The parent company of Blackwater Worldwide is restructuring and will drop the name Blackwater from its various units, a move that coincides with the winding down of the State Department guard work in Iraq that turned the small military-training company into one of the world's biggest -- and most controversial -- security firms.
EP Investments of McLean, Va., will now be called Xe, (pronounced "Z") and run by Gary Jackson, 51 years old, who had been the president of Blackwater Lodge and Training Center. EP was structured as a holding company without a president.
The company’s training-and-security business is now called U.S. Training Center Inc. and the company's airship operations is "Guardian Flight Systems." -A mere coincidence, of course, there couldn't be any attempt to keep operating in Iraq under a restructured new company.
Jan 29, 11:10 AM EST
Iraq bars Blackwater, tarnished by civilian deaths
By SINAN SALAHEDDIN
Associated Press writer
BAGHDAD (AP) -- Iraq said Thursday it will bar Blackwater Worldwide from providing security protection for U.S. diplomats because its contractors used excessive force, sanctioning a company whose image was irrevocably tarnished by the 2007 killings of 17 Iraqi civilians.
The move will deprive American diplomats of their main protection force in Iraq.
The decision not to issue Blackwater an operating license was due to "improper conduct and excessive use of force," said Iraqi Interior Ministry spokesman Maj. Gen. Abdul-Karim Khalaf.
Iraqis are bitter over the September 2007 killing of 17 Iraqi civilians in Baghdad's Nisoor Square. Five former Blackwater guards pleaded not guilty Jan. 6 in federal court in Washington to manslaughter and gun charges in that shooting. A sixth is cooperating with the government.
The Iraqi government has labeled the guards "criminals" and is closely watching the case.
But even before the shooting, Blackwater had a reputation for aggressive operations and using excessive force in protecting American officials, an allegation the company has disputed.
Neither Khalaf nor a U.S. Embassy official gave a date for Blackwater personnel to leave the country and neither said whether they would be allowed to continue guarding U.S. diplomats during the interim.
Anne Tyrrell, a spokeswoman for the North Carolina-based company, said the company had not yet been notified of the Iraqi decision but intended to continue providing security to U.S. officials until instructed otherwise.
"We have received no official communications from the government of Iraq or our customer on the status of those applications or the future of our work in Iraq," she said.
"Blackwater has always said that we will continue the important work of protecting U.S. government officials in Iraq for as long as our customer asks us to do so, and in accordance with Iraqi law. That has not changed."
The Iraq decision came just months after a U.S.-Iraqi security agreement approved in November gave the government the authority to determine which Western security companies operate in Iraq.
A joint U.S.-Iraqi committee is drawing up procedures for licensing and regulating security companies under the security agreement and it is unclear when it will finish the process.
"We have followed the procedures to apply for and secure operating licenses in Iraq," said Tyrrell, the Blackwater spokeswoman. "Any further questions about that the licensing process should be directed to our customer."
Khalaf said Blackwater employees who have not been implicated in the 2007 shooting have the right to work in Iraq but must find a different employer.
"We sent our decision to the U.S. Embassy last Friday," Khalaf told The Associated Press in a phone interview. "They have to find a new security company."
Farid Walid Hassoun, who was shot in the back as he cowered behind a concrete barrier during the Blackwater shooting, said he had heard the news but didn't understand why the company is still operating in Iraq.
"I saw children die in front of me," he recounted about that fateful day, speaking to The Associated Press Television News on Thursday. "I am asking my government: 'You have decided, but where is the action?'"
When President Barack Obama was campaigning in 2007, he announced a plan to force Iraq war contractors to follow federal law.
"We cannot win a fight for hearts and minds when we outsource critical missions to unaccountable contractors," he said at the time.
The State Department relies heavily in Blackwater because it is the largest and best-equipped security company in Iraq. The U.S. extended Blackwater's contract for a year last spring, despite widespread calls for the company to be expelled because of the Nisoor Square shooting.
But the company has become a lightning rod for Iraqi complaints about the behavior of Western security companies, whose employees were immune from prosecution under Iraqi law until the security agreement took effect this month.
The U.S. Embassy official confirmed it received the government's decision, saying that U.S. officials were working with the Iraqi government and its contractors to address the "implications of this decision."
The official made the statement on condition of anonymity under embassy regulations.
In the Sept. 16, 2007 shooting, Blackwater maintains its guards opened fire after coming under attack after a car in a State Department convoy broke down.
The shooting took place around noon in a crowded traffic circle in west Baghdad where U.S. prosecutors said civilians were running errands, getting lunch and otherwise going about their lives.
