Blackwater's Dark Prince Returns
A decade after Blackwater's retreat amid scandal and a massacre, its founder Erik Prince wants to privatize and shrink the conflict in Afghanistan.
A DECADE AFTER BLACKWATER’S RETREAT AMID SCANDAL AND A MASSACRE, ITS FOUNDER ERIK PRINCE WANTS TO PRIVATIZE AND SHRINK THE CONFLICT IN AFGHANISTAN. RECENT WHITE HOUSE TURNOVER HAS GIVEN HIS PLAN A FIGHTING SHOT
By Noah Kirsch
Illustrations by Sean McCabe
Amid reports that special counsel Robert Mueller had taken an interest in his activities, Erik Prince decided to host a fundraiser. On March 18, more than 100 people flocked to Prince's sprawling farm in Middleburg, Virginia, for an afternoon of pistol shooting in support of Putin's favorite congressman, Dana Rohrabacher, who the FBI reportedly had his own Kremlin code name. As the day progressed, the group headed to the barn, where, over sandwiches and Budweiser, they heard from Oliver North, the central figure in the 1980s Iran-Contra scandal, and Matt Gaetz, a member of the House who's big on Deep State "cabal" conspiracy theories.
Even among this motley bunch, Prince has enough notoriety to trump them all. The founder of Blackwater — the military contractor infamous for the 2007 massacre in Iraq in which a convoy of his mercenaries gunned down 14 unarmed civilians — he's kept a lower profile since he sold the company in 2010. But that doesn't mean he's been idle. Since then, he's pursued projects across the globe, from the United Arab Emirates to Somalia to Hong Kong.
But as the Rohrabacher event underscores, the so-called "Merchant of Death" again feels comfortable flexing his domestic muscles. The Trump administration "inherited a world on fire," Prince says. "And I think some out-of-the-box thinking can help put those fires out."
Following a decade in the wilderness, Prince has the White House access that will allow him to spread those ideas. He spent $250,000 to help get Trump elected; his sister Betsy DeVos now serves as Trump's secretary of education; and when Prince pitched a plan to privatize the war in Afghanistan last year, the White House took him seriously. "He actually had the most cogent argument, much more than the guys who were 'stay the course,' " Trump's former chief strategist Steve Bannon tells Forbes.
One major impediment to his privatization concept was national security advisor H.R. McMaster, a lieutenant general and war scholar adamantly opposed to the idea of replacing American soldiers with mercenaries. Nor did the Prince plan seem to fit the worldview of then-secretary of state Rex Tillerson. But now that McMaster will be replaced by neocon favorite John Bolton, and Tillerson with CIA director Mike Pompeo, who once ran an aerospace supplier, the dynamics have changed. Bolton's selection, particularly, is "going to take us in a really positive direction," a source close to Prince tells "Do the math." The assumption, of course: Prince would reap a big cut of the action.
As he planned his comeback, Prince met with Forbes at length, across two interviews, in the summer and fall of 2017. He stopped speaking to us after the that a grand jury in the Mueller investigation heard evidence that Prince traveled to the remote Seychelles to try to establish a back channel between Trump and Russia. But Prince, still in muscular military shape at 48, had already laid out his grand strategy and provided a window into his temperament, one that mixes a belief in destiny, rooted in religion, with a warrior's calm in the heat of battle. "My favorite miracle in the Bible is when Christ is on the Sea of Galilee and there's an enormous storm," Prince says, "and they're in the boat and they're at risk of being drowned." He pauses. "He says, 'Peace, be still.' And the sea calms.
To understand Prince, the first thing to know is that he's never wanted for anything or had any reason to moderate his ambition. His father, Edgar, cofounded the auto-parts giant Prince Corp., based in Holland, Michigan. The religious family sent Erik to parochial school and made him a shareholder of the firm at a young age. "I didn't have to put gas in my car," Prince says.
The second thing: His family traveled widely, including behind the Iron Curtain, infusing Erik with a fervent belief in the primacy of free-market economies. (This upbringing clearly imprinted his sister, who espouses private education.) It fit his messianic worldview, where life is black and white, with only good guys and bad. As a teenager, Prince argued vociferously with his more liberal teachers about the threat of communism and Reagan's military policies, and he's never really stopped. "He's a warrior," says the Reverend Robert Sirico, who has known Prince since 1990 and baptized his children. "He thinks deeply about things, but... he's very hardheaded."
PLANET PRINCE
Erik Prince's global reach extends from private armies to private equity.
