Blackwater: The Rise of the World's Most Powerful Mercenary Army

^{CHAPTER THREE} BLACKWATER BEGINS

ARMY. NAVY. Air Force. Marines. Blackwater.

Erik Prince might now see his empire as the fifth branch of the U.S. military, but his designs for Blackwater started off much more modestly, and they weren’t really his own designs. While he served as the hands-on ATM for the creation of Blackwater, the location, plans, and virtually every detail of the new company came not from Prince but rather from one of his mentors in the Navy SEALs: Al Clark, who spent eleven years as one of the elite unit’s top firearms trainers. In an interview, Clark said that in 1993, when Prince was just beginning his military career, Clark had already “started drawing the sketches for Blackwater.”¹ The concept grew out of Clark’s experiences as a Navy firearms trainer, when he recognized firsthand what he saw as an inadequate training infrastructure for what was one of the most vaunted forces in the U.S. military machine. “There were no facilities. We didn’t have anything. The Navy never owned ranges, they always had to borrow from the Marine Corps or the Army,” he said. “[Private] facilities were out there that had different pieces of the programs we needed, but no one had one-stop shopping.”²

But one essential element was missing from Clark’s plan: money. Little did Clark know that within a few years, one of the wealthiest men ever to serve in the U.S. military would be one of his pupils. In 1996, Clark was transferred to SEAL Team 8 to run its tactical training program. Lt. Erik Prince was in the first platoon that Clark trained there, but “I didn’t know he had a gazillion dollars,” Clark recalled.³ Prince went through Clark’s training, though the two never discussed any sort of business partnership. Eventually, Prince set off on a deployment with SEAL Team 8.⁴ Seven months later, Al Clark had learned not only that his former pupil was loaded with cash but that the two shared a common interest in the burgeoning world of privatized training. When Prince returned to the States after his SEAL deployment, “I hooked it up with him through the request of somebody else,” Clark recalled. “Basically, we just kind of started the dialogue from there.”⁵

For Prince, that period was a bittersweet time. His father had died in 1995, and every indication suggests that Prince wanted to remain in the SEALs, instead of jumping head first into the family business. But the combination of his father’s death and the worsening condition of his first wife, Joan—then sick with cancer—and the needs of their four children left Prince little choice. “Just prior to a deployment, my dad unexpectedly died,” Prince recalled a decade later. “My family’s business had grown to great success and I left the Navy earlier than I had intended to assist with family matters.”⁶ In short order, however, the family sold Edgar Prince’s empire. The 1996 sale for $1.35 billion in cash allowed Erik Prince to begin building his own kingdom, one that would combine his various religious, political, and military passions.⁷ “I wanted to stay connected to the military, so I built a facility to provide a world-class venue for U.S. and friendly foreign military, law enforcement, commercial, and government organizations to prepare to go into harm’s way,” Prince claimed in 2006. “Many Special Operations guys I know had the same thoughts about the need for private advanced training facilities. A few of them joined me when I formed Blackwater. I was in the unusual position after the sale of the family business to self-fund this endeavor.”⁸

But Prince’s attempt to claim virtually sole credit for Blackwater’s founding spurs sharp reactions from some of his early Blackwater cohorts. According to several sources involved with Blackwater’s founding and early history, the story of the company’s genesis had never been in dispute until Blackwater rose to prominence after the 2003 Iraq occupation. That was when Erik Prince began peddling what appeared to be a bit of revisionist history. The company Web site boasted, “Our founder is a former U.S. Navy SEAL. He created Blackwater on the belief that both the military and law enforcement establishments would require additional capacity to train fully our brave men and women in and out of uniform to the standards required to keep our country secure.”⁹ Prince has claimed the Blackwater concept came to him during his time with SEAL Team 8, when he was deployed in Haiti, the Middle East, Bosnia, and the Mediterranean. “As I trained all over the world, I realized how difficult it was for units to get the cutting-edge training they needed to ensure success,” he said. “In a letter home while I was deployed, I outlined the vision that is today Blackwater.”¹⁰

Al Clark and other former Blackwater executives hotly dispute that version of Blackwater’s history. “[Clark] was the guy that came up with the idea for Blackwater as a training center in the beginning and mentioned it to Erik Prince,” says a former Blackwater executive. “Al was the idea [man] and Erik came up with the money. Erik gets the credit for it because he’s the owner, but it was actually Al’s idea.”¹¹ Moreover, Prince’s claim that he laid out “the vision that is today Blackwater” in 1996 is dubious given how closely linked to the “war on terror” the company’s success has been. But because of his upbringing and the training he received at the hands of his father and the family’s conservative friends and allies, Erik Prince was a committed disciple of free-market economic theory and privatization; he clearly understood what led Al Clark to envision a “one-stop shopping” training facility for the federal government. In many ways, the Blackwater project couldn’t have come at a better time—converging as it did with the government’s embrace of some of the very policies the Prince family had long advocated.

