Secretary of State Condoleezza Rice had telephoned Iraqi Prime Minister Nuri al-Maliki late on Monday, and that the two had agreed to conduct a "fair and transparent investigation" into the killings.

But by Monday evening it remained unclear whether Rice's efforts would be sufficient to head off Iraqi anger at the perceived offences and impunity of Blackwater contractors.

According to figures released in July by the US State and Defense Departments, more than 180,000 civilians are currently employed in Iraq by the US government. The majority are Iraqis, but the figure also includes over 20,000 US citizens and over 40,000 foreign nationals. The figure also means that private contractors now outnumber the approximately 160,000 US troops currently in Iraq.


The most high-profile of these employees are security contractors, the armed forces that are responsible for protecting strategically important people, sites, and convoys. Although private security contractors are forbidden from engaging in offensive operations, their responsibilities can shade into the military when they are attacked.

The private security industry puts the number of security contractors in Iraq at about 30,000, although estimates vary widely.

Blackwater USA, which has an estimated 1,000 employees in Iraq and US$800 million in US government contracts, has been one of the most prominent private security firms operating in the country. Some of its notable assignments have included protecting L Paul Bremer, the former head of the Coalition Provisional Authority, as well as Crocker, who is currently the leading US diplomatic envoy to Iraq.

The firm came into the public eye in March 2004, when four of its employees were killed and mutilated by an Iraqi mob in Fallujah; the incident touched off the unsuccessful US attempt to retake the city in April 2004.
Family members of the four employees slain in Fallujah have since sued Blackwater, alleging that the firm failed to provide necessary equipment and manpower that could have saved the employees' lives.

Blackwater has in the past been criticized for using overly aggressive and confrontational tactics. One prominent critic, retired US Marine Colonel Thomas X Hammes, has argued that the firm's aggressive approach to protection detracts from the overall counterinsurgency effort to win over the local population.

"The problem is in protecting the principal they had to be very aggressive, and each time they went out they had to offend locals, forcing them to the side of the road, being overpowering and intimidating, at times running vehicles off the road, making enemies each time they went out," Hammes told Public Broadcasting Service in 2005.

Sunday's firefight in Baghdad was only the latest in a series of tense incidents involving Blackwater employees in Iraq that have highlighted the ambiguous legal status of private security contractors.


On December 24, 2006, an off-duty and inebriated Blackwater employee shot and killed an Iraqi bodyguard of vice president Adil Abdul-Mahdi. The employee was fired and brought back to the US, but as of yet no charges have been filed in the case.

And in May, a Blackwater guard killed an Iraqi driver near the Interior Ministry in Baghdad, which set off an armed standoff between the Blackwater convoy and Interior Ministry forces.

As private-sector employees, security contractors are not subject to military court-martial, but under a 2004 decree of the Coalition Provisional Authority, they cannot be tried by the Iraqi justice system, either. As of yet, no US contractors have been convicted for killing Iraqi civilians.

The perception among Iraqis that US security contractors can act with impunity has engendered widespread resentment, and led the Iraqi government to vow on Monday that the perpetrators of Sunday's deaths in Baghdad will be tried in Iraqi courts.

The State Department's pledge of a thorough investigation into the deaths appeared designed to head off this same possibility by keeping judgment of the contractors in US hands.

Messages left at Blackwater headquarters requesting comment were not returned.

The company was founded in 1997 by former US Navy Seal Erik Prince, who is also a prominent conservative Christian and heir to a billion-dollar car-mirror fortune. Blackwater currently has about 2,300 employees operating worldwide.




Blackwater vies for jobs beyond security

August Cole


Wall Street Journal

October 15th, 2007



Even as Blackwater USA seeks to extricate itself from a firestorm over the conduct of its private-security forces in Iraq, company founder Erik Prince is laying plans for an expansion that would put his for-hire forces in hot spots around the world doing far more than guard duty.

Blackwater faces criticism in the wake of a Sept. 16 shooting by the company's guards that the Iraqi government says killed 17 civilians, a crisis that appears to threaten the company's livelihood. Yet at Blackwater's headquarters here, where the sound of gunfire and explosions is testament to the daily training of hundreds of law-enforcement and military personnel, Mr. Prince's ambition is on display.

Mr. Prince wants to vault Blackwater into the major leagues of U.S. military contracting, taking advantage of the movement to privatize all kinds of government security. The company wants to be a one-stop shop for the U.S. government on missions to which it won't commit American forces. This is a niche with few established competitors, but it is drawing more and more interest from big military firms.

Already, the 10-year-old company -- which went from renting out shooting ranges for thousands of dollars in its early years to revenue of almost a half-billion dollars last year -- is bidding on military work against industry giants such as Lockheed Martin Corp. and Northrop Grumman Corp. Mr. Prince says he is planning to build Blackwater's expertise in training, transportation and military support while expanding into making everything from remotely piloted blimps to an armored truck called the Grizzly that is tough enough to compete for the Army's latest armored-vehicle contract.

"We see the security market diminishing," Mr. Prince said. He added that the company's focus "is going to be more of a full spectrum," ranging from delivering humanitarian aid to responding to natural disasters to handling the behind-the-lines logistics of moving heavy equipment and supplies.

A continued increase in the outsourcing of national-security work isn't assured. "There's certainly a lot of questions [about privatization] that need to be asked," said Rep. David Price (D., N.C.), who has introduced legislation to broaden the jurisdiction of U.S. criminal law to cover battlefield contractors. "I think this isn't just about one company. This is about governmental practice that has gone quite far without oversight and accountability."

Still, the Defense Department recently tapped Blackwater to compete for parts of a five-year, $15 billion budget to fight terrorists with drug-trade ties. The U.S. government wants to use contractors to help its allies thwart drug trafficking and provide equipment, training and people. Lockheed Martin, Northrop Grumman and Raytheon Co. are among those also in the running for the contracts.

To make good on Blackwater's expansion plans, Mr. Prince must first extinguish the crisis raging over Blackwater employees' conduct as a private security force for the State Department in Iraq. Critics say Blackwater's aggressive tactics, while effective, have unnecessarily led to civilian deaths and complicated already tense relations between the U.S. and the Iraqi government.

Investigators for the House Oversight and Government Reform Committee found that there have been 195 reported shooting incidents and 16 Iraqi casualties involving Blackwater's guards in Iraq since 2005. The company has said it has done 16,000 missions for the State Department since June 2005, using its weapons just 1% of the time.
[Not Just Guns for Hire]

The Bush administration, which has counted heavily on contractors to help the U.S. military in Iraq and elsewhere, has done little to directly help Blackwater in the current controversy. Defense Secretary Robert Gates has ordered a review of how security firms are used in Iraq. And the State Department has distanced itself, requiring that all private-security convoys include a State Department monitor to oversee their actions.

Also last week, Blackwater withdrew from an industry association of defense-services firms as the group began looking into whether Blackwater was following the association's ethical and operational guidelines.

Rather than hunker down, Mr. Prince has abandoned the low profile under which he has operated -- in part because of language in his contract with the State Department -- and mounted a public-relations campaign. Mr. Prince says he stands behind his people who are putting their lives on the line in one of the most dangerous cities in the world. He adds that he has confidence that the Federal Bureau of Investigation and State Department will determine what actually happened during the Sept. 16 shooting.