So it's no surprise he's been drawn to hot spots of dysfunction, with a mission to clean them up. "China and Russia are not the major threats to American security," Prince says. "Instability and sanctuaries where little pockets of psychopaths can breed and replicate — that's our problem." What about his critics, who have labeled him everything from hubristic to a neocolonialist to a war criminal? "Any mammals have parasites," he shrugs.
Third: Despite his charmed upbringing, his father insisted he forge his own path before possibly joining the family business. After graduating from Hillsdale College, a Christian school near the Ohio-Michigan border, he became a Navy SEAL, enduring its legendary training regimen, including a "hell week" that allows just four hours of sleep over five and a half days. Even now, he says, "I try to do what most people would call an extreme event three or four times a year." Recent examples include a 24-hour bike race in South Africa's desert and a 600-mile sailboat race.
After Edgar Prince died in 1995, the family quickly sold Prince Corp.'s automotive unit to Johnson Controls for $1.35 billion. Erik, then 26, walked away with at least $50 million. Around the same time, he left the SEALs when his first wife, Joan, was diagnosed with breast cancer. (She died in 2003.)
Flush and underemployed, Prince used a piece of his inheritance to build a training center for special forces in Moyock, North Carolina, which he called Blackwater, after the region's murky swamps. A series of domestic tragedies fueled the business' ascent. The shooting at Columbine High School brought police contracts. The U.S.S.Cole
bombing beckoned the United States Navy. And after 9/11, Blackwater became the Pentagon's mercenary army of choice in Afghanistan and Iraq. Through 2006, Prince's firm generated $1 billion in government work.
But as public support for the conflicts waned, things began to unravel. Tension boiled over in September 2007, when a convoy of Blackwater contractors shot 31 people in Iraq's Nisur Square, killing 14. The contractors said they had been ambushed; Justice Department prosecutors thought otherwise. One Blackwater guard pleaded guilty to manslaughter, three others were also convicted of manslaughter and one of first-degree murder in 2014. (The murder conviction was vacated last August; prosecutors have appealed to the Supreme Court for a retrial.) The event — hardly Blackwater's first deadly incident — was viewed in much of the world as an indiscriminate massacre.
Prince was summoned to Congress for questioning. Government officials, many of whom had sanctioned Blackwater's aggressive tactics — even if tacitly — condemned him. Prince thinks he was singled out unfairly. Blackwater "was the perfect bogeyman for them to make up," he says. "I was a sole owner, my guys carried weapons [and] I came from a conservative family."
Whatever the reason, Prince's name became toxic, and the new Obama administration wanted nothing to do with him. Blackwater rebranded as Xe Services, and in 2010 Prince sold the company to an investment group led by two private equity firms, Forte Capital Advisors and Manhattan Growth Partners, for over $100 million.
Prince is still not over the loss. "I've stuck it all out there for America. The previous administration was extremely abusive of us, and I don't forget that," he fumes with an unflinching stare. "That means I'm very cautious about sticking it out there for any government."
To most of America, that chapter spelled the end of Erik Prince. But it's not in Prince's nature to slow down, much less concede defeat, and he quietly took his gambits offshore. He moved to Abu Dhabi in 2010, where, he says, he worked on his energy-and-mining investment firm, Frontier Resource Group. But according to a
New York Times report he was also helping assemble a "secret army" for the UAE. (His spokesman denies the story.)
At the same time, he zigzagged around the globe on similar projects. Using Emirati funding, he helped create an antipiracy force in Somalia in 2010. The outfit targeted criminals on land rather than waiting for them to attack boats, "the way the U.S. or NATO or the EU was trying to do it," he says. "If you have a wasp problem, you deal with the nest."
To Prince, that endeavor offers proof of concept for his Afghanistan privatization proposal. "It worked," he says. "Have you heard of Somali piracy anytime recently? And that program cost less than the pirates were taking in ransom." But a 2012 UN report called the project "the most brazen violation of the [Somali] arms embargo by a private security company." Others say Prince deserves little credit for the pirates' demise. "It was ultimately the intensity of international naval patrolling, combined with the defenses that ships developed," says Vanda Felbab-Brown, senior fellow at the Brookings Institution.
Prince next shifted to Asia. In 2014 he cofounded Frontier Services Group, a logistics and security business that trades on the Hong Kong stock exchange. He says he spends more than 80% of his time on FSG. According to its literature, the firm provides straightforward services for "companies operating in frontier markets." It has a market cap of $325 million.
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