Tag Archives: Erik Prince

Blackwater’s Slap on the Wrist for Gun Smuggling and Arms Trafficking

By:  Tuesday August 7, 2012 6:41 pm

Viewed from one perspective the facts that Blackwater has admitted to amount to running guns–precisely the crime that Fast and Furious attempted to combat. Viewed from another perspective, Blackwater’s actions amount to the same kind of thing Viktor Bout is in prison for: making weapons deals with sanctioned entities.

But Blackwater will suffer no more than a wrist slap for such things: a $7.5 million fine, a third of which can be credited to implementing a compliance system that is substantially already in place, as well as a $42 million Consent Agreement fine it signed two years ago. (It has paid two $6 million installments of the $42 million fine it owes to State Department; even while it continues to get contracts with State)

That doesn’t make the Deferred Prosecution Agreement any less funny.

There are the repeated lists of all the aliases of Blackwater–by my count some 37 companies or subsidiaries. Just in case you needed master list of how many times it has tried to change its identity.

There’s the bragging about Blackwater’s new compliance structure (paid for, presumably, as part of this fine), featuring John Ashcroft (the monitor on one of the most corrupt DPAs ever) and former AIG (AIG?!?!?!) compliance whiz Suzanne Folsom.

There’s the way it says Blackwater can’t charge the government any aspect of its fine (what is left after its credit for compliance infrastructure, that is). Only in DPAs is money not fungible, I guess.

There’s the way they try to guard against Blackwater rebranding again (the DPA is written in the name Academi and invokes Xe) by selling itself to someone else. (There’s apparently an Erik Prince declaration I’m going to have to chase down tomorrow.)

And there’s the way that of those who signed this DPA for Blackwater, only the name of the attorney is included in the text.

Now maybe I shouldn’t be laughing so hard. The DPA implies that the US Attorney in North Carolina’s Eastern District, Thomas Walker, is still investigating. Maybe Erik Prince will go to jail? Ha!

But this DPA is more a case study in the myriad ways corporate entities escape all justice in this day and age than any real accountability for the same kind of actions we impose stiff sentences on others for.

As always, the lesson is if you’re going to commit crimes, do it as a corporation.


“He is hoping to build an empire in the desert, far from the trial lawyers” to train anti-Iranian soldiers

By:  Saturday May 14, 2011 7:25 pm

The NYT has a story on how Erik Prince’s latest scam–to hide from the trial lawyers–involves using retired US servicemen to train Colombian mercenaries to “defend” the United Arab Emirates.

Mr. Prince, who resettled here last year after his security business faced mounting legal problems in the United States, was hired by the crown prince of Abu Dhabi to put together an 800-member battalion of foreign troops for the U.A.E., according to former employees on the project, American officials and corporate documents obtained by The New York Times.

The force is intended to conduct special operations missions inside and outside the country, defend oil pipelines and skyscrapers from terrorist attacks and put down internal revolts, the documents show. Such troops could be deployed if the Emirates faced unrest or were challenged by pro-democracy demonstrations in its crowded labor camps or democracy protests like those sweeping the Arab world this year.

And Erik Prince said he resettled to UAE because of the churches!

Given Prince’s happiness about the legal climate in UAE you’d think he’d be able to wander publicly. But he appears to be exercising the same kind of tradecraft that Osama bin Laden did to evade spies in recent years.

To keep a low profile, Mr. Prince rarely visited the camp or a cluster of luxury villas near the Abu Dhabi airport, where R2 executives and Emirati military officers fine-tune the training schedules and arrange weapons deliveries for the battalion, former employees said. He would show up, they said, in an office suite at the DAS Tower – a skyscraper just steps from Abu Dhabi’s Corniche beach, where sunbathers lounge as cigarette boats and water scooters whiz by. Staff members there manage a number of companies that the former employees say are carrying out secret work for the Emirati government.

But ultimately, this seems to be about Iran.

The U.A.E.’s rulers, viewing their own military as inadequate, also hope that the troops could blunt the regional aggression of Iran, the country’s biggest foe, the former employees said.

