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Erik Prince exclusive interview

Blackwater Worldwide is the best-known of the private military companies whose personnel have become a ubiquitous presence in Iraq and Afghanistan.

Founded in 1997 by Erik Prince, a former Navy SEAL officer, Blackwater has grown into a firm with 600 full-time employees in the U.S. and 2,000 contractors serving abroad, most in Afghanistan and Iraq. The company’s wide-ranging business ventures include personal security services, manufacture of combat vehicles, operation of a fleet of aircraft and much more.

But Blackwater’s reputation has been tainted by several high-profile incidents that have garnered negative publicity, most recently a Sept. 16, 2007, incident in Baghdad’s Nisour Square in which a Blackwater personal security detail escorting a State Department convoy allegedly shot 17 Iraqi civilians.

In a July 7 meeting with the Military Times editors and reporters, Prince vigorously defended his company, which he said had a guiding principle of “operational excellence.”

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The following is the full transcript of that interview, edited for brevity and clarity:

Q: “It would be interesting if we could start out, just talk a little bit about the scope of what Blackwater is because most people think of you as this security company, private military company, but you’re involved in so many different business lines from having your own little “air force” to making targets, even selling T-shirts and ball caps and so on.

A: I’ll take you through kind of the progression of the start of the company and how we got to what we’re doing.

I spent a number of years in the SEAL teams. I actually went to the Naval Academy out of high school. I wanted to be a Navy pilot. I actually got my pilot’s license when I was in high school, and I left the Academy after a year and a half, went to a civilian school, and then went back in through OCS and became a SEAL, and I really liked being a SEAL, loved the people I worked with, but my dad passed away and my first wife got sick with cancer all within a few months of each other. So I started Blackwater.

I think a lot of guys in that community had had that same idea. I was in the position having—we sold the original business my dad started, which was very large. I had the ability to self-fund it. So we built a training facility, and it was, you know, the SOF community had been using private facilities since the late ‘70s, you know, almost a shooting version of what a dojo was of a different, you know, different pistol techniques or carbine, whatever.

No one had done it on an industrial scale, and so I knew nothing of defense contracting, but I knew what the community needed, and I wanted to stay connected to it so I built, you know, the original Blackwater footprint was about 3,100 acres and seven ranges. And that’s really what our model was.

There was, I think, four or five full-time employees and that’s where we started. I wrote, I kind of laid out the business plan in a letter home, just having come off seeing the U.N. in Bosnia in 1995. And Blackwater, we broke ground on it in June of ‘97, and our first customer was January of ‘98. Actually the SEAL teams were our first customer, and that was really Special Operations, SWAT teams, law enforcement were our first customers.

And really our first government contract came after the [Navy destroyer] Cole was blown up [in October 2000]. those buy decisions were made by warrant officers, team sergeants, the operators, and then our first big bid government contract was after the Cole was blown up, the Navy had a significant shortfall in their force protection training . . . it was a competitive bid . . . and we won, and we’ve trained well over 100,000 sailors since then safely.

It was one of their highest risk training events that they had outsourced, and because we had great facilities with great instructors we’ve done that all safely, and — knock on wood — after millions of rounds fired, we’ve had no major firearms related accidents doing that training.

So we’re trainers at our core, and we had very destructive customers, SEAL teams, SFA teams, Marine recon, and we shot a lot of volume of rounds, and we got in the target business because we destroyed everything we bought on the outside, and so that literally dragged us into the target side of things, you know, from building range systems to shoothouses to fully baffled ranges, etc.

then after 9/11, U.S. government had a big burst in overseas security needs for very high end, not normal uniformed gate guard base security here, but being able to operate in austere locations and set up security capabilities against some very real dangerous threats.

And so we were hired for our first few jobs in Afghanistan and then Iraq, and because we had facilities and a growing database of people and instructors and the facility that we could do the training and vetting and evaluation of all these kind of people, that kind of bulged us off into the security side.

About that time in early 2003, we bought a company called Presidential Airways Special Transport, Incorporated. they’ve done a lot of airlift for the military, again, for the SOF community, providing on-time airlift services for static line jump master school or free fall re-qual training, that kind of thing, and have grown a lot from there.

That has grown to the point we have many, many aircraft operating overseas for the U.S. government, both helicopters in Iraq and helicopter and fixed wing in Afghanistan with eight aircraft last year, in Afghanistan, competitive bid program — and all the contracts I’ve talked about are all competitively bid — the airlift one, we did 11,000 missions with eight aircraft. We moved nine and a half million pounds.

That would be beans, bullets, mail, 155 shells, whatever DoD wants us to carry. We did another million pounds by parachute. We got into that out of necessity because there’s a lot of forward operating bases that are tough to reach by helicopter and they’re big noise signature and delivering by low altitude parachute, it’s a cool system because it uses a truly disposable parachute. The parachute only costs about $200 apiece, and the guys put it out from about 100 feet going about 110 knots, and so they can get in and out of these very small drop zones.

They’re hitting drop zones as small as tennis courts. So we did a million pounds by that. We moved about 40,000 passengers, and our total costs, our total invoice for that mission is about what the U.S. Air Force is paying for one new C-27. So the idea of outsourcing versus having government do it, that’s a pretty simple math question for me.

So we’ve grown on the air side. That’s logistics. It’s Medivac, [quick reaction force], transport of VIPs, etc.. We’ve grown a lot, again, on the training side.

For the last three years, we’ve done counter-narcotics training in Afghanistan. Our guys kind of built and embed with now the Afghan Narcotics Interdiction Unit. Up until a few weeks ago, they’ve taken a little bit, over $3 billion in heroin out of circulation, $3 billion retail.

And they were a key part of the big bust a couple weeks ago, that big hash bust in Afghanistan down near Spin Boldak. It was 262 metric tons of hash, and our guys were embedded with those teams and helping provide that adult leadership.

The NIU is a great success story because there’s been very little turnover. With a lot of the units, there’s been an effort to train, you flush the guys through training, and then you just kind of set them on their own . . . they lose, they lose or sell their guns or they’re not getting paid, they’re not well fed. There are some of those material deficiencies that leads to a lack of unit cohesion.

And with our guys there, they make sure that they’re getting paid what they’re supposed to, they’re getting the medical care they need, and they assist with the mission planning, and the communications and the Medivac support, and it works. And a big bust like that — and the other cool thing about that, that mission, it was the first time they did a helicopter takedown of a fleeing suspect vehicle. That’s pretty good.

We’re kind of like a T-ball coach. You got to put it on the T first, and then they can take a slow pitch and now a fast pitch. That Afghan unit is well on its way to being a fast pitch hitter.

So it’s a great example of the kind of support and training, gap filling, that our guys could do.

What else? We’ve done some [research and development] work. We lost a lot of people to the same reasons that DoD was losing people in Iraq or Afghanistan, to roadside bombs, and so we, we first adapted by buying surplus British or South African military vehicles and outfitting them to fill that gap, and then we went after building an MRAP, or we call it a “Grizzly,” ourselves, and we went after the MRAP II vehicle, that bid, which was a much higher standard of protection. It was almost twice the explosive weight, I believe, and you had to be able to stop an EFP, and our vehicle does that.

And now we understand DoD is not going to be buying any of the MRAP II vehicles, but I know our guys will be well protected even if DoD is not buying MRAP II because we’ll be deploying those vehicles ourselves.

Q: You don’t have any concern about off-road ability?

A: No, I can show you—I can show you pictures—I’d be happy to show you—of our vehicle driving around the Outer Banks sand dunes fully loaded at max gross, a six-wheel vehicle. There’s no problem with that thing off road at all. So we, you know, we test it because we’re very much a ... we’re a bottoms-up company, and we designed those vehicles.

We literally brought back some of our vehicle drivers and mechanics and team leaders from Iraq and Afghanistan to help develop this vehicle for how the door should open and how the transmission should be serviced, and how fixable this thing, and how well you can fight and get out of it when things go bad.

Q: What about the weight of it on some of those roads in Iraq and the canals and bridges and those things?

A: We have a two-axle truck that still defeats EFPs. So it’s still at max gross at about 40 — well, 20, 22 ton — vehicle. So it’s not the enormous 60,000 or 80,000 pound truck. We can put that EFP protection on our smaller vehicle as well.

And actually our JLTV candidates, well, I won’t give any trade secrets away yet. That bid is still coming, but our JLTV will be very capable at defeating EFPs. I’ll say that.

We showed it at the SOCOM show.

Q: You owe—you meaning Blackwater owe much of your public profile to your State Department contract work.

A: Right. We have no DoD contracts in Iraq.

Q: Yes. Now, I understand that you’ve put a recently retired Delta Force officer in charge of that contract now. Is that true? And what changes, if any, has he made or have you as a company made to the way that your operators conduct themselves downrange in the last six months or year or so?

A: You know his rotation to that job was kind of a normal career rotation in the business. I mean that job is a pressure cooker and the phone never turns off, and there’s always things happening overseas, and so there was no, you know, it was the next rotation for him.

