Inside the Sausage Factory: Blackwater Edition

| Thu Aug. 6, 2009 12:01 PM EDT

McClatchy's Mark Seibel and the News & Observer's Jay Price probably wish their email thread, discussing whether to cover the latest Blackwater allegations, didn't wind up splashed on the front page of Gawker, but I'm kinda glad it did. It offers a peek inside the sausage factory into the very real struggle reporters are having over whether—and how—to cover this story, which seems more like the plot of last season's 24 than a real-life crime drama. We're talking charges that Blackwater founder Erik Prince not only is out on a religious crusade to kill Muslims, but had informants whacked; allegations of child prostitution and gun-running; accusations of a wife-swapping and sex ring run out of the company's Moyock, North Carolina compound. Compared to this, allegations of tax evasion and money laundering seem downright tame.

These accusations were contained in the anonymous declarations of two ex-Blackwater employees, filed in connection with a series of civil suits brought on behalf of Iraqi civilians. These ex-employees say their identities must not be revealed because they fear retribution if their names are made public. But if we don't know who these guys are, we can't parse their motivations for coming forward, or whether they are really in a position to know what they say they do. John Does 1 and 2 say they've learned from former colleagues that "one of more persons who have provided information, or who were planning to provide information, about Erik Prince and Blackwater have been killed in suspicious circumstances." Yet they provide no details of who these victims were, omitting the most important clues for reporters who want to pursue this wild tale. Frankly, it's tough to know what to believe, which is likely convincing many journos to give this story a wide berth.

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In their email exchange, Seibel inquires whether Price or his colleagues will be "doing anything on the murder allegations?"

Price, who's done some great work on Blackwater/Xe in the past, urges caution:

I would be careful about how seriously I took this stuff.....The allegations are anonymous and part of a lawsuit that frankly is pretty shaky with some wilder stuff re: child prostitution etc.
Norfolk wrote it because its in their yard, but their story was pretty lukewarm. This is not the same as someone publically saying this stuff happened.
They are prone to threats but its been essentially junior HS boy cheft puffing, no sense they would ever do this or that the talk of christian crusades... they shot a lot in iraq but if there were lots of intentional killings we'd know about it.

Seibel responds:

I don't know about that last part. I think there were many intentional killings. Let me know if you guys decide to do something.

Price writes back:

will do. I mean intentional in the sense described in lawsuit, where they are alleged to have gone over on a christian crusade to kill iraqis.
The allegations of killing potential whistleblowers is another red flag on this. victim(s ) are unnamed and it's not as if there are a ton of potential candidates. BW didnt lose but a handful there and most are known issues — fallujah and chopper shoot downs/crashes.
So we have unnamed accusers, no names or circumstances for alleged victims etc. , lawyers who have been really pushing the limits of credibility and Jeremy Scahill who has made a career out of sensationalizing.... worth digging at, but there isn't even a small piece of solid evidence to support this stuff. Eric is Catholic and surely religious but the guys he put in the field were no more interested in religion than anyone else, and prob less so.

In his final message, Price drops an intriguing tid bit:

Joe's hacking through the two guys' statements to see if there is somewhere further to push it. He and I are both aware of threats to folks inside the company not to talk but his take is this new stuff is not huge.

Threats? He's not specific about the nature of these threats, to whom Blackwater/Xe officials are being told not to speak, or what the company may be trying to hide, but this certainly seems newsworthy to me. I just wonder why Price and his colleagues don't appear to think the same.

UPDATE: The News & Observer's Joe Neff, who along with Jay Price has covered Blackwater extenstively for the paper, sends along the following response to my item:

Point one: I wish you'd contact us before assuming we don't think such threats are newsworthy. None of the people threatened by Blackwater have gone on the record, despite repeated requests. I don't blame them - at the very least, Blackwater is almost certain to sue them, and tie them down in expensive litigation. Blackwater has a long history of spending of money on lawyers. If our sources won't go on the record, we won't use them. We don't use anonymous sources here, except on very rare occasions, usually when we can corroborate with documents or other records.

Point two: We have reported on Blackwater threatening employees. Check the sidebar at the bottom of the story:

"In January 2006, Blackwater suspected that one of its accounting managers was secretly sharing trade secrets with a competitor. The manager, Curtis Smith, said he was brought into a conference room at Blackwater to meet with Bill Mathews, an executive vice president.

In a court filing, Smith said Mathews had a reputation for wild and violent behavior and was known to carry concealed weapons.

"A year earlier, during Smith's job interview, Mathews had waved two handguns in the air. Smith had also been informed that Mathews had once kicked in a conference room door and burst in with a rifle."

In the room were two Blackwater executives, both former Navy SEALs, "capable of inflicting serious bodily injury with their bare hands."

Mathews produced a sworn statement with Smith's name on it and told Smith he had one opportunity to sign the document. Smith said he found several mistakes.

"Each time Smith identified a misstatement, Mathews became aggressive in tone and physical posturing. ... Smith feared for his personal safety [and] ... believed that he was not free to leave the room and that he had no choice but to sign the document."

Smith signed the document. When Blackwater sued him and two other men for stealing trade secrets, Smith countersued Blackwater for wrongful imprisonment.

In court papers, Blackwater said Smith's claim was nonsense, an attempt to limit his legal liability: "Smith stole Blackwater's secrets. He got caught and confessed his misconduct. Now he is having second thoughts about doing so."

The two parties settled out of court after an initial court ruling in favor of Blackwater."

Point Three: This may be tangential. We reported on how Blackwater coerced all its contractors to keep quiet. Here's an excerpt of a contract we reported on in 2004 (and posted online). Contractors agreed not to talk about Blackwater, their jobs, etc.  If they talked, they automatically owed Blackwater $250,000 in 'liquidated damages." 

And here's my email back to Joe:

Given the context of Jay's email, it seemed to me he might be referring to threats that went beyond those of lawsuits or termination and into the realm of what John Doe 1 and 2 were talking about, physical violence. Am I mistaken? As for the Curtis Smith story, it surely illustrates a case of menacing behavior by a Blackwater official, though is this the type of threat that Jay was alluding to? Being confronted for sharing information with a competitor is one thing; being told your life is in danger if you talk to federal investigators is another. That said, I certainly understand that it's difficult to shed light on threats to Blackwater contractors/employees without relying on anonymous sources. As you point out, Blackwater's contracts stipulate harsh penalties for anyone who talks. (Any idea if this extends to employees, as well?) But in terms of the threats you're aware of, are these run-of-the mill admonitions not to talk? Or do people fear violent retribution?

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