War is hale

With the global market for “high-threat protection” booming, Blackwater USA digs into North Carolina.
By Edward Martin

Rain cascades down the windshield as the Chevrolet Suburban splashes along Puddin Ridge Road through landscape flat as a skillet. Past a stoplight, Andrew Blong pauses at a new hangar next to a mile-long runway and scans scudding storm clouds. A company plane is overdue, but the sky is silent. Pulling away, the Suburban is soon churning mud, evidence of all the construction under way here.

A nearby barracks sleeps 300. A larger one is planned. Several buildings make up a mock village, soon to grow into a mock town, for urban-warfare training. Next door, police assault-team trainees storm R.U. Ready High School, gunning after imaginary gunmen. Rumpled Ford Crown Victorias stream by, headed for a three-mile track where the drivers will learn to ram cars from behind to spin them out of control. In the past 10 years, some 50,000 military, police and private-security personnel from around the world have come to hone their skills at this vast tract of woods and scrubland tucked between farm fields and the Great Dismal Swamp in North Carolina’s northeastern corner.

Blong parks at a 65,000-square-foot office building, the largest in Camden County, and heads inside. The front door has machine-gun barrels for handles. Closing behind Blackwater USA’s director of strategic initiatives, it shuts out the distant “pock, pock” of small-arms fire and the occasional thud of heavy explosives. The site covers more than 6,000 acres and could pass for one of the state’s military bases. It is, but not like the others. By most measures, Blackwater is the largest private military company in the world. Clients include governments, both foreign and domestic, their armed forces and law-enforcement agencies, as well as private corporations.

But most people associate Blackwater’s name, which comes from the peat-stained water here, with a dark day in a sunny place: March 31, 2004, Fallujah. An ambush kills four Blackwater security contractors — mercenaries, critics call them — and a mob hangs the charred corpses of two on a Tigris River bridge. President Bush orders an all-out assault on the town that inflames the Iraqi insurgency. Marines suffer more than 100 casualties in a month-long meat grinder.

Though they’ve made overtures about fielding a private army for the U.S. and performing peacekeeping combat missions in other countries, Blackwater brass chafe at the soldier-of-fortune label. Its freelance fighters, they say, aren’t hired guns who wage war for a foreign government, the legal definition of mercenaries. But many left elite U.S. military units to triple their pay — $150,000 a year, some say, is common. Thirty-six of them, with two explosives-sniffing dogs and three helicopters, guarded Paul Bremer, U.S. civilian administrator in Iraq. The slippery, shadowy role they play in a booming global market for what a senior executive calls “high-threat protection” draws detractors to Blackwater like mating water moccasins to a cypress stump. But you won’t find many critics in Camden and surrounding counties.

“It gets my testosterone going every time I go out there,” says Vann Rogerson, president of the 16-county Northeastern Regional Economic Development Commission. Blackwater’s more than 600 local employees, nearly a quarter of its worldwide work force, make it the region’s largest private employer. Its property taxes are three times anyone else’s in Camden County. At Summit Farms, a subdivision sprouting houses a half-mile from the Puddin Ridge Road checkpoint and within earshot of gunshots, children play with a pony in a backyard where soybeans recently grew. Since Blackwater’s arrival, Camden County’s per capita income has leaped from $17,000 to more than $26,000. Some houses in the county now sell for more than $1 million, real-estate agents say.

The closest thing to a town is Moyock, an unincorporated community of barely 4,700 just across the line in Currituck County. This, too, is Blackwater country. Vintage Corvettes and Mustangs move off Moyock Muscle Cars & Trucks. The Honda dealer’s new-car lot stays busy. At 7 a.m., camouflage-dressed sailors can be seen dropping on the floor of Southland Restaurant to do pushups as they await rafts of pancakes and sausage. At 7 p.m., sheriff’s deputies, their day’s SWAT training over, haul plates groaning with fried chicken and mashed potatoes from the buffet line.

But on this day, back at headquarters, the rain slacks off by late morning. Blong has tracked down the wayward airplane, diverted to Elizabeth City because of the weather. Aboard is Joe Schmitz, whom Bush named the Defense Department’s inspector general in 2001. He resigned in late 2005 to become chief operating officer of Prince Group LLC, Blackwater’s McLean, Va.-based parent.

In a corner office upstairs sits Gary Jackson, the British-born former Navy SEAL who helped get Blackwater going and is its president. With his sun-etched face, he seems out of uniform in a dark business suit. He can be affable, chuckling about how a local women’s club stuffed him with cookies after a speech, but can quickly turn wary. He rarely speaks to reporters. “I have a healthy fear of the media,” he says. “I’ve been beat up a lot.” Blackwater, he says, spent $105 million in 2005 here and across the Virginia line, just a few miles away, on products and services, from paper clips to pansies for the flower beds. Jackson figures its local economic impact at about $250 million in 2006.

