Private U. S.-based security firm involved in military security operations in Afghanistan and Iraq. Blackwater USA (known as Blackwater Worldwide since October 2007) is one of a number of private security firms hired by the U. S. government to aid in security operations in Afghanistan and Iraq. The company was founded in 1997 by Erik D. Prince, a former Navy SEAL, wealthy heir to an auto parts fortune, and staunch supporter of the Republican Party. He serves as the firm’s chief executive officer (CEO). The firm was named for the brackish swampy waters surrounding its 6,000-plus acre headquarters and training facilities located in northeastern North Carolina’s Dismal Swamp.
Details of the privately held company are shrouded in mystery, and the precise number of paid employees is not publicly known. A good number of its employees are not U. S. citizens. Blackwater also trains upwards of 40,000 people per year in military and security tactics, interdiction, and counterinsurgency operations. Many of its trainees are military, law enforcement, or civilian government employees, mostly American, but foreign government employees are also trained here. Blackwater claims that its training facilities are the largest of their kind in the world. Nearly 90 percent of the company’s revenues are derived from government contracts, two-thirds of which are no-bid contracts. It is estimated that since 2002 Blackwater has garnered U. S. government contracts in excess of $1 billion.
Following the successful ouster of the Taliban regime in Afghanistan in late 2001, Blackwater was among the first firms to be hired by the U. S. government to aid in security and law enforcement operations there. In 2003 after coalition forces ousted the regime of Iraqi president Saddam Hussein, Blackwater began extensive operations in the war-ravaged country. Its first major operation here included a $21 million no-bid contract to provide security services for the Coalition Provisional Authority and its chief, L. Paul Bremmer. Since then, Blackwater has received contracts for several hundred million dollars more to provide a wide array of security and paramilitary services in Iraq. Some critics-including a number of congressional representatives and senators-took issue with the centrality of Blackwater in Iraq, arguing that its founder’s connections to the Republican Party had helped it garner huge no-bid contracts.
Although such information has not been positively verified by either Blackwater or the U. S. government, it is believed that at least 30,000 private security contractors are in Iraq; some estimates claim as many as 100,000. Of that number, a majority are employees or subcontractors of Blackwater. The State Department and the Pentagon, which have both negotiated lucrative contracts with Blackwater, contend that neither one could function in Iraq without resorting to the use of private security firms. Indeed, the use of such contractors has helped keep down the need for even greater numbers of U. S. troops in Iraq and Afghanistan. After Hurricane Katrina smashed the U. S. Gulf Coast in 2005, the U. S. government contracted with Blackwater to provide security, law enforcement, and humanitarian services in southern Louisiana and Mississippi.
In the course of the Iraqi insurgency that began in 2003, numerous Blackwater employees have been injured or killed in ambushes, attacks, and suicide bombings. Because of the instability in Iraq and the oftentimes chaotic circumstances, some Blackwater personnel have found themselves in circumstances in which they felt threatened and had to protect themselves by force. This has led to numerous cases in which they have been criticized, terminated, or worse for their actions. Because they are not members of the U. S. military they often fall into a gray area, which can elicit demands for retribution either by the American government or Iraqi officials.
Loose oversight of Blackwater’s operations has led to several serious cases of alleged abuse on the part of Blackwater employees. One of the most infamous examples of this occurred in Baghdad on September 16, 2007. While escorting a diplomatic convoy through the streets of the city, a well-armed security detail comprised of Blackwater and Iraqi police mistakenly opened fire on a civilian car that it claimed had not obeyed instructions to stop. Once the gunfire began, other forces in the area opened fired. When the shooting stopped, 17 Iraqi civilians lay dead, including all of the car’s occupants. Included among the dead was a young couple with their infant child. At first there were wildly diverging accounts of what happened, and Blackwater contended that the car contained a suicide bomber who had detonated an explosive device, which was entirely untrue. The Iraqi government, however, faulted Blackwater for the incident, and U. S. Army officials backed up the Iraqi claims. Later reports state that the Blackwater guards fired on the vehicle with no provocation.