[snip]

Although there was no expectation that the mercenary troops would be used for a stealth attack on Iran, Emirati officials talked of using them for a possible maritime and air assault to reclaim a chain of islands, mostly uninhabited, in the Persian Gulf that are the subject of a dispute between Iran and the U.A.E., the former employees said. Iran has sent military forces to at least one of the islands, Abu Musa, and Emirati officials have long been eager to retake the islands and tap their potential oil reserves.

[snip]

Some security consultants believe that Mr. Prince’s efforts to bolster the Emirates’ defenses against an Iranian threat might yield some benefits for the American government, which shares the U.A.E.’s concern about creeping Iranian influence in the region.

“As much as Erik Prince is a pariah in the United States, he may be just what the doctor ordered in the U.A.E.,” said an American security consultant with knowledge of R2′s work.

So, in a bid to avoid America’s trial lawyers, Blackwater 3.0 is holed up in UAE training unqualified Colombians so that the Blackwater guys have an excuse to shoot weapons against Iran?

Really?

Is this what we’ve come to?

Update: I edited this post to cut down on the blockquotes from NYT.


Fred Johnson Takes on Blackwater in Erik Prince’s Home Town

By:  Tuesday October 19, 2010 10:46 am

Fred Johnson is the Democratic candidate for Congress in MI’s 2nd Congressional District.

When his opponent–Crazy Pete Hoekstra lackey Bill Huizenga–claimed to want to cut costs in a debate the other day, Johnson called him on his hypocrisy regarding cutting spending on military contractors, starting with Blackwater. [my transcript]

Johnson: When that one question [about Blackwater] came up [in an earlier debate], we have a private corporation, that is taking taxpayer dollars to basically making profit off of war, they all agree that yeah, they should keep on using those kind of entities. If we’re going to have everything on the table–if you’re really serious about spending, if you’re really serious about cutting back, trimming the budget–those kind of things have to go too. Not to mention that those kind of corporations are beyond the purview of the US Constitution, the US Code of Military Justice, and they often times present as much a headache when it comes to diplomacy and when it comes to good relations, some of those countries being our defense partners.

So it’s kind of disingenuous to say, you know, we have a prioritization. I’m talking about, not just talking about it, I’m talking about actually doing it. I’m talking about going down there with the vision and the courage to make those cuts.

Johnson’s call on Huizenga’s hypocrisy is interesting for two reasons. First, MI-2 includes Holland (where Johnson lives). That’s Erik Prince’s home town.

But just as interesting–the reason why Huizenga and other Republicans in this part of the world are particularly vulnerable to this claim of hypocrisy–since they’re reliant on funding from Prince’s sister Betsy and her hubby, Dick DeVos, and boast about being high school friends with Prince.

Mind you, Republicans nationally are dependent on DeVos cash. But at a local level this hypocritical demand from Republicans that we keep paying more for security services that make us less safe so that their donors’ families can keep getting rich is palpable.

Help Fred Johnson.


If Blackwater Couldn’t Keep Benazir Bhutto Safe, Why Is State Still Contracting with Them?

By:  Wednesday September 15, 2010 1:19 pm

When Erik Prince testified before the Oversight Committee on October 2, 2007, he boasted that no one under Blackwater’s protection had ever been seriously hurt or killed.

No individual protected by Blackwater has ever been killed or seriously injured. There is no better evidence of the skill and dedication of these men.

At precisely the same time as Prince was making that boast, Blackwater was negotiating a protection deal that would not end so successfully.

The Nation has previously reported on Blackwater’s work for the CIA and JSOC in Pakistan. New documents reveal a history of activity relating to Pakistan by Blackwater. Former Pakistani Prime Minister Benazir Bhutto worked with the company when she returned to Pakistan to campaign for the 2008 elections, according to the documents. In October 2007, when media reports emerged that Bhutto had hired “American security,” senior Blackwater official Robert Richer wrote to company executives, “We need to watch this carefully from a number of angles. If our name surfaces, the Pakistani press reaction will be very important. How that plays through the Muslim world will also need tracking.” Richer wrote that “we should be prepared to [sic] a communique from an affiliate of Al-Qaida if our name surfaces (BW). That will impact the security profile.” Clearly a word is missing in the e-mail or there is a typo that leaves unclear what Richer meant when he mentioned the Al Qaeda communiqué. Bhutto was assassinated two months later. Blackwater officials subsequently scheduled a meeting with her family representatives in Washington, in January 2008.

