From BusinessWeek: The Business of War...

What Blackwater Founder Erik Prince Learned About the Business of War
By Drake Bennett                                                                  November 21, 2013

What Blackwater Founder Erik Prince Learned About the Business of War

Erik Prince is not whining, he wants that clear. “However much I had to put up with, in terms of the assault from all sides, from the lawyers and the bureaucrats, pales in comparison to guys who lost their lives, who were maimed, either active-duty military or contractors,” he says. “I’m just providing a cautionary tale to the next guy dumb enough to run to the sound of the alarm bell. Because the government can drop you on a dime and leave you hanging.” For Prince, who in less than a decade took an obscure military training facility, Blackwater USA, and transformed it, with government contracts, into a billion-dollar company before selling it in late 2010, even score-settling is a public service.

 

In a dark suit and white, open-collar shirt, Prince is sitting warily in a hotel suite above New York’s Times Square. For years he’s been rumored to be working on a memoir about Blackwater (now called Academi), a name linked in the public imagination with the killings of dozens of Iraqis and Afghans. Now, Civilian Warriors: The Inside Story of Blackwater and the Unsung Heroes of the War on Terror, is published, and Prince is busy promoting it. A private person, he submits to an interview with the enthusiasm of a dog in a shower. And yet he’s been waiting for this, too—to make the case for himself and his company and place the blame where he believes it belongs: “If I could send a message back to my younger self, it would be: Do not work for the State Department at all.”

 

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At 44, Prince has always striven to be the sort of person who runs to the alarm. At Hillsdale College in Michigan, he joined the local volunteer fire department, becoming a rescue diver. It was grim work. The emergency calls were usually for snowmobilers who had gone through thin ice, and they never lasted long enough to be revived. Still, he found it thrilling: stepping through a hole into inky water, accompanied only by the hiss of his own breath.

 

As Prince was growing up in the conservative, proudly Dutch town of Holland, Mich., Edgar Prince, his father, built a billion-dollar fortune making auto parts. When Erik graduated from college, however, he signed up for the U.S. Navy, survived the brutal attrition of Hell Week, and joined SEAL Team 8. In the spring of 1995, when Erik was 25, his father died of a heart attack, and a year later Erik’s wife, Joan, was diagnosed with breast cancer—she would live with it for seven years before succumbing. Erik left the service to tend to his family and his father’s estate. The family sold Prince Automotive, and Erik went into business for himself, building a private military training ground in the backwoods of North Carolina.

 

The business catered to law enforcement and the military—post-Cold War cuts had reduced training capacity—but struggled to find clients for its first couple of years. After Sept. 11, however, Prince and Blackwater went from training soldiers to finding them work, deploying thousands of vets to guard and transport American diplomats, aid workers, politicians, and CIA case officers through two wars. Forty-one Blackwater contractors eventually died in the line of duty. None of the U.S. State Department officials they were guarding were killed or seriously injured. While running the company, Prince says, he did covert intelligence work for the CIA.

 

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Civilian Warriors is an angry book, and some of Prince’s contentions have made immediate headlines: He argues that ill-conceived State Department regulations led to Blackwater’s many firefights in Iraq; he has accused former CIA Director Leon Panetta of blowing his cover as an intelligence asset; and he contends that, had Blackwater still been providing security for America’s diplomats, Chris Stevens, the ambassador killed in Benghazi, would be alive today.

And yet, Civilian Warriors is not just a rant about government incompetence. It’s also the tale of how Prince founded, ran, and then lost his company. Like many a Silicon Valley entrepreneur, Prince never saw Blackwater as simply a moneymaking venture. He wanted it to prove two things he strongly believed in: the dynamism of the private sector, and that some of the world’s most frustrating problems—piracy, warlords, genocide—could be solved by small groups of highly trained men with guns.

Blackwater got into the security business almost by chance. After the attacks of Sept. 11, Prince writes, he applied to the CIA’s National Clandestine Service but was turned down for a lack of field experience—he had seen little action in his five years in the SEALs. Soon thereafter, though, the CIA asked his company for help, and they developed a close relationship. (Prince’s book was vetted by the CIA.) The agency’s executive director, Alvin Bernard “Buzzy” Krongard, had heard of Blackwater—his son, a SEAL, had trained there. Krongard, uneasy about some of the local guards at the facilities the agency was setting up in Afghanistan, asked Prince if Blackwater could supply some men to do the job, drawing on its growing Rolodex of special forces veterans. That contract, fulfilled in days, was the first of many.

Incorporated in 2002, Blackwater’s security arm soon began supplying guards to other parts of the government. Crucially, two Blackwater contractors were attached to the U.S. Army team protecting Paul Bremer, the American diplomat who from May 2003 to June 2004 ran Iraq as the head of the Coalition Provisional Authority. One of the two was Frank Gallagher, a former Force Reconnaissance marine who had once run security for Henry Kissinger. When the Pentagon decided to contract out the whole detail in August 2003, he became its leader. Seven days later, Blackwater had found 34 more guys—former Army Rangers and special forces, Force Recon marines, SEALs, and SWAT team officers—promised them $600 a day, and flown them into Baghdad. Gallagher had a single day to train his team, and then they were in the field.

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To read the complete story, go to: http://www.businessweek.com/articles/2013-11-21/what-blackwater-founder-erik-prince-learned-about-the-business-of-war?campaign_id=DN112113 

 

Bennett is a staff writer for Bloomberg Businessweek in New York.