The Baghdad shootings caused an uproar in both Iraq and the United States. The Iraqi government suspended Blackwater’s Iraqi operations and demanded that Blackwater be banned from the country. It also sought to try the shooters in an Iraqi court. Because some of the guards involved were not Americans and the others were working for the U. S. State Department, they were not subject to criminal prosecution. In the U. S. Congress, angry lawmakers demanded a full accounting of the incident and sought more detailed information on Blackwater and its security operations.
To make matters worse, just a few days after the shootings federal prosecutors announced that they were investigating allegations that some Blackwater personnel had illegally imported weapons into Iraq that were then being supplied to the Kurdistan Workers’ Party, which has been designated by the United States as a terrorist organization.
These incendiary allegations prompted a formal congressional inquiry, and in October 2007 Erik Prince, Blackwater’s CEO, was compelled to testify in front of the House Committee on Oversight and Government Reform. Prince did neither himself nor his company much good when he stonewalled the committee and told them that Blackwater’s financial information was beyond the purview of the government. He later retracted this statement, saying that such information would be provided upon a “written request.” Blackwater then struggled under a pall of suspicion, and multiple investigations were soon under way involving the incident in Iraq, incidents in Afghanistan, and the allegations of illegal weapons smuggling by company employees. In the meantime, Congress considered legislation that would significantly tighten government control and oversight of private contractors, especially those involved in sensitive areas such as military security. In February 2009 Blackwater officials announced that the company would now operate under the name Xe, noting that the new name reflected a “change in company focus away from the business of providing private security.” There is no meaning in the new name, which was decided upon after a year-long internal search.
In June 2009 the Central Intelligence Agency (CIA) disclosed to Congress that in 2004 it had hired members of Blackwater as part of a secret effort to locate and assassinate top Al Qaeda operatives. Reportedly Blackwater employees assisted with planning, training, and surveillance, but no members of Al Qaeda were captured or killed by them.
2009 XE Services LLC
In February 2009, Blackwater announced that it would change its name again, to “Xe Services LLC”, as part of a company-wide restructuring plan. Subsequently, it reorganized its business units, added a corporate governance and ethics program, and established an independent committee of outside experts to supervise compliance structures.
Prince announced his resignation as CEO on March 2, 2009. He remained as chairman of the board but was no longer involved in day-to-day operations. Joseph Yorio was named as the new president and CEO, replacing Gary Jackson as president and Prince as CEO; Yorio and his team are credited with restructuring the company, resolving several legal issues, implementing numerous internal controls and compliance programs and improving the top and bottom line all the while positioning it for sale. Danielle Esposito was named the new chief operating officer and executive vice president.
In 2009, Prince announced that he would relinquish involvement in the company’s day-to-day business in December, along with some of his ownership rights. He also said he considered becoming a teacher. In late 2010, Prince moved to Abu Dhabi, where he subsequently started another security services company, Reflex Responses.
In 2010, a group of private investors purchased Xe’s training facility in Moyock, NC, and built a new company around it named Academi. The new ownership instituted a Board of Directors and entirely new management system, including a full compliance and governance program. The Academi Board of Directors includes former Attorney General John Ashcroft, former White House Counsel and Vice Presidential Chief of Staff Jack Quinn, retired Admiral and former Director of the National Security Agency Bobby Ray Inman, and Texas businessman Red McCombs, who serves as Chairman of the Board. Jack Quinn and John Ashcroft both serve as Independent Directors of Academi.
In May 2011, Academi named Ted Wright as CEO. Wright hired Suzanne Rich Folsom as Academi’s chief regulatory and compliance officer and deputy general counsel. The Academi Regulatory and Compliance team won the National Law Journal’s Corporate Compliance Office of the Year Award for 2012.
In 2012, Brigadier General (ret.) Craig Nixon was named the new CEO of Academi.
References Buzzell, Colby. My War: Killing Time in Iraq. New York: Putnam, 2005. Engbrecht, Shawn. America’s Covert Warriors: Inside the World of Private Military Contractors. Dulles, VA: Potomac Books, 2010. U. S. Congress. Private Security Firms: Standards, Cooperation, and Coordination on the Battlefield; Congressional Hearing. Darby, PA: Diane Publishing, 2007.