This detail–though not surprising–raises more questions than offer answers. Like what the hell word is that is missing before “communique”? Was Blackwater proposing to mitigate the PR problem of public association with Bhutto just as scrutiny over the Nissour Square massacre was most intense by inventing a fake communique, of some sort, from al Qaeda? (Elsewhere in Scahill’s piece, he describes a training course Blackwater offered on al Qaeda tactics, including propaganda. So presumably, they considered themselves experts in creating fake al Qaeda propaganda.

And if Blackwater had a previously unrevealed failure–a really costly, spectacular one–then why is State Department still contracting with them for such protective services? Not least given that Blackwater would presumably be protecting people in Afghanistan against some of the same creeps who presumably bested Blackwater when they assassinated Bhutto?

Moreover, given that the State Department gave Blackwater follow-on contracts after Blackwater failed to keep Bhutto safe, then have they at least done a real assessment of what went wrong? Last we heard from Blackwater publicly, they had a purportedly perfect record. But they don’t. And no one told us that. If we’re going to give another $120,000,000 to Blackwater, have we at least studied, first, what went wrong with Blackwater’s notable failure with Bhutto?


Blackwater Served as Monsanto’s Intelligence Arm

By:  Wednesday September 15, 2010 10:08 am

Jeremy Scahill has a new piece on Blackwater that is fairly incendiary.

Among other things (I’ll have more to say later), he reveals that Blackwater provided Monsanto with security services in 2008-2009.

According to internal Total Intelligence communications, biotech giant Monsanto—the world’s largest supplier of genetically modified seeds—hired the firm in 2008–09. The relationship between the two companies appears to have been solidified in January 2008 when Total Intelligence chair Cofer Black traveled to Zurich to meet with Kevin Wilson, Monsanto’s security manager for global issues.

After the meeting in Zurich, Black sent an e-mail to other Blackwater executives, including to Prince and Prado at their Blackwater e-mail addresses. Black wrote that Wilson “understands that we can span collection from internet, to reach out, to boots on the ground on legit basis protecting the Monsanto [brand] name…. Ahead of the curve info and insight/heads up is what he is looking for.” Black added that Total Intelligence “would develop into acting as intel arm of Monsanto.” Black also noted that Monsanto was concerned about animal rights activists and that they discussed how Blackwater “could have our person(s) actually join [activist] group(s) legally.” Black wrote that initial payments to Total Intelligence would be paid out of Monsanto’s “generous protection budget” but would eventually become a line item in the company’s annual budget. He estimated the potential payments to Total Intelligence at between $100,000 and $500,000. According to documents, Monsanto paid Total Intelligence $127,000 in 2008 and $105,000 in 2009. [my emphasis]

Click through for the denial Monsanto’s Wilson gave to Scahill: basically, he denied that Monsanto used Blackwater to target animal rights activists, but did use them for “scanning the content of activist blogs and websites.” Not to mention work in Asia and Latin America.

It’s bad enough to have PA’s contractor developing intelligence reports on anti-drilling activists to send to lobbyists. It’s yet another thing when Blackwater’s thugs are tracking those activists.


Erik Prince’s Long Form Graymail

By:  Friday September 10, 2010 6:21 am

Remember that Vanity Fair tell all in which Erik Prince offered new details about Blackwater ops? Though Michael Hayden has suggested Prince made up some of the details, it seemed to be a form of graymail targeted at those who approved Blackwater ops now under criminal investigation. Apparently, there’s a long form version.

Erik Prince, chairman of the private security firm once known as Blackwater, is writing a memoir that says Democratic officials in two administrations approved of his most sensitive and controversial operations, sources close to the company, now known as XE Services, said. [snip] But two sources, speaking independently, said that Prince will name Democratic officials in both the Clinton and Obama administrations who allegedly approved of clandestine intelligence operations carried out by Blackwater on behalf of the CIA and other government agencies. “He’s going to drop the names of people who, before, were saying, ‘Yeah, go kill Osama Bin Laden’ and stuff like that, but went sideways on him when the investigations began,” said one of the sources, who spoke only on condition of anonymity in order to maintain relations with the company.