Blackwater was born just as the military was in the midst of a massive, unprecedented privatization drive that had begun in force during Dick Cheney’s time as Defense Secretary, from 1989 to 1993, under George H. W. Bush. “In his first year in office, Cheney reduced military spending by $10 billion. He cancelled a number of complicated and expensive weapons systems, and reduced the number of troops from 2.2 million to 1.6 million. Year after year, from 1989 to 1993, the military budget shrank under Cheney,” wrote Dan Briody in his book The Halliburton Agenda. “The army depended very little on civilian contractors in the early 1990s and Cheney was inclined to change that. The idea was to free up the troops to do the fighting while private contractors handled the back-end logistics. It was also a tidy way of handling the public relations nightmare that ensued every time the United States committed troops overseas. More contractors meant fewer troops, and a much more politically palatable troop count.”¹² At the end of his tenure, Cheney commissioned Halliburton subsidiary Brown and Root (later renamed KBR following a merger with engineering contractor M. W. Kellogg) to do a classified study on how the military could privatize the majority of support services—troop housing, food, laundry, etc.—for U.S. international military operations. ¹³ Brown and Root was paid $3.9 million to write a report that would effectively create a hugely profitable market for itself by greatly expanding the Pentagon’s Logistics Civil Augmentation Program (LOGCAP).¹⁴ Indeed, by late August 1992, the U.S. Army Corps of Engineers had selected Halliburton, soon to be run by Cheney himself, to do virtually all of the support work for the military over the next five years.¹⁵ That first Halliburton contract burst open the door for the rapid privatization that would culminate in the contracting bonanza in Iraq, Afghanistan, and elsewhere ushered in by the war on terror.

By the time Al Clark, Erik Prince, and a handful of others began serious planning for what would become Blackwater in the mid-1990s, the military had been downsizing for years, and training facilities were some of the casualties of that trend. Those facilities were also some of the most valuable components of the military machine. But the Base Realignment and Closure Act process that had begun during the Reagan/Bush era, ostensibly as a money-saving venture, had accelerated under Bill Clinton and had left the military with what many in the special forces community saw as an inadequate number of training venues. This downsizing would provide fertile ground for Blackwater to sprout and grow fast. “There was a need for training for military and for Special Operations units, because most of the ranges and facilities were World War II and they were antiquated,” said Bill Masciangelo, the first president of Blackwater, who now runs military and government sales for hotel giant Cendant. “Since they were running out of places to train, and nobody provided a modern military facility, that was the whole concept behind Blackwater when it was first conceived.”¹⁶ Al Clark said that at the time of Blackwater’s founding it was “not an original idea. Everybody knew for twenty years there needed to be a place like this built.”¹⁷ Not long after Clark pitched his idea to Prince in 1996, Clark says his former pupil told him, “Let’s do it.”¹⁸

At the time, the United States was in the midst of one of the darkest moments in recent history for the Republican Party and the religious right. Bill Clinton’s defeat of George H. W. Bush in the 1992 presidential election meant the end of a twelve-year golden era of conservative governance, molded in large part by the policies of Ronald Reagan’s White House. While the right-wing political apparatus in which Edgar Prince was a key player did succeed in propelling the 1994 Republican Revolution and Newt Gingrich’s rise to Speaker of the House, the Clinton administration was viewed by the theocons as a far-left “regime” that was forcing a proabortion, progay, antifamily, antireligious agenda on the country. In November 1996—the month Clinton crushed Bob Dole and won reelection—the main organ of the theoconservative movement, Richard Neuhaus’s journal First Things, published a “symposium” titled “The End of Democracy?” which bluntly questioned “whether we have reached or are reaching the point where conscientious citizens can no longer give moral assent to the existing regime.”¹⁹ A series of essays raised the prospect of a major confrontation between the church and the “regime,” at times seeming to predict a civil-war scenario or Christian insurrection against the government, exploring possibilities “ranging from noncompliance to resistance to civil disobedience to morally justified revolution.”²⁰ Erik Prince’s close friend, political collaborator, and beneficiary Chuck Colson authored one of the five major essays of the issue, as did extremist Judge Robert Bork, whom Reagan had tried unsuccessfully to appoint to the Supreme Court in 1987. “Americans are not accustomed to speaking of a regime. Regimes are what other nations have,” asserted the symposium’s unsigned introduction. “This symposium asks whether we may be deceiving ourselves and, if we are, what are the implications of that self-deception. By the word ‘regime’ we mean the actual, existing system of government. The question that is the title of this symposium is in no way hyperbolic. The subject before us is the end of democracy.” It declared, “The government of the United States of America no longer governs by the consent of the governed…. What is happening now is the displacement of a constitutional order by a regime that does not have, will not obtain, and cannot command the consent of the people.”²¹ The editorial quoted Supreme Court Justice Antonin Scalia saying, “A Christian should not support a government that suppresses the faith or one that sanctions the taking of an innocent human life.”²²

Colson’s essay was titled “Kingdoms in Conflict.” “[E]vents in America may have reached the point where the only political action believers can take is some kind of direct, extra-political confrontation of the judicially controlled regime,” Colson wrote, adding that a “showdown between church and state may be inevitable. This is not something for which Christians should hope. But it is something for which they need to prepare.” He asserted, “[A] ‘social contract’ that included biblical believers and Enlightenment rationalists was the basis of the founding of the United States…. If the terms of our contract have in fact been broken, Christian citizens may be compelled to force the government to return to its original understanding…. The writings of Thomas Jefferson, who spoke openly of the necessity of revolution, could also be called upon for support.” Colson stopped short of calling for an open rebellion, but he clearly viewed that as a distinct possibility/necessity in the near future, saying, “with fear and trembling, I have begun to believe that, however Christians in America gather to reach their consensus, we are fast approaching this point.”²³

