Blackwater's Prince Abdicates

| Mon Mar. 2, 2009 12:22 PM EST

First Blackwater lost its big State Department contract to do security work in Iraq. Then it changed its name to Xe. Now the controversial firm is replacing its head man. On Monday, Erik Prince, who founded the company, announced that he was bailing out as chief executive office and was appointing a new CEO and a new president. From AP:

The management shake up, he said, was part of the company's "continued reorganization and self-improvement."

Prince founded Blackwater in 1997 and last month the company changed its name to Xe, pronounced like the letter "z," in an effort to repair its severely tarnished name and reputation.

The company has had a contract to protect U.S. diplomats in Iraq, but the State Department announced it would not rehire Blackwater after its current contract with the company expires in May. The company has one other major security contract, details of which are classified.

A report by a House committee in October 2007 called Blackwater an out-of-control outfit indifferent to Iraqi civilian casualties. It said that Blackwater had been involved in nearly 200 shooting incidents since 2005.

In January, five Blackwater security guards pleaded not guilty to federal manslaughter and gun charges. A federal judge in Washington on Feb. 17 denied motions to dismiss the case against the guards, accused in a September 2007 shooting that left 17 Iraqis dead and another 20 wounded in a Baghdad's busy Nisoor Square.

Could it be that by renaming the company and removing himself as its frontman, Prince is hoping to keep the firm-formerly-known-as-Blackwater afloat and in line for big-ticket US government contracts? That might explain all these changes. But Blackwater's baggage is so heavy that these moves still might not allow it to escape its past.

But there's a more important question: who will do Blackwater's work once it is gone from Iraq? That has not yet been announced by the State Department. There are some obvious candidates, other private security firms. But one former CIA officer now working in Iraq in a private capacity tells me that these companies may not be up to the task and that a precipitous shift from Blackwater could cause problems of its own. In other words, in the Blackwater tale, there still may be no good exit strategy.

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