Now, I’m all in favor of Erik Prince, safe in his haven in UAE, telling the details of what he’s been doing in our name. I’d sure like to know about them. But Prince is nuts to think that anything he’ll reveal by the election will affect the success or failures of the Democrats.

“They think this will destroy the Democratic Party in the elections,” he said of Prince and his friends.

Even supposing Prince provides proof that people in the Obama Administration signed off on assassination … the response to Obama’s targeting of an American citizen for assassination has been a giant, collective yawn. And if Prince were to reveal that Clinton asked Blackwater to assassinate Osama bin Laden before 9/11? Wouldn’t that suggest, first of all, that Blackwater failed to accomplish the task? And wouldn’t it suggest, secondly, that Clinton was more of a bad ass about bin Laden than the Bushies up until the time when it was too late? Furthermore, we know that the Obama Administration continues to employ Blackwater.

Sure, learning that Obama employed Blackwater for tasks that should be limited to government employees would piss someone like me off. But the rest of the country would go back to watching Koran burnings and football.

The Spy Talk article on Prince’s memoir offers one more curious detail: that Parsons is the leading bidder to buy the company formerly known as Blackwater. Parsons is notable because it was almost certainly the most corrupt, incompetent construction contractor wasting reconstruction dollars in Iraq. Not only that, but it had ties every bit as close as Halliburton did to top members of the Administration.

I’d like to connect that news with another of yesterday’s big stories, the news that the Police Academy Parsons built in Iraq has shit raining from the ceiling.

The Baghdad Police College, hailed as crucial to U.S. efforts to prepare Iraqis to take control of the country’s security, was so poorly constructed that feces and urine rained from the ceilings in student barracks. Floors heaved inches off the ground and cracked apart. Water dripped so profusely in one room that it was dubbed “the rain forest.”

They’re related, you see, because Parsons also had extraordinary access to Karl Rove. When Parsons signed this contract in 2004, its lobbyist was a woman named Karen Johnson. And in addition to being the business partner of Dick Cheney’s hunting buddy, Katharine Armstrong, Karen Johnson is known to be close to Karl Rove. So close, in fact, that it is rumored they’re lovers. At one point, Karen Johnson was not entirely forthcoming about her ties to the White House. When she first filled out her lobbying disclosure forms for 2004, the year in which she helped Parsons get a contract to build a shit shower instead of a police academy, Johnson forgot that she had been, um, lobbying the White House.

If Parsons were to take over the company formerly known as Blackwater, it would single source all the worst in contracting: cowboys with guns immune from the law, contractors who do shitty (literally) work for inflated amounts of taxpayer dollars, and influence peddling. What a perfect next chapter for Blackwater!

Update: Jeremy Scahill suggests there are Democrats worried about this. I guess this may be more about embarrassing those Democrats–like those currently or formerly on the intelligence committees, presumably–who signed off on Blackwater activities.


“It was the privatization of warfare.”

By:  Tuesday August 24, 2010 1:49 pm

I owe ROTL a hubcap, apparently, because while I’ve been distracted with the joy of moving in a historically bad housing market, the US won its long extradition battle over Viktor Bout.

Coincidentally, I actually found Douglas Farah’s book on Bout, Merchant of Death, half-read a few weeks ago, as I was packing up the house. So in the days before the Thai court agreed with the US extradition request, I picked up reading of Bout’s exploits during the Afghan and Iraqi wars. And reading the story at this distance, particularly given Russian efforts to prevent Bout’s extradition, I couldn’t help but think the US underplayed Russian involvement in Bout’s exploits.

Which one of the men who investigated Bout for years, Robert Eringer, seems to support.

Former FBI counterintelligence Robert Eringer, who until recently headed the Monaco Intelligence Service, doesn’t think so. In 2002, Eringer investigated Bout’s money-laundering activities, which were allegedly facilitated through Monaco by US-registered company Pastor International. Eringer claims that Russian weapons merchants, including Bout, used the company to launder nearly one billion dollars in sales profits between 1996 and 2001. But Eringer claims to have made another discovery during his investigation: namely that Bout had been “co-opted by the Russian external intelligence service (SVR)” and had been offered shelter by the Russian Federal Security Service in Moscow, despite being named in an international arrest warrant issued by Interpol.

