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Posted at 6:00 AM ET, 06/23/2010

CIA gives Blackwater firm new $100 million contract

By Jeff Stein

The Central Intelligence Agency has hired Xe Services, the private security firm formerly known as Blackwater Worldwide, to guard its facilities in Afghanistan and elsewhere, according to an industry source.

The previously undisclosed CIA contract is worth about $100 million, said the industry source, who spoke on condition of anonymity to discuss the deal, which is classified.

“It’s for protective services … guard services, in multiple regions,” said the source.

Two other security contractors, Triple Canopy and DynCorp International, put in losing bids for the CIA’s business, the source said. (A DynCorp spokeswoman says the company did not bid on the contract.)

The revelation comes only a day after members of a federal commission investigating war-zone contractors blasted the State Department for granting Blackwater with a new $120 million contract to guard U.S. consulates under construction in Afghanistan.

CIA spokesman Paul Gimigliano stopped short of confirming the contract, saying only that Xe personnel would not be involved in operations.

“While this agency does not, as a rule, comment on contractual relationships we may or may not have, we follow all applicable federal laws and regulations,” Gimigliano said.

The spokesman added, “We have a very careful process when it comes to procurement, and we take it seriously. We’ve also made it clear that personnel from Xe do not serve with CIA in any operational roles.”

Mark Corallo, a spokesman for Erik Prince, chairman of the board at Xe and owner of Prince Group — which owns Xe — said the firm would have no comment.

“Blackwater has undergone some serious changes," maintained a U.S. official who is familiar with the deal and spoke on condition of anonymity to discuss it freely.

"They’ve had to if they want to survive. They’ve had to prove to the government that they’re a responsible outfit. Having satisfied every legal requirement, they have the right to compete for contracts. They have people who do good work, at times in some very dangerous places. Nobody should forget that, either."

The Moyock, N.C.-based firm has been fighting off prosecutions and civil suits since a September 2007 incident in Baghdad, when its guards opened fire in a city square, allegedly killing 17 unarmed civilians and wounding 24.

In December a federal judge threw out charges against five of the alleged Blackwater shooters on procedural grounds, but the Justice Department is appealing the ruling.

Early this year German prosecutors launched a preliminary investigation into allegations that the CIA sent Blackwater operatives on an assassination mission against a suspected terrorist in Hamburg, Germany, in 2001.

In April, meanwhile, a federal grand jury indicted four of Prince's former top deputies, including his legal counsel, and a fifth employee, on 15 counts of conspiracy, weapons and obstruction-of-justice charges.

Prince personally has not been charged with any crimes.

Members of the federal Commission on Wartime Contracting hammered a State Department official during a hearing Monday, repeatedly asking how much weight was given to Blackwater’s record when the decision was made to give the firm a new contract last week.

“I don’t want to guess,” said Charlene Lamb, the department’s assistant director of International Programs.

Apparently weary of all the controversy, Prince announced two weeks ago he was putting the company on the block.

“A number of firms” are interested in buying the company, a spokeswoman said, declining to elaborate.

Meanwhile, on June 15, The Nation magazine reported that Prince was considering moving to the United Arab Emirates.

“If Prince's rumored future move is linked to concerns over possible indictment,” wrote Jeremy Scahill, author of a book on Blackwater, “the United Arab Emirates would be an interesting choice for a new home -- particularly because it does not have an extradition treaty with the United States.”

Prince's spokesman Corallo declined to discuss his client's plans, saying “his personal life is his own.”
For additional background, see "Contracting in Conflicts: The Path to Reform," from the Center for a New American Security.

By Jeff Stein  | June 23, 2010; 6:00 AM ET
Categories:  Financial/business, Intelligence, Lawandcourts  | Tags:  DynCorp, Erik Prince, Jeremy Scahill, Mark Corallo, Paul Gimigliano, Triple Canopy  
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The more things change, the more they stay the same. Why would Obama allow this kind of nonsense to occur on his watch?

Posted by: demtse | June 23, 2010 6:52 AM | Report abuse

Hmmm, maybe because they have never lost a client, yet they have lost dozens of their own people? Maybe because they can get the job done?

Posted by: john_bruckner | June 23, 2010 8:04 AM | Report abuse

Why would Obama allow it? Because there is a separation of duties when it comes to procurement. There is an administrative chain of command and a procurement chain of command in the Fed government, just like there is also an IT chain, etc. The administrative chain cannot make procurement decisions, they can only nominate staff to participate in the process and provide feedback. The long and the short of it is that there are probably not many companies in the world that have the faculties, experience, and capacity required for these contracts. And $100 million contract is only 1/10th the size of an IT prime contract for a medium-sized agency, so maybe that's some context.

Posted by: NovaMike | June 23, 2010 8:24 AM | Report abuse

This great news.....all the more so since it will cause the antiAmerican left (aka: the democrats) apoplexy

Obama is such a loser........

"Obama" is a word which means different things in different countries

1) "Obama" in kenya means "failure"

2) "Obama" in indonesian is something which smells bad and sticks to your shoe if you step in a pile of it

3) "Obama" in America means "affirmative action presidential election winner"

4) "Obama" in November's election means "doom" to the democrats

Posted by: georgedixon | June 23, 2010 10:03 AM | Report abuse

The comapany is getting "about $100 million" but "Xe personnel would not be involved in operations"? I suppose next my barber will be demanding $100 a visit but won't be involved in cutting hair.