The First Things symposium sparked great controversy—even within the theoconservative movement. Among those who came to the defense of Colson, Bork, Neuhaus, et al. was Edgar Prince’s old friend, ally, and beneficiary James Dobson of Focus on the Family. “My deepest gratitude to the editors of First Things for facilitating what history may reveal to be their most important symposium. The moral legitimacy of our current government and the responsibility of the Christian towards it are questions of tremendous moment,” Dobson wrote. “I wonder—do we have the courage to act upon the conclusions we may reach in these deliberations?” Dobson said the essays had “laid an indisputable case for the illegitimacy of the regime now passing itself off as a democracy,” adding, “I stand in a long tradition of Christians who believe that rulers may forfeit their divine mandate when they systematically contravene the divine moral law…. We may rapidly be approaching the sort of Rubicon that our spiritual forebears faced: Choose Caesar or God. I take no pleasure in this prospect; I pray against it. But it is worth noting that such times have historically been rejuvenating for the faith.”²⁴

It was against this backdrop—a throwing down of the political and religious gauntlet by many of the powerful conservative leaders Prince and his family had supported and built up—that Blackwater was born. A month after the First Things symposium explored the possibility of a “showdown between church and state” and a “morally justified revolution,”²⁵ Erik Prince would begin building up one of the largest privately held stockpiles of weaponry inside the United States, a few hours outside Washington, D.C. Prince simultaneously strengthened his bonds with powerful Republican legislators and the leaders of the theoconservative movement, becoming a major bankroller on par with his father.²⁶ On December 26, 1996, three months after being discharged from active duty with the SEALs,²⁷ he incorporated Blackwater Lodge and Training Center.²⁸ The next year, he purchased more than four thousand acres in Currituck County, North Carolina, for $756,000 and nearly one thousand acres in neighboring Camden County for $616,000. Prince’s new kingdom would be built near the Great Dismal Swamp.²⁹ The stated idea behind Blackwater was “to fulfill the anticipated demand for government outsourcing of firearms and related security training.”³⁰

Blackwater USA might now have influence over and access to some of the most powerful operatives roaming the chambers of power in Washington, D.C., but at its inception, the company struggled to convince the planning commission of Currituck County—population twenty-thousand³¹—that Blackwater should be allowed to open for business. In the pre-9/11 days of Bill Clinton’s America, the planning commissioners weren’t worried about international terrorism and couldn’t have even comprehended the company that Blackwater would become. Instead, what concerned them was property values, noise ordinances, and the possibility that the types of militia groups that Oklahoma City bomber Timothy McVeigh had been linked to would come to their community for training. When Erik Prince appealed to the plan commissioners, his project was described as a “$2 million outdoor shooting range.”³² At the time, Prince estimated the facility could create up to thirty new jobs in the county and help to train its sheriff’s department. But before Prince could land approval for the facility, he needed to convince the planning commission to create a new ordinance that would allow it to be built, and to spell out the protections that would be put in place to keep the area quiet and stray bullets away from residences. ³³

Local opposition to the Blackwater project was strong. A year earlier, residents had been outraged when stray bullets from a hunter struck a truck and building at a local junior high during school hours.³⁴ Consequently, county officials raised serious questions that a proposed 900-foot buffer between nearby properties and firing areas would be sufficient. “The 900-foot buffer is no buffer at all, really,” County Attorney William Romm said.³⁵ One resident constructing a home near Blackwater’s proposed site said, “Nobody’s going to want to live anywhere near a shooting range,” while another resident asserted, “I’ve not spoken to anyone who is in favor of this.”³⁶ One woman at one of the early meetings said she “would never consider buying anything next to a firing range of this magnitude.”³⁷ The commission apparently didn’t seem sold on the idea, either, and a month later denied Prince’s request for a new ordinance. “We’re very disappointed,” Prince said at the time. “For a county that claims to be a sportsman’s paradise, it doesn’t bode well for safe-shooting sports.”³⁸ After being rebuffed by Currituck, Prince went down the road to Camden County, which quickly approved the project.³⁹

In June 1997, ground was broken on the Blackwater compound, and in May 1998, the company officially opened for business.⁴⁰ Though the company’s name sounds ominous, it actually was inspired by the black waters of the Great Dismal Swamp—a 111,000-acre peat bog stretching from south-eastern Virginia to northeastern North Carolina—close to where Blackwater was contructed. While many later accounts from company executives and others would portray the early days of Blackwater as slow going, its volume of “black” and confidential contracts makes that difficult to confirm. As Clark remembers it, the company hit the ground running. “The SEAL community came down, because we came from the SEAL community and they were aware of it. They came down at least for the shootouts and the ranges to run their training. It filtered into a lot of law enforcement; the FBI came down, as word got out. The facility was the initial draw to a lot of them because it was something new and big and close by,” Clark said.⁴¹ While Blackwater was constructed on a swamp, it was strategically located a half-hour from the largest naval base in the world, the forty-three-hundred-acre Norfolk Naval Station,⁴² and not far from the epicenter of the U.S. intelligence and federal law enforcement communities. The facility would also provide various government agencies—federal, state, and local—with a remote and secure location to discreetly train forces. “A lot of the reason some of those agencies came down there was to get away from everybody else, get out of the public eye, for the press and the public,” Clark recalled. “Just because they’re wearing black outfits everybody want[ed] to come see what they’re doing.”⁴³

