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Blackwater chief: I was thrown ‘under the bus’

The man who built Blackwater USA into one of the world's most respected and reviled defense contractors feels let down by government probes.
Blackwater Owner
Blackwater USA founder Erik Prince, shown in a 2008 photo, will relinquish involvement in the company's day-to-day operations and give up some of his ownership rights. Gerry Broome / AP
/ Source: The Associated Press

The man who built Blackwater USA into one of the world's most respected and reviled defense contractors feels that he was thrown "under the bus" after serving America's security interests for years.

Erik Prince's company, which renamed itself Xe Services in February after an uproar over its Iraq operations, has worked closely for years with the CIA, the State Department and the U.S. military. But it became the target of a series of federal investigations and congressional probes, primarily for its Iraq work. Most recently, officials disclosed that the CIA tapped the company to work under a program to capture or kill terrorists.

The 40-year-old heir to a Michigan auto parts fortune told Vanity Fair in an interview released Wednesday that Xe now pays $2 million a month in legal bills. The company is headquartered in Moyock in northeastern North Carolina.

"I put myself and my company at the CIA's disposal for some very risky missions," Prince told Vanity Fair for its January issue. "But when it became politically expedient to do so, someone threw me under the bus."

Likened to Plame affair
Prince likened his case to the leak of former CIA operative Valerie Plame's identity — a disclosure that led to a special prosecutor investigating the matter.

"Well, what happened to me was worse," Prince said. "People acting for political reasons disclosed not only the existence of a very sensitive program but my name along with it."

With his auto parts inheritance, Prince founded Blackwater in 1997 along with former colleagues from the Navy SEALs. After the Sept. 11 attacks, the company quickly developed a presence providing security and later won a lucrative contract to protect diplomats in Iraq.

A September 2007 shooting in a Baghdad square that led to federal charges against company contractors triggered outrage in Iraq and the United States and prompted the eventual State Department decision not to renew Blackwater's contract protecting diplomats in Iraq. Executives at the company bemoaned that the work had tarnished the company's image.

"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," Prince said in a 2008 interview with The Associated Press.

Future in classroom?
The company's work for the U.S. government was lucrative. The Iraq contract at one point consisted of one-third of company revenues, and executives have for years been eyeing a goal of $1 billion in annual revenues, although the privately owned company does not release financial figures.

Prince announced earlier this year that he would relinquish involvement in the company's day-to-day business as part of a management shake-up, and company spokeswoman Stacy DeLuke said Wednesday that Prince also plans to give up some of his ownership rights. He is considering becoming a high school teacher.

U.S. Joseph Yorio, recently a vice president at DHL and a former Army special forces officer, is Xe Services new president. Danielle Esposito, who has worked within Xe for nearly 10 years, is serving as chief operating officer and executive vice president. The CEO position has not been filled.