Black days in Baghdad

Each week Arabian Business turns the spotlight on a leading company.

What is it involved in? Private equity?

Actually, Blackwater is a US mercenary company which is unofficially the world's largest ‘for hire' private army. It is based near the Great Dismal Swamp in the US state of North Carolina, where it operates a tactical training facility that it claims is the world's largest. The company trains more than 40,000 people a year, from all the military services and a variety of other agencies.

Peacekeepers, eh?

The ordinary citizens of Baghdad may beg to differ. On September 17 this year, the company's licence to operate in Iraq was revoked, resulting from a highly contentious incident that occurred the previous day during which 11 Iraqis were killed.

That's tragic. What happened?

That depends on who you believe. Blackwater, which has just under 1000 people in Iraq, says its personnel were guarding a diplomatic convoy when it came under fire. The Iraqi government, however, insists there was no ambush and that Blackwater troops indiscriminately and without provocation opened fire on civilians in the street.

Sounds ugly. Does Blackwater have previous form?

Well, the security contractor's rate of shootings is at least twice as high as the rates for other security firms providing similar services to the State Department, according to Bush administration officials and industry officials. In addition to the September 16 shootings, Iraqi officials say Blackwater staff have been involved in six other episodes under investigation. Those episodes left a total of 10 Iraqis dead and 15 wounded.

But it's had its licence revoked now?

It's not clear how much of a difference this will make. A July report from the American Congressional Research Service indicates that the Iraqi government still has no authority over private security firms contracted by the US government, and the Bush administration has so far fended off public demands by the Iraqi government for Blackwater to be evicted from the country. Blackwater will be thanking its lucky stars - after all, its diplomatic security contract with the State Department is now the company's largest, landing it just under US$350m so far.

And who exactly are those ‘lucky stars'?

Very cute. Blackwater was founded in 1997 by Erik Prince, a former member of the Navy Seals. Prince was an intern in George Bush Snr's White House, and has contributed around US$200,000 to the Republican National Committee since 1998. He also supported the candidacies of several conservatives, including a certain President George W Bush. The company's close ties to the Bush administration have raised questions about Prince's political muscle, and he has cemented his ties to the government by hiring a significant number of former senior CIA and Pentagon officials, including the former counterterrorism chief at the CIA and State Department, and the former inspector general at the Pentagon. That's serious star power.