You know State Department has put cameras and DS agents in with our conveys. That’s something we’d asked for back in 2005 already in writing. Again, it was don’t take our word for it. Let the camera or the government DS agent be that third-party arbiter to avoid the kind of incidents which, you know, got very overblown last September.

Q: But, I mean the other stories that I’ve heard are that there’s been a series of what you might call superficial changes made, but they impact the way that folks perceive Blackwater personnel downrange. No more sort of goatees, no visible tatoos, no alcohol when deployed, that sort of thing.

A: Well, we’ve had a no-alcohol policy for a long time. The haircut and uniform presentation has always, is very, very clearly defined for State Department.

Our problem is there’s 170-some companies in Iraq, security companies, and because really since, since 2003 in the fall, we’ve protected the most al-Qaeda worthy targets, we would constantly get calls, even now, even very today, we get calls that Blackwater guys were involved in a shooting or Blackwater guys were captured or killed here or there, and when we go and investigate, they weren’t within 100 miles of that because we know where each of the vehicles are.

We track them with a Blue Force Tracker so we know what they’re doing and what they’re not doing, and because of those 170 companies, we got, you know, Blackwater kind of became the Xerox or the Kleenex brand name for the industry, that any armed Americans in a Suburban or an SUV were Blackwater guys.

Well, no, we only have, you know, a total of 1,000 people in Iraq, and of that, only 600 or so of those would be protective folks and the rest would be gate guards, logisticians, mechanics for the helicopters, air crews, that kind of thing.

Q: But because you are the brand name, have you established specific grooming standards and behavior standards for your people?

A: I’d be happy to share with you a copy of our independent contractor handbook, and it’s all the do’s and don’t’s that we have our guys sign up for before they go, whether it’s the Foreign Corrupt Practices Act, the fraternization, all those policies, how they’ll conduct themselves on the way over when they’re traveling, when they’re in country, you know, it is dictated to us by a thousand-page contract, down to what sighting system will be put on the gun.

If the guy puts a different sight on his gun, it’s a firing offense. So it’s a very, very tight, I mean the State Department has been buying these kind of services for the last, well, probably longer than, for overseas high-end protective services, they’ve been buying them for at least since the early ‘90s.

They are the most developed and advanced standards that we’ve come across, and so I’ll be happy to share with you that detail from our handbook.

Q: Why are they all private contractors, subcontractors? They’re not, most of your guys overseas are not employees; right? They’re individual subcontractors?

A: We use independent contractors just like some other elements of the U.S. government do because they, it’s like a professional mariner. They go to sea, and the days that they’re at sea, they get paid very well, and the days they get off the ship or the day they leave the hot zone, their pay goes to zero because some of the guys might be in school, they might be running a Subway franchise, they have all kinds of other jobs.

Some of them are farmers. It’s very much the model that they can, they work hard, they can schedule their times to deploy, and sometimes we can give them a year or two in advance where they can schedule the times they’re going to deploy so they can work around a birthday, an anniversary, school finals, whatever. It works, and it allows us to have a very, very high rate retention. We don’t send guys for 15 months or 12 months at a time. We rotate individuals, not units.

That allows for much better on-the-ground continuity, especially in training and mentoring and even in security jobs. If you don’t have a wholesale group that leaves an area, but you always have, you know, half or more of the folks have been there in the previous days, weeks and months, you have much better feel of what’s happening, what the threats are, and how to adjust.

And especially when you’re training and mentoring, when you are living with and you earn the trust of those locals, don’t break that. You know, I met a guy from the Arkansas National Guard on my way out from Afghanistan last time, and he’d been there for 15 months, and he knew his battlespace.

I mean he’d been there, and he’s leaving. The turnover time was only a few days with his replacement, and so when this Arkansas guy left, all that knowledge left with him. And how we rotate guys, we allow them the on-the-ground continuity, and they can be there for 60 or 90 days or 120 days, and then they come home. We have a lot fewer incidents of PTSD. It keeps their families together and it works. And we can keep guys in an area for three and four years, not for one year, not for four years, one year at a time.

Q: You mentioned a couple minutes ago sort of the overblown publicity that resulted from some of the incidents in Iraq in particular. Until you—you did catch a lot of negative publicity for some of that stuff.

Until you appeared before Congress, it appeared that sort of Blackwater wasn’t for whatever reason mounting a very public defense of its actions. Under what constraints are you operating when, you know, when it comes to publicly explaining or defending yourself against sort of some of the allegations that have been leveled at you over the last couple years?

A: And the four guys that were set up by bad Iraqi cops in March of 2004, led into an ambush and murdered in Fallujah, were our guys, and about eight months later, trial lawyers, LA trial lawyers sued us. They hired a PR firm whose specialty is influencing juries. So they start cranking up with as much negative PR as they can at the same time we go to work for State Department who by contract says you will have no contact with the media.

So 99 out of 100 times, we have to say no comment to the media, and after, and we still try to abide that however we can. This is kind of an anomaly, me going to an editorial board, but, you know, I’m here not really to talk about our State Department stuff but about the other stuff we do for DoD and aviation etc..

But it’s, that is a difficult quandary that we’re put into where we’re a punching bag of sorts for folks that want to attack whatever is going on in Iraq and we’re not able to put the facts out, you know. Perspective on it all, we’ve done 19, you know, well over 20,000 missions now for the State Department. Less than one-half, probably 0.4 of one percent of all those missions have resulted in the discharge of a firearm, not four percent, 0.4 percent of one percent.

So the idea that the guys are trigger happy and shooting up the place is just grossly inaccurate, and still no one under our care has been killed or injured.

Q: Do you feel State Department could have done more, should have done more?

A: I’m not here to criticize the State Department at all . . . , they have a difficult job there; we have a difficult job there. And I’m glad, I’m proud to say that no one under our care has been killed or injured, and we’re big boys, and we can take those lumps, and I’m honored . . . that they renewed our work, that they see the value that we provide them.

You know I constantly remind our folks, we are not, we are not a government entity, there’s no guarantee Blackwater will exist next year. We’re not a line item in the budget. So if we don’t convince our customers that we add them value, then we won’t exist. That’s the premise. You know when—why is the private sector doing this. We’re a service organization. We serve the customer.

If the Army gets frustrated with the Air Force, they can’t fire the Air Force. They just can’t do that, but they can fire us if we don’t serve them the way they need the job done.

Q: Or they want the job done.

A: Or they want the job—right.

Q: What are the rules of engagement as far as for the Blackwater employees operating under the security for the State Department, that contract, rules of engagement as far as using fire power?

A: Very clearly defined, defensive rules of engagement. We’re not there to win fire fights, we’re not there to engage the enemy or to flank them in a maneuver or to establish fire power dominance. We are there to be a protective screen, to get those government officials, reconstruction experts, members of Congress, whoever, off the place where they’re in grave danger.

Q: Who sets those rules? Is it part in the contract, the State Department sets them?

A: That’s clearly delineated in the contract. It’s dictated to us what the use of force continuum is by the State Department. We are essentially a robust temp agency for that kind of work.

We bid to a thousand-page contract competitively. All of it is competitively bid, and we then recruit, vet, equip, train the type of personnel, the eight to 12 year military experience or big sea law enforcement, SWAT team kind of a guy, person. They then go through medical, psychological, criminal background check, 160 some hours of additional training, vetting, in a lot of scenarios, the suicide vest in the marketplace, the suicide car bomb defense, all those kind of scenarios, with big pyrotechnics, big booms that we can provide at a big training facility, to put them through that.

And then we, once they go through that detailed curriculum that’s inspected by DS agents, then we send them wherever State Department says. They’re going to go to Iraq or they’re going to go to Afghanistan. They then drive the vehicle dictated and provided by State Department, carry the weapon on the mission, carry the person, take the route, all dictated by the State Department.

Q: Has that changed at all since the event last September?

A: Well, as I said, there’s cameras now in the vehicles that we had asked for years previous, and there is DS agents staffed, diplomatic security agents that ride along with the convoys.

Q: Is that guy the senior guy in the convoy now? He calls the shots if something goes down?

A: He is the last word.

Q: The U.S. government and the Iraqis have been negotiating a status-of-forces agreement. There have been reports in the past week that rather than cordoning you, your folks off and other private security people off as protected under that SOFA, that perhaps they would be subject to local jurisdiction.

A: We’ve heard a lot of speculation on that. We’ve heard no definitive word from our government customers on that, and we’re standing by for further orders.

Q: The question is does that not change your agreement? I mean if youfind your guys are subject to local law, that kind of changes the whole ball game; no?

A: There’s all kinds of speculation as to what is or what will be. We’re waiting to see what those decisions are and we have no part in that decision obviously.

Q: But you would not foresee changing your business with the State Department if the rules of the game changed? If your people could be prosecuted under Iraqi law, would you maintain the agreement that you have?

A: A significant change like that would certainly cause a whole bunch of things to be renegotiated. That’s a substantial change.

Q: As the level of violence increases in Afghanistan, do you see the number of missions for Blackwater and need for your company in Afghanistan to increase?

A: Well, we, you know, in Afghanistan, we’re different because we, you know, we do a lot of things for DoD there as well, and we do a lot of training missions, and we certainly see more capacity-building kind of missions there and globally, guys that will go and live and work with those units, imbed with them.