I guess we’ll see whether there have been more formal ties between Bout and Russia (as well as what role Russian organized crime plays in the relationship) as his trial develops here in the states.

But the question is worth asking for what it might say about how countries enact foreign policy as globalization continues to erode the nation-state. In that model, ostensibly private arms dealers repeat the role our government (and Russia’s) did during the Cold War, destabilizing countries in a fight over spheres of influence. Of course, as weapons proliferate, the danger of it all increases.

Here’s what Farah had to say to NYT about the US’ long pursuit of Bout.

Mr. Farah said the United States began pursuing Mr. Bout in the 1990s after officials became alarmed that he was making conflicts more deadly by showering warring parties with weapons on an unprecedented scale, including weapons as sophisticated as attack helicopters.

“They became aware in the mid-1990s that he had fundamentally altered the way wars were being waged,” Mr. Farah said. “He was flying in planeloads of this stuff. There was a lot of alarm that we were facing something new. It was the privatization of warfare.”

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So Why Can’t Democrats Rein in the Intelligence Industrial Complex?

By:  Wednesday July 28, 2010 11:56 am

Jeff Stein had a piece on the response to the WaPo article on intelligence contracting the other day that started with this question:

House Speaker Nancy Pelosi has long wanted more members of Congress to know what’s going on at the CIA, but why doesn’t she announce a full-fledged investigation into the intelligence contractor mess, complete with televised hearings?

In it, he quotes from someone he describes as a Pelosi aide saying there’s little will to get this done.

Back to Pelosi: An aide, who like all the others speaks only on condition of anonymity, said she “certainly sees a need to step up oversight.” But after taking an informal sounding, he added, Pelosi found “there wasn’t any momentum for it.”

I asked her about that quote when we talked on Saturday. Her first response was to deny that such a quote could have come from one of her staffers, and to suggest it had come from the intelligence committee (which is what her office said in a follow-up to me as well).

Pelosi: You mean someone from the intelligence committee? Not my staff or my office.

When I asked whether there was any support for doing something about contracting, Pelosi said the WaPo article had raised awareness of the problem.

Wheeler: Is there the support in the House and the Senate to do something about all this contracting?

Pelosi: This has been very well read by members.

Wheeler: The Washington Post piece?

Pelosi: Yes. And it isn’t, it doesn’t come as a surprise to people. But it comes as almost a relief that finally some of this is out in the open.

Pelosi went on to describe all the problems with contracting: the cost, the lack of a single chain of accountability, the lack of information-sharing, and the turf battles. Then she basically said the Intelligence Committee would have to take a look–or, maybe, the Administration might assess whether it was making us safer.

Pelosi: I think there, my view is, I think the intelligence committees would have to take a really harsh look, and I would hope the Administration has to say, are the American people safer because of what’s happening in the intelligence community and I think it’s all about their security.

In response to her hope the Administration would do something about contracting, I noted that James Clapper–on his way to being confirmed as DNI–has been a big fan of contracting. Pelosi’s response was to direct responsibility back to the Intelligence Committee.

Wheeler: Although, again, Clapper has been involved in the contracting side and seems to be a pretty big fan of using contractors, I mean he kind of poo-pooed the whole article, so do you think Clapper, again, assuming he’s approved…

Pelosi: I don’t have to vote on him so I’m sort of, I’m always saying to the White House, why him? No, I just don’t know. I don’t want to go there. I don’t know enough to give you a precise view on that. But I do know that this really needs some careful consideration and some review and the intelligence committee is the appropriate place to do it.

Of course, the folks at the Intelligence Committee–at least according to Pelosi though not according to the attribution in his article–are the ones giving Jeff Stein anonymous quotes saying any real investigation of the contracting won’t happen.

For her part, Jan Schakowsky (remember, she was in the room for the interview) doubted the commitment (implicitly, I assume she means the Executive Branch, since they’re the ones still awarding Blackwater contracts) to reducing intelligence contracting. But she also doubts whether the committees (remember, she’s a member of HPSCI) know what these contractors are doing, and ultimately comes back to the question of whether they make us safer.