For Blackwater, the stakes are high because there is a steady stream of cash from the security work. "We're a lot smaller than you think," Mr. Prince said. According to State Department testimony before Congress, Blackwater's share of the department's world-wide spending on security, mainly focused on Iraq, costs the government $360 million a year for guard work and another $113 million for aircraft.

Just six years ago, Blackwater didn't even register a blip on the defense industry's radar screen. When he founded Blackwater in 1997, Mr. Prince wasn't yet 30 years old and had just helped sell his family's auto-parts business for $1.35 billion. Betting that he could capitalize on his experience as a former Navy SEAL, he established a compound in North Carolina to train elite forces in conditions as close to combat as possible.

There are signs everywhere at Blackwater's Moyock compound that Mr. Prince is serious about making Blackwater more indispensable to the government.

The company has a fleet of 40 aircraft, including small turboprop cargo planes that can land on runways too small or rough for the Air Force. The company's aviation unit has done repeat business with the Defense Department in Central Asia, flying small loads of cargo between bases.

Also in the North Carolina compound: an armored-car production line that Mr. Prince says will be able to build 1,000 of the brutish-looking Grizzly vehicles a year. The project arose out of a need for Blackwater to protect its security convoys in Iraq. Drawing on Mr. Prince's family history in the automotive industry, Blackwater made sure that the vehicles are legal to drive on U.S. highways.

Mr. Prince bought a 183-foot civilian vessel that Blackwater has modified for potential paramilitary use. Mr. Prince sees the ship as a possible step into worlds such as search-and-rescue, peacekeeping and maritime training.

Betting big on future work doesn't come cheap, however, and Mr. Prince said that he has spent millions of dollars on research and development to come up with better airships and armored cars.

Some observers say Blackwater is positioned to land more military work, despite the controversy over its operations in Iraq.

"We learned in the last round of big Army contracts, Congress can beat up on Blackwater all they want without regulating them, but it just ends up giving jobs to the Brits and other foreign firms," said Steve Schooner, a professor at the George Washington University law school and a contracting expert. "Blackwater is going to grow, and if they don't, one of their competitors is going to."


Outsourcing Fear

Robert Young Pelton


October 2, 2007


Robert Young Pelton is the author of "Licensed to Kill: Hired Guns in the War on Terror " and the "Guide to the World's Most Dangerous Places." He is also co-founder of . This blog item is about his experiences attending the Congressional hearing into the Blackwater shootings in Iraq written on October 2nd, 2007.

Standing in line to get into Tuesday's hearing, I found myself in a strange position. In front of me, dark-suited and staid Blackwater executives stood waiting to show moral support for their boss, Erik Prince, while the colorful and animated Pink Ladies behind me ticked off reasons he and his industry should be feared.

The two extremes represent the bookends of public debate on the private security industry. The former military men who run Blackwater view their supporting role in the war on terror as both necessary and good, while human rights activists believe there is something deeply wrong with authorizing private citizens to kill other private citizens.

One of the women waiting in line asked me, "How can we find out what these people are doing?"  I suggested she could go to any neighborhood in Baghdad and just ask the locals.

Or better yet--spend a week driving through Baghdad in an unmarked car to see how often convoys blast through intersections, guns bristling from every door, pointed directly at you, giving you mere seconds to get out of the way before the bullets start flying. Feel your own pulse racing as you realize how easily you could have been killed if you'd had your radio a little louder, or hadn't noticed their approach, or hadn't swerved to a stop fast enough.

Companies like Blackwater wield a life-and-death power in Iraq, creating an arrogant misuse of force the United States has put into civilians hands.

I spent time in Sadr City and other areas interviewing the victims of Blackwater and other security companies. Terrified Iraqis, many who did not want to be identified or publicly quoted, told of sudden unexpected encounters with fast moving convoys of SUVs--then death, destruction, or permanent life change as family members were crushed, maimed, killed, or traumatized.

During the time I spent researching my book Licensed to Kill, I realized there were thousands of stories waiting to be heard about excessive force being used on civilians in the name of "security". Not surprisingly, many victims look to a militia to seek some revenge for the transgression in the form of an ambush or IED.

Security companies are reviled; the Iraqis that work for these companies have to cover their faces because they know militias or their neighbors will kill them and or their families.

Military commanders understand that a non-state actor on the battlefield is a wild card--whether death squad, militia or security company. Iraqis know that the undermanned military must rely on contractors to deliver 16 flavors of ice cream, frozen lobster and bullets to the war effort.

The normally timid State Dept, known more for issuing warnings and shutting down embassies when things get rough, has decided that its people must travel the mean streets of Baghdad rather than give in to intimidation. Security contractors are literally the grease that makes our forward-leaning foreign policy in Iraq work.

So when Prince pretends like he is defending the US--justifying violent acts by categorizing it as fighting bad guys--he does it with the support of the State Department, though to the direct detriment of the Iraqi civilians those actions terrify and kill.

When Prince testified that his people "acted appropriately at all times," it made me wonder how many killings he investigated from the Iraqi viewpoint. He has a blind spot towards the damage he causes if he thinks that firing a contractor who just murdered someone somehow fixes the problem. "Window or Aisle" instead of "guilty or not guilty" does not enforce any accountability


It is no coincidence that BW has been involved in shootouts with the Iraqi police. They too have seen the destructive force Blackwater has been authorized to unleash on their citizens. 

When Prince rattles off the various legal umbrellas he operates under, he conveniently ignores that none of his hired guns have been brought up on any charges for anything-despite clear incidents of malfeasance. Blackwater itself faces no ill consequence for deploying unstable men into the war zone.

"Anytime a contractor is abroad, he can be brought up on charges," is the equivalent of saying speeding is illegal while cars whip by at 80 mph without a cop in sight.

Blackwater is the personification of war as a business, violence as a service, and chaos as a product. Prince recognized the lack of sufficient available US troops and provided a privatized solution. He cannot be faulted for that.

Any corporate master would take the position, like Prince did in front of Congress Tuesday, that his people are perfect, his conduct perfect. 

Exposed deceit or corruption at most companies would lead to its own downfall. If it's a monster like Enron, it could conceivably flutter Wall Street for a few days.

But the conduct of companies like Blackwater directly impacts US strategic interests.

The obvious polarization of politicians addressing Prince during the hearing indicates that Republicans are willing to bless the use of lethal force by a private individual against the people they are trying to pacify, while Democrats have yet to quite capture what it is about the industry that makes people so nervous.

I say again: Go to Iraq. Talk to the people. Drive in an unmarked car.  When an armed convoy pushes you off the road with guns drawn, you'll understand the naked fear that Blackwater sells.


Blackwater depicted as an aggressor

A House memo says guards instigate violence, cover up misdeeds and find protection from State Dept. officials.


By Peter Spiegel


Los Angeles Times

October 2, 2007

WASHINGTON — Blackwater USA, the private security contractor under scrutiny for its role in a deadly Baghdad shootout last month, has fired 122 of its armed guards in Iraq since it started protecting U.S. diplomats there three years ago, congressional investigators said Monday.

