NEWS: Need a private-label armored vehicle? A detachment of Chilean infantrymen? A special forces "engagement team"? Erik Prince's expanding global private army is at your service—and the war in Iraq was just the beginning.
By Bruce Falconer and Daniel Schulman
Additional reporting by Casey Miner
March 20, 2008
When blackwater founder Erik Prince took his seat before the House Committee on Oversight and Government Reform last October, in the midst of a firestorm over the killing of 17 civilians in Baghdad by his contractors the previous month, the 38-year-old was at the helm of a fast-growing global business—and had the confidence to match. Sporting a neatly pressed suit and a fresh military-style haircut that evoked his service as a Navy seal, Prince had been prepped by crisis-management specialists from the Beltway PR firm Burson-Marsteller, and throughout the tense four-hour hearing he leaned back frequently to confer with his lawyer. A private man who seldom gives interviews, he nevertheless seemed at ease in a room filled with politicians, cameras, and reporters. He extolled his men's professionalism—"I believe we acted appropriately at all times"—and bristled at the term most commonly used to describe his line of work. "The Oxford dictionary defines a mercenary as a professional soldier working for a foreign government," he said. "We have Americans working for America, protecting Americans."
The truth is a bit more complex. As profit margins in the private security industry have narrowed—Blackwater clears just 10 percent on its primary State Department contract, Prince testified—the ceo has increasingly looked beyond American shores. More and more of his foot soldiers now come from Third World countries, and his corporate network is aggressively pitching for business from foreign governments. (It has already trained naval commandos in Azerbaijan and has been hired to train special forces troops in Jordan.) In his most ambitious moments, Prince has set out a vision in which his companies would act as for-profit peacekeepers, working with the United Nations and other international organizations in conflict areas around the world. Even Blackwater's marketing materials are infused with the imagery of global humanitarianism; one of the company's recent ads shows a tiny malnourished infant being spoon-fed and proclaims the company's intention to "provide hope to those who still live in desperate times."
Yet the most important vehicle for Prince's global aspirations isn't Blackwater proper, but Greystone Limited, a company he quietly founded in 2004 as his firm's "international affiliate." According to Chris Taylor, a former Marine Recon soldier who until May was Blackwater's vice president for strategic initiatives, Prince sought to build a new brand. "Blackwater has a sexy name and people pay attention to it," Taylor says, and sometimes that high profile "may not fit the proposed mission." In particular, he says, "international opportunities" were to be "looked at through Greystone."
Nearly all of the 20 or more companies Prince has launched or acquired over the years are U.S. based. Greystone, however, was incorporated in the Caribbean tax haven of Barbados, although it is managed from Blackwater's headquarters in Moyock, North Carolina. (The Barbados address and phone number listed in the federal government's contractor database trace back to a firm that specializes in shielding corporate revenues from U.S. tax authorities.) "As far as I know, they were the same company with different names," notes a contractor who worked for Blackwater in Iraq.
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