Blackwater: New Name, New Ownership, New Company?

The private military company formerly known as Blackwater (then later renamed Xe Services) is under new leadership, has a new name: “Academi” (now on its third name) and is hoping to put its checkered past behind it. 

But with lawsuits lingering (among the many, former security workers have filed a class-action suit alleging the company denied them benefits), public scrutiny high (one will recall investigative journalist Jeremy Scahill’s best-selling book, Blackwater: The Rise of the World’s Most Powerful Mercenary Army), and a reputation for being less than law-abiding (on April 16, 2010, five former Blackwater executives were indicted on felony firearms charges) the task of moving on and/or starting anew is proving to be difficult. 

Nevertheless, the company’s newly hired president and chief executive officer Ted Wright is resolved to forge ahead in a new direction. 

He recently told interviewers about his current struggles and his desire to change the public’s perception of the company. 

“It was just this huge sense of arrogance that I don’t have to follow the rules of the United States government, I don’t have to follow the rules of business, I don’t have to follow any of that crap,” Wright told CNN. “That was my initial impression from the outside looking in and I knew that is behaviors, that is not culture. Their culture was, they’re darn good operationally. And they cared about what they were doing. Their behaviors were what made them appear to be arrogant. It’s a lot easier to change a behavior than it is to change a culture.”

It can be assumed that by “behaviors” Wright was referring to incidents where security personnel acted indiscriminately, using excessive force against innocents.  One will recall that on Sept. 16, 2007, Blackwater guards got into a gunfight in a busy Baghdad traffic square.  After the gunfight ended, 17 Iraqi civilians were dead.  Now, four ex-Blackwater operatives face federal manslaughter charges. 

Following this incident, the company was ousted from Iraq, where it had been guarding U.S. diplomats on what was one of its most lucrative government contracts. 

The rough waters and the intensifying political pressure stemming from that 2007 shooting compelled founder and former CEO Erik Prince to eventually sell the company to an investment group in Dec. 2010.  Prince, a former Navy SEAL, had been the face of Blackwater and its staunchest defender since its inception in 1997.  

When Prince sold the company, he had to pay out a $42 million fine for 288 alleged violations of federal arms export laws and regulations. 

Prince now lives in the United Arab Emirates and is only affiliated with Academi through an “earn-out” clause that was part of the sales agreement. 

“It’s to ensure that he doesn’t do anything to hurt the company,” Wright said explaining the reason for the “earn-out” clause. Otherwise, he said, “Erik Prince has absolutely no association with the company from the perspective of ownership or of control or anything else.”

In looking ahead, Wright knows that there are plenty of opportunities for redemption.  He spoke about the need for Academi’s specialized services around the globe. 

“As the situation in Afghanistan changes from private security companies to Afghans doing that for themselves, what they’re going to need is our training services,” Wright said. “So I think that fits inside of our strategy extremely well.”

“The future is about security, it’s a dangerous world,” he added.

But still, he admitted that there’s a long road ahead.  Rebuilding relationships and earning back trust takes more than a name change. 

“The biggest thing in my mind is ‘Will the press, will members of Congress, and others continue to say its just a name change? Will they accept this as real change now?'” Wright wondered.

Only time will tell. 

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