The firings, most frequently for weapons-related incidents, amount to about 15% of Blackwater's current workforce in Iraq. None of those fired has been subject to any legal proceedings or other sanction, the investigation found.

The disclosures came in a memo about the investigation by aides to Rep. Henry A. Waxman (D-Beverly Hills). He is chairman of the House oversight committee, which is holding a hearing on Blackwater today. Blackwater founder Erik Prince, a former Navy SEAL, is to appear.

The detailed allegations, which the committee said were backed by thousands of documents, depict a security firm that almost routinely opens fire in Iraq's streets, occasionally attempts to cover up its transgressions and is frequently protected from censure and prosecution by its State Department overseers.

The memo describes incidents in which Blackwater guards eagerly rushed to battles involving U.S. soldiers; plowed their armored trucks into civilian vehicles for no apparent reason; and left scenes of violence without assisting wounded civilians.

In the 15-page memo, Waxman's staff says State Department officials ignored misconduct by Blackwater. And in one high-profile incident, the memo says, State officials were directly involved in making sure that a Blackwater employee who had been accused of killing an Iraqi guard while intoxicated was flown out of the country less than 36 hours after the Christmas Eve shooting.

"Even in cases involving the death of Iraqis, it appears that the State Department's primary response was to ask Blackwater to make monetary payments to 'put the matter behind us,' " the memo said.

It added that the most serious consequence for misconduct appeared to be termination of employment.

Of the 122 firings, 28 were for weapons-related incidents, including two for improperly shooting at Iraqis and one for threatening Iraqis with a firearm. Twenty-five people were discharged for drug and alcohol violations, and 16 for "inappropriate/lewd conduct." Ten others were dismissed for aggressive and violent behavior.

Most of Blackwater's armed contractors in Iraq used to be in the U.S. military, many of them in Special Forces units. Blackwater says it does not directly recruit from active-duty military personnel.

A State Department spokesman would not comment on the specific allegations made in the Waxman memo. A Blackwater spokeswoman said she expected the issues to be addressed by officials at today's hearing.

The congressional allegations are particularly sensitive in the aftermath of the Sept. 16 shooting. Iraqi officials have accused Blackwater contractors of firing without provocation.

The Iraqi government has attempted to strip the company of its ability to do business in the country, alleging that Blackwater guards have repeatedly shot at civilians with impunity.

Blackwater and the State Department have insisted that a diplomatic convoy was ambushed in the Sept. 16 incident and that Blackwater guards returned fire only after being fired upon.

In a new development, the FBI said Monday that it was sending a team of investigators to Iraq to assist in the investigation -- at the request of the State Department, an FBI spokesman said.

The State Department acknowledged Monday that one Blackwater employee involved in the incident had left Iraq, but said that the departure was for a medical emergency and that all other guards were still in the country.

The congressional inquiry -- which had access to 437 internal Blackwater incident reports as well as some State Department documents and communications about the incidents -- found 195 shootings involving Blackwater guards since 2005. It deemed Blackwater's use of force "frequent and extensive."

The investigators also found that more than 80% of the time, the Blackwater guards fired first.

"Blackwater is legally and contractually bound to only engage in defensive uses of force to prevent 'imminent and grave danger' to themselves or others," the memo said. "In practice, however, the vast majority of Blackwater weapons discharges are preemptive, with Blackwater forces firing first at a vehicle or suspicious individual prior to receiving any fire."

In what appeared to be the most serious allegation, the memo detailed the fallout from the shooting on Christmas Eve last year. The Blackwater contractor was accused of killing a guard of Iraqi Vice President Adel Abdul Mehdi within Baghdad's fortified Green Zone.

According to Blackwater and State Department documents acquired by the committee, the Blackwater guard was immediately fired, but arrangements were made for him to be flown quickly out of Iraq. The Waxman memo said that the State Department was informed of the travel plans and that the itinerary, which included flights to Jordan and then to the U.S., was approved by State's regional security officer.

In addition, the committee reported obtaining a Christmas Day e-mail by one of the most senior officials in the U.S. Embassy in Baghdad in which the official suggested "a sizeable compensation" to the family of the slain Iraqi guard to "avoid this whole thing becoming even worse." The official's initial proposal was $250,000, the Waxman memo said.

The e-mail, as quoted by the Waxman memo, said: "I think a prompt pledge and apology -- even if they want to claim it was accidental -- would be the best way to assure the Iraqis don't take steps, such as telling Blackwater that they are no longer able to work in Iraq."

The department's Diplomatic Security Service said the official's proposed sums were far too high, according to the memo, and the day after Christmas, State Department and Blackwater officials agreed the company would pay the family $15,000.

Today's committee hearing -- which will include State Department Iraq policy coordinator David M. Satterfield and several other senior State officials -- is also expected to question whether Blackwater has been awarded security contracts in part through political ties to the Bush administration.

According to the congressional investigators, Blackwater won more than $1 billion in contracts from 2001 through 2006, including $593.6 million in 2006 alone. The memo alleges that more than half of the total has been awarded "without full and open competition," and notes that relatives of Blackwater founder Prince have been major Republican contributors.

Prince's brother-in-law is Richard DeVos Jr., former chief executive of Amway Corp. A former Republican gubernatorial candidate in Michigan, DeVos has donated more than $160,000 to the Republican National Committee and Republican congressional committees.

Amway attracted widespread attention in 1993 when it paid President George H.W. Bush $100,000 for an address to the company's distributors. At the time, the speaking fee was one of the largest ever paid to a former government official.


Chief of Blackwater Defends His Employees

by John M. Broder


New York Times

October 2nd, 2007



Erik D. Prince, chief executive of Blackwater USA, told a Congressional committee on Tuesday that his company's nearly 1,000 armed guards in Iraq were not trigger-happy mercenaries, but rather loyal Americans doing a necessary job in hostile territory.

Mr. Prince disputed a Congressional staff report that detailed several instances of Blackwater employees killing Iraqis, fleeing the scene and then the company trying to cover up the violent episodes by whisking the Blackwater employees out of the country and quietly paying off the families of the victims.

He accused Congress and the news media of a "rush to judgment" about Blackwater episodes that left civilians dead, including a chaotic confrontation in a Baghdad square on Sept. 16 that killed at least 17 Iraqis. He said it was too soon to pass judgment on that episode, which is under investigation by the State Department, the F.B.I and the Iraqi government.

"We have 1,000 guys out in the field," he said. "People make mistakes; they do stupid things sometimes." But he added that the company dismissed or disciplined those who broke its rules and that many of the episodes that led to Iraqi deaths came to light only because Blackwater personnel reported them to the State Department.

Mr. Prince's appearance before the House Committee on Oversight and Government Reform was his first extended turn in public. The company he founded 10 years ago has come under fire from critics in Congress and the military who portray its employees, many of them former military special forces operators, as unaccountable soldiers of fortune who are undermining the American mission in Iraq by alienating the Iraqi public.

