Is Diplomatic Security Too Risky for Big Publicly Traded Companies?

In his August 14 interview on CNBC, Blackwater CEO Erik Prince says he's surprised that huge, publicly traded defense contracting giants are getting into the private security area because of the incredible risks involved. Prince says,

"We’re uniquely positioned because we have a large facility. No one’s made the investment in the assets that we have. Even our big competitors, the Lockheed Martins, the Northrop Grummans of the world, they are running hard to get into this space but I’m surprised their risk management boards let them do that. They’re one incident away of being filleted in the media like we were."

The trial lawyers are going to love this one!

CNBC Interviews Blackwater CEO

Blackwater CEO Erik Prince was the guest on CNBC's major morning financial talk show Squawk Box. Among the points Prince raised in the interview, prompted by the three co-hosts:

On commitment: "Our guys take tremendous risks. Many have paid the ultimate price. Many have given parts of themselves in the process."

On business expansion: "We’re certainly not focusing as much on security going forward because we take a lot less grief. … It hammers our ability to raise capital. Our training site is growing like crazy, our aviation is growing a lot."

On whether an Obama administration would affect Blackwater's security contracting in Iraq: "All of it is competitively bid. Whoever takes over in January, the US government unfortunately is not going to be born again hard fast innovative and efficient. Someone’s going to do the work. The private sector’s going of be a part of it."

On profitability: "The margins aren’t nearly as good as you think. Law firms, PR firms and accounting firms have much better margins than we do." (Hmm - that raises the question: Is the taxpayer getting a good value in services performed by law firms and accounting firms under federal contract? A Congressional Budget Office study might be revealing.)