Erik Prince: $1bn profit from the invasion of Iraq

When Erik Prince stepped down as chief executive of Blackwater in March, he claimed he would stay on as chairman, but take a back seat. Some hope, says the Los Angeles Times. Blackwater changed its name to Xe Services LLC "to escape the notoriety that followed a series of bloody incidents in Iraq". Yet the explosive allegations keep on coming.

The latest that Blackwater was secretly contracted by the CIA to arrange the (unrealised) assassination of al-Qaida leaders follows a series of damning personal allegations made earlier this month by two former employees in a Virginia court. Testifying anonymously as "John Doe 1" and "John Doe 2" (for fear of reprisals), the two men claim Prince "views himself as a Christian crusader tasked with eliminating Muslims and the Islamic faith", reports The Nation. They also claim that Prince "may have murdered or facilitated the murder" of individuals who were co-operating with federal authorities investigating the company. Lesser allegations include smuggling "illegal" weapons into Iraq, racketeering and tax evasion.

The firm has so far dismissed all such claims as "anonymous, unsubstantiated and offensive". Erik Prince, meanwhile, is keeping schtum. But these developments only add to the aura of intrigue and menace surrounding the secretive security company founded by the former US Navy Seal (special operative) in 1997.

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Prince, 40, has always been "an adventure seeker and conservative true believer", imbued with strict values inculcated by his father, Edgar, a self-made Michigan auto-parts billionaire, and influential Republican, says Newsweek. "Hard work, family and God were the elder Prince's core beliefs." An "intense and dutiful" son, Erik got his pilot's licence aged 17. In 1990, he served as an intern for George Bush Snr at the White House. Respected for his toughness in the US Navy, Prince was posted abroad but saw no action. He started Blackwater after his father's death in 1996.

Prince's big commercial break came with the September 11 attacks and subsequent invasion of Iraq. Beginning with a $27m no-bid contract to guard the US administrator, L Paul Bremer III, Blackwater "metastasized into a central component of the US presence in Iraq", says the LA Times (see below). Its operatives gained a reputation as "trigger-happy and ruthless". In September 2007 they opened fire in Baghdad's Nisoor Square, killing 17 civilians, says The Guardian. The Iraqi government has since banned the firm from its territory.

Blackwater reportedly made $1bn from its contracts in Iraq. However, Prince has always angrily denied running a mercenary force, says the Daily Mail. He claims that his operatives are "loyal Americans" and denies having any Christian supremacist agenda. Yet Prince's language often hints at a "restless search" for "martial and religious purity", says Newsweek.

Describing Blackwater's activities in Iraq, he once remarked that: "Everyone carries guns, like Jeremiah rebuilding the Temple in Israel, a sword in one hand, a trowel in the other."

Blackwater: a Fedex for 'CIA-type services'

Blackwater's training arm operates the "largest private technical training facility in the US", says The Washington Times. So a tour of its operations based in 6,000 acres adjoining North Carolina's Great Dismal Swamp is quite an eye-opener. Amid "life-size replicas of Navy ship hulls" and "bombed-out vehicles", some 35,000 individuals are put through their paces annually.

As well as American police and military and navy personnel, the company trains foreign forces, including Pakistani soldiers and Afghan border police. Prince likens Blackwater's emergence as a private force to Fedex, which "evolved due to the lack of capabilities and responsiveness" of the US postal service. And if Blackwater was involved with secret CIA missions, as alleged, it "will not surprise scholars of the Bush-Cheney strategy in Iraq", says The Independent. As one unnamed intelligence official told The Washington Post: "Outsourcing gave the agency more protection in case something went wrong". The company's Total Intelligence Solutions arm now offers "CIA-type services" to both governments and Fortune 1000 firms.

Despite the controversy, Prince's empire continues "to benefit under Barack Obama's presidency", says The Guardian: the number of private military contractors has increased in Afghanistan by almost 30%. "Consider the numbers," says the LA Times. In 2007, Blackwater had two-thirds as many operatives in Baghdad as the US State Department had global diplomatic security agents. It would take years for the State Department to recruit, vet and train a force to take over its work.