The hearing also included testimony from two senior State Department officials who offered extensive praise for Blackwater's professionalism in Iraq and insisted that the department had acted properly in investigating cases in which the company's employees were accused of illegal acts.

Representative Henry A. Waxman, the California Democrat who is the committee's chairman, citing evidence of State Department efforts to protect Blackwater employees from investigations by Iraqi officials and to help the company compensate victims of shootings, said it appeared that the department was acting as Blackwater's "enabler."

Mr. Prince, 38, a former Navy Seal, appeared before the committee and its openly skeptical chairman in a trim dark blue suit with his blond hair in a fresh cut. He was accompanied by a handful of Blackwater executives and lawyers.

In the audience were family members of the four Blackwater guards who were killed and whose bodies were burned in an ambush in Falluja in 2004 that marked a turning point in the war.

Mr. Prince said he welcomed additional oversight and new regulations from Congress to clarify the company's roles and legal responsibilities overseas. He said the company was providing a needed service at a reasonable cost. Many Democrats on the committee disputed that, citing the $1,222 that the company charged the government for each day of work by one of its security guards.

Near the end of his more than three hours at the witness table, Mr. Prince said, "If the government doesn't want us to do this, we'll go do something else."

Mr. Prince answered most questions directly, although he demurred on specific questions on Blackwater's government contracts and on the number of Iraqi civilians it had compensated for killing family members or destroying private property.

By agreement with Mr. Waxman and Representative Tom Davis of Virginia, the ranking Republican on the committee, Mr. Prince was not asked questions about the Sept. 16 shootings in Baghdad to avoid prejudicing the current criminal inquiry.

But in prepared testimony, Mr. Prince defended his employees' actions in Baghdad that day. "I stress to the committee and to the American public," he said, "that based on everything we currently know, the Blackwater team acted appropriately while operating in a very complex war zone on Sept. 16."

Mr. Prince, who comes from a wealthy and prominent Republican family in Michigan, said his company's phenomenal rise came from competence, not connections. He said he had not personally lobbied the White House or Congress to get federal contracts.

Asked if his sister-in-law, Betsy DeVos, a major Bush fund-raiser, former Michigan Republican Party chairwoman and wife of the party's 2006 nominee for governor, had interceded on Blackwater's behalf, he smiled and shook his head. "No," he said.

The company had less than $1 million of federal government contracts in 2001. Last year, the company took in nearly $600 million in federal money, most of it under contract with the State Department to provide bodyguards for diplomats and visiting dignitaries, including the dozens of members of Congress who travel to Iraq each year.

Mr. Prince said he was proud of his employees, who have conducted thousands of escort missions in the most dangerous parts of central Iraq without death or serious injury to any of the people they are assigned to protect. Thirty Blackwater workers have been killed in Iraq, he said.

He said Blackwater guards strictly followed rules of engagement set by the State Department, which call for gradual escalation of force before any shots are fired.

The House committee staff found that Blackwater employees had fired their weapons 195 times since early 2005 and in a vast majority of incidents used their weapons before taking any hostile fire. The report also said that in most cases Blackwater guards fired from fast-moving vehicles and immediately fled the scene of any confrontation.

"Our job is to get them off the X - the preplanned ambush site where the bad guys have planned to kill you," Mr. Prince said. "We can't stay and secure the terrorist crime scene investigation."

He forcefully rejected the characterization of Blackwater from some members of the committee as a mercenary army. He said that contractors had served with the United States military since Revolutionary times and that mercenaries were soldiers who fought with foreign armies for money.

"They call us mercenaries," he said. "But we're Americans working for America protecting Americans."

State Department officials who testified after Mr. Prince did largely defended the government's use of security employees from Blackwater and other firms that handle diplomatic security in Iraq, saying the armed guards performed a critical service.

"Without private security details, we would not be able to interface with Iraqi government officials, institutions and other Iraqi civilians critical to our mission there," said David M. Satterfield, the State Department's coordinator for Iraq and a senior adviser to Secretary of State Condoleeza Rice.


Inquiry details Blackwater firings

The private security contractor has sacked 122 of its armed guards in Iraq, a congressional investigation says.


By Peter Spiegel

Los Angeles Times

October 1, 2007,0,5942255.story?coll=la-home-center


WASHINGTON -- Blackwater USA, the private security contractor under scrutiny for killing civilians in a Baghdad shootout last month, has fired 122 of its armed guards in Iraq since it started protecting U.S. diplomats, according to a congressional investigation.

The firings, most frequently the result of weapons-related incidents, amount to more than one-seventh of Blackwater's current workforce in Iraq. None of those fired have been subject to any legal proceedings or other sanctions, the investigation found.

The disclosures came today in a memo by the staff of Rep. Henry A. Waxman (D-Beverly Hills) sent to members of the House Oversight Committee, which is scheduled to hold a hearing on Blackwater on Tuesday. Erik Prince, Blackwater's founder, is scheduled to appear at the hearing.

In the 15-page memo, Waxman's staff said the State Department had either ignored misconduct by Blackwater or, as in one high-profile incident, was involved in making sure a Blackwater employee accused of killing an Iraqi guard while intoxicated was flown out of the country less than 36 hours after the shooting.

"Even in cases involving the death of Iraqis, it appears that the State Department's primary response was to ask Blackwater to make monetary payments to 'put the matter behind us,' rather than to insist upon accountability or to investigate Blackwater personnel for potential criminal liability," the memo said. "The most serious consequence faced by Blackwater personnel for misconduct appears to be termination of their employment."

The State Department and Pentagon are investigating the latest shooting involving Blackwater, which took place Sept. 16 and resulted in the deaths of at least 11 Iraqis. FBI officials said today that the agency would take part in the investigation.

Of the 122 firings, 28 were for weapons-related incidents, including two for improperly firing at Iraqis and one for threatening Iraqis with a firearm. Twenty-five were dismissed for drug and alcohol violations and 16 for "inappropriate/lewd conduct."

Blackwater and State Department spokesmen said that they would not comment on the specific allegations made in the memo, but expected them to be addressed by officials at Tuesday's hearing.

The congressional allegations are particularly sensitive coming in the aftermath of the Sept. 16 shooting, in which Iraqi officials have accused Blackwater contractors of firing without provocation. The Iraqi government has attempted to strip the company of its ability to do business in the country, alleging Blackwater guards have repeatedly shot at civilians with impunity.

Blackwater and State Department officials have insisted a diplomatic convoy was ambushed in the incident, and that Blackwater guards returned fire only after being fired upon.

The FBI said it was sending a team of investigators to Iraq to take part in the investigation. An FBI spokesman said the assistance was being sent at the request of the State Department.

The congressional investigation, which had access to 437 internal Blackwater incident reports, as well as some State Department documents and communications, found there have been 195 shootings involving Blackwater guards since 2005, a rate investigators deemed "frequent and extensive."

The investigators also found Blackwater guards were returning fire in only 16% of those incidents. In the other 163 occasions, more than 80% of the time, Blackwater guards fired first, the committee staff found.

"Blackwater is legally and contractually bound to only engage in defensive uses of force to prevent 'imminent and grave danger' to themselves or others," the congressional staff report said. "In practice, however, the vast majority of Blackwater weapons discharges are preemptive, with Blackwater forces firing first at a vehicle or suspicious individual prior to receiving any fire."

