Blackwater's Private CIA

By Jeremy Scahill, The Nation. Posted June 9, 2008.

This past September, the secretive mercenary company Blackwater USA found its name splashed across front pages throughout the world after the company's shooters gunned down seventeen Iraqi civilians in Baghdad's Nisour Square. But by early 2008, Blackwater had largely receded from the headlines save for the occasional blip on the media radar sparked by Congressman Henry Waxman's ongoing investigations into its activities. Its forces remained deployed in Iraq and Afghanistan, and business continued to pour in. In the two weeks directly following Nisour Square, Blackwater signed more than $144 million in contracts with the State Department for "protective services" in Iraq and Afghanistan alone and, over the following weeks and months, won millions more in contracts with other federal entities like the Coast Guard, the Navy and the Federal Law Enforcement Training Center.

Blackwater's Iraq contract was extended in April, but the company is by no means betting the house on its long-term presence there. While the firm is quietly maintaining its Iraq work, it is aggressively pursuing other business opportunities. In September it was revealed that Blackwater had been "tapped" by the Pentagon's Counter Narcoterrorism Technology Program Office to compete for a share of a five-year, $15 billion budget "to fight terrorists with drug-trade ties." According to the Army Times, the contract "could include antidrug technologies and equipment, special vehicles and aircraft, communications, security training, pilot training, geographic information systems and in-field support." A spokesperson for another company bidding for the work said that "80 percent of the work will be overseas." As Richard Douglas, a deputy assistant secretary of defense, explained, "The fact is, we use Blackwater to do a lot of our training of counternarcotics police in Afghanistan. I have to say that Blackwater has done a very good job."

Such an arrangement could find Blackwater operating in an arena with the godfathers of the war industry, such as Lockheed Martin, Northrop Grumman and Raytheon. It could also see Blackwater expanding into Latin America, joining other private security companies well established in the region. The massive US security company DynCorp is already deployed in Colombia, Bolivia and other countries as part of the "war on drugs." In Colombia alone, US military contractors are receiving nearly half the $630 million in annual US military aid for the country. Just south of the US border, the United States has launched Plan Mexico, a $1.5 billion counternarcotics program. This and similar plans could provide lucrative business opportunities for Blackwater and other companies. "Blackwater USA's enlistment in the drug war," observed journalist John Ross, would be "a direct challenge to its stiffest competitor, DynCorp -- up until now, the Dallas-based corporation has locked up 94 percent of all private drug war security contracts." The New York Times reported that the contract could be Blackwater's "biggest job ever."

As populist movements grow stronger in Latin America, threatening US financial interests as well as the standing of right-wing US political allies in the region, the "war on drugs" is becoming an increasingly central part of US counterinsurgency efforts. It allows for more training of foreign security forces through the private sector -- away from Congressional oversight -- and a deployment of personnel from US war corporations. With US forces stretched thin, sending private security companies to Latin America offers Washington a "small footprint" alternative to the politically and militarily problematic deployment of active-duty US troops. In a January report by the United Nations working group on mercenaries, international investigators found that "an emerging trend in Latin America but also in other regions of the world indicates situations of private security companies protecting transnational extractive corporations whose employees are often involved in suppressing the legitimate social protest of communities and human rights and environmental organizations of the areas where these corporations operate."

If there is one quality that is evident from examining Blackwater's business history, it is the company's ability to take advantage of emerging war and conflict markets. Throughout the decade of Blackwater's existence, its creator, Erik Prince, has aggressively built his empire into a structure paralleling the US national security apparatus. "Prince wants to vault Blackwater into the major leagues of U.S. military contracting, taking advantage of the movement to privatize all kinds of government security," reported the Wall Street Journal shortly after Nisour Square. "The company wants to be a one-stop shop for the U.S. government on missions to which it won't commit American forces. This is a niche with few established competitors."

In addition to providing armed forces for war and conflict zones and a wide range of military and police training services, Blackwater does a robust, multimillion-dollar business through its aviation division. It also has a growing maritime division and other national and international initiatives. Among these, Blackwater is in Japan, where its forces protect the US ballistic missile defense system, which, according to Stars and Stripes, "points high-powered radio waves westward toward mainland Asia to hunt for enemy missiles headed east toward America or its allies." Meanwhile, early this year, Defense News reported, "Blackwater is training members of the Taiwanese National Security Bureau's (NSB's) special protection service, which guards the president. The NSB is responsible for the overall security of the country and was once an instrument of terrorism during the martial law period. Today, according to its Web site, the NSB is responsible for 'national intelligence work, special protective service and unified cryptography.'" Former Pakistani Prime Minister Benazir Bhutto reportedly tried to hire Blackwater to protect her as she campaigned for the presidency in 2007. Conflicting reports indicated that either the US State Department or the Pakistani government vetoed the plan. She was assassinated in December.