Clark said Blackwater’s new training facility offered U.S. Special Operations forces another advantage over existing private shooting facilities, many of which were run by competitive “trophy shooters.” At Blackwater, Clark recalled, “the training that we exposed them to—mainly that I exposed them to while I was there—kind of gave them a breath of fresh air. You know, finally someone that’s not a competitive trophy shooter or some kind of action shooter.” Competitive shooting, Clark said, was “all about me, me, me. Second place for them is just a small trophy, but [for] tactical shooters, people who have to kick in doors or go to the desert, second place is not a very good place to be.”⁴⁴

By 1998, Blackwater was doing a brisk business in training private and government customers in the use of a wide variety of weapons from pistols to precision rifles to machine guns. It was leasing out the facility to SEALs for their training. Police officers from Virginia, North Carolina, and Canada had enrolled in Blackwater training programs, and the company was starting to get inquiries from foreign governments. The Spanish government was interested in training security details that would protect presidential candidates, while Brazil expressed interest in counterterrorism training.⁴⁵ “They are the best of the best… to come to a school where you are taught by the best in the world is great,” an early customer told the Virginian-Pilot in September 1998. “It is an honor to be here.”⁴⁶

As word spread about Blackwater’s training, Prince and other executives wanted to make sure that Blackwater would earn a reputation as the premiere facility of its kind. “I was a retired Marine officer who had been in the hotel business for fifteen years, so they were looking for somebody that had that balance,” Masciangelo, the company’s first president, said in an interview. “Blackwater delivered more than training. The whole customer service issue and the ambiance and the setting and the facilities, that was the whole reason for them hiring me.”⁴⁷ By late 1998, Blackwater boasted a nine-thousand-square-foot lodge with conference rooms, classrooms, lounge, pro shop, and dining hall. A wide variety of ranges including an urban street façade and a pond for water-to-land training were just some of the early offerings.⁴⁸

Steve Waterman, a writer on assignment for Soldier of Fortune, visited Blackwater in 1999 and described the facility at Moyock in glowing terms. With “a great chow hall (I would describe it more as a cafeteria), satellite TV systems in the dorms and plenty of hot water in the showers, I would put Blackwater ahead of any of the civilian or military training sites I have visited,” Waterman wrote. “When you turn the last corner and are able to see the buildings, it quickly becomes obvious that the operators of this center are quite serious in their endeavors and nothing has been spared to make this a top notch facility. The buildings are brand new… and the place is well laid out and neat. Off to the right are the dorm facilities and the tactical house. Straight ahead is the main building which houses the classrooms, store, administrative offices, cafeteria, armory, and conference rooms, lounge, where tall tales may be spun and examples of taxidermy are displayed. A large black bear looms out at you over the fireplace and several other animals watch you through plastic eyes. The gun cleaning area is off to the side of the main building where there is room for more than a dozen people to clean weapons. The benches are chest high and there are compressed air nozzles for blowing dust and dirt out of weapons. The well-lighted rooms have four bunk beds in each with a spacious closet for each occupant. There are two heads (bathrooms to you landlubbers), each with several shower stalls. On both sides of the dorm building is a large room with a couch and several chairs. A TV in each lounge is fed by a satellite system. There is also a refrigerator and water cooler in each of these rooms. Magazines are there for the perusal of the guests.”⁴⁹ In 1998 Blackwater hosted a police and military handgun competition, the first of many such events, later called the Shoot-Out at Blackwater, that would draw people from all over the world to Moyock. But Blackwater would soon demonstrate its powerful ability to capitalize on tragedy and fear. In fact, 1999 would kick off a string of almost annual high-profile violent incidents that would play out on international television and result in more business and growing profits for Blackwater.

On April 20, 1999, Dylan Klebold and Eric Harris walked into their high school, Columbine High, in Littleton, Colorado, wearing black trench coats and armed to the teeth with semiautomatic weapons and shotguns. The two proceeded to go on a killing rampage that took the lives of twelve of their fellow students and one teacher. The incident would quickly be dubbed the “Columbine massacre.” Despite the fact that the number of school shootings had dropped from thirty-two during the 1992-1993 school year to nineteen during 1998-1999, the hype around Columbine encouraged a panic about such incidents that spread throughout the country.⁵⁰ It also caused law enforcement agencies at all levels to review their ability to respond to such incidents. “Nobody thought that Columbine could have happened,” Ron Watson, a spokesman for the National Tactical Officer’s Association (NTOA), said at the time. “So Columbine has changed thinking. It has thrown a new wrinkle into training.”⁵¹

In September 1999, some four hundred SWAT team officers found their way to Moyock for exercises at Blackwater’s newly constructed “R U Ready High School.”⁵² The NTOA kicked in $50,000 to construct the fifteen-room, 14,746-square-foot mock school, but the project likely cost Blackwater much more.⁵³ As with future projects, Prince had the means and the motivation to spend if he thought there would eventually be a payoff. “Erik had enough money to pay for whatever they needed up front, so he could get his money back, he had plenty of capital,” said Al Clark. “He probably inherited $500 million, so he had plenty of money to play with.”⁵⁴ The mock school featured the sound effects of screaming students, blood spatters, gunshot wounds, and simunition (practice ammo). “You’re dealing with chaos—a tremendous amount of confusion,” said retired NYPD Emergency Service Unit commander Al Baker. “They are all young and all are unknowns in this large place. There is a tremendous amount of noise. You don’t know who the shooter is. We’re trying to teach them the techniques of clearing a hostile environment. There is a lot of bleeding. This is not something that can wait.”⁵⁵