Posted by: Adam_Smith | June 23, 2010 10:32 AM | Report abuse

The CIA is a huge criminal organization helping to give contracts to other criminal organization. Why does this surprise anyone?

Posted by: maxsgami | June 23, 2010 11:08 AM | Report abuse

If a contractor has to be armed in order to complete their assignment, I say a case could be made that this is an inherent governmental function. That said, the Blackwater contract is similar to almost all government bureaucracies - the more you screw up, the further you go. How about a public accounting for past expenditures? This is the same company that lost container loads of cash in Iraq. Another classic case of who you know is more important that past performance.

Posted by: DrFish | June 23, 2010 11:20 AM | Report abuse

New boss…

same as the old boss.

Change that isn’t.

Posted by: thromulese | June 23, 2010 11:36 AM | Report abuse

Pitiful. I hoped the days of private armies were over.

Posted by: sarahabc | June 23, 2010 11:54 AM | Report abuse

Panetta hires Blackwater firm. Obama expands the war, and prosecution of "national security" leaks. Holder promises not to prosecute Joe Cassano. Geithner doles out billions to Wall Street banksters and fraudsters.

Bush left the country in a deep hole. Obama is digging deeper.

For all the Obamaniacs, how is the hope&change deal working?

Posted by: ashrink | June 23, 2010 12:14 PM | Report abuse

"There is an administrative chain of command and a procurement chain of command in the Fed government, just like there is also an IT chain, etc. The administrative chain cannot make procurement decisions, they can only nominate staff to participate in the process and provide feedback."

The President can, however, provide leadership as to the general direction that procurements take (i.e., efficiency vs. waste). I believe the President just made a commitment on the part of the Administration to eliminate wasteful spending on the part of the government. It would be nice if this were applied to murderous contractors as well as government entitlements paid to dead people.

Posted by: WickedRose | June 23, 2010 12:14 PM | Report abuse

I can't believe this crap is happening all over again. WHO IS IN CHARGE? This company shamed us last time, now again we are going to let it happen. Somebody better grab his butt before he heads for oversea, and who's the numnuts who ran this through without anyone noticing?

Posted by: sue60 | June 23, 2010 12:25 PM | Report abuse

Will Blackwater (or whatever) continue to have the right to kill civilians at will with impunity?

Posted by: twm1 | June 23, 2010 12:57 PM | Report abuse

I cannot imagine the corruption that goes on behind closed doors at the CIA.

Posted by: metroman76 | June 23, 2010 1:22 PM | Report abuse

I always supported Blackwater, and still do.

The reason is because Blackwater is successful in its missions.

The fact is, people were being beheaded in Iraq and Afghanistan, and Blackwater was able to penetrate dangerous areas effectively.

If I had ever had to travel through such a war torn area, I'd want Blackwater to get me there and back, and I trust that they definately would.

Posted by: lindalovejones | June 23, 2010 1:23 PM | Report abuse

I've got a problem with Xe's cowboy attitude, too -- but I recognize it's not in every employee, nor the majority, nor anywhere nearly a majority. However, attitude, performance, and public image are three separate aspects.

Attitude: as I already said, "Hello, my name's Wyatt Earp" is limited. (Thank the gods.)

Performance: strong track record -- at high human costs. But as far as I know, they've never lost someone they were assigned to guard.

Public image: it's not good, but I don't know exactly what, if anything, Xe can do preemptively to avoid that trouble. It may be just the nature of the beast -- i.e., you can't know months ahead of time that an employee is going to blow it.

Let's see how they handle these assignments. They're expensive, but they're very good, I gather. Good where it counts -- on the ground.

Posted by: MekhongKurt1 | June 23, 2010 1:59 PM | Report abuse

So the US military has to save them from their covert operation to use Afghanistan as anti soviet bait and run the cleanup and now they need privateers to protect them from themselves...

Posted by: Wildthing1 | June 23, 2010 2:10 PM | Report abuse

What happen to that cry from the repub's that company's charged with a crime should recieve federal funds. Oh, that was just for ACORN.

Posted by: tobmore | June 23, 2010 2:17 PM | Report abuse

So, we're hiring a discredited mercenary company to guard our covert torture-and-assassination base camps.

And all of this makes the locals hate us less ... how?

Posted by: kcx7 | June 23, 2010 2:41 PM | Report abuse

Where's all the 'change' you promised, Obusha?
Arming the Left: Is the time now? By Charles Southwell 21 Oct 2003 As long as we pose no REAL threat to the powers-that-be, to what is shaping up into [is] a dictatorship, we will continue to be ignored. Right now, we are ignored because we present no organized power to fight this onslaught of anti-democratic, totalitarian government that we are up against...

Posted by: lorifromclg | June 23, 2010 3:18 PM | Report abuse

Oh lord - - that's what my country needs more of - - idiots who don't understand our democratic processes advocating violent overthrow because they can't stand to be LOSERS.

MOVE TO CANADA! Obama isn't the president there - you'll be happier.

Posted by: lquarton | June 25, 2010 12:14 AM | Report abuse

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