What could prove to be one of Blackwater's most profitable and enduring enterprises is one of the company's most secretive initiatives -- a move into the world of privatized intelligence services. In April 2006, Prince quietly began building Total Intelligence Solutions, which boasts that it "brings CIA-style" services to the open market for Fortune 500 companies. Among its offerings are "surveillance and countersurveillance, deployed intelligence collection, and rapid safeguarding of employees or other key assets."

As the United States finds itself in the midst of the most radical privatization agenda in its history, few areas have seen as dramatic a transformation to privatized services as the world of intelligence. "This is the magnet now. Everything is being attracted to these private companies in terms of individuals and expertise and functions that were normally done by the intelligence community," says former CIA division chief and senior analyst Melvin Goodman. "My major concern is the lack of accountability, the lack of responsibility. The entire industry is essentially out of control. It's outrageous."

Last year R.J. Hillhouse, a blogger who investigates the clandestine world of private contractors and US intelligence, obtained documents from the office of the Directorate of National Intelligence (DNI) showing that Washington spends some $42 billion annually on private intelligence contractors, up from $17.5 billion in 2000. That means 70 percent of the US intelligence budget is going to private companies. Perhaps it is no surprise, then, that the head of DNI is Mike McConnell, the former chair of the board of the Intelligence and National Security Alliance, the private intelligence industry's trade association.

Total Intelligence, which opened for business in February 2007, is a fusion of three entities bought up by Prince: the Terrorism Research Center, Technical Defense and The Black Group -- Blackwater vice chair Cofer Black's consulting agency. The company's leadership reads like a Who's Who of the CIA's "war on terror" operations after 9/11. In addition to the twenty-eight-year CIA veteran Black, who is chair of Total Intelligence, the company's executives include CEO Robert Richer, the former associate deputy director of the agency's Directorate of Operations and the second-ranking official in charge of clandestine operations. From 1999 to 2004, Richer was head of the CIA's Near East and South Asia Division, where he ran clandestine operations throughout the Middle East and South Asia. As part of his duties, he was the CIA liaison with Jordan's King Abdullah, a key US ally and Blackwater client, and briefed George W. Bush on the burgeoning Iraqi resistance in its early stages.

Total Intelligence's chief operating officer is Enrique "Ric" Prado, a twenty-four-year CIA veteran and former senior executive officer in the Directorate of Operations. He spent more than a decade working in the CIA's Counterterrorist Center and ten years with the CIA's "paramilitary" Special Operations Group. Prado and Black worked closely at the CIA. Prado also served in Latin America with Jose Rodriguez, who gained infamy late last year after it was revealed that as director of the National Clandestine Service at the CIA he was allegedly responsible for destroying videotapes of interrogations of prisoners, during which "enhanced interrogation techniques," including waterboarding, were reportedly used. Richer told the New York Times he recalled many conversations with Rodriguez, about the tapes. "He would always say, 'I'm not going to let my people get nailed for something they were ordered to do,'" Richer said of his former boss. Before the scandal, there were reports that Blackwater had been "aggressively recruiting" Rodriguez. He has since retired from the CIA.

The leadership of Total Intelligence also includes Craig Johnson, a twenty-seven-year CIA officer who specialized in Central and South America, and Caleb "Cal" Temple, who joined the company straight out of the Defense Intelligence Agency, where he served from 2004 to '06 as chief of the Office of Intelligence Operations in the Joint Intelligence Task Force -- Combating Terrorism. According to his Total Intelligence bio, Temple directed the "DIA's 24/7 analytic terrorism target development and other counterterrorism intelligence activities in support of military operations worldwide. He also oversaw 24/7 global counterterrorism indications and warning analysis for the U.S. Defense Department." The company also boasts officials drawn from the Drug Enforcement Agency and the FBI.

Total Intelligence is run out of an office on the ninth floor of a building in the Ballston area of Arlington, Virginia. Its "Global Fusion Center," complete with large-screen TVs broadcasting international news channels and computer stations staffed by analysts surfing the web, "operates around the clock every day of the year" and is modeled after the CIA's counterterrorist center, once run by Black. The firm employs at least sixty-five full-time staff -- some estimates say it's closer to 100. "Total Intel brings the...skills traditionally honed by CIA operatives directly to the board room," Black said when the company launched. "With a service like this, CEOs and their security personnel will be able to respond to threats quickly and confidently -- whether it's determining which city is safest to open a new plant in or working to keep employees out of harm's way after a terrorist attack."