Q: How about for aviation specifically? You talked a little bit about some of the increases you’ve made with aviation since the purchase of a company. Especially in Afghanistan, what do you foresee there?

A: I, you know, continued short haul, rugged strip operation, getting into the small, you know, we support 38 combat outposts across 19,000 square miles of battlespace. So we do vertical replenishments in WESTPAC with helicopters. We do some work in Africa for DoD with medevac and air logistics, again operating small rugged aircraft that land on dirt strips.

Q: Okay. How does that process work for, you know, through the command structure where Army units and especially logistics—well, I guess not logistics but SOF units?

A: In that case, the Air Force or Transportation Command puts out a competitive bid, I need this kind of aircraft that can lift “x” amount of pounds of stuff off of this kind of, you know, this distance runway or this kind of—kind of performance requirements. And so we the vendors then go through kind of the world of assets that are out there and say, will this kind of work or this won’t

Q: Well, maybe not the acquisitional process but the operational process of — how is that distinction made between, you know, this is going to be an Air Force mission or this is going to be a Blackwater mission when it comes especially to SOF units?

A: Well, there we become almost a force provider just like the National Guard or a Reserve unit would, and we operate under their, very much their operational control. You will haul this package from this location to there on this date following this route and passengers get moved the same way or bundle drops get done the same way as well.

It very much comes from higher headquarters and it’s part of the the Air Tasking Order.

Q: What type of missions do you have in Afghanistan when it comes to special operations? When it comes to moving personnel, like you were saying, in and out of hot zones in Afghanistan?

A: You know, not necessarily special operation support there. It’s regular support in the Army, the 82nd, the 173rd Airborne Brigade, those kind of guys.

Q: Okay. So just moving those in and out.

A: Rotator birds, star route birds, you know, periodic or emergency resupply of beans, bullets, mail, batteries, 155 shells, whatever.

Q: Why are you guys better equipped to do that than the services themselves?

A: I think there was a, there’s a gap, you know, the C-130 is a great aircraft, but, you know, the older ones are getting pretty worn out and the C-130Js are coming on line, but that’s a very expensive airplane. That’s $100 million plus aircraft by the time it’s outfitted in the field.

A CASA runs less than two million bucks, and it gets into a lot of small spaces and it gets the job done. Each aircraft that we fly over there has a pilot, a copilot, the load master, a crew chief is also a full A&P mechanic, and there’s one other mechanic back at the base so we support an aircraft and operate it with four people. We don’t even have a hangar. We operate out of five Conex boxes on the side of the ramp at Bagram Air Force Base, so our footprint and our cost to the taxpayer is mighty low.

Q: How many CASAs do you have?

A: More than 10.

Q: 235s?

A: We have some 235s as well. We have 212s and 235s.

Q: Are there other private companies that do those missions as well in Afghanistan in addition to Blackwater?

A: We are a U.S. company so all of our stuff is U.S. registered. There’s other companies out of kind of the former Soviet bloc. They’re flying Antonovs, they’re flying IL-76s, AN-124s. They do the heavy lift mission, but in this case, since we’re flying troops, they wanted a U.S. cardboard certified provider to do that. So, yeah, there are a couple of other ones globally that do that.

Q: And you’re unique in that—but you’re unique in being able to provide those services?

A: Well, there is cardboard certified helicopter providers and cardboard certified lift providers. In this case, we’ve won and have done the job they want us to.

Q: How about for Africa Command? With that standing up on October 1, do you see a lot of, you know, growth rate in Africa for that, an Africa Command as it stands up for aviation?

A: We’ll see. I think there’s less roads now than there were 40 years ago in Africa. So, you know, being able to fly around is pretty key and being able to fly into rough places.

You know we have—there’s a medevac we’re very proud of. Last summer, two CASAs had just been in country for I think for less than two weeks, and one of them was up in a remote part of Mali and doing a survey for a, call it an airfield. It was a swath of desert, and there was a special forces unit up there doing some training, U.S. military special forces unit, and some kind of storm came up. And it badly damaged our aircraft.

It was unflyable and it actually picked up the tent that the SF guys were in, and it tossed them, and it killed one guy, broke another guy’s spine and pelvis. Two other guys with broken limbs and one guy with major internal bleeding, and we’d been hired to provide aircraft with 18 Delta, a civilian 18 Delta medic on the aircraft decked out ready to go.

And the comms gear was also trashed so our pilots got on their SATCOM radio in the damaged aircraft, called the other guys who were hundreds of miles away, said we need help, we need it now, get here. Our guys started flying.

They had to refuel a couple of spots along the way. They did. They landed on a single set of headlights, okay. If you’ve ever flown in the desert at night, you know how dark it is. On a single set of Hummer headlights our guys put that bird down and landed.

Our medic worked the guy for 36 hours including doing an emergency splenectomy on him, saved his life. So that’s why we wake up in the morning to do jobs like that, and that guy is alive and well and, I believe, living in Colorado.

He might not have the nicest zipper in the front, but he’s alive.

Q: Has there been an increase in higher risk missions in places like Afghanistan with helicopters, things of that sort, in the last six months or so, given what you said about Blackwater picking up stuff that at certain points the services may or may not have wanted to do?

A: Our operational tempo kind of ebbs and flows with the ebbing and flowing of the op tempo of the U.S. military on the ground. But I knowChristmas Eve and Christmas Day every outpost where there was Americans in Afghanistan was visited by a Blackwater aircraft and we did Christmas bundle resupplies with the guys from the 782nd that were there including dropping a whole bunch of Blackwater watch caps.

We weren’t going to drop tee shirts or anything because they couldn’t wear that stuff, but we figured they could at least wear a warm hat because, you know, the Afghan winters are cold.

Q: What are the demographics of the people who work for you? Army, Navy, former military? I mean can you break that down a little bit?

A: 90 plus percent would be prior U.S. military.

Q: But Army, Navy, do you have that breakdown?

A: Oh, we are completely ecumenical.

Q: They’re not all SEALs?

A: No, no. You know, obviously a lot of our aviators come from the Army aviation or the covered air programs or Air Force lift guys. Our senior pilot is actually an ex F-4 pilot from late in the Vietnam War.

We have our training cadre would be a lot of law enforcement. We use cops to train cops and soldiers to train soldiers because it’s a different use of force continuum. It’s a different way to approach things, and so police mentors that we put out in the field in dangerous places, they have special operations experience and they have law enforcement experience.

And so a guy that’s maybe out of the 19th or 20th group that’s a cop that’s also an SF guy is the perfect guy for that. We have a database of more than 40,000 folks, and that would range from I think 50 some Ph.D.s, water, sewer, power, call it civil affairs infrastructure kind of experts, down to, you know, lots of security specialists, and then a whole host of engineers, mechanics, helicopter and fixed wing pilots, linguists, you name it, in between there.

And, you know, it’s a proprietary database we built up, and it’s got all kinds of special search tools so we can find the really unusual skill sets. If a guy knows how to pack horses, different language abilities, fixing vehicles, et cetera, we try to send jacks of all trade that can do a lot of things.

You know in 2003, we backfilled a DoD facility in southwest Asia. There was 166 soldiers there. They had 28 to provide security, and 138 to support the 28. We backfilled with 25 people total, five of which were dual-hatted. They’re all what you call gun guys. They all could, had special operations, small unit tactics kind of skills, but five of them could keep the power, the water, the sanitation, the communication, the food, all that going on the base.

So our footprint was smaller. The loss of firepower or security capability didn’t go down at all, but our cost was lower. The effect on the local populace was lower and it’s much simpler to support.

Q: Where was that?

A: Can’t say.

Q: Today out in the world, how many people are working under the Blackwater aegis whether they be independent contractors or full time employees?

A: About 600 full time in the States and about 2,000 deployed.

Q: And that 40,000 that you just described in your database?

A: That’s a big pool of folks that are standing by.

Q: That’s big pool, prescreened?

A: Ready to go.

Q: You’ve already put those people through all your training and so on?

A: No, no. They haven’t all been through the training, no, but we can surge to deploying thousands more if the demand was there because we’ve got, you know, at our facility in North Carolina, we train about 650, 700 people a day, U.S. military, state, federal, local law enforcement.

We got 48 ranges. I would invite you all down to see it if you’d ever like to come for a field trip. It’s a pretty cool tour. It’s, so, you know, if we needed to grow a bunch of mentors or police trainers or whatever, whatever the U.S. needed us to train or grow, we can pull from that database the right skill sets and put them through a three or six-week, however long, predeployment program and send them.

And we’ve got the supply infrastructure there, the medical—we’ve got our own medical clinic. We’ve got our doc on staff with nurses and our medic training and armory. So it’s a predeployment facility.

Q: You said you got 2,000 overseas, about six or 700, you said that were in Moyock [N.C.]

A: Right.

Q: And then you’ve got this pool of potential people. How many, of the 2,000 that are overseas, how many people are rotating with them?

A: In rotation?

Q: Yeah.

A: It’s about two-and-a-half to one. So for one spot filled, you need about two-and-a-half people.