The report noted Prince's ties to ultra-conservative politics in his native state, Michigan. His late father, Edgar Prince, was a west Michigan industrialist and a supporter of conservative causes. The Blackwater chief's sister, Betsy DeVos, is a former Michigan Republican chairwoman who is married to Richard DeVos, a former head of the Michigan-based Amway Corp. and an unsuccessful 2006 GOP gubernatorial candidate.



Blackwatergate: Bush Administration Lets Corporate Criminals Off Again


Charlie Cray,

October 5, 2007


"More than in most criminal law areas, prosecution of corporate criminals has a significant element of general deterrence," the Department of Justice's new strategic plan for 2007-2012 suggests.

Yet everyday we see more evidence that the Bush Administration's Department of Justice has no interest in deterring the ongoing epidemic of corporate crime.

During yesterday's House Oversight and Government Reform Committee hearing on Blackwater, for instance, we heard about how a drunk Blackwater employee killed one of Iraqi Vice President Abdul-Mahdi's bodyguards in the Green Zone on December 24.

Not only was the unnamed Blackwater employee almost immediately flown out of Iraq to avoid prosecution under the Iraqi legal system, but ten months after the case was referred to the Department of Justice, he apparently has yet to face any charges. In fact, not one Blackwater or other private military contract employee has been charged for crimes committed in Iraq.

It's obvious that problems like that are the inevitable result of the use of private contractors. And rather than try to regulate them (as Rep. Price has proposed in his bill -- an approach that I previously endorsed but now do not because, as Jeremy Scahill has pointed out, the law would be virtually unenforceable), we need to push for a reversal of the privatization of war. More on that soon.

But what escapes this discussion so far, is how the Blackwater case fits the broader pattern of the Bush Administration's almost total failure to enforce the law against corporations.

Take the many False Claims Act cases filed by whistleblowers against the U.S. companies contracted in Iraq. As attorney Alan Grayson has testified numerous times before Congress, "the Administration has not actively litigated one single case of fraud, or even breach of contract, against any contractor in Iraq. Iraqis have looked on in disbelief, and then in anger, as one botched Iraq reconstruction job after another has been paid in full, and they see that this Administration won't even protect our own troops from cheating and overcharging. Many Americans feel the same anger."

Indeed, David Rose reports in the November issue of Vanity Fair that whistleblowers have filed dozens upon dozens of lawsuits, trying to prod the Bush Administration to fight contractor fraud. The response: The administration has obtained court order after court order barring the filers and their attorneys from even discussing the cases - i.e. to keep the American people from knowing how bad the cronyism and corruption really is.

Grayson, who has handled many of the cases says "the Defense Department itself has been vigorous in its efforts to protect its troops from war profiteering. … The problem has been that the Bush Administration Justice Department won't do anything to recover the stolen money, much less punish the wrongdoers."

Grayson cited the role of Peter Keisler, Assistant Attorney General of the Civil Division, who not only stifled the cases, but was also responsible for reducing settlement payments with the tobacco industry from $130 billion to $10 billion.

The point is that when it comes to corporate crime, the Department of Justice has become a major sinkhole, where cases of alleged fraud and corruption are routinely referred, and where they often disappear or are "settled" for pennies on the dollar, ending any chance of bringing the war profiteers to justice. (After four years, the Bush Administration recovered just $14 million through settlements of whistleblower cases - which will pay for about half an hour's cost of the war).

The problem goes well beyond the war profiteers. Other corporate crime cases that have been tossed into the prosecutorial blackhole include:

Meanwhile, the Justice Department is rolling over as leading business groups push legislation that would weaken key enforcement tools against corporate crime. A campaign orchestrated by the Chamber of Commerce, the Business Roundtable, the Association of Corporate Counsel and their allies at the ABA and ACLU seeks to pass the so-called "Attorney-Client Privilege Protection Act," which would limit the government's power to pursue corporate fraud by prohibiting federal agencies (including the Department of Justice and the SEC) from demanding that companies cut off legal support for employees under investigation - a policy established by the Justice Department's guidelines for corporate cases, a policy that was key to the prosecution of prominent corporate criminals such as WorldCom's Bernie Ebbers. The Department of Justice has gone on record in opposition to this policy, but has done little to stop the legislation, which members of both parties are supporting.

It also appears that some U.S. attorneys who have tried to do their job and pursue corporate criminals have been subject to political retaliation. According to the Washington Post, for example, John Brownlee, the U.S. attorney responsible for handling the OxyContin case was called by Michael Elston, chief of staff to deputy attorney general McNulty (the person supposedly responsible for leading the Department's efforts to crack down on corporate crime), the night before he secured a guilty plea from Purdue Pharma. Eight days later, Brownlee's name appeared on a list compiled by Elston of prosecutors that officials suggested be fired.

It could be said that a few anecdotes don't paint a complete picture, and I don't doubt that there are still some sincere, adept people laboring long hours within the federal government to crack down on corporate crime. But their numbers are clearly dwinding and there has been little evidence that they have received much support, or that in the aggregate, the Department's efforts are adequate to the scale of the problem.

Moreover, the few reports where the enforcement data has been crunched suggest that things are getting worse.

Experts at the Transactional Records Access Clearinghouse at Syracuse University track federal enforcement data, and say that white collar crime prosecutions credited to the FBI (the nation's lead agency for cracking down on white collar crime) have dropped from 5,031 in FY 2001 to an estimated 2,693 for FY 2006.

And government employee watchdogs at Public Employees for Environmental Responsibility crunched the data and recently reported that EPA's pursuit of criminal cases against polluters has dropped off sharply during the Bush administration, with the number of prosecutions, new investigations and total convictions all down by more than a third.

The same story has been told about occupational safety (OSHA), mine safety (MSHA), product safety (CPSC) and so forth. The cops are not only off the corporate crime beat. They're at the bar getting wasted.

And those who follow the issue closely say weakened enforcement efforts have emboldened corporate criminals such as major polluters, who have begun to flout U.S. environmental laws, threatening progress in cleaning the air, protecting wildlife, eliminating hazardous materials, and countless other endeavors overseen by the EPA.

"You don't get cleanup, and you don't get deterrence," says Eric Schaeffer, who resigned as director of the EPA's Office of Civil Enforcement in 2002 to protest the administration's approach to enforcement and now heads the Environmental Integrity Project, a watchdog group. "I don't think this is a problem with agents in the field. They're capable of doing the work. They lack the political support they used to be able to count on, especially in the White House."

They say that "fish rot from the head" just like corporations and governments. The problem is that when the corruption becomes systemic as it has in recent years, simple decapitations are not enough.

A major overhaul is needed. Until we get that, Congress should be pressed to investigate the Department's handling of the worst corporate crime cases, including Blackwater, and use his nomination process as an opportunity to grill Judge Michael MuKasey about what he will do to make corporate crime the priority it should be.

Charlie Cray is director of the Center for Corporate Policy in Washington, DC.