Prosecutors said the guards unleashed a gruesome attack on unarmed Iraqis, with the dead including young children, women, people fleeing in cars and a man whose arms were raised in surrender as he was shot in the chest.
Twenty others were wounded, including one injured by a grenade launched into a nearby girls' school. Another 18 Iraqis were assaulted but not wounded, prosecutors said.
Iraqi witnesses said the contractors opened fire unprovoked and left the square littered with blown-out cars.
But the Blackwater guards insist they were ambushed by insurgents. One of the trucks in the convoy was disabled in the ensuing firefight, the guards say.
Blackwater radio logs made available to The Associated Press by a defense attorney in the case last month raised questions about prosecutors' claims that the guards' shooting was unprovoked. The log transcripts describe a hectic eight minutes in which the guards repeatedly reported incoming gunfire from insurgents and Iraqi police.
The Blackwater guard cooperating with the government in the case, Jeremy Ridgeway of California, pleaded guilty to one count each of manslaughter, attempted manslaughter, and aiding and abetting.
In his plea agreement with prosecutors, Ridgeway admitted there was no threat from a white Kia sedan whose driver, a medical student, was killed and his mother, in the front passenger seat, was injured.
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Associated Press Writer Mike Baker in Raleigh, N.C., contributed to this report.
By Missy Ryan Missy Ryan – 28 mins ago
BAGHDAD (Reuters) – In Iraq, tens of thousands of private contractors from poor countries like Nepal, Pakistan or Peru keep the U.S. military on its feet, driving trucks, scrubbing floors, and ladling out food at sprawling U.S. bases.
But the role of Iraq's multi-billion-dollar contracting business will change next year as Washington draws down troop levels and Iraq assumes control for maintaining a fragile calm.
Change may mean fewer jobs for workers from the developing world who have been willing to risk their lives to join the 200,000 private contractors who outnumber U.S. troops in Iraq.
The risks are real. More than 400 foreign contractors have been killed in Iraq since 2003, according to an independent compilation. They include U.S. citizens, Fijiian, Pakistani and Nepalese.
For some in countries where unemployment is high and wages are low, it's a deal worth making.
A former soldier from Peru, who did not wish to be named, came to Iraq in 2005 to work for a private security firm. In his new work in Baghdad he could make 60 percent more than he did as a bodyguard for wealthy businessmen back home.
He has paid off debts, his children are studying in private school, and he is hoping to stay in Iraq as long as possible.
He shrugs off the risks in Iraq. His own country, Peru, has its own bloody past. "It's nothing new for us," he said.
Such non-Iraqi, non-American contractors can earn five to 10 times in Iraq what they would at home, said Doug Brooks, head of the International Peace Operations Association.
"There is huge demand for these jobs," he said.
The contracting business has exploded in almost six years of war in Iraq, especially as a leaner U.S. military strives to ensure soldiers are doing only what they do best -- fighting.
Through last year, the United States awarded $85 billion in private contracts directly supporting the Iraq war, a fifth of total Iraq spending, the Congressional Budget Office has said.
The main contract for food, fuel, and other basics, now awarded to giant, politically connected U.S. contractor KBR Inc. and other firms, alone was worth $22 billion.
MIXED RECORD
At times the Iraq contracting business has earned a bad name, accused of fraud, waste, shoddy work, and even human trafficking. The Pentagon is blamed for improper oversight.
Five guards for U.S. security firm Blackwater have been charged over the 2007 killing of 14 unarmed Iraqis in Baghdad, which outraged Iraqis.
From January 1, contractors in Iraq will be subject to Iraqi law, removing them from what critics called a legal black hole.
The U.S. military is also probing whether Bangladeshi and other workers were illegally trafficked to Iraq with promises of KBR jobs, and says it could punish firms that mistreat workers.
As the United States looks toward an end-2011 deadline for pulling its 143,000 troops out of Iraq, the number of contractor jobs is expected to dwindle along with overall U.S. needs.
That is unwelcome news for Alhaji Musa Sendor, a Sierra Leonean trying to land a job in Iraq. He has heard he can earn thousands of dollars a month, a fortune by local standards.
He worked in Kuwait, but has been unemployed for months, and is growing desperate. "People walk up and down the streets here, but there is no job for them," he said by phone from Freetown.
Iraq's private security industry is still hoping for work protecting foreign businessmen as reconstruction picks up.
"Those people are going to have to be guarded," said Lawrence Peter, who heads an Iraq private security association.
