Glitz, grit, timing mix for contracting success

MOYOCK, N.C. (AP) | Erik Prince gets his guests to the runway seconds before the turboprop’s approach. The financiers hop out of his black Chevy Suburban and gawk as the pilots drop a pair of packages that float to within feet of their target — just as they might on a mission for Blackwater Worldwide in the Afghan backcountry.

His audience is captivated by the show, but the Blackwater founder and CEO focuses on a seemingly minor detail: the parachutes.

“They’re made out of the same stuff sandbags are made out of,” Mr. Prince tells the group in hurried, staccato sentences. “They are truly disposable. The normal parachutes you put a human out under are much more expensive. With these, you can use them, repack them. It’s very cheap.”

Then it’s back in the Suburban — a “sub” in Blackwater talk — as Mr. Prince speeds the investors off to their next stop on the tour of Blackwater’s campus in the North Carolina swamplands. This is life at Mr. Prince’s Blackwater: the glitz of business, the grit of military.

In that mix, critics see Blackwater as a company that recklessly manipulates the gears of war to make a buck.

Mr. Prince and his devoted team view themselves as a military support staff that helps the government save a buck through an obsessive commitment to identifying and fixing inefficiencies in operations and training.

“You can’t paint with one broad brush that absolutely applies across this whole place,” Bill Mathews, the company’s executive vice president, said during a recent interview with the Associated Press. “This is sort of the quintessential veteran-owned, operated and managed company. Almost everybody is a former U.S. serviceman.”

Their work is hardly charity. The scion of a Michigan family that made a fortune in the auto-parts business, Mr. Prince is pushing his company to reach $1 billion in revenue annually by 2010. To get there, he has decided to scale back the work — private security contracting — that at first drove the company’s growth but later made Blackwater a caustic brand name.

Mr. Prince and another former Navy SEAL founded Blackwater a decade ago, sensing an opportunity to provide training for the SEALs based in nearby Virginia Beach and for law-enforcement officers and others in the military.

The company only started booming after the bombing of the USS Cole and the Sept. 11 attacks, and company President Gary Jackson said the government later approached Blackwater about providing private security. Mr. Prince and his team were able to fill a Rolodex with thousands of contractors who were willing to stand in harm’s way to protect diplomats at a time when the military was fighting wars across two countries.

“There are only two business-development people for this huge company,” Mr. Mathews said. “It’s because, typically, there’s something that needs to be done that nobody else can really get done at the time — other than the military, and they’re too busy. So, they ask us.”

At one point, Mr. Jackson said, security contracting was 50 percent of Blackwater’s business. The company has fans among those they protect, including U.S. Ambassador to Iraq Ryan C. Crocker, and guards have never lost anyone under their protection.

But the work also has earned Blackwater a legion of detractors. The company’s workers were involved in two of the defining moments of the Iraq war — the grisly slaying of four Blackwater contractors in 2004 in Fallujah, and a September 2007 shooting at a crowded Baghdad intersection that killed 17 Iraqis — prompting congressional hearings and investigations by more than a dozen federal agencies.

Mr. Prince, who for years guarded himself and his business from public scrutiny, has been more open since the Iraq shooting, allowing reporters to see operations and question executives about the direction of the company — all in an attempt to save the Blackwater brand he launched a decade ago.

As part of that, the company told the AP last week, Blackwater plans to scale back its contracting work to a fraction of its business, worried that the cost of doing the work hurts its bottom line.

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