Blackwater’s Back-Channel Deals With U.S. Government

blackwater-logoIn one of the better pieces of investigative reporting seen in the New York Times of late, James Risen and Mark Mazzetti reveal the continuing close relationship between the U.S. Government and the disgraced mercenary group Blackwater (now re-named Xe, but they’re not fooling anyone):

Blackwater Worldwide created a web of more than 30 shell companies or subsidiaries in part to obtain millions of dollars in American government contracts after the security company came under intense criticism for reckless conduct in Iraq, according to Congressional investigators and former Blackwater officials.

While it is not clear how many of those businesses won contracts, at least three had deals with the United States military or the Central Intelligence Agency, according to former government and company officials. Since 2001, the intelligence agency has awarded up to $600 million in classified contracts to Blackwater and its affiliates, according to a United States government official.

The Senate Armed Services Committee this week released a chart that identified 31 affiliates of Blackwater, now known as Xe Services. The network was disclosed as part of a committee’s investigation into government contracting. The investigation revealed the lengths to which Blackwater went to continue winning contracts after Blackwater guards killed 17 Iraqi civilians in Baghdad in September 2007. That episode and other reports of abuses led to criminal and Congressional investigations, and cost the company its lucrative security contract with the State Department in Iraq.

The network of companies — which includes several businesses located in offshore tax havens — allowed Blackwater to obscure its involvement in government work from contracting officials or the public, and to assure a low profile for any of its classified activities, said former Blackwater officials, who, like the government officials, spoke only on condition of anonymity.

Senator Carl Levin, the Michigan Democrat who is chairman of the Armed Services Committee, said in a statement that it was worth “looking into why Blackwater would need to create the dozens of other names” and said he had requested that the Justice Department investigate whether Blackwater officers misled the government when using subsidiaries to solicit contracts.

The C.I.A.’s continuing relationship with the company, which recently was awarded a $100 million contract to provide security at agency bases in Afghanistan, has drawn harsh criticism from some members of Congress, who argue that the company’s tarnished record should preclude it from such work. At least two of the Blackwater-affiliated companies, XPG and Greystone, obtained secret contracts from the agency, according to interviews with a half dozen former Blackwater officials…

[continues in the New York Times]


Majestic is gadfly emeritus.

Latest posts by majestic (see all)

5 Comments on "Blackwater’s Back-Channel Deals With U.S. Government"

  1. That’s the free market for you. 600 million dollars down the toilet Of course the portable stalls a free market gem will electrocute you. Shell companies and rip off the taxpayer is what free market is all about. How are those free market eggs doing for you?

    Governmet is like a gun and we all know guns don’t kill, people kill, hence government is not the problem, Ronald Reagan is the problem.

    • Haystack | Sep 5, 2010 at 4:38 pm |

      Wait, I thought Ronald Reagan was a 15 foot tall bulletproof demigod who defeated the Soviets by shooting lasers from his eyes?

  2. Anonymous | Sep 4, 2010 at 7:05 pm |

    Interesting how the same pattern always repeats in America among these so-called free market types (with their endless holding companies to hide ownership, and endless offshore financial constructs, such as SPEs, SPCs, SPVs, SIVs, etc., etc., to hide both debt and capital, and avoid all taxation).

    Blackwater becomes Xe. Wackenhut is rolled into G4S (second largest private employer around, largest security services firm), Kroll division which does federal background investigations (something the feebs at the FBI did prior to privatization) becomes Pearson (Veritas Capital), USIS is rolled into Altegrity.

    Why is this of any importance? Because Blackwater does the background checks for Transportation Security Administration (TSA), and other government agencies (which is probably why, at last count, there were over 56 Sky Marshals who have been relieved of duty, some for drug smuggling, human slave trafficking, rape, etc. — I recall an article about 4 TSA people at Sea-Tac Airport in Washington state who went back to jail for pilfering travellers’ luggage — please note “went back to jail”), USIS does background checks for Office of Personnel Management (OPM – which is responsible for major hiring of civil service personnel), and Kroll, now Pearson, does background checks for remaining federal employees.

    They who give or deny the background checks pretty much have a serious handle on who does and doesn’t get hired!!!!

  3. Dkarnold46 | Sep 6, 2010 at 5:10 am |

    I’m confused. Is it illegal for a company to sub contract a job for the gov’t? Before I retired, I was a contract employee at a military hospital scheduling medical appts. My employer was Lockheed Martin.

    • Anonymous | Sep 6, 2010 at 5:37 pm |

      Hmmm….Lockheed Martin, owner of private military company (PMC) Pacific Architects and Engineers, murderer of how many Africans?

      No, it isn’t “illegal” to privatize all public resources. Just as it isn’t illegal in American-invaded countries of Iraq and Afghanistan, where since the American-installed puppet governments have rewritten their constitutions making Sharia Law the dominant law of those lands, it is no longer illegal to stone women to death for trivial reasons.

      It just depends on the definition and comprehension of terms to an ethical and moral person.

Comments are closed.