Tuesday, July 22, 2008

Blackwater to Scale Back Security Work

The next president may have to change his calculus for the war in Iraq. Expensive government investigations have made Blackwater's cost of providing diplomatic security prohibitively high, and the company will no longer seek federal security contracts. If, that is, we are to believe the accuracy of what the Associated Press is reporting.

With its largest embassy in the world in Baghdad, the US depends almost completely on Blackwater to provide security for diplomats, aid workers, and visiting VIPs such as congressmen and senators. No government agency or military service can provide the scope of security that Blackwater is providing.

In the photo, General David Petraeus recognizes Blackwater diplomatic security men who rescued the Polish ambassador to Iraq last year after an assassination attempt.

Constant dogging by political opponents of the war in Congress, misleading media attacks, and endless government investigations that cost the company millions are reportedly blamed for prompting Blackwater to decide that providing security in a wartime environment just isn't worth it.

"The experience we've had would certainly be a disincentive to any other companies that want to step in and put their entire business at risk," says Blackwater founder and CEO Erik Prince.

The company will continue its current diplomatic security contract for the State Department in Iraq, but the report is unclear whether or not the company will seek to renew it upon its expiration in about ten months.

Blackwater did not begin as a security company, and providing security was never a part of the firm's master plan. "Our focus is away from security work. We're just not bidding on it," adds Blackwater President Gary Jackson.

Diplomatic security accounted for more than half of Blackwater's business in 2005 and 2006, and has wound down to about 30 percent now. "If I could get it down to 2% or 1%, I would go there," says Jackson. However, he held out the possibility of staying in the security business.

Says AP, "The decision to scale back future security business reflects not only the difficult year Blackwater has had but also the fact that there's probably not as much growth opportunity."

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