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Posted at 5:41 PM ET, 10/ 1/2010

Blackwater firm partners with State Dept., CIA insiders

By Jeff Stein

Nothing like a new suit of clothes -- and a good tailor -- for a fresh start.

So it seems for the firm formerly known as Blackwater, which has won yet another government security contract, despite its long and continuing trail of legal problems.

Bidding under a new name, Xe Services won a share this week of a $10 billion State Department deal to provide protective services for American embassies abroad.

Two months ago a Xe affiliate, U.S. Training Center, won a $100 million security contract from the CIA. But at least it used its own name for that.

In its latest score, Xe employed a new business vehicle, International Development Solutions, “a blandly named cut-out,” in the description of Danger Room’s Spencer Ackerman, who first reported the deal on Friday.

“No one who looks at the official announcement of the contract award would have any idea that firm is connected to Blackwater,” Ackerman wrote.

But the State Department confirmed that U.S. Training Center, which it described as "part of International Development Solutions (IDS)," won the contract "in a joint venture with Kaseman,” a McLean, Va., security services firm, whose board is stocked with top former State Department and CIA officials.

Kaseman’s board of directors includes Henry A. Crumpton, a former coordinator for counterterrorism at the State Department, and Kara L. Bue, a former deputy assistant secretary of state for regional stability who had previously served as special assistant to Deputy Secretary of State Richard L. Armitage during the George W. Bush administration.

Other board members include former NSA and CIA director Michael V. Hayden; Donald M. Kerr, a longtime former CIA official who also served as principal deputy to the director of national intelligence; and former Sen. Chuck Hagel (R-Neb.), who sat on the Senate Select Committee on Intelligence.

A number of top former military officials also serve on the board, including retired Marine Corps general and U.S Central Command chief Anthony Zinni, and retired Navy Adm. Stephen F. Loftus, a former chief financial officer at the powerhouse D.C. firm Carlyle Management Group.

On Tuesday, Sept. 28, the day before the State Department deal was announced, Kaseman added Herbert J. Lanese, a former president of security giant DynCorp, to its board. DynCorp is one of the eight firms sharing in the new security contract.

Spokesmen for Kaseman declined to answer questions about its partnership with Xe and what role, if any, it played in securing the State Department contract.

For its part, the State Department said, “This joint venture was determined by the Department’s source selection authority to be eligible for award.”

In August Xe, which is up for sale, negotiated a $42 million fine with the federal government related to illegal weapons exports to Afghanistan, as well as to other accusations.

In addition, former Blackwater executives have been targeted in a half dozen civil suits and prosecutions, including one against five former Blackwater guards in connection with the death of 17 Iraqis during a Baghdad shootout in September 2007. Two company-affiliated guards are also being prosecuted on murder charges stemming from a 2009 shooting in Afghanistan.

In the meantime, two former Blackwater employees have filed a suit alleging that the firm's founder, Erik Prince, and his companies defrauded the departments of State and Homeland Security. Xe has denied wrongdoing.

“The Department of State has supported the Department of Justice’s investigation and prosecution every step of the way,” a spokeswoman there told SpyTalk Friday on condition of anonymity. “We fully respect the independence and integrity of the U.S. judicial system and support holding legally accountable any contractor personnel who have committed crimes.”

By Jeff Stein  | October 1, 2010; 5:41 PM ET
Categories:  Financial/business, Intelligence, Lawandcourts  | Tags:  Erik Prince, International Development Solutions, U.S. Training Center  
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Next: CIA mum on lawsuit alleging drone targeting errors


"You cannot be serious!"

Posted by: whocares666 | October 1, 2010 11:24 PM | Report abuse

If the fiscally conservative, ethically focussed Tea Party has any credibility what so ever, getting the CIA to cancel this 100 million contract would be a good start.

Posted by: cadam72 | October 2, 2010 12:00 AM | Report abuse

Great company, and a great group of guys. Couldn't have chosen a better security service for our boys at the state department. Good call for a change given the power dynamic.

Posted by: Homunculus | October 2, 2010 12:14 AM | Report abuse


History counts and ZERO losses speaks wonders!!!

Posted by: | October 2, 2010 3:03 AM | Report abuse

This report is incomprehensible.
Neither Blackwater nor XE nor any affiliates should be allowed to submit bids until all cases are resolved.
These companies, as a part of the military/industrial complex, are like an octapus, its tentacles so entwined underground in the Pentagon that, like a raging contagion, it must be completely eradicated from any involvement with the U.S. Government.
Armitage, Zinni, Loftus, Hagel and the others by their association with this cabal of domestic terrorist organizations, have, as far as I am concerned, forfeited any reputation they ever had for service to this nation.
They have blackened themselves beyond recognition and should be banned from any further contact with the government; all their security clearances forfeit.
That's just a part of what must be done to cleanse our government of these con artists and their ilk, who are milking our government and our Treasury.
They're in bed with the M/I mafia and we can smell the stench all the way down here.