Blackwater’s quick construction and running of “R U Ready High” convinced the NTOA, an organization that trains four thousand police officers annually, to split its sixteenth annual conference between Virginia Beach and Blackwater’s Moyock compound. The event drew tactical teams and police officers from every state, Canada, Haiti, Belgium, and England. By April 2000, the NTOA had put more than one thousand officers through training at “R U Ready” as police departments across the country started more and more to hear the name Blackwater. At an NTOA soiree at the time, Prince commented that events like Columbine are “a reminder that vigilance is the price of liberty, and we need well-trained law enforcement and military. There is no shortage of evil in the world.”⁵⁶

On February 1, 2000, with its name spreading across the law enforcement community, Blackwater took a huge leap forward as it landed its first General Services Administration contract, creating a government-approved list of services and goods Blackwater could sell to federal agencies and the prices it could officially charge. Winning a “GSA schedule” essentially opened Blackwater up for “long-term governmentwide contracts.”⁵⁷ The schedule outlined a list of prices for use of Blackwater facilities or to use Blackwater instructors for specialty training. Use of the tactical training area cost $1,250 per day for less than twenty shooters. Use of the urban training area, of which “R U Ready High” was a component, ran $1,250 a day for less than thirty people, $1,500 a day for more. Each range could be rented out to a government agency for $50 per person per day with a $500 minimum. The schedule also provided for $1,200-a-day Blackwater instructors to teach classes in executive protection, force protection, close quarter battle, ship-boarding movement, and hostage rescue, and allowed Blackwater to sell its own specially developed targets and other training gear to whatever agency requested it. Offerings ranged from $1,335 bullet traps to $170 “pepper poppers” to $512 turning targets.⁵⁸ In and of themselves, those may not seem like big ticket items, but having the GSA schedule in place essentially opened Blackwater’s doors to the entire federal government, provided it could politick well enough to score contracts. “It’s like having a Wal-Mart to the government,” explained Jamie Smith in an interview.⁵⁹ Smith is a former CIA operative who spent years working for Blackwater. “Having a GSA contract allows the government to go in and buy things from you without having to go out to bid really.” The real work for companies once they win a GSA designation is greasing the wheels at various government agencies and convincing them to use the company’s services often and widely. That’s where a company’s political connections come into play. Halliburton had developed a model that Blackwater and others could mimic. As Smith said, “It’s a handshake-type thing and you say, ‘Here’s our GSA schedule, and let’s see what we can do.’” Blackwater’s first payment under its GSA contract was for $68,000 in March 2000 for “armament training devices.”⁶⁰ As it happened, that was the exact amount Erik Prince would donate later that year to the Republican National State Elections Committee in an election year that would see George W. Bush take power.⁶¹

Blackwater’s original five-year GSA contract value (i.e., the government’s projection of how much business Blackwater would do with federal agencies) was estimated at a meager $125,000.⁶² When it was extended by five years in 2005, the estimate was pushed to $6 million.⁶³ But all of those projections were far shy of the actual business Blackwater would win under the GSA. As of 2006, Blackwater had already been paid $111 million under the schedule. “This is a multiple-award schedule, indefinite quantity, indefinite delivery contract,” said GSA spokesman Jon Anderson. “When the contract is first awarded, we do not know whether or not agencies are going to place orders with the contractor as the contractor has to compete with other… contractors for task orders, so we set the estimated dollar value of the contract at $125,000. Blackwater was obviously very successful in their endeavors and was able to build their sales to $111 million over a six-year period.”⁶⁴ By 2008, the number would reach more than a billion dollars.

In 2000, as business was picking up for Blackwater, all was not well at the Moyock compound. Al Clark, the man many credit with dreaming up the company, found himself at odds with Prince and others at the company. “As time went on, some things took place there that I didn’t really agree with, so I left to start another business,” recalled Clark, who founded Special Tactical Systems with former Blackwater employee and fellow SEAL Dale McClellan in 2000. “One of the things that started happening was Erik wanted it to be a playground for his rich friends. And I was questioned on why would I train your standard Army guy on the same level that I’d train a SEAL. And my rebuttal was, ‘Why would you base the value of someone’s life on the uniform they’re wearing, because once the bullets start flying they don’t discriminate,’ and I was basically told my standards were too high.”⁶⁵

Clark says during training sessions he “gave everybody everything I had when I had them,” but he said company executives “thought there was no incentive for [clients] to come back if I gave them everything, and my argument was, they may not get a chance to come back, so while we’ve got them, we should give them everything we have. A lot of cops were paying out of their own pocket, taking their vacation time away from their families, to go to a school they thought would give them something their departments wouldn’t.” Clark was reluctant to expand much on his split with Prince, but he summed up his feelings about leaving Blackwater: “Let’s put it this way: I wanted it to be a place built by professionals for professionals, and I wanted it to be professional, and it didn’t feel to me like it was being that way.”⁶⁶ Blackwater had already started down the path to success when Clark left in 2000, having landed a couple of hundred thousand dollars in payments on its GSA contract and other awards, but it wasn’t until more than a year later that the business really began to boom. That would come courtesy of two terror attacks attributed to Osama bin Laden.