Q: I think part of what you’ve described is, could be argued as not necessarily more efficient because it’s a private company. It’s more efficient because you figured out a more efficient way to do what the military could be doing itself; is that fair?

A: Well, we’ve had to adapt with very clear cost constraints in a competitive environment, and, you know, the military was set up to do big conventional wars, and the U.S. military is the finest in the world at doing that. I mean what they did to Saddam in ‘91 and then again in 2003 to be able to move that many men and material and doing big conventional operations.

But when you turn, you stop that unit and now you’re going to turn and trying to retask an air defense artillery man or a chemical warfare specialist to be a precinct cop or a sanitation specialist, there’s going to be some gaps, and so we’ve just tried to run hard to fill those gaps. We’re not here to replace anybody. We’re just filling in gaps that are created when you take a huge conventional force and turn it.

Yeah, I mean the military has all kinds of challenges to adapt, and there’s all kinds of threats and challenges they have to keep adapting for. They have to prepare for the big war, the medium war, and the small war at the same time.

We can just focus on what is this, what is this three and ten-yard problem, and we’re going to find a solution for that, and, you know, I don’t have to do, I don’t have to think about a Fulda Gap type war or defending the Taiwan Straits. The military has to do that. I’m just worried about some shorter-term problems, and that let’s us focus very close.

I mean the military is buying more short-haul lift aircraft so maybe our need for short haul lift and the like in Afghanistan will go down as those C-27s come on line. Okay. Then those aircraft can be put to work doing lots of other things around the world.

Q: Do you work for other countries, too, or just the United States?

A: Yeah. We do some training work for other countries, some helicopter support and training and maintenance and that kind of stuff.

Q: Jordan?

A: Yeah, for example. And there the foreign government comes to us and says we’d like you to teach us how to do dogs, explosive detection dogs, and we get the license and all that stuff for it, and then we can go teach it.

In Azerbaijan, there’s an example. We were hired by DoD to build for them an NSW, a naval special warfare, kind of capability to defend the oil platforms and interdict weapons and drugs and whatever else in the southern Caspian.

And with a very small team, never more than four to six guys, we built — over about a year and a half — a unit, and we took them from zero capability to doing underway shipboarding in ten months.

And we also redid their entire base, the pool, climbing tower, the shoothouse, the ranges, the boathouse, everything, and for a very, very, very small fraction of what it would cost DoD to do it.

At the same time, there was a seabee unit that was supposed to come in and build a barracks, but it was always a big political problem for 150 seabees to be moved in to build these barracks, you know, to put 150 active duty military personnel on the northern border of Iran. That’s a sensitive problem. Four to six trainers living in an apartment out in town, not so bad.

Q: Have you been approached by any countries wanting your services that you would not do this in this way?

A: Sure.I think we had a lot of inquiries from China a couple years ago wanting police training before the Olympics, and that’s just not something we wanted to do, didn’t even take it any further than that.

Q: Why not?

A: That’s a policy question. So we just didn’t do it.

Q: A Blackwater policy question?

A: Yeah.

Q: Yeah, but I mean what’s the difference between working for the Azeris and working for the Chinese?

A: Well, China has plenty ofhuman rights challenges and we didn’t want any of our training to be used in another Tiananmen Square type faceoff. Simple.

Q: Another difference is also the U.S. government said they wanted you to go to Azerbaijan. They didn’t ask you to go to China.

A: Correct. I mean they hired us to do that.

Q: And is that part of the policy question is where does the U.S. government stand on this particular mission?

A: Sure. And, you know, that’s something we stopped before even going to the State Department to the licensing process to get permission. That was something we stopped before that. There’s other things that we might get asked to do that. But it was something that was in the U.S. foreign policy interest and our training has to align with that. Whatever we do overseas has to align with that because it’s licensed and very strictly controlled down to the curriculum, to the individual background of the person going to be trained, all that stuff.

Basically an hour-by-hour, minute-by- minute curriculum has to be provided for review and approval to the U.S. government before we do any foreign training.

Q: Can you do that training better than—clearly, you believe you can do that training better overseas than the United States military?

A: I’m not saying we can do it better. I’m saying we can do it differently, that we can put guys that are focused on it for the long term and they can dwell there, you know, in Azerbaijan with the continuity that’s there.

You know the military unit sends a guy, and he’s going to be at that post for a year and he might get to know some of these areas, and then he leaves and he gets assigned to another SEAL team or another SF unit or he’s somewhere off in the staff career.

We can assign guys that will build that local knowledge, the continuity and credibility, so that you get a lot more done in the country than a guy that’s there. There’s a difference between being in a country, for a guy to be in the country for five years or for five people to be there one year at a time. That’s the difference.

Q: Do you feel you’re doing some of that, you’ve been doing some of the hearts and minds stuff that the military is ... you’ve been doing it longer than they’ve been.

A: Oh, the military does lots of hearts’ and minds’ stuff, too, but just knowing who’s who in the, in the different ministries, the organization, how, you know, when a package comes, how you get it smoothly through customs, how do you not get it stuck there. All those things, all those continuity issues, having guys dwell in the country for a long time works.

I mean the military, you know, there’s all kinds of talk about that with mentors, with, you know, foreign area officers, you know, for the military that’s a challenge now because that’s a huge need for the military, but yet if a guy, you know, some smart captain, O-3, becomes a foreign area officer, it’s a different career track than being a company commander, brigade staff, battalion and brigade staff officer. It’s different.

We can take that guy and incent them to do that kind of job. And the military can do it, too. They just have to really change their personnel system.

Q: One of the things that the military and SOF guys historically have been used as is building those kind of bridges, bridges that would be useful for the future at some point so that when you’re chief of staff, you know your opposite number. You can pick up the phone and say, hey, Erik, how’s it going; so what the heck is really going on over there? Because you and I built a relationship because I did that deployment.

Is it taking something away from the military guys at all or do you feed this data then back into the US military when the right time comes for you guys to be like, okay, look?

A: Well, yeah, I mean we’re under the operational control, if you will, of the attache of the embassy, of the U.S. embassy, working that country. So the linkage, the connectivity, is there. He just has more, more data collectors, relationship builders out there, and if they don’t like us, they fire us and we’ll go away.

Seriously, I mean, you know, how hard is it, if you’ve been in the military, how hard is it to really get rid of that, you know, the guy that just doesn’t belong there? It’s tough to get rid of them in the military. It’s much simpler for private organization to release a guy from service.

Q: And that happens? People say, hey, I don’t want this guy coming back here again?

A: Yep, all the time. All the time. Trainers, security guys, dog handlers, dogs, mechanics.

You name it, if it’s not working, it goes away.

Q: Has there been an instance when Blackwater wanted to do work for a certain country or government and because it’s aligned with U.S. foreign policy, it couldn’t or didn’t or was restricted from doing it? It sounds like in every instance, the contract would be aligned with the State Department or the U.S. government.

A: Well, without sounding critical of the U.S. government, there’s not always alignment. There’s not always perfect alignment between DoD, Congress, State. It’s assuming all those parts get in line. So, you know, there’s not always perfect alignment across all those cases, but we work under those authorities, and we don’t work without those authorities.

Q: Okay. I wanted to ask quickly about the vehicle programs, which one, whether it be the MRAP II, Grizzly, the JLTV with Raytheon, or the Light Strike Vehicle, any recent developments in those three or things coming up that we can ask you about? For example, I understand the Light Strike Vehicle is made a little smaller and lighter now to fit on an Osprey, etc. Is there growing interest in that? It’s very fast. I know the Army has programs to look at vehicles like that. Any thoughts on that?

A: I haven’t spent a whole lot of time on the Light Strike Vehicle as much. I mean our guys worked very hard on an MRAP II, and I’ll tell you that our MRAP II that came back from explosive testing and started. Okay. After it went through the full explosive testing, twice the size of MRAP I, the engine started. So it’s pretty survivable.

Q: Was it able to drive off or did it just start?

A: Ah, no, the T-case went away, and once we replaced the T-case, the engine still fired.

Q: Speaking of vehicles, you guys rolled out your first ship last year, the McArthur, which you got from [the National Oceanic and Atmospheric Administration] , and I wonder if you can tell us what your expectations are for it and what types of missions you expect to be able to do with this ship and potentially future ships?

A: Well, we did that as a maritime security and training platform because for U.S. government customers, for foreign government customers, we do shipboard security, shipboard training, deck landing qualifications of helicopters. You got to have a boat with a helideck to be able to do a deck landing qual.

So we did that, and it’s a start. It’s a toe in the water. It’s kind of the same model that we’ve done with aircraft — the contractor owned and operated platform for government support missions. So whether it’s a riverine security platform or just a training platform, that’s what we started with.

Q: Is there a demand for a set of maritime missions or particular maritime mission, the same way there’s demand for your services in Afghanistan and elsewhere, that you could potentially expand into?

A: Yeah. We haven’t seen as much demand on the maritime side as we have for the aircraft, fixed wing, but the other thing we’re working hard on, you know, the other R&D project we did, starting a couple years back, was an airship. You know there’s a big push towards UAVs, fixed wing and rotary wing UAVs, you know, no one has really done it on the airship side.