Black insists, "This is a completely legal enterprise. We break no laws. We don't go anywhere near breaking laws. We don't have to." But what services Total Intelligence is providing, and to whom, is shrouded in secrecy. It is clear, though, that the company is leveraging the reputations and inside connections of its executives. "Cofer can open doors," Richer told the Washington Post in 2007. "I can open doors. We can generally get in to see who we need to see. We don't help pay bribes. We do everything within the law, but we can deal with the right minister or person." Black told the paper he and Richer spend a lot of their time traveling. "I am discreet in where I go and who I see. I spend most of my time dealing with senior people in governments, making connections." But it is clear that the existing connections from the former spooks' time at the agency have brought business to Total Intelligence.

Take the case of Jordan. For years, Richer worked closely with King Abdullah, as his CIA liaison. As journalist Ken Silverstein reported, "The CIA has lavishly subsidized Jordan's intelligence service, and has sent millions of dollars in recent years for intelligence training. After Richer retired, sources say, he helped Blackwater land a lucrative deal with the Jordanian government to provide the same sort of training offered by the CIA. Millions of dollars that the CIA 'invested' in Jordan walked out the door with Richer -- if this were a movie, it would be a cross between Jerry Maguire and Syriana. 'People [at the agency] are pissed off,' said one source. 'Abdullah still speaks with Richer regularly, and he thinks that's the same thing as talking to us. He thinks Richer is still the man.' Except in this case it's Richer, not his client, yelling 'show me the money.'"

In a 2007 interview on the cable business network CNBC, Black was brought on as an analyst to discuss "investing in Jordan." At no point in the interview was Black identified as working for the Jordanian government. Total Intelligence was described as "a corporate consulting firm that includes investment strategy," while "Ambassador Black" was introduced as "a twenty-eight-year veteran of the CIA," the "top counterterror guy" and "a key planner for the breathtakingly rapid victory of American forces that toppled the Taliban in Afghanistan." Black heaped lavish praise on Jordan and its monarchy. "You have leadership, King Abdullah, His Majesty King Abdullah, who is certainly kind towards investors, very protective," Black said. "Jordan is, in our view, a very good investment. There are some exceptional values there." He said Jordan is in a region where there are "numerous commodities that are being produced and doing well."

With no hint of the brutality behind the exodus, Black argued that the flood of Iraqi refugees fleeing the violence of the US occupation was good for potential investors in Jordan. "We get something like 600 - 700,000 Iraqis that have moved from Iraq into Jordan that require cement, furniture, housing and the like. So it is a -- it is an island of growth and potential, certainly in that immediate area. So it looks good," he said. "There are opportunities for investment. It is not all bad. Sometimes Americans need to watch a little less TV. ... But there is -- there is opportunity in everything. That's why you need situation awareness, and that's one of the things that our company does. It provides the kinds of intelligence and insight to provide situational awareness so you can make the best investments."

Black and other Total Intelligence executives have turned their CIA careers, reputations, contacts and connections into business opportunities. What they once did for the US government, they now do for private interests. It is not difficult to imagine clients feeling as though they are essentially hiring the US government to serve their own interests. In 2007 Richer told the Post that now that he is in the private sector, foreign military officials and others are more willing to give him information than they were when he was with the CIA. Richer recalled a conversation with a foreign general during which he was surprised at the potentially "classified" information the general revealed. When Richer asked why the general was giving him the information, he said the general responded, "If I tell it to an embassy official I've created espionage. You're a business partner."

In May, Erik Prince gave a speech in front of his family and supporters in his home state of Michigan. Security was extremely tight, and Blackwater barred cameras and tape recorders from the event. "The idea that we are a secretive facility, and nefarious, is just ridiculous," Prince told the friendly crowd of 750 gathered at the Amway Grand Plaza. In Iraq, Blackwater has banked on the idea that it is a sort of American Express card for the occupation. But for the future, Prince has a different corporate model, as he indicated in his speech. "When you send something overseas, do you use FedEx or the postal service?" he asked.

There are serious problems with this analogy. When you send something by FedEx, you can track your package and account for its whereabouts at all times. You can have your package insured against loss or damage. That has not been the case with Blackwater. The people who foot the sizable bill for its "services" almost never know, until it is too late, what Blackwater is doing, and there are apparently no consequences for Blackwater when things go lethally wrong. "We are essentially a robust temp agency," Prince told his fans in Michigan. He's right about that one. A temp agency serving the most radical privatization agenda in history.

See more stories tagged with: iraq, cia, bolivia, pentagon, iraq war, latin america, blackwater, mercenaries, private contractors, colombia, war on drugs, privatization, jordan, cofer black, state department, erik prince, king abdullah, nisour square, dyncorp, total intelligence soluti, rj hillhouse, robert richer

Jeremy Scahill is the author of the international bestseller, Blackwater: The Rise of the World's Most Powerful Mercenary Army, which has just been released in updated paperback form.

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