The company doesn’t divulge revenue, but agencies that track government contracts estimate that it has received more than $500 million in federal ones since 2000. That doesn’t count the revenue it gets from state, local and foreign governments and private clients. A grin crinkles Jackson’s face. “We love it when the world thinks we’re a lot bigger than we are,” he says, fingers pursed. Still, his own figures seem to say Wall Street’s bull rather than a 598-pound stuffed bear, shot on the grounds, should greet visitors in the lobby outside its pro shop — which last year sold more than $1 million of $4 coffee mugs, $160 folding knives, high-capacity ammo clips and other items. “It’s public knowledge that we have government contracts right now for the next three to four years in excess of $2 billion. We’re a very secure company for years down the road.”

A dust cloud trails a car down Cooper Garrett Road, a spine-rattling washboard that skirts Blackwater’s site. A dead deer half-stripped to bone by buzzards marks the two-mile road’s halfway point across vast fields silent except for the whisper of the wind. Born with a silver spoon in his mouth, Erik Prince picked an unlikely place to fork over much of his inheritance. Much of it hasn’t changed a great deal since George Washington surveyed the canal through the Great Dismal Swamp before the Revolutionary War.

The black earth is good farmland, which is what drew Larry Gaither, now 71, here in 1976, a crop-dusting pilot swooping over rows of soybeans and peanuts. Then came disaster. “We had the agricultural depression of the 1980s. Farming collapsed. My wife got into real estate, and, hey, I didn’t have to get run over by a truck.” He sold his airplane and began selling real estate. He’s now partner in Alpha Realty, the local Re/Max franchise. Though the Outer Banks and some Albemarle Sound waterfronts are booming, much of the East’s economy is still deep in the dirt. The northeastern region’s per capita income of about $24,000 was some $5,000 below the state average in 2004. Bertie County, west of Camden, and Martin and Washington to the south have lost population, according to recent census estimates.

But Prince, who declined to be interviewed, saw something in what to many was a lot of nothing. In 1996, then in his mid-20s, he left the Navy, where he had been a SEAL platoon leader, and was living in Virginia Beach. Reclusive, hyperpatriotic, conservative and very rich — his industrialist father had died the previous year, leaving the family a company that was sold for $1.3 billion. Prince sensed that defense cutbacks would result in outsourcing some military tasks, and he knew just the place to send them.

Land was cheap in Currituck and Camden counties, just south of Norfolk, the world’s largest naval base, and midway between Fort Bragg and Camp Lejeune and Northern Virginia’s military posts and headquarters of intelligence agencies. “The biggest military-industrial complex on the planet is from here to D.C.,” Gaither says. On the next to last day of 1996, Prince and several others incorporated Blackwater Lodge and Training Center Inc. A few weeks later, he put up $1 million to start buying parcels. Currituck residents torpedoed plans for a training camp there, so he focused on Camden.

“Currituck might be enjoying their million dollars a year in taxes, too, if they’d let them have it,” says Gaither, whose real-estate company has 14 agents. “I don’t have a one that hasn’t sold somebody from Blackwater a house. I’ve got one that sold four. I’m a real pinko-commie-liberal Democrat, but when it comes to capitalism and Blackwater, I’m a closet Republican.” There’s nothing closeted about the politics of the man responsible for all this: Federal Election Commission records show Prince, now 38, has contributed more than $200,000 to the GOP and its candidates since 1998.

In 1997, he hired Jackson, who was about to retire after 23 years in the Navy, after the SEAL chief warrant officer sent him a computer disk containing a proposed Web site for Blackwater and information about himself. Jackson started as jack of all trades, as he describes it, and was named president in October 2001. Like Prince — who is CEO and chairman of Prince Group and of Blackwater — he contributes to conservative candidates. Though he sometimes has to fish for the appropriate word, he gets quoted in publications such as Harvard Business Review. Last year, he was named one of Fast Company magazine’s Fast 50 executives, based on Blackwater’s revenue growth of more than 500% from 2002 through 2005.

A foxhole philosopher, Jackson, 50, is both a product and critic of the conventional military. In the Business Review interview, “I talked about 80% solutions we can exercise today or tomorrow rather than the 100% solution five weeks from now.” Referring to logistics, he says, “Ten or 15 of our guys in the field have one guy supporting them back here. In other places, it’s pretty much the opposite.” Blackwater has another advantage over government-issue troops. As Hugh Overholt, a retired Army major general who is a partner in the New Bern law firm of Ward and Smith and member of the N.C. Advisory Commission on Military Affairs, puts it: “They can cut through red tape. They don’t have to go through several layers of command to execute a mission you need to do quickly.”