(Additional reporting by Christo Johnson in Freetown)
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U.S. Moves to Replace Contractors in Iraq
Blackwater Losing Security Role; Other Jobs Being Converted to Public Sector
By Karen DeYoung
Washington Post Staff Writer
Tuesday, March 17, 2009; Page A07
The decision not to renew Blackwater Worldwide's security contract in Iraq when it expires in early May has left the State Department scrambling to fill a protection gap for U.S. diplomats and civilian officials there.
Two other U.S. security contractors with a far smaller presence in Iraq -- DynCorp International and Triple Canopy -- have been asked to replace the ousted company, according to State Department and company officials. To meet time, training and security-clearance pressures, officials said, one or both of the firms are likely to undertake the task by rehiring some personnel now working for Blackwater.
The Iraqi government refused to issue Blackwater a license to perform security services after a 2007 incident in which company guards on a diplomatic protection mission shot and killed 17 civilians in Baghdad. U.S. prosecutors have indicted five of the guards on charges of manslaughter. Blackwater (which recently changed its name to Xe) still has State Department contracts for air transport in Iraq and security for U.S. diplomats in Afghanistan.
Meanwhile, fallout from the shootings -- including a new U.S.-Iraq status-of-forces agreement that places contractors under Iraqi legal jurisdiction for the first time -- has led both the Pentagon and the State Department to create new categories of "full-time, temporary" federal jobs to handle some tasks currently done by contractors.
The Blackwater incident helped fuel a wider debate on the overall cost and conduct of contractors. President Obama last week ordered a government-wide review of federal contracting procedures, saying that his administration "will stop outsourcing services that should be performed by the government."
Nowhere has that outsourcing been larger or more contentious than in Iraq, where contractors have long outnumbered the U.S. military presence, even at its peak of 160,000 troops.
The days of massive U.S. reconstruction contracts in Iraq are over, with little to show for tens of billions of dollars spent, according to government auditors. While the military continues to outsource much of its supply chain, contracts for services such as transport and food will diminish as combat forces begin to draw down.
Clarification to This Article
This article said that a directive from Gen. Ray Odierno, the U.S. commander in Iraq, ordered all military units to cut the number of U.S. contractors by 5 percent each quarter. The Jan. 31 directive referred both to U.S. contractors and to those from foreign countries other than Iraq.
In a commandwide directive issued Jan. 31, Gen. Ray Odierno, the U.S. commander in Iraq, ordered all military units to start cutting U.S. contractors at a target rate of 5 percent each quarter and to hire more Iraqis to do their jobs. "As we transition more responsibility and control to the government of Iraq, it's time to make this change," he added.
However, some contracted activities, from training Iraqi forces to strategic communications, are likely to increase as troops withdraw, and certain U.S. contractors are seen as irreplaceable. "Human terrain" experts -- civilian social scientists and linguists hired to help the military better understand Iraq and Iraqis -- have been told that they must accept newly created government jobs, at potentially lower salaries, or leave. The highly touted human terrain program, which fields 20 teams of five to nine specialists in Iraq and six in Afghanistan, was begun by Odierno's predecessor, Gen. David H. Petraeus.
Program head Steve Fondacaro said that when hazardous-duty, locality and other government pay benefits are added, total compensation will be competitive with the private sector at $147,000 to $236,000 a year. He estimated that at least 60 of about 100 currently contracted specialists would accept the year-long government jobs, with annual renewal options for up to four years, even though some have complained anonymously on blogs that the new arrangement constitutes an unacceptable pay cut.
Avoiding legal problems in Iraq, Fondacaro said, was more of an impetus for the move than cost-cutting. Although no U.S. contractor has been arrested under the new status-of-forces agreement, which became effective in January, he said the risks were too great in a country whose legal system is "a shambles." He is also putting the same program in place for human terrain specialists in Afghanistan.
"I had to take action to protect our people and protect our mission," Fondacaro said.
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Fondacaro pointed to the Rockville-based contractor BAE Systems, which he said has informed employees that it would no longer accept liability for any legal problems they might have in Iraq and suggested they stay inside U.S. military installations at all times. "So here I am, paying exorbitant contractor wages for people whose company is not going to provide them any legal defense, and is recommending they don't go outside" to make contact with Iraqis, he said. "Which is mission failure."
By making the specialists into government employees, Fondacaro said, "this all goes away in one fell swoop. . . . They are protected under U.S. law and have the same rights and privileges as U.S. troops," including immunity from Iraqi taxes and arrest.
