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Blackwater created shell companies to fool government, public

By The Associated Press
September 4, 2010

Blackwater headquarters in Moyock, NC (AP)

The security company Blackwater Worldwide formed a network of 30 shell companies and subsidiaries to try to get millions of dollars in government business after the company faced strong criticism for reckless conduct in Iraq, The New York Times reported Friday.

The newspaper said that it was unclear how many of the created companies got American contracts but that at least three of them obtained work with the U.S. military and the CIA.

Sen. Carl Levin, chairman of the Senate Armed Services Committee, has asked the Justice Department to see whether Blackwater misled the government when using the subsidiaries to gain government contracts, according to the Times.

It said Levin’s committee found that North Carolina-based Blackwater, which now is known as Xe Services, went to great lengths to find ways to get lucrative government work despite criminal charges and criticism stemming from a 2007 incident in which Blackwater guards killed 17 Iraqi civilians. A committee chart outlines the web of Blackwater subsidiaries.

Messages left late Friday with spokespeople for the Michigan Democrat and Xe were not immediately answered.

The 2007 incident and other reports of abuses by Blackwater employees in Iraq led to criminal investigations and congressional hearings, and resulted in the company losing a lucrative contract with the State Department to provide security in Iraq.

But recently the company was awarded a $100 million contract to provide security for the agency in Afghanistan, prompting criticism from some in Congress. CIA Director Leon Panetta said that the CIA had no choice but to hire the company because it underbid others by $26 million and that a CIA review concluded that the contractor had cleaned up its act.

Last year, Panetta canceled a contract with Xe that allowed the company’s operatives to load missiles on Predator drones in Pakistan, and shifted the work to government personnel.

However, the Times quoted former Blackwater officials as saying that at least two Blackwater-affiliated companies, XPG and Greystone, obtained secret contracts from the CIA to provide security to agency operatives.

The newspaper said the network of subsidiaries, including several located in offshore tax havens, were uncovered as part of the Armed Services Committee’s examination of government contracting and not an investigation solely into Blackwater. But Levin questioned why Blackwater would need to create so many companies with various names to seek out government business, according to the Times.

The report quoted unidentified government officials and former Blackwater employees as saying that the network of companies allowed Blackwater to obscure its involvement in government work from contracting officials and the public, and to ensure a low profile for its classified activities.

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12 Responses to Blackwater created shell companies to fool government, public

  1. Carl Nemo

    September 4, 2010 at 11:12 am

    Too bad I can’t see a show of hands as to how many folks in this country have had a bellyfull of hearing about Blackwater and the associated scandals linked to the company from low level employees to the former CEO Erik Rrince. Prince a billionaire still owns the company/s.

    Blackwater XE is now corporately headquartered in Dubai.

    “Sen. Carl Levin, chairman of the Senate Armed Services Committee, has asked the Justice Department to see whether Blackwater misled the government when using the subsidiaries to gain government contracts, according to the Times.” …extract from article

    Where have we heard this before from our ‘outraged’ do nothing Senators. Yep, another toothless investigation, yet Blackwater XE continues onward like the “Energizer Bunny” although not quite as cute.

    I believe Barack Obama when on the campaign trail during one of his stopover visits to Iraq decried that he thought Blackwater was getting a bum rap…say what?! Notice too that Blackwater is still shaking down the U.S. taxpayers while our seemingly clueless leader and Congressional reps act ‘outraged’…! / : |

    Carl Nemo **==

    • Guardhouse lawyer

      September 4, 2010 at 5:22 pm

      “Blackwater XE is now corporately headquartered in Dubai.”

      Xe is headquartered in North Carolina, not in the UAE.


      “Sources close to Blackwater and its secretive owner Erik Prince claim that the embattled head of the world’s most infamous mercenary firm is planning to move to the United Arab Emirates (UAE). The Middle Eastern nation, a major hub for the US war industry, has no extradition treaty with the United States. In April, five of Prince’s top deputies were hit with a fifteen-count indictment by a federal grand jury on conspiracy, weapons and obstruction of justice charges. Among those indicted were Prince’s longtime number-two man, former Blackwater president Gary Jackson, former vice presidents William Matthews and Ana Bundy and Prince’s former legal counsel Andrew Howell.