So we went after that, and we built a 170-foot airship that will give us Predator A-like payloads, about 400 pounds aloft for three days with a vertical takeoff and landing. So we can drive it right back down to a parking lot, a tennis court, whatever, and it will carry...

Q: Sounds like Raytheon’s Aerostat, roughly the same kind of concept.

A: That, well, that is, but that’s static. It’s tethered. It’s tethered to a static point. This is free flying. It cruises at 30 to 40 knots, dashes at about 55 knots, and it’s unmanned free-flying so you can put your [Forward Looking Infrared] ball, your cell phone intercept box, your radio repeater, synthetic aperture radar, whatever. I mean that’s, the other real nice thing about it is with a lot of UAVs, it’s always a challenge to jam the electronic box into a fairly small fuselage.

In this case, it’s like the back of an F-150 pickup truck where you have racks and you just literally plug and play your electronics gear and plug it in and make it work. It is unarmed at this point, but, you know, the idea being with a boat, with an airship like that, a small vessel could act as a lily pad for three, four, five airships and literally put up a radar picket line to intercept all those narcotics flights coming out of South America, going from Colombia, across border to Venezuela, flying north to Haiti, you know, four or five airships flying would give you complete picture of all that air travel.

Q: And you see that as a growth industry market for your company?

A: Yes, or for border security, or for pipeline security in the Middle East, it’s a cheap, rugged and simple way to do surveillance with the long dwell times.

Q: Okay. Is that why you went with the airship on that? I mean just for really long dwell times?

A: Yeah.

Q: So who are you sending that surveillance data to from the airship? Is that going to the U.S. military? Or is it for your use?

A: Well, we have not deployed it yet. We have one ship done, and it’s got 60, 70 hours on it. The second one is just about in production where we’re just doing some contract demonstration and testing this summer for the U.S. military. And, you know, kind of our model will not be to sell it necessarily but to provide the service turnkey.

So the military doesn’t have to stand up a whole new squadron to run blimps. They could just say I want this kind of package flying over this area at this period of time, and they’ll pay by the hour or, you know, kind of like the same aviation model that we’ve used, fly by the hour.

Q: Right. So you would be providing the data to the U.S. military?

A: In many cases, the government would put their own sensors on the airship and they could, they run all the sensors. We just provide a platform.

Q: You’re just going to fly it.

A: It’s a flying truck.

Q: Did Blackwater have any hand at all in the surveillance of the group that was holding the hostages in Colombia?

A: I’m afraid not. It’s a great success. I’m mighty happy for them.

Q: We’ve talked a lot about training and what you do, and you said, well, it’s not necessarily better. You’re not saying it’s better, but there are things that you’ve learned in running certainly what must be one of the biggest or if not the biggest private training facility, private military facility, training facility anywhere.

A: Private firearms facility.

Q: You’re building another one or you’re hoping to build another one out on the west coast.

A: No, it’s operating.

Q: It is operating.

A: In San Diego.It’s an indoor facility.

Q: Can you do firearms training and related training better than the military or more efficiently than they can?

A: I’m not here to say that we do anything better than the military. I don’t want to ever come off as being critical of the military. I, you know, the leadership and the staff at Blackwater came from a special operations community.

And, you know, the special operations mind set is to equip the men, not to man the equipment. I heard the head of SOCOM years ago give this explanation, and I agree with it. SOF, for years, that the man was the weapon system, and you equip the man to do the job, and you trained them, and you trained them a lot, and that meant when I was a SEAL, we shot until our fingers were sore and bleeding because there were so many rounds of ammo.

That is not the case with the line infantry units because in a conventional military unit, you equip, you man the equipment because in those units artillery is the king of battle and you have tanks and you have missiles, and you, and the men run the equipment which does the heavy lifting and the fighting in combat.

So we’ve basically just applied the SOF mentality of firearms training of individual fire team, squad, platoon, company-sized tactics and made it more available back to those SOF units and back to bigger units or to nontraditional units, whether it’s a military intelligence unit, a Coast Guard boarding team, a city or county SWAT team, those kind of places.

Very adaptive, very much focused on small unit tactics, not, you know, who could disagree that, you know, the U.S. military was great at combined arms warfare, artillery, deep rocket strikes, moving tanks hundreds of miles through the desert, but then there wasn’t nearly as much practice done on shooting at three, five and ten- yard targets with a handgun or a carbine.

I mean look at, it’s great to see how many optics have been adapted for soldier’s inventory now, whether it’s ACOGs or EOTECHs or Aimpoints, all those kind of small unit tactics stuff that a SEAL team or an SF unit had had for ten or 15 years previous.

Q: But in terms of running a facility and equipping it and keeping it running, you know from your experience that you trained on ranges where the pop-up targets didn’t pop up, and things didn’t work as they were supposed to.

A: Things are not always maintained that well

Q: Have you figured out a better way to do that?

A: Yeah, if the range doesn’t work, fire the maintenance technician. I mean it’s very simple. Our customers come because they expect to have a great experience when they come to Blackwater. Whether it’s an SF team, a whatever government unit comes, they’re on a tight schedule. They’re going to go someplace dangerous after they come to us. So they better make the most of their experience.

So when they come in on Sunday night, they’ve shipped their ammo ahead, their rooms are waiting for them. There’s an envelope waiting for, with all the guys’ names for keys. So you hand them out quick. It’s a ten minute, maybe five minute check-in process. I mean a former regional manager from Marriott runs our hotel side of things. So it better run smooth and fast or, or we’ll make a change.

So the next morning, you get, you get up, you get the range brief, it’s quick, you hand them a radio. The schedule is laid out for which ranges you’re going to get, and the ranges go, and if you’re going to rent a shoothouse from us, we’ve got five. We’ve got a NASCAR-like pit crew team, that if you’re going to use a shoothouse in the morning, over lunch the crew will come through and they’ll replace all the doors.

We buy doors, full door units by the truckload right from Lowe’s or direct from the manufacturer, and they go through with a quick screw gun, “zip, zip, zip,” and they’re swapping out doors. So the whole thing has got to work.

We’ve got, even down to the contracts, there’s a maximum amount of down time a car can be busted on the range, on the driving track. So if a car goes down, we got another one up and running because we’re a service organization. That’s not the kind of service, you know, when an infantry unit goes to some military training range, if something is not working, it’s hard for them.

Q: They sit.

A: They sit. And that’s why people come because we guarantee them that level of service, and if they don’t get the service, they’re not going to come back.

Q: Could you provide that service on government installations?

A: Sure.

Q: Isn’t that sort of the ideal concept for privatizing sort of non-mission critical role?

A: There’s three arguments for or against privatization. There’s reliability, there’s cost and accountability. And we can handle two of those, and the government customer has to handle the accountable piece, but cost, we’re happy to have that discussion. And reliability. If we’re not reliable, the customer is not going to come back because no one is making them come here, you know. 97 percent of our revenue is bid, is competitively bid.

This idea that we’re sole source junkies and the whole place was built on political connections is absolute nonsense. We built it by serving the customer and making it first a place that the warrant officer and the team sergeant wants to come to, and we’ve slowly worked our way up the chain. And I encourage you to call and come down and see it.

Q: aside from the obvious trappings of being extremely successful financially, what motivates you to apparently get very little sleep and work very hard? Is there some larger thing that motivates you personally?

A: I love the military. I love the U.S. military, and I want to see it be the finest it can be, and helping them do little jobs like training and little stuff that we’re allowed to do and able to do, if we do it very, very well, and they see, the government sector sees the private sector counterpart doing it at this level of service, it makes everybody step up their game.

Q: But why not stay in the military and be a part of the military? Why Blackwater ?

A: Because I have more latitude to make changes here than I would be if I ... because if I was still in the Navy, I’d be about an O-4, maybe an O-5. So I’d be in command of, not even command of a SEAL team yet, of, you know, be a task unit commander so I’d be in charge of 30 or 40 guys. I have a little more flexibility now.

Q: Why did you get out of the Naval Academy?

A: It just didn’t suit me. The Academy just didn’t agree with me. So I left and I went to a small school in Michigan, and I was a fireman and a diver for the county sheriff’s department doing body recoveries, and was flying and hunting and doing all that stuff in college . . . I remember my exit interview at the Naval Academy, I said I’m going to get out, I’m going to finish school, I’m going to come back through OCS and I’m going to be a SEAL. And it worked.

Q: Is that something of a metaphor for what you just said about you wouldn’t even be a SEAL team commander if you had stayed?

A: But don’t get me wrong. I don’t ever want to minimize how cool a job being a SEAL team commander is, and if I could wave a magic wand, I’d love to go back and command a SEAL team, but I’ve chosen a different path, and the path was kind of chosen for me because my, you know, my dad’s business was very successful.

There was 5,000 employees, and he died suddenly, and my mom needed some help with the family farm, so to speak, and then my first wife got sick with cancer so between those two, I had to get out and help out with things at home.

Q: You said the term, you said earlier on about we may not be here tomorrow, and if we don’t give, if we don’t give great service ...

A: If we don’t add value to our customers.