Shortly after 11:00 a.m. on the morning of October 12, 2000, in the Yemeni port of Aden, a small boat approached the U.S. Navy guided missile destroyer the USS Cole, which had just finished up a routine fuel stop. As the boat neared the ship’s port side, it exploded, ripping a forty-by-forty-foot hole in the massive ship. Osama bin Laden would later take responsibility for the suicide attack that killed seventeen U.S. sailors and injured thirty-nine others. The second annual tragedy, following 1999’s Columbine massacre, that would benefit Blackwater resulted in a $35.7 million contract with the Navy, Blackwater’s ancestral branch of the military, to conduct “force protection” training.⁶⁷ Traditionally, the average Navy midshipman didn’t train for a combat role, but with increased threats to the fleet, that began to change. “The attack on the USS Cole was a terrible tragedy and dramatic example of the type of threat our military forces face worldwide on a day-to-day basis, emphasizing the importance of force protection both today and in the future,” Adm. Vern Clark, the chief of Naval operations, told the Senate Armed Services Committee in May 2001. “The Navy has taken action at home and abroad to meet this challenge, undergoing a sea change in the way we plan and execute self-defense. We have enhanced the manning, training, and equipping of naval forces to better realize a war fighter’s approach to physical security, with AT/FP serving as a primary focus of every mission, activity, and event. Additionally, we are dedicated to ensuring this mindset is instilled in every one of our sailors.”⁶⁸ At the time, the Navy had already committed itself to incorporating “a comprehensive plan to reduce infrastructure costs through competition, privatization, and outsourcing.”⁶⁹ Among its projects was a review of some 80,500 full-time equivalent positions for outsourcing.⁷⁰ While the bombing of the USS Cole significantly boosted Blackwater’s business, it would pale in comparison to the jackpot that would come courtesy of the greatest act of terror ever carried out on U.S. soil.

On the morning of September 11, 2001, American Airlines Flight 11, carrying ninety-two passengers from Boston to Los Angeles, abruptly turned course and headed straight toward New York City. At 8:46 a.m., the plane smashed directly into the North Tower of the World Trade Center. Some seventeen minutes later, United Airlines Flight 175 crashed into the South Tower. At 9:37 a.m., American Airlines Flight 77 hit the Pentagon. As fire and smoke burned from two of America’s most famous buildings, the attacks almost instantly accelerated an agenda of privatization and conquest long sought by many of the people who had just taken over the White House less than a year earlier. President Bush’s Secretary of the Army, Thomas White, a former Enron executive, oversaw the rapid implementation of the privatization agenda kick-started by Dick Cheney a decade earlier.⁷¹ The program would soon see the explosion of a $100 billion global for-profit military industry. Among the greatest beneficiaries of the administration’s newly declared “war on terror” would be Erik Prince’s Blackwater. As Al Clark put it, “Osama bin Laden turned Blackwater into what it is today.”⁷²

“The bombing of the USS Cole in Aden, Yemen, sent a ripple through the U.S. Navy, and then 9/11 happened and the ripple was worldwide,” Blackwater vice president Chris Taylor said in a 2005 speech at George Washington University Law School. “The Navy appropriately responded realizing that in order to combat today’s terrorist threat, all sailors would need substantial training in basic and advanced force protection techniques. The Navy moved swiftly to create a sound training program, the majority of which Blackwater now executes and manages all over the country. Sailors the world over are now better prepared to identify, appropriately engage, and defeat would-be attacks on naval vessels in port and underway. To date, Blackwater has trained some 30,000 sailors.”⁷³ Blackwater was officially awarded the $35.7 million Navy contract for “force protection training that includes force protection fundamental training… armed sentry course training; and law enforcement training.”⁷⁴ The bulk of the work was to be performed in Norfolk, with some in San Diego and San Antonio.⁷⁵ A Blackwater trainer who oversaw the contract commented shortly after it started in 2002 that his instructors were shocked to find many sailors “have never held a firearm, except for at boot camp.”⁷⁶

The post-9/11 environment provided Erik Prince and his Blackwater colleagues with a blank canvas on which to paint a profitable future for the company, seemingly limited only by imagination and personnel. Defense Secretary Rumsfeld had come into office determined to dramatically expand the role private companies like Blackwater would play in U.S. wars, and 9/11 had put that agenda on the fastest of tracks. On September 27, two weeks after 9/11, Prince made a rare media appearance as a guest on Fox News’s flagship program, The O’Reilly Factor. “I’ve been operating in the training business now for four years and was starting to get a little cynical on how seriously people took security,” Prince said on the show. “The phone is ringing off the hook now.”⁷⁷ The reason for Prince’s appearance on Fox was to discuss the air marshal program and the training that marshals would receive, some of it at Blackwater. That month, Blackwater inked contracts with the FBI worth at least $610,000.⁷⁸ Soon it would be providing training for virtually every wing of the government, from the Department of Energy’s National Nuclear Security Administrative Service Center to the Department of the Treasury’s Financial Crime Enforcement Network to the Department of Health and Human Services assistant secretary’s office.⁷⁹