      “The Blackwater/Erik Prince saga took yet another dramatic turn last week, when Prince abruptly announced that he was putting his company up for sale.”


      “Notice too that Blackwater is still shaking down the U.S. taxpayers while our seemingly clueless leader and Congressional reps act ‘outraged’”

      The CIA, like all government agencies, is required by Federal law to award contracts to the lowest bidding “responsible, responsive” bidder. The CIA conducted a review and determined that the bidder met the requirement for being responsible and responsive.

      Also, I see nothing in this thread to indicate that anyone was “outraged,” at least not before you made that allegation. Nor was the word outrage or outraged used in the NYT article. I checked. Since you put it in quotes I assume you are quoting someone else. Whence came it?

      • Carl Nemo

        September 4, 2010 at 9:56 pm

        Thanks GHL for throwing me a bone after refuting that Blackwater moved to Dubai you come up with the rumor that Erik Prince is considering a move to the UAE, Dubai specifically. In June of this year he made commentary that he was considering to sell Blackwater and to relocate in order to avoid extradition. Dubai and possibly the Emirates in general have no extradition treaty with the U.S. Halliburton has moved its headquarters to Dubai.

        “The CIA conducted a review and determined that the bidder met the requirement for being responsible and responsive.” …extract from reply

        The CIA is a terminally corrupt organization and needs to prosecuted on RICO statutes as far as I’m concerned from top to bottom. I put outrage in quotes for emphasis, not as a quote per se, but you are welcome to quote me concerning my personal outrage. I guess I’m the only American that’s outraged. In fact we live in times that seemingly nothing is too outrageous too endure.

        Yur ok, I’m ok, they’re ok, we’re all ok…no?! / : |


        Carl Nemo **==

        p.s. Survey: Is anyone else on this site or the nation at large outraged by Blackwater’s ongoing corporate shenanigans both of a civil and criminal nature?

        • Guardhouse lawyer

          September 5, 2010 at 4:30 am

          Halliburton has two headquarters, in Houston and in Dubai, but remains incorporated in the US, so the reach of the criminal justice system here is sufficient.

          As to the Coke thing:

          YOU EVIL B******D! I am going to have that damned song running through my head all day.

        • Almandine

          September 5, 2010 at 9:13 am

          First, The Fed, then Congress, then Obummer, then Goldman Sachs, Blackwater, et al. Why pick on only one? There’s plenty of outrage needed all around.

        • sircher

          September 5, 2010 at 11:52 am

          YES me!!!

  2. woody188

    September 4, 2010 at 12:25 pm

    Caught their money laundering network, just like drug cartels or the mob in this aspect as well as others. Surprise surprise, contractors, aka mercenaries have few scruples. Imagine that.

  3. Alfred Supe

    September 5, 2010 at 2:13 am

    S’prise, s’prise,s’prise!

    Dick(less) Cheney strikes again.

    “And the shotgun sings it’s song.”

    “Meet the new boss, same as the old boss.”

  4. Alfred Supe

    September 5, 2010 at 2:16 am


    Outraged, yes.

    Suprised ? No.

  5. Bogofree

    September 5, 2010 at 9:26 am

    Blackwater. CIA. Government. All tied together. Magnify it by 100 or so other countries that probably are involved in either internal and external skulduggery or both and that represent significant resources that could be better directed. Seems you need watchdogs but it also seems like we now need watchdogs for the watchdogs. Self defeating after a bit.

  6. Bill

    September 5, 2010 at 9:45 am

    Correct me if I’m wrong, but aren’t we still paying Blackwater for doing our shit in Iraq and Afghanistan? Why?

    Maybe we should offer all the illegal immigrants everyone is complaining about the Blackwater jobs. The I I’s would work for less, be less violent, and would work harder. We could rotate them in and out like on a draft. They would be so happy to make so much money that they would get the jobs done in half the time.

  7. woody188

    September 6, 2010 at 1:48 pm

    Here’s a background on Blackwater and Prince for those that are interested. Lots of good accurate information in this video.