Q: If we don’t have value, we might not be here tomorrow. [We] interviewed Obama last week, and apparently he used the words “troubling” when he was referring to private military contractors. He said they were troubling, but probably whoever gets in next year will have a different — that administration will have a different view on the PMCs because they’re a very closely associated with the current administration.

What’s your view of that?

A: You know that’s a misnomer that contracting with the private sector is new, so I have to go all the way back to, you know, the founding of the country, whether it’s Massachusetts, Jamestown, Plymouth colonies, those were private investment endeavors that hired private security contractors to come over and protect their investments.

Q: The Italians actually started the private contractor

A: Sure. I mean Columbus was an Italian who went to work for the Spaniards on a contract to explore a way to the new world.

Lafayette, Rochambeau, Van Steuben, Kosciuszko. Okay. Von Steuben, a Prussian, first Inspector General. Worked for General Washington. Kosciuszko, a Pole, engineering officer, regarded as the founder of American artillery, key to the defenses at Saratoga, the first victory against the British really that convinced the French that these crazy Colonials could win this thing.

And then Rochambeau and Lafayette were both French battlefield commanders for Washington. On land, at sea, you have John Paul Jones buried in the Naval Academy Chapel, who was a privateer. Nine out of ten ships taken during the American Revolution were taken by privateers, not by Continental Navy ships.

You know the Marine Corps is great. From the Halls of Montezuma to the Shores of Tripoli, how many Marines were on that expedition? Eight. The rest were hired contractors, about 250 Greek artillery men and cavalrymen.

So the idea of battlefield contractors on, you know, supporting the U.S. government abroad, there’s nothing new about that at all.

Q: But Iraq has raised that to a new prominence most recently

A: I disagree. I mean you had the Flying Tigers in World War II, guys that were allowed to take leave from the Army Air Corps jobs, go to work for a private company, got paid very well. Average Army Air Corps pay in 1940 was $260 a month. Chennault paid them anywhere from $600 to $750 a month, and he paid another $500 for every enemy aircraft, every Japanese aircraft they destroyed.

Those guys were doing offensive combat operations against the Japanese. We don’t do anything offensive. We play defense. We do defensive security or training or aerial logistics, nothing offensive at all.

So in terms of offensive or potentially controversial missions, there’s passes. They’ve done far, far more than we’re doing now. I think, you know, Iraq is a controversial, somewhat unpopular war in America. Any contractor that’s over there helping out was attacked the way a lot of the effort was back in Vietnam as well. That’s I think part of the politics of that.

I’m not going to go any deeper into that part of the discussion, but, you know, I don’t think who, whoever is in charge come January, the U.S. government is not going to suddenly be reborn innovative, super-efficient, fast.

The work is still going to have to get done and the private sector is still going to have some kind of role doing it. So we have a very scalable model. We can scale up; we can scale down. Again, we didn’t, we didn’t achieve this kind of success because of political connections

Q: Do you think, but part of the issue, and I think that a lot of people are under this impression that Blackwater is the private army of the U.S. I mean this is a very popular, you know, it’s not just people wearing tinfoil hats who are there who are thinking this. How do you get out there and better explain what it is that you guys do? And I would flip that around a little bit. What do you want average people to know about what it is you do?

That’s not saying, necessarily saying that we’re getting to the average person and the average reader. I mean ours are a little more discriminating and more military reader.

But it’s amazing because I was in New York visiting my dad, and I had another one of those tinfoil hat moments when people were saying, well, you know, this is Cheney’s war, and its engineer, and Blackwater is the one fighting it.

You know and this is just average — three average New Yorkers on a street corner in front of my building. You have a real PR problem because people have no fricking idea what it is you’re doing.

A: We employ veterans, U.S. military veterans or about ten percent would be U.S. law enforcement folks. We provide them a job where they can continue to serve America, whether they served for a couple of periods of enlistment, eight years, or they served for a career, just like most of the commercial airline industry was trained by the U.S. military, guys who get out and they go to work for the air lines, or most of the nuclear powerplants have people that came out of U.S. Navy nuclear power school.

They reuse those skills in the private sector. This is a way to reorganize those talents, those sunk costs already that the U.S. military has put into these guys building them skills, whether it’s providing security, providing training, flying an aircraft, fixing an aircraft. Whatever that task is, we reorganize those abilities into a package that is usable and cost effective for the U.S. government to use.

It’s not a private army. The idea that the guys, you know, part of that independent contractor handbook is that they swear the same oath to support and defend the Constitution that they swore when they joined the U.S. military.

They’re not swearing an oath to me. They’re not swearing an oath to Blackwater. They swore to defend the same Constitution. So the idea that it’s a private army, that I would suddenly reprogram these guys from having served America very well — okay, these are decorated soldiers with great track records of proven judgment in the U.S. military and they’re out, and we provide them another way to go back to work — the idea that we’re going to reprogram them to being some private army to do something nefarious against America is absolute insulting to the veterans that have served America so well and are still serving today.

Q: you must hear anecdotes about the situation in Iraq because I imagine many of your people go places, whether it’s to provinces or work with Iraqi officials, that even the U.S. military not be as frequently. Are you hearing anecdotal remarks about progress?

A: Yeah.

Q: Or increased stability?

A: It’s getting a lot better.

Q: How about relationships between your employees and Blackwater and soldiers and Marines out in Iraq? You know I hear anecdotes all the time about sometimes, you know, hard relationship.

A: By and large, very, very good.

Q: Yeah, but there is some resentment there.

A: No. You know what, hey, if you ask a thousand people the same question, you’re always going to get a few that disagree . But my proudest professional moment was, it was probably two years ago, I was speaking at the war college across the river here, ICAF, one of those big entities, and there was a whole bunch of colonels in the room, and one of them came up to me, and he said I want you to know, ‘I just came back from Baghdad. I was a brigade commander in the area, and on the dashboards of my soldiers’ Humvees, they had the Blackwater call signs and frequencies because my soldiers knew that if they were in trouble, the Blackwater guys would come for them.’

So the soldiers have that kind of regard for our guys, and that has been the case on more times than I have fingers and toes have our helicopters or our PSD teams stopped and scooped up wounded American soldiers from a recent roadside bomb blast and flown them to the CASH. We have that reputation because, you know, and that’s the guidance we give to our guys.

It’s well beyond the scope of our contract to land and provide medevac upport to U.S. military, but the good Samaritan rule applies there just like it should apply here in Washington.

Q: They also deployed some tear gas at an entry point one time so there is some friction. Never heard of it?

A: No, no. Just like there was a colonel that claimed that there was some dispute with one of our guys referring to a pistol about the safety on a pistol, and our guys by contract, by the government issued weapon they carry are Glocks, which if you know anything about firearms have no external safeties. So that incident didn’t happen.

Q: The tear gas incident?

A: I never saw anything like that in an incident report. No, and we have very, very clear policies on all the incident reports.

Q: There was a story in the New York Times. You must have seen it ... about six months ago.

A: And the New York Times is always accurate in their reporting.

Q: I mean I’m just asking you what is out there.

A: ANNE TYRELL [Blackwater’s Director of Public Affairs]: It was out there, but our incident reports do not reflect that that ever occurred. I will say that I am on record in that story having said not that it did occur, but commenting on that

A: ERIK PRINCE: Tear gas is not even something our guys are issued.

A: MS. TYRELL: It was a confused story.

Q: How about the fight between the two lieutenant colonels and the one Blackwater employee when the Blackwater employee, you know, I mean there was the lawsuit between them?

A: No, I don’t think there was. There wasn’t a lawsuit there. I think there was some investigation into the conduct of the officers, of the Air Force officers.

Q: Sure. I mean just another example of some of the friction that’s going on between there . . . .

A: MS. TYRELL: But they were the ones that were determined to have done wrong in that case.

Q: No, they were charged, but the charges were dropped.

Q: Charges were dropped, but the charges turned around and questioned the veracity of your employees.

A: Right. The traffic accident, and the Air Force guys hit our guy’s vehicle when he was driving a company vehicle, and he was going to try to go see who damaged the company truck because he’d be held accountable for the big old dent in the fender.

Q: You talked about sort of the range of experience that your ex-military folks have. You know they may have done one or two tours that they wanted, you know, in the military, or they may have been career military guys. It seems that when you started the security business, obviously it seems as if the demand has exploded for that business over the last five or six years.

A: It’s level now. Level and hasn’t really contracted yet, but it’s at least level.

Q: When it seemed, when you started out, and this is just perception — I obviously haven’t seen the demographics of it — that you were taking a lot of folks from the SOF community, a lot of SEALs, SF guys into the [personal security detachment] business. As it expands and you need hundreds and hundreds and hundreds of guys for PSD teams, is there a level at which you can no longer get the same quality and experience of an average team member, and you have to start going to sort of junior enlisted guys from the Army and the Marines and so forth?

A: Well, there is the physical limits of how many people have ever served in a SEAL team, SF team or recon, and you know there’s a big GAO study done about whether companies like us were looting the ranks of SOF units. And that GAO study found that that indeed was not the case; that, sure, a lot of those guys get out and instead of going to MBA school, you know, getting another job on the private sector, they instead come to work for us kind of at the same rate that they’re always getting out before.

