03.02.09

Exit Interview: Outgoing Blackwater Chief on Why He Owes No Apologies

After 11 years at the helm of the controversial military company he founded, Erik Prince is stepping down. In an interview with The Daily Beast, he talks about why he’s proud of Blackwater’s work, the future of the company, and whether he expects the Obama administration to keep his firm on the payroll.

In an interview with The Daily Beast, Erik Prince, the outgoing CEO of Blackwater Worldwide, said his decision to step down from the company today, along with longtime executive Gary Jackson, is part of the business' natural evolution.

“We've been at this for 11 years,” Prince, a former Navy SEAL, said. “The military rotates leadership every 1½ to two years. Myself and Gary, we've grown this thing from when it was nothing and it was time to turn it over to the next generation of leadership.”

“I’d say [Blackwater] performed above and beyond the scope of our contract and did exactly what our customers hired us to do,” Prince said.

Prince said that Blackwater's new president, Joe Yorio, would be better suited to cement its position as a large-scale international company rather than the smaller domestic operation he founded in 1997. He likened the process to “sending the business off to college.”

“In Joe Yorio you find a guy who's smarter at business than I am,” Prince said. “I'm an entrepreneur and idea guy; he's a professional businessman.”

The move comes amidst a brutal stretch for Blackwater Worldwide in which the company has suffered major financial setbacks and watched its public image disintegrate in the press.

In December, federal prosecutors charged five Blackwater employees with 14 counts of manslaughter and 20 counts of attempted manslaughter, the result of an investigation into a 2007 shootout in Baghdad in which some 17 Iraqis were killed. According to prosecutors, at least 14 Iraqis—all civilians—were killed directly by Blackwater employees, who allegedly fired a grenade into a girls' school and shot at unarmed innocents fleeing the battle. A sixth employee has pleaded guilty to voluntary manslaughter in the case. The remaining defendants' attorneys contend they were acting in self defense.

The case cemented Blackwater’s reputation for trigger-happy recklessness that's led critics in Washington and the military to condemn the company for failing to professionally carry out its operations.

When asked about the charges, Prince declined to address specific allegations regarding its employees serving in Iraq.

“I'd say we performed above and beyond the scope of our contract and did exactly what our customers hired us to do,” Prince said.

In December, he rebutted critics who derided the company as beholden to no law but its own with an op-ed in the Wall Street Journal, arguing that the current trial showed that its members were within the scope of the law and that their operations save American lives.

“Our teams are not cooking meals or moving supplies,” he wrote then. “They are taking bullets. They are military veterans who have chosen to serve their country once again.”

Prince said he was frustrated by criticism that the military should exclusively perform many of Blackwater's tasks and argued that the scope of America's activities abroad made privatizing certain missions its only option.

“We're not private soldiers at all. There's no offensive operations done by our folks,” he told The Daily Beast. “Sure, the US military could do all these jobs, but the US military is a lot smaller than it used to be... You can decide how much you want the military to do and the policy makers have to decide the military's priorities, but if they don't have enough to do it, then someone else is going to have to do the work or you're not going to accomplish those goals.”

In late January, the State Department dealt the company a major financial blow by announcing they would not renew a lucrative contract to protect diplomats in Iraq after the Iraqi government denied Blackwater a license to operate in the country. The contract made up one-third of the company's annual revenue, according to the Associated Press. Shortly afterward, the company changed its name to Xe (pronounced like the letter “Z”), following the lead of tarnished businesses like tobacco giant Philip Morris, which became the friendlier-sounding Altria.

While the loss of the Iraq contract was a blow, Prince said that his company would still vie for personal protective-services contracts outside of Iraq.

“We'll continue to bid on places the US government asks us to work,” Prince said.

Nonetheless, he said large-scale bodyguard operations of the type seen in Iraq were likely not in the cards.

“I think the diplomatic-security needs in Iraq were an anomaly,” Prince said. “There's never been a bulge of requirements that large ever before. Whether it's phased to the army or to a more Iraqi-based model is certainly not my decision, but I don't see us conducting personal-security operations in the midst of a warzone to that extent.”

Prince said the company would remain profitable on the strength of domestic training programs—the type of work Blackwater initially was founded to conduct—as well as operations in Africa and Afghanistan, like support missions from its fleet of helicopters and planes. Overall, he said he saw little reason to believe Blackwater's services would be any less in demand in the near future.

“I don't believe the Obama administration is going to move significantly away from using the private sector in various applications,” Prince said. “This is just my gut, but when the private sector can do things in a cost-effective manner, especially in this overall budgetary environment, it's hard for anyone to say outright 'No, we wont do that,' because of some predisposed position.”

Benjamin Sarlin is a reporter for The Daily Beast. He previously covered New York City politics for the New York Sun and has worked for talkingpointsmemo.com.