With the withdrawn Prince and quick-draw Jackson in place, Blackwater began making its mark on northeastern North Carolina. While it grappled with its business model — trying to decide to target corporate clients or military business — world events provided an answer. The al-Qaida attack on the USS Cole in Yemen in 2000 convinced the admirals that sailors needed to know how to defend themselves. The Navy awarded Blackwater a five-year contract for an undisclosed figure to train 20,000 seamen. Now, in a 20-acre manmade lake visible through the window over Jackson’s shoulder, sailors practice defending and retaking the BW1, a mock ship, from terrorists. Last fall, the Navy awarded Blackwater another contract — this one for $37.5 million — to train sailors in what it calls force protection.

On Sept. 11, 2001, the terrorist attacks in New York and Washington assured the future of companies like Blackwater. “Try to find a war now where only soldiers are fighting,” says Peter Singer, a fellow at the nonpartisan Brookings Institution in Washington and author of Corporate Warriors: The Rise of the Private Military Industry. Blackwater began landing more contracts, including some for private security consulting, its highly visible role in Iraq. Today it has about 2,700 employees around the world, including about 1,400 in Iraq.

“We’re the leaders in this industry,” Jackson says flatly. Competitors include Herndon, Va.-based Triple Canopy, which has about 1,000 in Iraq, and DynCorp International in Falls Church, Va., which has about 700 in Iraq and 500 in Afghanistan. At Blackwater, most work as private contractors who train here — tuition is about $20,000 for a two-month program — then hire themselves out to the company. If the business model seems complicated, it fits warfare that increasingly makes few distinctions between corporations, combatants, noncombatants and the traditional and nontraditional military. And, again, there’s the edge that Blackwater and its peers have.

In August 2005, it deposited more than 135 security contractors in New Orleans less than 36 hours after Hurricane Katrina. “We were there when the National Guard arrived,” Jackson says. A week later, the company landed a contract from the Federal Emergency Management Agency — some reports put it at more than $73 million — to protect FEMA operations. The size of Blackwater’s force exploded to more than 700. Its presence was not without controversy. Armed, mostly white outsiders pointing weapons at mostly black residents provoked cries of racism, which Jackson scoffs at. His company’s contractors never fired a shot, he says, adding that Katrina merely played to its strengths.

Signs of that strength are here at its headquarters. There’s an arsenal stacked with M4 rifles, the weapon used by U.S. Marines and soldiers in Iraq, and assorted pistols. “We’ve got a supply-and-logistics system here as good as any in the world,” Jackson says. “We’ve got a short chain of command. We execute faster than anyone else. Some of the bad press was because we didn’t know what to expect on the ground when we got there, so we sent 135 guys ready for whatever. But FEMA hired us because they didn’t have to provide us billeting, food or weapons. That’s just another aspect of our business — rapid deployment for disasters, manmade or natural.” At Blackwater, he says, there’s no such thing as a back order. “We have that package on the shelf.”

Deployment in the field isn’t the only way the company executes faster than anyone else. “Gary’s a high-energy guy who sees an opportunity around every corner,” Rogerson says. “They’ll have their own private industrial park in there before long. It’s as quick-reacting a company as I’ve ever seen. It doesn’t take them years to come out of the ground with something.” Blackwater recently opened a training center in Illinois, about 100 miles west of Chicago, and Jackson says he’s considering a second North Carolina base, probably in the southeast near the South Carolina line. The company is pushing for a base on 824 acres near San Diego, Calif., which would accommodate about 350 staff and trainees, 15 firing ranges and other activities, but has run into opposition. Calling the company a war profiteer, local critics decry the traffic and other changes such a camp would bring to their rural region.

Big money is at stake here. N.C. Department of Commerce officials estimate that the conventional military — primarily through the presence of the Army’s Fort Bragg, the Marines’ Camp Lejeune and Cherry Point air station and Seymour Johnson Air Force Base — contributes more than $18 billion a year to the state economy. While Blackwater can’t match that, Overholt says factors are converging that will only increase its impact. Conventional forces are overstretched. Rapid rotation to Iraq has worn down troops and worn out their equipment. Heavy use of the National Guard has left states ill-prepared for domestic disasters. Morale has eroded. “The private military becomes attractive to the past soldier, sailor or airman who wants to continue the adventurous life at a good salary. They have tremendous loyalty that they transfer from country to corporation.”