So, but once you draw through that entire pool, you know, we’re not putting guys out there to do SEAL team missions. They don’t have to swim, they don’t have to insert over hundreds of miles, they don’t have to do a special forces capacity building mission for a security job.

Instead we can take guys that have at least sergeant level experience, you know, all the folks we had deployed doing security work is especially a MIKE Force of sergeants, and we can train them and build up those infantry skills, those, the leadership, judgment, experience skills and hone them, especially to focus them on PSD, protective security mission, because we don’t have to teach them. They don’t have to do free fall, they don’t have to do combat swimming. They don’t have to do all that other stuff, but we can definitely build that skill set.

Q: I mean is it untrue to say that the level of military experience on those teams has been diluted over the years as you’ve had to create more and more of the teams?

A: I think it’s changed. I think early on you had predominantly SOF because the demand wasn’t as big, and there was a lot more SOF guys that had been out in recent years, and they were able to pull them back in because they got out two or three years ago, and they dialed in their skills.

Then as you had large conventional forces who deployed in Afghanistan first and then in Iraq, then you have those guys building skill sets as well, so as you start to tap out of the — not tap out; bad analogy — as you start to fully draw out of the SF pool, you have a growing conventional pool of military experience, combat experience, even if it wasn’t SOF experience, that we’re able to kind of grow, retrain and hone to be high end PSD.

Q: Well, exceeded the SOF experience that your generation came from. No offense intended for the guys who—

A: Well, definitely. Definitely they’re there. The conventional guys’ combat time exceeded that of the SOF community in 2001. Absolutely.

Q: Can I ask you about Graystone? Can you talk a little bit about Graystone and what Graystone is made up of and where you see that growing?

A: Sure. Graystone is essentially our foreign employment agency that we employ TCNs, third country nationals, through. Some of our government contracts dictate that you will have a non-host national or a non-American doing a job like a gate guard or a baggage screener or something like that.

And so that’s who we employ them through, all of which, all of their training activities, staffing, all that stuff, even the training we provide to those TCN guards that are going to work for us is all licensed back through the State Department.

So even if it’s a, if it’s a foreign subsidiary, because I’m the owner, it all links back to U.S. accountability and controls.

Q: Where do you see that growing? I mean across the world, third country?

A: It will pretty much stay, stay steady state.

Q: I mean is it like a B brand for you guys?

A: No. It’s a staffing agency for third country national guards.

Q: To fulfill a contractual requirement?

A: Yep.

Q: But Graystone would work with the same sphere of countries that Blackwater would work with? It wouldn’t be the, you know, that Blackwater would not work with certain countries and Graystone might work with those countries?

A: Right. Because Graystone’s regulatory environment is the same as Blackwater’s.

Q: Is there like a guiding principle? You guys are in so many businesses right now, and I think I’ve seen—

A: Operational excellence.

Q: That’s it? Where do you draw—when somebody comes to you with an idea and says, you know, we should make knives, Erik—

A: We do, you know, since we have 600, 700 people, customers on the property everyday, we have a pro shop and so there’s tee-shirts and fleeces and all that kind of stuff.

If you go to a country club, you go to the pro shop, you’re going to get drivers and golf pins and all that kind of stuff, the same if you go to Blackwater, you can get holsters and pistols and knives and all that kind of stuff. But that’s a niche part of the business.

Q: You have encouraged innovation in a way that’s unusual in business, you know, at all. It’s a fairly horizontal organization. You’ve got, you’ve talked about your airship.

A: Yep. We operate the largest wind turbine in the state of North Carolina. It’s a 60 kilowatt wind turbine on a 120 foot tower, and why do we do that? Well, and it actually drives into our Grizzly factory. Because we operate in a lot of weird remote places around the world. And when you look at fully the burden of fuel costs of some of these places along the — there’s the Afghan-Pakistan border or way out in the remote parts of Africa, fully loaded costs of diesel is pushing 200 bucks [per gallon] by the time you buy it and truck it. So that makes for crazy electrical costs. So if we can throw up a turbine and drive that cost down, it lightens our costs, lowers our logistics footprint and makes us more competitive and more efficient.

Q: So but to go back to the question, operational excellence or it’s a good idea, let’s do it, I mean what, how do you decide which ideas you’re going to go invest a substantial amount of money in? That airship must have cost you a fortune.

A: You know what, we run a pretty lean organization and we don’t throw a lot of extra dollars. So our, you know, our costs to develop that airship will be, I would say well under 10 million bucks.

Q: That’s still a lot of money in my house.

A: It’s a lot of money, but compared to what, you know the Northrop’s, the Lockheed’s, those kind of guys, would spend, it’s—and again, let me also say no plus-ups, okay; no earmarks, zero in the history of the company. No directed appropriations, none of that stuff. The airship is not based off of any congressional grants or anything like that.

I think we might get a, we get some kind of employment break from the state of North Carolina for every aviation job we add or something, but that’s not much. I know it’s many R&D dollars, that’s for sure.

Q: Are you working on the .30-caliber helmet too, though? The .30-caliber helmet requirement for the Marine Corps.

A: .30-caliber helmet requirement?

Q: Yeah, the ballistic protection for .30-cal?

A: Oh, no, we have nothing on that one.

Q: You may have touched on this when you were on the Hill. Was an FBI or independent report about the incident that was controversial released and was it established that Blackwater security people were fired on first?

A: The FBI investigation is still ongoing. I can tell you, you know, there’s a radiator that came out of that truck that had AK rounds lodged in it, and the reason the vehicle was stuck there was because there was an AK round that cut the coolant hose and, you know, the curse of modern engines is if you got no coolant, the computer won’t let you run the engine.

So, you know, the FBI investigation is ongoing. I couldn’t tell you assuredly that there was AK rounds that impacted our vehicle.

Q: How many people has Blackwater lost over in Iraq and Afghanistan and how many wounded do you have and how do you provide for those wounded and the families?

A: We’ve had 27 KIA in Iraq and three in Afghanistan. We, every time you send a contractor abroad on behalf of the U.S. government, you have what’s called DBA insurance, Defense Base Act.

It’s a continuation of really what started during Lend-Lease in the late 1930s when you had — well, early ‘40s — when you had U.S. merchant ships, civilian crews, going through a war zone getting torpedoed by Nazi submarines. It was a full-on insurance program to provide for those sailors’ families.

So it is a full-on disability, death benefit to the individual or to their family and for their kids until age 18 or 22 if they go to college.

Q: Provided by the federal government?

A: It is an insurance policy that we buy and if the individual is killed or injured by enemy action, border fire, ambush, whatever, the insurance company is indemnified by the Labor Department. So, so we insure for all the non-combat risks, whether it’s disease, car accident, earthquakes, whatever.

Q: Back to sort of the guns and knives stuff, kind of out of curiosity, your typical PSD guy or security guy, do they get a standard package of a carbine and what do they carry? And do you test weapons?

A: We do. We do some contract testing for the U.S. military, the U.S. Army Special Operations Command RDT&E folks, you know, for years they had, they still have, access to every Army base in the world, but they would pay and they would come to Blackwater because we were that user friendly. They could accomplish so much more of their training, testing and evaluation stuff in the period of days that it would take them weeks to do in a government facility.

Standard PSD operator, that would be violating the terms of the contract if I gave the detail stuff. But all that, all the weaponry is provided by the government customer. I mean I think we provide them a pocket knife.

Q: They’re provided by who?

A: Government issued weapon. Government issued carbine. Government issued handgun. If there’s night vision involved, that’s government issued as well.

Q: Body armor?

A: We do the body armor.

Q: How big are you?

A: About 2,000 folks deployed and 550, 600 folks full time. That’s all.

Q: Fewer than 3,000 employees.

A: Way fewer, yeah.

Q: What’s the turnover in the company?

A: That we’ll leave off the table for now.

Q: You guys do a lot of stuff, and one of the things I’m curious about is your program for SEAL mentoring and recruitment. Can you tell us about that and how that works?

A: That was one competitive bid one through Navy Recruiting Command because, again, that kind of came out of that GAO study. How do you grow the SOF community. But the problem was how do you stuff the front end of the pipeline with the really qualified guys that can run and swim and don’t mind the cold and can pass the dive physics and all that stuff, stuff your front end pipeline with really qualified guys, and not change the standards at all but increase the throughput of the school?

And so that’s what that mentor contract did. It put I think 50 some mentors out across the country to go after the—to go to the triathlon series and the state college wrestling matches and all those kind of places where you get the qualified hungry guys that want to go serve their country and be a frogman, and you teach them how to get through the process, how to get the applications, and their physicals and, you know, the guy might be a great wrestler but he might not swim very well.

So work on his swimming so he passes that swim test and teach him those basic parts because if you’ve got the, if he’s got the heart and the head to do it, the mentor program takes care of the other peripheral things that will get him through the process.

And it works. I mean I’ll get you the exact number, but the increase of quality, qualified bodies at BUDS has gone way up.

Q: And are they passing at a higher rate?

A: Yes. NSW is very happy.