Lucy Fitch, BAE Systems senior vice president for communications, said the "government has told us they wish to convert contractor positions in Iraq and Afghanistan to government positions" when the company's contract expires in August, but she called Fondacaro's description of company instructions "inaccurate."
BAE employees were advised during December and January to stay inside U.S. military installations "until we could figure out . . . the legal implications and personal risk" under the new status-of-forces agreement, Fitch said. In a clarification last month, she said, employees were told that the company would "assist them in finding in-country legal representation" if they were prosecuted or sued for any reason in Iraq. If problems were related to "actions properly undertaken for BAE Systems," she added, "we will provide them counsel at the company's expense."
The State Department has also created new temporary government jobs in Iraq, but for a different purpose. Following the 2007 Blackwater shooting, then-Secretary of State Condoleezza Rice ordered that a federal security agent ride along on each of the contractor-protected convoys that carry U.S. diplomats, aid and other civilians -- including provincial reconstruction team members based in Baghdad neighborhoods and around the country -- outside their official compounds.
State's Bureau of Diplomatic Security not only handles security for embassies and other civilian outposts around the globe but also protects foreign officials visiting the United States. With only 1,600 highly trained special agents in the bureau, the Iraq mandate has severely stretched the service. "You'd need the entire [Diplomatic Security] workforce just to do Iraq," a senior State Department official said, "leaving nothing for Afghanistan, nothing for anywhere else in the world."
In postings on government job sites last month, State solicited "Protective Security Specialists," a new job category offering lower pay -- $52,221 with guaranteed employment for 13 months, renewable for up to five years -- and requiring less training than full-fledged agents.
Riding along on convoys and making sure that security contractors follow the rules, the official said, does not require "all that training and experience. . . . We had a lot of applicants."
Listed qualifications, seemingly designed for former security contractors, included "at least three years of specialized experience conducting overseas protective security operations within the last five years. Experience in Iraq, Afghanistan or Israel is particularly desirable."
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Former Blackwater teams not in Iraq long-term
AP
1 hr 9 mins ago
BAGHDAD – Iraq's government spokesman says the former Blackwater Worldwide security firm can have no long-term role in the country.
Ali al-Dabbagh has also promised to press for compensation for the September 2007 shootout that left 17 Iraqis dead and 20 wounded.
His comments Tuesday follow reports that the North Carolina-based company — now known as Xe (pronounced ZEE) — will continue some air and ground work in Iraq at least until the summer. The State Department earlier said it would stop using the company for diplomatic protection on May 7.
Iraqi authorities had ordered the company to leave Iraq, but al-Dabbagh says that delays in getting new teams in place requires the company to remain longer.
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BAGHDAD – Iraq's government spokesman says the former Blackwater Worldwide security firm may have some presence in Iraq until next year.
Ali al-Dabbagh says the company's helicopters could continue operating in Iraq until May 2010. That significantly extends the company's role in Iraq after being ordered out following a September 2007 shootout that left 17 Iraqis dead.
Al-Dabbagh says the stopgap measure is needed because Iraq doesn't have the capacity to protect diplomatic convoys with air power.
His comments Tuesday follow reports the North Carolina-based company — now known as Xe (pronounced ZEE) — will continue some work in Iraq at least until the summer. The State Department earlier said it would stop using the company for diplomatic protection on May 7.
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Blackwater (Now Xe) Still Working In Iraq
Different Name, No License, But Same Faces Still Working For U.S. Government
Comments Comments 13
WASHINGTON, April 21, 2009
Plainclothes contractors working for Blackwater USA take part in a firefight as Iraqi demonstrators loyal to Muqtada Al Sadr attempt to advance on a facility being defended by U.S. and Spanish soldiers, in this April 4, 2004 file photo in the Iraqi city of Najaf. (AP Photo/Gervasio Sanchez)
(AP) Armed guards from the security firm once known as Blackwater Worldwide are still protecting U.S. diplomats in Iraq, even though the company has no license to operate there and has been told by the State Department its contracts will not be renewed two years after a lethal firefight that stirred outrage in Baghdad.
Private security guards employed by the company, now known as Xe, are slated to continue ground operations in parts of Iraq long into the summer, far longer than had previously been acknowledged, government officials told The Associated Press.
In addition, helicopters working for Xe's aviation wing, Presidential Airways, will provide air security for U.S. diplomatic convoys into September, almost two years after the Iraqi government first said it wanted the firm out.
The Washington Times first reported that Blackwater, or Xe, signed a $22.2 million deal in February with the State Department to keep the company working there through most of the summer.
The company's continued presence raises fresh questions about the strength of Iraq's sovereignty even as the Obama administration urges the budding government to take more responsibility for the nation's future.
