Iraq

Is Blackwater Leaving the Security Biz?

| Tue Jul. 22, 2008 10:38 AM PDT

If his controversial company exits the private security business, Blackwater president Gary Jackson wants you to know exactly who's to blame: "If you could get it right," he told the AP, referring to the journalists covering Blackwater, "we might stay in the business." According to the AP, which recently visited the company's Moyock, North Carolina headquarters, Blackwater is planning to refocus its operations on aviation, logistics, and training, moving away from the security work that has earned the firm hundreds of millions of dollars in federal contracts since 9/11. "The experience we've had would certainly be a disincentive to any other companies that want to step in and put their entire business at risk," Erik Prince, the company's founder and CEO, told the wire service.

The company has been a magnet for controversy, the subject of negative news coverage, sustained congressional scrutiny, and activist outcry. Its shoot-first-ask-questions-later rep has at times obscured the company's better deeds, such as when Blackwater operators swooped in to Kenya to rescue three young American women who'd gotten stranded in a part of the country that had descended into violence. But while Blackwater has at times served, unfairly, as a stand-in for all the security contractors working in Iraq and Afghanistan—some of them fly by night operations that you probably wouldn't want protecting your local Target—and as the Left's favorite punching bag, its bitter experience in the protection field has more often than not been of its own making.

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Blackwater operators have been at the center of a number of questionable incidents, culminating with last September's shooting in Baghdad's Nisour Square that left 17 civilians dead and more than 20 wounded. (The episode remains under investigation by the FBI, and the Justice Department is mulling whether to bring charges.) Its aviation branch, Presidential Airways, meanwhile, is the subject of an ongoing lawsuit filed by the widows of three American soldiers who died when one of its planes crashed in Afghanistan, after its pilot allegedly took the aircraft on a low altitude joyride through mountainous terrain. (Adding to the controversy, Blackwater has attempted to derail the case by requesting that it be decided using Islamic, or Shari'a, law.) Then there's Blackwater's shadowy sister company, Greystone, which has scoured the Third World for discount soldiers to supplement its ranks, dealing with some unsavory characters along the way.

Despite all this, business remains good for Blackwater (though profit margins industry-wide appear to be slimming). Since last September, Presidential Airways has snagged at least three Pentagon contracts, worth close to $160 million, to provide its services in Afghanistan, Kyrgystan, Pakistan, and Uzbekistan, the latest of which was awarded in April. And, this spring, even as the company remained under investigation in connection with the Nisour Square shooting, the State Department renewed Blackwater's lucrative contract to provide security to diplomats in Iraq.

If Blackwater does ease out of the protection biz, bad PR likely has little to with it. While other of Blackwater's competitors have focused almost exclusively on security, Prince has anticipated the day when the security boom created by the wars in Iraq and Afghanistan inevitably begins to dry up. He has spent recent years diversifying his operations, branching out into manufacturing (of, among other things, armored vehicles), testing the waters in the humanitarian aid sector, and opening a private intelligence firm that caters to corporate clients. Security work currently makes up about 30 percent of Blackwater's business, but according Gary Jackson, "If I could get it down to 2 percent or 1 percent, I would go there."

With headlines like this one in today's Washington Post—"Iraq Points to Pullout in 2010"—Prince and Jackson probably see the writing on the wall and are plotting a graceful exit strategy, though not necessarily a prompt one. After the AP story went out on the wire, Blackwater spokeswoman Anne Tyrrell told the Virginia-Pilot that the company is not leaving the security business—or Iraq—in the near term. "As long as we're asked, we'll do it," she said.

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