Blackwater: The U.S.'s Trigger-Happy Guardians

By Robert Scheer, Truthdig

October 5, 2007

How did it come to be that the ostensibly best-educated and most refined representatives of the United States in Iraq are guarded by gun-toting mercenaries who kill innocent civilians? More urgently, why did State Department employees and their bosses in Washington tolerate -- and pay to conceal -- the wanton murder conducted on their watch?

That's the real scandal of the more than $832 million the U.S. State Department paid Blackwater, investigated this week by the House Committee on Oversight and Government Reform, headed by Henry Waxman (D-Calif.). The issue is not simply that of the Blackwater forces' horrid behavior but, more important, why the mayhem they unleashed upon innocent Iraqis was approved and covered up by the Bush administration. For example, why did a top State Department official initially suggest a payment of $250,000 of American taxpayers' money to conceal the uncontested fact that, as the House committee report states, "a drunken Blackwater contractor killed the guard of Iraqi Vice President Adil Abd-al-Mahdi"?

The State Department enabled the Blackwater shooter to be spirited out of the country within 36 hours, and although Blackwater subsequently fired him, he has never faced any criminal charges. Nor have any of the others involved in the 195 shooting incidents Blackwater officials admitted have occurred in the past two years, incidents in which 84 percent of the time Blackwater contractors fired first. According to Blackwater's own documents, the congressional committee reports, "in the vast majority of incidents ... Blackwater shots are fired from a moving vehicle and Blackwater does not remain on the scene to determine if their shots resulted in casualties." During one trip U.S. diplomats made to the Ministry of Oil, 18 different Iraqi civilian vehicles were smashed by the fast-moving motorcade. Those hit-and-runs were conducted in full view of the escorted State Department officials without any of them forcing a subsequent investigation.

Despite all the nonsense about a "liberated Iraq," one of President Bush's favorite phrases, the Iraqis still lack the authority to prosecute American mercenaries occupying their country because of a law pushed through by then-U.S. proconsul Paul Bremer, who was also guarded by Blackwater personnel. Bremer awarded the original no-bid contract to Blackwater, run by a major Republican campaign contributor, Erik Prince, who has donated $225,000 to the GOP. Prince's sister Betsy DeVos was Michigan's Republican Party chair and a Bush-Cheney "Pioneer" who came through with at least $100,000 for their 2004 campaign.

But this is not yet another story about payoffs to the GOP faithful who have predominated in the occupation and are totally untrained for their assigned tasks in the restructuring of a country that they know nothing about. The Blackwater guards know their job all too well, which is to guard top U.S. officials by any means necessary -- including the casual extermination of innocent Iraqis.

Clearly, paid contractors are better for this task than American military personnel, since contractors operate outside of the restraints imposed on ordinary troops by law and by their own consciences. Many Blackwater contractors have been recruited from the U.S. military at much higher pay than direct service to their country afforded them. Whereas a top Army sergeant is paid $51,100 to $69,350 a year in salary, housing and other benefits, a Blackwater contractor (often a retired sergeant) receives six to nine times as much. The U.S. government pays Blackwater $1,222 per day for one Blackwater "Protective Security Specialist," which, the congressional report notes, "amounts to $445,891 per contractor" per year. In an unusual display of disapproval aimed at Blackwater from the right side of the aisle, Rep. John J. Duncan Jr., R-Tenn., noted Tuesday that Army Gen. David H. Petraeus' annual salary amounts to less than half of what some high-ranking Blackwater security officials in Iraq earn.

Of course they're worth it, along with the Iraqi deaths they cause, if your own life is on the line and that's all that matters. This is clearly the position of the State Department employees in Iraq and their bosses in Washington who have covered up for Blackwater for years. As the House committee majority staff states: "There is no evidence in the documents that the Committee has reviewed that the State Department sought to restrain Blackwater's actions, raised concerns about the number of shooting incidents involving Blackwater or the company's high rate of shooting first, or detained contractors for investigation."

No better evidence that the Iraqis are the Indians, attempting as imperfectly as they may to protect their ancestral terrain. But this time the imperial majesty of the United States, represented by American Ambassador Ryan Crocker, is established not by the U.S. cavalry but by a band of hired gunslingers.

Robert Scheer is the co-author of The Five Biggest Lies Bush Told Us About Iraq. See more of Robert Scheer at TruthDig.

© 2007 Independent Media Institute. All rights reserved



Democrats Criticize Immunity Offers to Guards

by David JohnstonNY Times
October 30th, 2007



Prominent Democrats in Congress reacted angrily today to disclosures that State Department investigators made apparently unauthorized offers of immunity to Blackwater security guards in the case of last month’s deadly shooting of 17 Iraqi civilians.

Calling the offers of immunity “an egregious misjudgment,” Representative Henry A. Waxman of California wrote Secretary of State Condoleezza Rice and demanded details about the offers, which he said “raises serious questions about who conferred the immunity, who approved it at the State Department, and what their motives were.”

Most of the guards who took part in the episode were offered what officials described as limited-use immunity, which means that they were promised they would not be prosecuted for anything they said in their interviews with the authorities as long as their statements were true.

Some government officials are calling these offers of immunity a potentially serious investigative misstep that could complicate efforts to prosecute the company’s employees involved in the episode.

Mr. Waxman is chairman of the Committee on Oversight and Government Reform, which has broad investigatory powers that Mr. Waxman has relished using on the Bush administration since Democrats won control of Congress.

Senator Patrick J. Leahy of Vermont, the chairman of the Senate Judiciary Committee and head of the appropriations subcommittee that has budget jurisdiction over the State Department, also issued an angry statement. “In this administration, accountability goes by the boards,” he said. “If you get caught, they will give you immunity. If you get convicted, they will commute your sentence.”

Mr. Waxman asked Ms. Rice when she and other top officials of the State Department first learned that the Blackwater people had been offered immunity. Mr. Waxman asked that details of the episode be made available to his panel by noon Friday.

The White House referred questions about the affair to the State Department, whose chief spokesman, Sean McCormack, responded cautiously to questions.

“The Department of State cannot immunize an individual from federal prosecution, federal criminal prosecutions,” Mr. McCormack said after conferring with department lawyers.

“I can’t in any way, shape or form comment on any arrangements arranged, arrived at with individuals concerning that case,” Mr. McCormack said. But he said he has heard nothing about the episode so far that would preclude prosecution.

The State Department investigators from the agency’s investigative arm, the Bureau of Diplomatic Security, offered the immunity grants even though they did not have the authority to do so, government officials said Monday. They spoke on the condition of anonymity because the investigation is ongoing. Prosecutors at the Justice Department, who do have such authority, had no advance knowledge of the arrangement, they added.

Most of the guards who took part in the episode were offered what officials described as limited-use immunity, which means that they were promised they would not be prosecuted for anything they said in their interviews with the authorities as long as their statements were true.

The immunity offers were first reported Monday by the Associated Press.

“If there’s any truth to this story, then the decision was made without consultation with senior officials in Washington,” one State Department official had said.on Monday

A spokeswoman for Blackwater, Anne E. Tyrell, said: “It would be inappropriate for me to comment on the investigation.”