Another factor in its favor is friends in high places. In addition to Schmitz on Prince Group’s staff, former Central Intelligence Agency counterterrorism chief Cofer Black came aboard in 2005 as Blackwater co-chairman. In April, he became a senior adviser to Republican Mitt Romney’s presidential campaign. Star power also includes Kenneth Starr, the Whitewater investigator and independent counsel in the 1999 impeachment of Bill Clinton. Starr heads the company’s defense in a lawsuit resulting from the Fallujah affair. “I call it the power of ‘ex,’’’ says the Brookings Institute’s Singer. “The unfortunate truth is, when it comes to federal contractors, it’s often not so much a matter of what you do and how well you do it as it is who you know.”

Blackwater appears to combine the two. It has begun courting the region’s elected officials, civic leaders and business executives. Jackson says he concentrates spending on local companies. “They keep as much of their business here as they can,” says landscaper Vernon Beavers, owner of Moyock Gardens. “I’ve been here 24 years and done all right without them, but they’re the icing on the cake.” Employees are encouraged to join local civic groups, though an aura of mystery — secrecy — still prevails. “I’m not saying we know what all they’re doing out there,” says Cecil Perry, chairman of the Pasquotank County Board of Commissioners in Elizabeth City. “Maybe we don’t want to. I know they’re controversial, but I also know they’re making quite a contribution to the area tax base.”

An outbreak of world peace and domestic civility could be bad for its business, but some Blackwater critics aren’t waiting for that. They are fighting the company in the courts in a struggle that, though already long, is just beginning. One battleground will be the Raleigh courtroom of Superior Court Judge Donald Stephens, where lawyers for the families of the four contractors killed in Fallujah will argue that the company rushed the men into a killing field, poorly armed and equipped, because it valued profit over human life. Company lawyers, including Schmitz and Starr, have argued that the men, who earned about $600 a day, signed contracts barring survivors from suing. The U.S. Supreme Court declined in February to hear Blackwater’s appeal of lower-court rulings, sending the case back to Superior Court. No trial date has been set.

David Helvenston was one of the men killed. A former SEAL and bodybuilder, he had trained Demi Moore for the movie G.I. Jane and has been featured on Navy recruiting calendars. In the California law office of Marc Miles, who represents Helvenston’s mother, hangs a grisly photograph of his charred body swinging from the bridge. Blackwater has countersued for $10 million, citing the contract. “They’ve got the money and they’ve got leverage,” Miles says. “They’ve blown through five law firms and a lot of political connections. They know they can accomplish nothing by the truth coming out. They make money for every warm body they put on the ground, but the commodity they’re dealing with is human life.”

Miles also is representing the families of three soldiers killed when one of Blackwater’s Presidential Airways flights crashed in Afghanistan in November 2004. The suit contends that the aircraft, which flew into a box canyon, had neither the proper equipment nor an adequately trained crew. Company lawyers decline to discuss either case, though in a congressional hearing in February, one of them, Andrew Howell, accused Miles and the other plaintiff lawyers of presenting “an incomplete and one-sided exploration of a specific battlefield incident.”

There is an even larger issue at stake here, argues Singer, the Brookings researcher: Using pri-vate security contractors allows the government to mask the scope of U.S. involvement in conflicts and the price in blood. “The Defense Department concedes we’ve got about 100,000 private contractors in Iraq,” he says, adding that an estimated 800 to 1,000 have been killed — nearly a third the number of military deaths. “You don’t have mothers protesting in the streets. When they’re killed or captured, it doesn’t make headlines.”

On future battlefields, fast, flexible private military contractors will play increasingly large roles. Black recently told a Defense News security conference that Blackwater was ready to provide a brigade-size — about 10,000 — force for hire for peacekeeping missions in places such as Darfur, where ethnic genocide has left 180,000 dead.

When Jackson talks about the prospect, he vets his words carefully. “We totally believe that’s the answer. We’ve offered several different options, from embedding with regular forces to training, to manning and logistics. We’re not sure the world is ready for it yet, but if it does become ready, it won’t be like, ‘Ask, and we’ll tell you in nine to 12 months.’ It is, ‘Ask, and we’ll be ready next week.’” Blackwater has 35,000 private military contractors in its database. “I venture to guess that within 60 days, if I had to write a platform, I could bring 10,000 to bear.”

Meanwhile, Jackson is building and branding the company with a warrior’s aggressive zeal. Beside the door to his office hangs a framed print. It’s neither large nor overly artistic, but it’s telling. “That shows all our assets,” he explains. It shows men and the armored personnel carrier and surveillance blimp the company is manufacturing in Elizabeth City. There’s also a 220-foot-long ship with a helipad on its stern, suitable for training or possibly naval operations. And a Boeing 767, a jetliner with global reach that can whisk 200 to 300 people across oceans in a matter of hours.

An aide winces as Jackson begins to discuss the role the ship and the plane play in Blackwater operations. “We don’t talk about that a lot,” Jackson says of the airliner. Then he grins and, under his breath, adds, “But it should be flying in a month or so.”