Entrepreneurial Culture Keeps Blackwater Growing

TradingMarkets.Com carried a very balanced and interesting article on Blackwater, discussing the company's history and ethos. “Blackwater is thriving because of its aggressive and entrepreneurial business culture and a strong network of… connections,” they write. “The company has hired extensively from the top levels of the CIA, Defense Department and State Department, and named the former No. 2 official at the CIA to its Board of Advisors.” Looking back to the early days of the company, they explain:

Blackwater Lodge and Training Center was the brainchild of Al Clark, a Navy SEAL and instructor. Dissatisfied with the Navy's rented training grounds, Clark told colleagues he would open his own when he left the service. Clark hooked up with Erik Prince, a young Navy SEAL who shared his interest in training.... When the two broke ground on Blackwater Lodge and Training Center in Currituck and Camden counties in northeast North Carolina in 1997, the timing was good. The military had closed and consolidated bases after the Cold War and neglected training facilities. Blackwater built the largest shooting facility in the country, with indoor ranges, mock urban landscapes, a 1,200-yard firing range, driving tracks and a lake for naval training. Blackwater boasted it could design any sort of training a client might want. The location was excellent, within four hours of the Pentagon in Washington, and Fort Bragg and Camp Lejeune in North Carolina. The country's biggest naval base in Norfolk, Va., was less than an hour away.

But Blackwater's service really began after the terrorist attacks of 9/11 and the launching of the Global War on Terror:

The CIA was stretched thin in the aftermath of Sept. 11 and the invasion of Afghanistan. Blackwater landed a… contract to provide security at CIA stations in Afghanistan…. The contract was not a big one; it called for 16 Blackwater security personnel, plus dozens of Afghan guards hired locally.... In August 2003, Blackwater won a… contract to guard Paul Bremer, the head of the Coalition Provisional Authority and probably the top assassination target of insurgents. The contract called for helicopters to fly Bremer around Iraq. Blackwater was well positioned for that; the company had bought a Florida aviation company four months earlier.

Blackwater's patriotism and business acumen converge when it comes to identifying new threats to the United States and pouncing on them. “They are very good and very savvy at identifying market needs and pushing hard to enter into those markets, even before clients have recognized the need,” Peter Singer, an expert on private military contractors said.

For all the controversy, Blackwater has an unblemished record on its main task in Iraq: None of the diplomats in the company's care have been killed or wounded. Undersecretary of State Patrick Kennedy recently told The New York Times that the diplomats could not function in Iraq without Blackwater: “If the contractors were removed, we would have to leave Iraq.”

Why military can't do Blackwater's job

One of the most common questions concerning Blackwater is, Why can't the military protect our diplomats in Iraq?

The Washington Post provides us the answer. Essentially, the Pentagon lacks the personnel with the proper training, lost interest in protecting the diplomats when the State Department opened its huge new embassy in 2004, and the State Department's own Diplomatic Security cadre are too small and too overextended to do the job.

Post reporter Karen DeYoung's bias seeps through the first quarter of the October 21 article, but after she settles her scores she provides much new and balanced information.

Here's a summary of some of that reporting: After the invasion of Iraq in 2003, the Coalition Provisional Authority (CPA) led by Paul Bremer reported directly to the Pentagon. The Pentagon contracted Blackwater to provide security for the CPA chief and other top US civilians in Iraq.

In 2004, with the US preparing to return sovereignty to Iraqis and to build a huge embassy in Baghdad, Defense Secretary Donald Rumsfeld "lost a bid to retain control over the full US effort, including billions of dollars in reconstruction funds," according to the report. "A new executive order, signed in January 2004, gave State all authority over all but military operations. Rumsfeld's revenge, at least in the view of many State officials, was to withdraw all but minimal assistance for diplomatic security."

"'It was the view of Donald Rumsfeld and [then-Deputy Defense Secretary] Paul Wolfowitz that this wasn't their problem,' said a former senior State Department official. Meetings to negotiate an official memorandum of understanding between State and Defense during the spring of 2004 broke up in shouting matches over issues such as their respective levels of patriotism and whether the military would provide mortuary services for slain diplomats."

But many at State conceded DoD's point that soldiers lacked the training to serve as personal guards. Other diplomats were concerned that surrounding civilians with uniformed soldiers would undermine the American image in Iraq," according to the Post.

The mission was beyond the capabilities of the State Department's small Diplomatic Security (DS) service. As the opening of the new embassy approached in mid-2004, "we had to decide what we were going to do," said the former State Department official. "We had to get jobs done, and to do that we had to have some protection."

The State Department "chose the most expedient solution: Take over the Pentagon's personal security contract with Blackwater and extend it for a year," the Post continues.