[News] The Petulant Prince of Blackwater - XE can get contracts again

Anti-Imperialist News news at freedomarchives.org
Fri Aug 27 12:23:31 EDT 2010

August 27-29, 2010

The Petulant Prince of Blackwater


Gratitude is a fruit of great cultivation. You do not find it among 
gross people.   Samuel Johnson, " Journal of a Tour to the Hebrides"

It's hard to understand why Eric Prince is mad.  The settlement 
sounded like such a good deal for him and his company.  And 
furthermore, he's trying to sell the company - and the settlement 
will probably help that, and to make things even better, he now lives 
happily in Abu Dhabi where it is harder to sue him.  (He moved 
hurriedly in August.  It had nothing to do with the lawsuits he was 
defending.  He needed to get there quickly so his children could 
enroll in school.  School started on August 15.)  Here's why Eric 
Prince's  petulance is hard to fathom.

On August 21, 2010 it was announced that Xe, formerly known as 
Blackwater Worldwide, the company founded by Eric Prince in 1997, had 
settled State Department allegations of hundreds of export and other 
violations by agreeing to pay fines of  $42 million.  According to 
the New York Times, the illegal activities for which it was fined 
included "illegal weapons exports to Afghanistan, making unauthorized 
proposals to train troops in south Sudan and providing sniper 
training for Taiwanese police officers."  Xe signed a $120 million 
contract with the State Department to provide security services at 
new U.S. Consulates in Herat and Mazr-e-Sharif in mid-June of 
2010.  If the settlement and the contract are netted out, Xe will net 
$78 million on the two deals.

Although the fines seem like a lot of money to those not involved in 
such things, in fact they are a small price to pay.  Here's what Xe 
got in exchange for paying the fines: the company is now able to once 
again bid on and get contracts with the government, something it 
would have been barred from doing had it pled guilty to criminal 
conduct.  (Since 2001 it's been paid hundreds of millions by the U.S. 
Government for activities it conducted in Afghanistan and Iraq.  It 
can now look forward to many hundreds of millions more.) Here's 
something else it got for paying the fines:  it won't be subject to 
any criminal charges on account of those transactions.

Not that all its criminal type legal troubles are over.  According to 
reports there is still an ongoing federal probe to see whether the 
company bribed Iraqi officials; five executives have been indicted on 
weapons and obstruction of justice charges; and two former employees 
face federal murder charges in connection with the death of two 
Afghan civilians.  Whether those charges would impact its ability to 
get government contracts is unclear.  What is also unclear is whether 
the investigation of Xe requested  by Senator Carl Levin in February 
from the attorney general might yet result in criminal charges that 
could impact its ability to get government contracts. (In February 
Senator Levin, Chairman of the Senate Armed Services Committee, asked 
Attorney General Eric Holder to investigate whether Xe had made false 
or misleading statements in bidding for an Army contract in 
Afghanistan.)  What is clear is that for the present, Xe is once 
again able to bid on government contracts and stands to make millions 
of more if its bids are accepted.

Mr. Prince no longer lives in the United States. According to court 
documents filed in a case brought by former Xe employees against Mr. 
Prince accusing him of defrauding the government, Mr. Prince has 
moved to Abu Dhabi.  In addition to enrolling his children in good 
schools, he reportedly hopes to continue the very profitable line of 
work in which he has been engaged, in Africa and the Middle 
East.  According to colleagues there's another reason he moved.  They 
told the New York Times, Mr. Prince is bitter about the "legal 
scrutiny and negative publicity his company had received."  It's hard 
to imagine why he thought his company, facing the kinds of charges 
described above and having settled the charges described above, would 
be surprised at the absence of favorable publicity.  The offenses for 
which it's been fined as well as those still being investigated, 
rarely earn their perpetrator applause.

Mr. Prince's colleague who spoke to the NYT also said that Mr. Prince 
needed "a break from America." Mr. Prince is an heir to a "Michigan 
auto parts fortune." Michigan is in America.  His family made its 
fortune in America and that fortune enabled Mr. Prince to make 
millions more.  I am confident his  "break from America" will not 
have any adverse affect on his fortunes and I am sure he does not 
want it to be perceived as a lack of appreciation for all America has 
done for him.  He probably just moved because Abu Dhabi has really 
good schools.  It's too bad he didn't stay in the town in which he 
lived and worked and help to improve the schools there.

Christopher Brauchli can be e-mailed at 
<mailto:brauchli.56 at post.harvard.edu>brauchli.56 at post.harvard.edu.

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