The immunity deals came as an unwelcome surprise at the Justice Department, which was already grappling with the fundamental legal question of whether any prosecutions could take place involving American civilians in Iraq.

Blackwater employees and other civilian contractors cannot be tried in military courts and it is unclear what American criminal laws might cover criminal acts committed in a war zone. Americans are immune from Iraqi law under a directive signed by the United States occupation authority in 2003 that has not been repealed by the Iraqi parliament.

A State Department review panel sent to investigate the shootings concluded that there is no basis for holding non-Defense Department contractors accountable under United States law and urged Congress and the administration to urgently address the problem.

Earlier this month, the House overwhelmingly passed a bill that would make such contractors liable under a law known as the Military Extraterritorial Jurisdiction Act; the Senate is considering a similar measure.

The government has transferred the investigation from the diplomatic service to the Federal Bureau of Investigation, which has begun re-interviewing Blackwater employees without any grant of immunity in an effort to assemble independent evidence of possible wrongdoing.

Richard J. Griffin, the chief of Diplomatic Security Service resigned last week, in a departure that appeared to be related to problems with his supervision of Blackwater contractors.

In addition, the Justice Department reassigned the investigation from prosecutors in the criminal division who had read the State Department’s immunized statements to prosecutors in the national security division who had no knowledge of the statements.

Such a step is usually taken to preserve the government’s ability to argue later on in court that any case it has brought was made independently and made no use of information gathered under a promise that it would not be used in a criminal trial.

Immunity is intended to protect the Fifth Amendment right against self-incrimination while still giving investigators the ability to gather evidence. Usually people suspected of crimes are not given immunity and such grants are not given until after the probable defendants are identified. Even then, prosecutors often face serious obstacles in bringing a prosecution in cases in which defendants have been immunized.

The courts have made it all but impossible to prosecute defendants who have been granted immunity since the appellate court reversals of the Iran-contra affair convictions against John M. Poindexter, a former national security adviser, and Oliver L. North, a national security aide, who had each been immunized by Congress.


Blackwater's Owner Has Spies for Hire

Ex-U.S. Operatives Dot Firm's Roster

By Dana Hedgpeth

Washington Post

November 3, 2007; A01

First it became a brand name in security for its work in Iraq and Afghanistan. Now it's taking on intelligence.

The Prince Group, the holding company that owns Blackwater Worldwide, has been building an operation that will sniff out intelligence about natural disasters, business-friendly governments, overseas regulations and global political developments for clients in industry and government.

The operation, Total Intelligence Solutions, has assembled a roster of former spooks -- high-ranking figures from agencies such as the CIA and defense intelligence -- that mirrors the slate of former military officials who run Blackwater. Its chairman is Cofer Black, the former head of counterterrorism at CIA known for his leading role in many of the agency's more controversial programs, including the rendition and interrogation of al-Queda suspects and the detention of some of them in secret prisons overseas.

Its chief executive is Robert Richer, a former CIA associate deputy director of operations who was heavily involved in running the agency's role in the Iraq war.

Total Intelligence Solutions is one of a growing number of companies that offer intelligence services such as risk analysis to companies and governments. Because of its roster and its ties to owner Erik Prince, the multimillionaire former Navy SEAL, the company's thrust into this world highlights the blurring of lines between government, industry and activities formerly reserved for agents operating in the shadows.

Richer, for instance, once served as the chief of the CIA's Near East division and is said to have ties to King Abdullah of Jordan. The CIA had spent millions helping train Jordan's intelligence service in exchange for information. Now Jordan has hired Blackwater to train its special forces.

"Cofer can open doors," said Richer, who served 22 years at the CIA. "I can open doors. We can generally get in to see who we need to see. We don't help pay bribes. We do everything within the law, but we can deal with the right minister or person."

Total Intel, as the company is known, is bringing "the skills traditionally honed by CIA operatives directly to the board room," Black said. Black had a 28-year career with the CIA.

"They have the skills and background to do anything anyone wants," said RJ Hillhouse, who writes a national security blog called The Spy Who Billed Me. "There's no oversight. They're an independent company offering freelance espionage services. They're rent-a-spies."

The heart of Total Intel operations is a suite on the ninth floor of an office tower in Ballston, patterned after the CIA counterterrorist center Black once ran, with analysts sitting at cubicles in the center of the room and glass offices of senior executives on the perimeter.

A handful of analysts in their 20s and 30s sit hunched over Macintosh computers, scanning Web sites, databases, newspapers and chat rooms. The lights are dimmed. Three large-screen TVs play in the background, one tuned to al-Jazeera.

The room, called the Global Fusion Center, is staffed around the clock, as analysts search for warnings on everything from terrorist plots on radical Islamic Web sites to possible political upheavals in Asia, labor strikes in South America and Europe, and economic upheavals that could affect a company's business.

"We're not a private detective," Black said. "We provide intelligence to our clients. It's not about taking pictures. It's business intelligence. We collect all information that's publicly available. This is a completely legal enterprise. We break no laws. We don't go anywhere near breaking laws. We don't have to."

Total Intel was launched in February by Prince, who a decade ago opened a law enforcement training center in Moyock, N.C., that has since grown into a half-billion-dollar business called Blackwater Worldwide. Prince has nine other companies and subsidiaries in his Prince Group empire, offering a broad range of security and training services. (One, Blackwater Security, is under scrutiny because of a Sept. 16 shooting incident in Iraq that involved some of its armed guards and in which 17 Iraqi civilians were killed.) Prince built Total Intel by buying two companies owned by Matt Devost, the Terrorism Research Center and Technical Defense, and merging them with Black's consulting group, the Black Group. Devost, a cyber security and risk management expert, is now president of Total Intel.

Devost runs day-to-day operations, overseeing 65 full-time employees. At the Global Fusion Center, young analysts monitor activities in more than 60 countries. They include a 25-year-old Fulbright scholar fluent in Arabic and another person with a master's degree in international affairs, focused on the Middle East, who tracks the oil industry and security in Saudi Arabia.

Black and Richer spend much of their time traveling. They won't say where. It's a CIA thing. Black called at midnight recently to talk about Total Intel from "somewhere in the Middle East."

"I don't spend a lot of time telling people where I am as part of my business," he said. "I am discreet in where I go and who I see. I spend most of my time dealing with senior people in governments, making connections."

Black, who also serves as vice chairman of Blackwater Worldwide, said he also does "a lot more mundane things like go to conferences and trade shows," looking for business opportunities. "I'm going to have to go," he said. "My guy is motioning for me. I have to go meet people."



Government people? Business people?

All kinds.

The company won't reveal its financial information, the names of its customers or other details of its business. Even looking at an analyst's screen at its Global Fusion Center wasn't allowed.

"No, no," Richer said, putting his hands up. "There may be customers' names on there. We don't want you to see."

In their conference room overlooking the Global Fusion Center, Total Intel executives fired off a list of some of their work. Are some recent bombings at major cities in India isolated incidents or should you pull your personnel out? What are the political developments in Pakistan going to mean for your business? Is your company popping up on jihadist Web sites? There's been crime recently in the ports of Mexico, possibly by rogue police officers. Is the government going to be able to ensure safety?