Iraqis had long complained about incidents caused by Blackwater's operations. Then a shooting by Blackwater guards in Baghdad's Nisoor Square in September, 2007 left 17 civilians dead, further strained relations between Baghdad and Washington and led U.S. prosecutors to bring charges against the Blackwater contractors involved.
That deadly incident was the end, Iraqi leaders said. Blackwater had to get out.
But State Department officials acknowledge the company is still there.
The company declined to comment about a timetable for leaving. "We follow the direction of our U.S. government client," Xe spokeswoman Anne Tyrrell said. Last February, Blackwater changed its name to Xe - pronounced ZEE - in a bid to leave its controversial reputation behind.
Defense analyst Loren Thompson of the Lexington Institute said Iraq's ability to enforce bans on companies like Blackwater may provide an early measurement of the strength of its internal sovereignty. As the Iraqi leaders gain more control, he said, the final exit for Blackwater will be inevitable.
"But let's face it, they're not entirely their own masters yet," he said.
In Baghdad, an Iraqi security official, speaking on condition of anonymity because he was not authorized to talk to the media, said that while Xe will not be allowed to work in Iraq, the company needs "some time" to fully shut down its operations there. The official did not give further details on the timetable.
The State Department's continued reliance on Blackwater also underscores the difficulties facing the U.S. government in finding other options to protect its diplomats in dangerous areas.
Department officials said this month that Blackwater guards would stop protecting U.S. diplomats on the ground in Baghdad on May 7, when the company's contract for that specific job expires and a new security provider, Triple Canopy, takes over.
But in its statement following the Iraqi government's decision to prohibit Blackwater from operating there, State did not reveal that the firm has two other contracts - known as "task orders" - that do not expire until August and September respectively.
Blackwater guards will remain on the ground protecting American diplomats in al Hillah, Najaf and Karbala, all south of Baghdad, until Aug. 4, according to the department.
And Presidential Airways - which operates some two dozen helicopters - will continue to fly until Sept. 3, it said.
After the Nisoor Square deaths, Iraqi officials ruled that Blackwater would be barred from operating in the country. Despite the ban, the State Department renewed Blackwater's contract seven months later, in April, 2008.
It wasn't until January of this year, when Iraqi authorities denied the company an operating license, that the Obama administration said it would not renew the company's existing task orders.
On Jan. 30, the department said it had informed Blackwater in writing that it "did not plan to renew the company's existing task orders for protective security detail in Iraq."
On Feb. 2, though, the department signed a revised task order for Presidential Airways that allowed the Blackwater-owned airline to operate through Sept. 3, according to a federal public procurement database.
Department officials deny any impropriety in the move because the change in the task order was a revision of an old contract. Karl Duckworth, a State spokesman, said the Iraqi government did not tell U.S. officials until March 19 that it would bar Presidential Airways' flights.
"Based on the government of Iraq's decision, the department notified Xe in writing that it did not plan to renew the company's task order for aviation services in Iraq," Duckworth said.
Duckworth said that State would "re-compete the aviation task order," allowing Xe and Virginia-based DynCorp and Triple Canopy to bid for the air security contract.
Xe is technically allowed to rebid under federal law because it holds the existing task order. But State would not grant the company a contract because it lacks an operating license in Iraq, officials said.
The State Department has not yet selected a successor to Blackwater for ground protection in al Hillah. But both Triple Canopy and DynCorp have the capability to do the job.
Some of the same security personnel who worked for Blackwater might simply transfer to the new companies operating there, industry experts say.
"As Triple Canopy's work expands, the logical place to start looking and interviewing and evaluating employees will be those who are already there, those who have some skills and are already employed by Blackwater," said Alan Chvotkin, a senior vice president and counsel for the trade group Professional Services Council.
Xe, DynCorp and Triple Canopy are all members of the council.
Chvotkin added that in view of the controversies over Blackwater's role, "Triple Canopy and other security companies are making an independent assessment of any individual before deciding whether to hire them."
The Iraqi official also said that some former Blackwater officials could remain in Iraq, depending on their experience.
The transition from Blackwater to a new air security firm may be even more complicated. Chvotkin said it will not be easy to find a firm with Blackwater's air resources. Blackwater should not be ruled out as an option, he said.
"Since the nature of the work is so very different, there may actually be authority for them to operate the air services contract even though they don't have a license for private security," Chvotkin said.
Blackwater has been shifting its focus to other lines of business, including international training and air support in places like Afghanistan and Africa.
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