Schakowsky:While there has occasionally been lip service that we need to reduce the number of contractors, it’s been disappointing to me that in the last few months we’ve seen Blackwater get another big contract with the CIA and with the State Department. I would really question the commitment–any commitment–to reducing the number of contractors. Just even in the most sensitive missions.

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The Contractors Causing Chaos but Not Out and Out Corruption

By:  Tuesday July 20, 2010 7:17 am

I’m beginning to agree with Rayne’s comment of the other day that the only explanation for the length of the WaPo series on contractors is to please the Pulitzer committee. The other most (perhaps more) likely explanation for the style of the piece is that editors have tried so hard not to piss off the security establishment–and to stop short of voicing the conclusions that Dana Priest and William Arkin’s work support–that they’ve turned Priest and Arkin’s work into a bunch of disembodied fluff.

Take a look at the logic of this passage–which points out the drawbacks of using contractors–to see what I mean:

Since 9/11, contractors have made extraordinary contributions – and extraordinary blunders – that have changed history and clouded the public’s view of the distinction between the actions of officers sworn on behalf of the United States and corporate employees with little more than a security badge and a gun.

Contractor misdeeds in Iraq and Afghanistan have hurt U.S. credibility in those countries as well as in the Middle East. Abuse of prisoners at Abu Ghraib, some of it done by contractors, helped ignite a call for vengeance against the United States that continues today. Security guards working for Blackwater added fuel to the five-year violent chaos in Iraq and became the symbol of an America run amok.

Contractors in war zones, especially those who can fire weapons, blur “the line between the legitimate and illegitimate use of force, which is just what our enemies want,” Allison Stanger, a professor of international politics and economics at Middlebury College and the author of “One Nation Under Contract,” told the independent Commission on Wartime Contracting at a hearing in June.

Misconduct happens, too. A defense contractor formerly called MZM paid bribes for CIA contracts, sending Randy “Duke” Cunningham, who was a California congressman on the intelligence committee, to prison. Guards employed in Afghanistan by ArmorGroup North America, a private security company, were caught on camera in a lewd-partying scandal.

It starts with a classic “on the one side, on the other” piece of cowpie: a sentence that even linguistically refuses to take sides. Contractors, you see, are extraordinary in all ways!!!

Then watch the shift into an almost agent-less soft-pedaling of the problems contractors have caused. Abuse of prisoners happened. But apparently, only at Abu Ghraib, not at Bagram, not at Gitmo, not at firebases where detainees died. And the names of those contractors? Their role in the abuse? The WaPo stops short of telling you, for example, that a CACI interrogator was the one instructing the grunts at Abu Ghraib to abuse detainees. The WaPo also doesn’t tell you the CACI contractors never paid any price for doing so. The WaPo doesn’t mention that DOD believed they had no way of holding  contractors accountable for such things (though the case of David Passaro, in which a detainee died, of course proved that contractors could be prosecuted).

Then there’s Blackwater. What’d they do? Why they, “added fuel to the five-year violent chaos in Iraq and became the symbol of an America run amok.” No mention of Nisour Square. No mention of the Iraqi Vice President’s murdered security guard.  No mention of the contractors killed in Fallujah–who were left exposed by Blackwater. No mention of the illegal gun smuggling. And definitely no mention of the most recent allegations that Blackwater has been involved with assassination squads. Instead, we get Allison Stanger’s quote–alluding to contractors doing the actual killing, but never actually spelling that out for those who don’t read Jeremy Scahill (or, frankly, Erik Prince).

And then, after alluding to the CACI interrogators who avoided the legal consequences the Abu Ghraib guards paid, after alluding to Blackwater’s fueling of chaos but not mentioning its many legal problems, only then does this story say,

Misconduct happens, too.

Which, grammatically and logically, suggests the CACI and Blackwater crimes were not actually misconduct.