Since 2000, the Terrorism Research Center portion of the company has done $1.5 million worth of contracts with the government, mainly from agencies like the Army, Navy, Air Force, Customs and the U.S. Special Operations Command buying its data subscription or other services.

To Black and Richer, one of the most surprising things about being in the private sector is finding that much of the information they once considered top secret is publicly available. The trick, Richer said, is knowing where to look.

"In a classified area, there's an assumption that if it is open, it can't be as good as if you stole it," Richer said. "I'm seeing that at least 80 percent of what we stole was open."

As he's no longer with the CIA, Richer said he's found that people are more willing to share information. He said a military general in a country he would not name told him of the country's plan to build its next strike fighter. "I listened," Richer said.

"We talked business and where we could help him understand markets and things like that." At the end of the conversation, Richer said, he asked the man, "Isn't that classified? Why are you telling me this?"

Richer said the man answered, "If I tell it to an embassy official I've created espionage. You're a business partner."



Blackwater Mounts a Defense with Top Talent

John M. Broder and James Risen


New York Times

November 5th, 2007



Blackwater Worldwide, its reputation in tatters and its lucrative government contracts in jeopardy, is mounting an aggressive legal, political and public relations counterstrike.

It has hired a bipartisan stable of big-name Washington lawyers, lobbyists and press advisers, including the public relations powerhouse Burson-Marsteller, which was brought in briefly, but at a critical moment, to help Blackwater’s chairman, Erik D. Prince, prepare for his first Congressional hearing.

Blackwater for a time retained Kenneth D. Starr, the former Whitewater independent counsel, and Fred F. Fielding, who is now the White House counsel, to help handle suits filed by the families of slain Blackwater employees.

Another outside public relations specialist, Mark Corallo, former chief spokesman for Attorney General John Ashcroft, quit working for Blackwater late last year because he said he was uncomfortable with what he termed some executives’ cowboy mentality.

Blackwater is pursuing a bold legal strategy, going so far in a North Carolina case as to seek a gag order on the lawyers for the families of four Blackwater employees killed in an ambush in Falluja in 2004. The company argues that the dead men had signed contracts that prohibited them from talking to the press about Blackwater and that this restriction extended to their lawyers and their estates even after death.

One of Blackwater’s Washington lawyers is Beth Nolan, who served as White House counsel for the last two years of the Clinton administration. (Ms. Nolan is leaving private practice at the end of November to become general counsel at George Washington University.) Another is Stephen M. Ryan, a top white-collar defense lawyer and former general counsel of the Senate Governmental Affairs Committee.

The company’s chief Washington lobbyist is Paul Behrends, who worked at the now-defunct Alexander Strategy Group, a Republican firm with close ties to the jailed lobbyist Jack Abramoff. Mr. Behrends, who now works at C & M Capitolink, a Washington lobbying firm, declined to discuss his work for Blackwater, which has paid his company $300,000 since last year.

Anne E. Tyrrell, the company’s chief spokeswoman (and the daughter of R. Emmett Tyrrell, the longtime editor of the conservative magazine American Spectator), said that Blackwater was more comfortable operating in the shadows, but that it decided that it had to strike back publicly. She said, however, that she was not sure that the blitz was succeeding.

“It’s not as if we woke up one day and said it’s time to get out there,” she said. “We were put there. But there’s only so much you can do in one month, as opposed to 10 years of largely remaining silent.”

“There’s still a lot of misinformation out there,” she added, “but I think we have taken positive steps toward correcting the record.”

In the aftermath of the Sept. 16 shootings in Baghdad that Iraqi authorities said left 17 Iraqis dead, the formerly reclusive Mr. Prince has conducted a series of media interviews intended to polish Blackwater’s tarnished brand. The company has changed the name of its major operating division from Blackwater USA to Blackwater Worldwide and toned down its warlike logo. It has sent out a mass e-mail message to workers, suppliers and clients hoping to inspire them to send letters to members of Congress and make other public statements of support.

As reports poured out of Baghdad about the September shootings by several Blackwater guards, the company felt it could not adequately defend itself. The company operates under confidentiality agreements with the State Department, which employs 845 Blackwater guards to protect its diplomats in Iraq. But after Mr. Prince testified for more than three hours before the House Oversight and Government Reform Committee on Oct. 2, the company said it felt free to speak out.

“It was no picnic to keep our contractual obligations not to talk,” said one person close to Blackwater, who insisted on not being named. “We wrote the book on how not to get good P.R.”


In the days leading up to the hearing before the oversight panel, which is led by Representative Henry A. Waxman, a liberal California Democrat who has no love for Blackwater, the company hired Burson-Marsteller, a global public relations firm. Blackwater said it hired the company on a temporary basis to help prepare Mr. Prince for his testimony.

Mark J. Penn, Burson-Marsteller’s chairman and a senior adviser to Senator Hillary Rodham Clinton’s presidential campaign, said in an e-mail message that he had no direct contact with Blackwater and that the work was landed by BKSH, a subsidiary. BKSH is a political consulting firm led by Charles R. Black Jr., an adviser to President Bush and his father, and R. Scott Pastrick, a top Democratic fund-raiser. Mr. Penn said that a BKSH associate had worked briefly in Iraq and met several Blackwater personnel, who steered the work to his firm.

In the days following the hearing, Blackwater began its media offensive. Because Mr. Prince had been required to speak publicly about his firm before Congress, Blackwater officials reasoned that they could now go to the news media.

They mounted an impressive publicity campaign, granting a series of interviews with Mr. Prince in quick succession to, among others, the CBS program “60 Minutes”; CNN; NBC; PBS; The Washington Post; and The Detroit Free Press. The central message in all of the interviews was that Blackwater was doing only what the State Department asked it to do, that it had not lost a single official under its protection while 30 Blackwater guards had been killed, and that if the company lost its $1.2 billion contract with the State Department it would find other ways to make money.

Blackwater officials clearly believe that Mr. Prince, a young, clean-cut former member of the Navy Seals, is their best asset as they try to dig out from their public relations hole. “It just got to the point where we all decided it was time to defend the company and there is no one better to do that than Mr. Prince,” Ms. Tyrrell said.

Mr. Prince’s appearances helped dispel the notion, as one Blackwater insider put it, “that he would be some guy with a peg leg and a parrot on his shoulder and an eye patch.”

The company also released two detailed reports about two of its most controversial operations, the Falluja ambush in 2004 and the crash of a Blackwater-operated military flight in Afghanistan that same year that killed six people. The papers were intended to rebut staff reports from Mr. Waxman’s committee. The company, citing current investigations, has not produced a similar report about the September shootings in Baghdad.

But the company still suffers from the image that its workers are reckless gunslingers charging around Iraq with impunity.

Mr. Corallo, the former Blackwater public relations adviser, said this image was due in part to the company’s culture and attitude.

He said he quit working for the company last year because of personality conflicts with some top executives, although he praised Mr. Prince as a “visionary.”

“They do have a few people at the upper levels of Blackwater who are a little bit unsophisticated and rather disdainful of anything that goes to oversight and due process,” he said. “The reason they get the caricature that’s been created is that they do have a few cowboys in their midst.”