Despite Denials, Blackwater Still Working for U.S.

Reports that Blackwater is out of the government’s private-security game have been greatly exaggerated. A consigliere to the company’s new owners tells Danger Room that not only does the controversial firm still hold security contracts with the State Department, it has every intention of seeking more.

In October, Danger Room reported that U.S. Training Center, a division of the renamed “Xe Services,” had won part of State’s $10-billion Worldwide Protective Services contract to guard diplomats. U.S. Training Center formed a partnership with Kaseman, another security firm, called International Development Solutions, to bid on the contract. But last week, an anonymous State Department official told Danger Room pal Jeff Stein of the Washington Post that the firm “no longer had a relationship with Xe.”

Untrue, says Harry Clark, an adviser to USTC Holdings, the group of investors that purchased Xe from founder Erik Prince last month. “U.S. Training Center is a subsidiary of Xe Services. Still,” Clark says. Any future security services Xe provides to State will be conducted through International Development Solutions, in which USTC is a “minority partner.”

First up — as Stein was the first to report — International Development Solutions will guard the U.S. consulate in Jerusalem, part of a Worldwide Protective Services deal worth up to $84 million. It includes providing “protective security in the West Bank,” says State Department spokesman Andy Laine.

That’s the first opportunity for the revamped Xe to demonstrate that its guards are no longer the sort of people that open fire on civilians, take drugs or carry unauthorized firearms — part of the rationale for selling the company off.

That’s a case Xe 2.0 wants to make. The new ownership is “committed to being the best-in-class in security services,” in Clark’s words. Don’t think for a second Xe isn’t going to keep pitching the government on its guard services, even as it also emphasizes its training packages for law enforcement. “USTC will pursue training and security services contracts as [Xe] did before,” Clark says.

While the $84 million Jerusalem contract is a boon, just a week after USTC Holdings bought Xe, the company was dealt a loss when the Army opted to hire DynCorp for a $1.04 billion contract to train Afghan cops. Still, Xe got a $100 million deal to guard CIA bases in Afghanistan last year, and Clark said that the new owners retain “95 percent” of Xe’s pre-sale government contracts. He declined to specify which ones the firm no longer retains.

Next up for Xe: finding a new CEO and building an independent board and appointing an external-compliance officer, all of whom will chart the company’s future. Could this be the end of an era when lawmakers accuse Xe of setting up front companies to win government contracts? Clark said to expect the firm to be more open and transparent “than when Erik Prince was in charge.” We’ll be watching.

See Also:

Despite Denials, Blackwater Still Working for U.S. | Danger Room |

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