But while Blackwater raised its profit margin and profile with its training services in the aftermath of 9/11, its true fame and fortune would not be gained until it formed Blackwater Security Consulting in 2002 and burst into the world of soldiers-for-hire. As with Blackwater’s founding, Erik Prince would once again provide the medium for another’s idea. This time, it was the vision of former CIA operative Jamie Smith. Smith had been recruited by Al Clark to teach weapons classes while he was a law student at Regent University, “America’s preeminent Christian university,” in Virginia Beach, not far from Blackwater.⁸⁰

In an interview, Smith said he first thought about the prospects for a private security company while working as a CIA operative during the 1991 Persian Gulf War. “I’m not trying to say that I was some sort of soothsayer a decade prior to all of this, but it was an infantile idea, it looked like it was just going to continue the trends of privatization,” Smith said. “There were already companies doing similar things. There wasn’t a lot of public knowledge surrounding that. DynCorp was working, there were other companies, SAIC, that were doing something along the same lines.” Smith said he realized that the military was beginning to use private forces to guard military facilities, a practice known as “force protection,” thus freeing up more forces for combat. It was a trend, and Smith said he “did not think it was something that could be arrested because of the nature of our military being a volunteer service. Do you really want to have your volunteer force standing guard out at the front gate when they could be doing things a lot more valuable for you? So I just didn’t see that it would change and that it would probably just continue.”⁸¹

Like Al Clark a few years earlier, Jamie Smith didn’t have the means at the time to start his own private security company, and while the demand was certainly there, it was not overwhelming. Then, after 9/11, Smith says Prince “called and said, ‘Hey, I’d like you to consider a full-time job and come back to work with us,’ and I told him that was interesting to me and that I would consider doing that with the caveat that we could create this security company.” Prince agreed. But, Smith contends, Prince didn’t see the payoff in what would shortly become Blackwater’s biggest moneymaker. “I was told, ‘You can’t devote all your time to this because it’s not going to work.’ They said, ‘You can devote about 20 percent of your total time to this, but no more than that—you need to stick to what you’re doing now,’” Smith said.⁸² Smith joined Blackwater full-time in December 2001, and Blackwater Security Consulting was incorporated in Delaware on January 22, 2002.⁸³ Within months, as the U.S. occupied Afghanistan and began planning the Iraq invasion, Blackwater Security was already turning a profit, pulling in hundreds of thousands a month from a valuable CIA contract.⁸⁴

One of the key players in landing that first Blackwater Security contract was A. B. “Buzzy” Krongard, executive director of the CIA, the agency’s number-three position.⁸⁵ Krongard, who was named to that post in March 2001,⁸⁶ had an unusual background for a spook, having spent most of his adult life as an investment banker. He built up Alex.Brown, the country’s oldest investment banking firm, into one of the most successful, eventually selling it to Bankers Trust, which he resigned from in 1998.⁸⁷ There have been some insinuations that Krongard was working undercover for the CIA years before he officially joined the agency in 1998 as a special adviser to George Tenet.⁸⁸ But he won’t reveal how he met the CIA director, except to say that it was through “mutual friends.”⁸⁹ The Princeton alum, Hall of Fame lacrosse player, and former Marine boasts of having once punched a great white shark in the jaw; and he keeps one of its teeth on a chain and pictures of the animal in his office.⁹⁰ Despite his bravado, some at the agency thought Krongard more of a wanna-be, according to a 2001 Newsweek story published shortly after his ascension to the number-three spot. “A wanna-be? Maybe I am. Maybe I’m not. That’s as much as you’re going to get,” Krongard responded.⁹¹

9/11 conspiracy theorists have long been interested in Krongard because the bank he headed until 1998, which was bought out by Deutsche Bank after he left, was allegedly responsible for the unusually high number of put options on United Airlines stock placed just before 9/11, options that were never collected.⁹² There is no evidence of his having prior knowledge of the attacks. While at the CIA, working under George Tenet, Krongard acted internally, reorganizing divisions⁹³ and pushing for projects like an intelligence venture capital firm,⁹⁴ but he did on occasion speak publicly. In October 2001, he declared, “The war will be won in large measure by forces you do not know about, in actions you will not see and in ways you may not want to know about, but we will prevail.”⁹⁵

Some three years later, in January 2005, Krongard made news when he became the most senior administration figure to articulate the benefits of having not killed or captured Osama bin Laden. “You can make the argument that we’re better off with him (at large),” he said. “Because if something happens to bin Laden, you might find a lot of people vying for his position and demonstrating how macho they are by unleashing a stream of terror…. He’s turning into more of a charismatic leader than a terrorist mastermind.”⁹⁶ Krongard also characterized bin Laden “not as a chief executive but more like a venture capitalist,” saying, “Let’s say you and I want to blow up Trafalgar Square. So we go to bin Laden. And he’ll say, ‘Well, here’s some money and some passports and if you need weapons, see this guy.’”⁹⁷