Q: So talk us through the typical lifespan of a person who’s involved with this. Your guy goes out and finds a good candidate and then shepherds that person until Great Lakes and then it’s over, or is it all up until from finding the person till BUDS?

A: There’s a mentor that works with them from before enlistment till they get to Great Lakes, and there’s a secondary contract that after they graduate Great Lakes before they go to BUDS that really buffs out the swimming skills, the pullups, the running, all those things that they love to beat into you at BUDS.

The mentors, call it the preenlistment to Great Lakes mentors, are all across the country. They have regions, almost like a regional salesman. They are out there working through the recruiting districts. They’re there to supplement, and it’s not just for SEALs, but it’s for EOD, SWCC, the boat guys, CSAR

Q: PJs?

A: No, not PJs,

Q: Rescue swimmers?

A: The rescue swimmers, yes.

Q: So on the back end of it, if you’re—I mentioned the McArthur before, and you said it was kind of a test bed. Is there potential for Blackwater to become interested in Navy people who are not special operators but who are surface crewmen or gunners mates, etc?

A: Sure.

Q: If you do more the maritime type of stuff in the future?

A: Maritime, riverine, yep.

Q: How about other services?

A: I mean so most of the world moves its stuff by water. And maritime piracy is a growing problem, and I think there’s some private sector solutions that are available when folks want to go to that measure as well.

Q: Providing this sort of mentorship for other services, for the Army, for the Air Force?

A: Oh, I think the success of what we’ve helped Naval Special Warfare to do is attracting the attention of other services because I mean from General Wallace, it was a frightening statistic to me, was that between 18 and 24-year-olds, that only 28 percent of those youths are qualified to serve in the U.S. military. That’s a problem, folks.

So the more you can find qualified kids that will want to do that job, the better, because they’re better for it having served in the U.S. military. I can say that with assurance.

Q: You’ve got a whole bunch of kids.

A: Yep.

Q: How many—do you anticipate sending them to, into military service when they’re old enough?

A: Oh, well, I mean my youngest is so young, he’s not even walking yet. But the older boys, yeah, they all know that it’s certainly an expectation and I think they all want to join the U.S. military and do their time.

Q: You talked about, and I’ve heard you say it before, that the sort of low percentage of times when your PSD missions have had to actually, you know, use their firearms.

But you also talk proudly about the fact that none of the folks that you’ve protected have ever come to any harm. Is there a conflict between your mission narrowly defined as protecting State Department people and the larger goals of the United States in a place like Iraq? Hypothetically, where you might have a PSD element with a State Department guy or two in the back, and they sense what might be a threat and they decide to eliminate that potential threat because they’re not taking any chances with their precious cargo. Whereas, if that had been a military unit without sort of precious cargo just moving through, they might have waited another ten seconds before opening fire to see what, how the situation developed.

And do you run the risk of, you know, in situations like that because of the fact that you are contracted simply to protect those people of sometimes—

A: Sure. You know what? A lot of that comes down to the judgment and the professionalism of the people you put out there. And so we’re not sending 18- and 19-year-olds to do that job. These are guys that are all sergeant and above that have already been through extensive U.S. military or law enforcement training, that they go through all those tests and evaluations including a psychological evaluation.

I mean I would say most soldiers have not been through a psych eval to see what their propensity to pull the trigger is or if they’re dealing with any other issues. But you put guys out there with clear rules of engagement that have a whole bunch of experience and proven good judgment in their previous job of working for the U.S. government and you hold them accountable everyday.

You know we fire guys for little things, whether it’s a bad haircut, a bad attitude, stealing a bike, or some unauthorized piece of equipment hanging from his rifle, unauthorized scope. We fire for the little reasons so that they don’t have, they don’t become big issues.

It is a war zone. We strive for perfection, but our guys are human so is a mistake possible? Absolutely. But we do the absolute everything in our power to eliminatethose mistakes.

Q: What’s the training like for your contractors?

A: After you get through all the testing and everything else, there’s obviously, you know, PSD formations, driving, defensive driving, driving through ambushes, hand-to-hand stuff, defensive tactics, how to defuse a situation without even having to use your weapon, lots of scenarios, attack scenarios, getting the protected off the “x” with full-on role players.

We have a crew, a part-time crew of a couple hundred folks from the community that dress up and do the bigscenarios, and the arrival of the VIP, and someone comes out with a suicide vest and all kinds of things start blowing up or motorcade practices with one car that’s trying to get to the limousine. The other cars are protecting it, protecting against that suicide car bomb threat just like that big one that blew up in Kabul today.

We put through a lot of folks through that training and evaluation period. A lot of them don’t make it, and some of them, you know, we make the booms big enough that it rattles their cage, and they say, you know, this is not for me, and we’d rather have them drop now than once we get them over in country.

Q: Are there women on those teams?

A: In some cases, yes, yeah, both protective—

Q: In the war zone?

A: Yes, doing a protective function or a canine handler or logistics and we also have some female pilots.

Q: Is it like a boot camp? I mean does everybody go through a sort of training regimen before they get put on a team or a mission or something?

A: Yes, very much so. There’s classes.

Q: How long?

A: They get a class and each guy is issued their stuff, and there’s a big, their name is in duct tape on the back of their vest, and the instructors are evaluating them from the time they come on the property till the time they leave.

And the other guys in their team or in that class also, they actually get a vote, and they say, man, this guy has got the skills, but man, his attitude and his demeanor and all the rest of it is just not going to work because you’ve got to, you know, it’s not only a matter can it work on the range or in a car, but can they work in doing it—is their mind-set one that will work operating under the high stress environment of a war zone?

Q: How long is the program?

A: Three to four weeks.

Q: What percent? You said a lot of folks don’t make it through. What’s the rough percentage of guys who like wash out of Blackwater assessment and selection?

A: It depends on the program. Some of the contracts are very, very tight and you’d get a 70, 80 percent washout rate.

Q: What about the PSD contract, the State PSD contract?

A: After significant resume vetting and everything else, you’re at north of 50 percent washout.

Q: So that’s of the people who come into the training, 50 percent will make it?

A: They’re dropped for a psych eval or for a ding on their security clearance. I mean, you know, whether it’s a guy had a bankruptcy within the last seven years or a DUI or any of those things. That will also drop them from the program.

Q: Are you seeing PTSD as an increasing issue of the people that are coming to you?

A: Some. And you know we have a staff psychologist and they get interviewed and we havea company chaplain. He’s not full time, but he’s the former Chief Chaplain of the Marine Corps, and we have a command master chief, just like a military unit has a senior enlisted adviser, but, you know, we deal with the same kind of issues that a military unit does of deploying guys, of guys that get hurt or family separation issues, all those kind of problems. So we make those guys available to intercept and to deal with PTSD stuff.

Q: Who’s the chaplain?

A: His name is Father George Pucherelli.

Q: You raised this—this is a question—what, how would you structure that? The point that Cofer introduced at the SOFEX conference a couple of years ago that got, you know, a lot of people hot and bothered about the notion of using Blackwater or whatever company like it in order to be an on-call force until the United Nations and everybody else dickers with what they want to do and what the ROE is we will deploy. How many people would you put on a stand-by notice like that? How much would that cost?

I mean do you charge, would Blackwater charge a residual charge to the United Nations of $25 million a year and ten, 50?

A: Oh, you mean for a stand-by? For a positioning fee? No, look, I can give you the one example, Hurricane Katrina. We had no plans to be in the domestic security business at all.

We sent one of the Puma helicopters. We had just taken delivery of it the night before for the VERTREP mission. I told the pilots, put them to bed, reset their crew time and start flying to Louisiana. We’ll figure it out when we get there. By the time the helicopter got there, we’d coordinated with the Coast Guard.

November 505 became Coast Guard 505, and they did a bunch of evacuations and support for the Coast Guard. Then the private sector called. We surged 140 some guys in about two days into New Orleans, licensed by the state of Louisiana to be private security investigative people, doing static security. We protected wholesale distribution facilities, cell phone infrastructure, oil and gas pumping stations, hotels, those kind of things, and then the Federal Protective Service had a big mission.

It’s a DoD, it’s a DHS police force, supposed to provide the people, and they had a shortfall because they had—off the record—they had employee union problem. The employees said it was too rough, too unsafe. They weren’t going to send their people to Louisiana.

So we sent ours. We built to 711 people, trained, vetted, mostly, about 90 percent U.S. law enforcement guys that had retired or were still serving law enforcement guys that could take leave of their jobs, and we organized them, reorganized those talents, kind of like the other stuff I’ve been talking about, reorganize those talents for a stand-up temporary capability for stability operations for the U.S. government.

We do the same thing in a peacekeeping operation the same way, 700 or more.

Q: Going to your database of 40,000 and cranking out what you need.

A: In that case, we stood up, we literally brought in a trailer, brought in a call bank, started working the calls, and that was, that was three years ago. We’ve come a long ways in being able to reach out fast to a lot of people, and we literally had people, you know, hundreds move into our location for equipping, vetting, training before they were sent, and we do the same kind of model for a peacekeeping support type operation.

And we could have hundreds out the door within hours.

Q: Within hours?

A: Well, call it within two days, 48 hours.