And even here there’s some real fudging. According to the WaPo, there was only one contractor involved in the Duke Cunningham story: MZM. (And even there, WaPo makes no mention of MZM’s involvement in CIFA’s spying on American citizens.) No mention of the other contracting scandal exposed in the Duke Cunningham case, wherein the third most senior guy at CIA, Dusty Foggo, went to jail for sending contracts to his childhood buddy Brent Wilkes in exchange for prostitutes and–possibly–a plush job after he left the CIA. That kind of revolving door corruption is one of the real and repeated problems with reliance on contractors. The such a senior person at CIA sold out security for an expensive whore ought to serve as a cornerstone for this morality tale. But according to the WaPo, it didn’t happen.

And that’s how the miracle of modern MSM editing presents the downsides of contractors as largely disembodied chaos rather than security contracts getting doled out for reasons that have nothing to do with security, rather than contractors abusing their quasi-immune status to engage in really counterproductive crimes.


Erik Prince, Sanctions, and Mineral Wealth

By:  Monday June 28, 2010 4:40 am

Let me start by laying out a few details about Erik Prince that have been reported of late.

  • Prince recently gave a speech I interpreted as a proposal for private contractors to serve as big oil’s enforcer–including in Nigeria and Iran
  • Blackwater illegally tried (but allegedly failed) to negotiate a deal to train guards for southern Sudan; as part of the deal, Blackwater would be paid with 50% of Sudan’s mineral wealth
  • The US is close, again, to not prosecuting Blackwater and instead simply fining it for that illegal contracting attempt and other export control violations
  • Anonymous sources say (but his spokesperson will not confirm) that Erik Prince will move to the United Arab Emirates, which has no extradition treaty with the US, claiming he would be leaving the US market altogether
  • He also announced he was selling the company–though you gotta wonder how the reported fine will play into the sale
  • For its part, Blackwater just signed new deals with the State Department and CIA for work in Afghanistan, which has been recently touted for its mineral wealth
  • When asked about the new CIA Blackwater contract, Leon Panetta explained that CIA has reviewed all of BW’s contracts and that for this one, BW simply underbid other bidders
  • Facing a veto threat from the Obama Administration, DiFi has all but dealt away Congress’ demand that GAO be able to audit intelligence related programs–including things like fraud in black ops contracts (more on that later)

Now, as I pointed out in my post on Prince’s reported move to UAE, his move followed that of Halliburton. Given the McClatchy report on the fairly extensive list of alleged export and Foreign Corrupt Practices Act crimes Blackwater had committed, I could imagine that Prince might move for precisely the same reason Halliburton may have–to avoid being held responsible for bribing foreign officials and violating sanction regimes (Halliburton faced its own FCPA charges when it moved to UAE).

Here’s what Blackwater was up to in Sudan:

After negotiating a $2 million draft contract to train Kiir’s personal security detail, Blackwater in early 2007 drafted a detailed second proposal, valued at more than $100 million, to equip and train southern Sudan’s army. Because the south lacked ready cash, Blackwater sought 50percent of its untapped mineral wealth, a former senior U.S. official said.

In addition to its well-known oil and natural gas reserves, southern Sudan has vast untapped reserves of gold, iron and diamonds.

“Most people don’t know this stuff exists. These guys did,” said a second former senior official who saw the document, which apparently was never signed.

Ultimately, though, Blackwater’s venture in Sudan foundered, U.S. officials said.

“Blackwater had some problems in Iraq,” said Deng Deng Nhial, the deputy chief of southern Sudan’s Washington office. “Nothing really materialized. No services were performed.”

Federal investigators, however, found evidence that Blackwater’s sales campaign had violated U.S. sanctions, export control laws and the Foreign Corrupt Practices Act, which is designed to prevent U.S. companies from bribing foreign officials in return for business, according to the officials and documents.

The suspected violations included brokering for defense services without a U.S. government-approved license; transferring satellite phones and encrypted e-mail capabilities to southern Sudanese officials; and attempting to open a joint escrow account with the South’s government at a Minnesota bank.

So now you’ve got Prince, the guy who set up our Black Ops contractor, located in the Persian Gulf, with no way to prevent him from violating the US’ own laws about corruption and sanctions. Prince says he’s done working with the United States, and maybe he’s done working directly with the US. Or maybe not. But we do know he’s got aspirations to work with both US allies and enemies.

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