It’s not clear exactly what the actual connection was between Prince and Krongard. Some have alleged that Krongard knew Prince’s father.⁹⁸ In a brief telephone interview, Krongard would only say he was “familiar” with Prince and Blackwater.⁹⁹ A former Blackwater executive, however, asserted, “I know that Erik and Krongard were good buddies.”¹⁰⁰ Whatever Krongard’s involvement, it was the CIA that handed Blackwater its first security contract in April 2002.¹⁰¹ Krongard visited Kabul and said he realized the agency’s new station there was sorely lacking security.¹⁰² Blackwater received a $5.4 million six-month no-bid contract to provide twenty security guards for the Kabul CIA station.¹⁰³ Krongard said it was Blackwater’s offering and not his connection to Prince that led to the company landing the contract, and that he talked to Prince about the contract but wasn’t positive who called who, that he was “not sure which came first, the chicken or the egg.”¹⁰⁴ He said that someone else was responsible for actually signing off on the CIA contract. “Blackwater got a contract because they were the first people that could get people on the ground,” Krongard said in the interview. “We were under the gun, we did whatever it took when I came back from Kabul…. The only concern we had was getting the best security for our people. If we thought Martians could provide it, I guess we would have gone after them.”¹⁰⁵

The relationship between Krongard and Prince apparently got chummier after the contract was signed. “Krongard came down and visited Blackwater, and I had to take his [family] around and let them shoot on the firing range a number of times,” said a former Blackwater executive in an interview. “That was after the contract was signed, and he may have come down just to see the company that he had just hired.”¹⁰⁶ Prince apparently became consumed with the prospect of being involved with secretive operations in the war on terror—so much so that he personally deployed on the front lines.¹⁰⁷ Prince joined Jamie Smith as part of the original twenty-man contingent Blackwater sent to fulfill its first CIA contract, which began in May 2002, according to Robert Young Pelton’s book Licensed to Kill.¹⁰⁸ Most of the team guarded the CIA Kabul station and its assets at the airport, but Smith and Prince also went to one of the most dangerous places in Afghanistan, Shkin, where the United States was establishing a base four miles from the Pakistani border. But after just one week, Prince left the Shkin detail and the mud fortress (that some called the “Alamo”) out of which U.S. forces operated. Smith told Pelton that Prince’s trip was more like “playing CIA paramilitary” and that he left to go “schmooze” those who could give more work to Blackwater Security.¹⁰⁹ Smith stayed in Shkin for two months and then in Kabul for four months. After leaving Shkin, Prince remained in Kabul for a week. Apparently Prince enjoyed the experience so much that he subsequently tried to join the CIA, but was reportedly rejected when his polygraph test came back inconclusive.¹¹⁰ Though Prince was denied the status of a full CIA operative, he has apparently maintained close ties with the agency. Prince reportedly was given a “green badge” that permitted him access to most CIA stations.¹¹¹ “He’s over there [at CIA headquarters] regularly, probably once a month or so,” a CIA source told Harper’s journalist Ken Silverstein in 2006. “He meets with senior people, especially in the [directorate of operations].”¹¹²

Since CIA and other intelligence and security contracts are “black” contracts, it’s difficult to pin down exactly how much Blackwater began pulling in after that first Afghanistan job, but Smith described it as a rapid period of growth for Blackwater. The company’s work for the CIA and the military and Prince’s political and military connections would provide Blackwater with important leverage in wooing what would become its largest confirmed client, the U.S. State Department. “After that first contract went off, there was a lot of romancing with the State Department where they were just up the road, so we traveled up there a lot in Kabul and tried to sweet talk them into letting us on board with them,” Smith said. “Once the State Department came on and there was a contract there, that opened up some different doors. Once you get your foot in the door with a government outfit that has offices in countries all over the world, it’s like—and this is probably a horrible analogy—but it’s something maybe like the metastasis of a cancer, you know, once you get into the bloodstream you’re going to be all over the body in just a couple of days, you know what I mean? So if you get in that pipeline, then everywhere that they’ve got a problem and an office, there’s an opportunity.”¹¹³

For Blackwater, the opportunity of a lifetime would come when U.S. forces rolled into Baghdad in March 2003. Strapped with a GSA schedule and deep political and religious connections, Prince snagged a high-profile contract in Iraq that would position his men as the private bodyguards for the Bush administration’s top man in Baghdad, Ambassador L. Paul Bremer III. Referred to as the “viceroy” or “proconsul,” Bremer was a diehard free-marketeer who, like Prince, had converted to Catholicism and passionately embraced the neoconservative agenda of using American military might to remake the world according to U.S. interests—all in the name of democracy. The Bremer contract meant that Prince would be at the helm of an elite private force deployed on the front lines of a war long sought by many of the forces that made up the theocon movement. Far from the simple shooting range on a North Carolina swamp that Blackwater was just a few years earlier, the company was now recognized by the Bush administration as an essential part of its war on terror armada. Blackwater president Gary Jackson, a career Navy SEAL, would soon boast that some of Blackwater’s contracts were so secret that the company couldn’t tell one federal agency about the business it was doing with another agency.¹¹⁴ Iraq was a pivotal coming-of-age moment for mercenaries, and Blackwater would soon emerge as the industry trendsetter. But less than a year after Prince’s forces deployed in Iraq, four of Blackwater’s men would find themselves on a fatal mission in the Sunni Triangle that would propel Blackwater to international infamy and forever alter the course of the U.S. occupation and Iraqi resistance to it. It happened in a city called Fallujah.