Posted by: Judy-in-TX | October 2, 2010 4:22 AM | Report abuse

Whether it's Blackwater or some other group of 'roid-raging hired thugs: what in the world is the USA doing hiring a 10-BILLION-dollar mercenary army?

What kind of country have we become?

Posted by: vfr2dca | October 2, 2010 9:26 AM | Report abuse

It is unfortunate that on the /world/content page, which has a link in a tiny box leading to Mr. Stein's blog on this page, that a word is spelled like so: i-n-t-e-l-l-e-i-g-e-n-c-e

Posted by: graffen1 | October 2, 2010 9:54 AM | Report abuse

With Xe George Hillary Clinton strikes again ?
What is Bushes little Xe doing anything for the Government, let alone the State Department ? ... And then we have Haliburton...

Posted by: peterroach | October 2, 2010 2:10 PM | Report abuse

How can the government justify doing any more work with these criminals? Independent special prosecutor, please!

(That's assuming there is anything like an independent person to be found.)

Posted by: nan_lynn | October 2, 2010 6:12 PM | Report abuse

Where is Erik "The Brain" Prince? Oh yeah, in some despotic Middle east kingdom getting away from those meanies in the USA. Talk about a guy who sees truth only when convenient. Cut him off, he's gotten plenty rich off the American taxpayer already.

Posted by: citizen625 | October 2, 2010 6:44 PM | Report abuse

Events are emerging all at the same time, and it is a $10b mercenary army to be deployed around the world as US Embassy centred but protecting US citizens and their enterprise in light of a terrorist threat/attack. Now I see this top to bottom with a stunning coherence and similarity.

Blackwater(Xe) et al will be a core protective force that cannot or is not mounted locally which includes London. The US is moving worldwide with a contractor military force in civilian areas. Two high ranking SAS officers stated that London is unprepared for a Mumbai-style attack:

They went further describing a prime target as the Docklands and Canary Wharf with its high rise office building that could turn into a slow motion 9/11 because London is not currently prepared to defend against such an attack launched from the Thames estuary. There sits the likes of Morgan Stanley and other US organisations as prime targets for such an invasion and attack.

The US appears to be moving swiftly with a known force to provide such security protection by the likes of Blackwater everywhere. The connection with the "CIA insiders" is also profound with the presence of Michael Hayden on the Kaseman board along with the others. This enterprise reflected as "part of International Development Solutions (IDS)," won the contract "in a joint venture with Kaseman” is absolutely incredible if you know what is really happening on the ground.

Top Secret American is truly beyond control and reflects a government within a government slowly taking over worldwide based on the terrorist threat. Since February 2001 what I believe to now be TSA contractors in the form of Colonel Vine USMC Ret and Lt Harry Bird USMC Ret joined a UK 2.5 year 24/7/365 surveillance operation against me bringing the most sophisticated surveillance technology ever known. It can monitor and feedback to the human being completely in much the same way as it can monitor any electronic device including computer technology. It's based upon Tempest intercept of electromagnetic radiation emissions.

This came out of NSA after decades of use and, for me, explains why Michael Hayden moved from DIRNSA to DCI: SIGINT and HUMINT are now combined in practice and the management of these two agencies reflected that by his move. If you examine TSA carefully, all the building methods and security reflect this fact of intelligence gathering.

For almost a decade Colonel Vine USMC Ret (who travels) and Lt Harry Bird USMC Ret (who stays here 24/7/365) have literally taken over. I believe that this is exactly what will happen as the US State Dept deploys its own security forces with the likes of Blackwater throughout its embassies. Rather then ignore the top nations of the world, the will be primary places of emphasis because of US citizens and enterprise. Expect to see these forces take over from local ones as has happened to me in London since February 2001. There is a new government in place.

Posted by: garydchance | October 3, 2010 5:36 AM | Report abuse

It is perhaps inevitable that any group doing the dirty job of security is going to get . . . well, dirty. Someone has to do these jobs. As a nation we have decided that the professionals doing security work deserve to get paid more than military grunts. If this were not being done by Xe it would be some other group which would undoubtedly have attracted as much controversy. Could more security work be done by military personnel? Probably. But it is hypocritical to demand national security and then attack those who are trying to do the thankless job. Just as in the military, there will be those who abuse their positions--witness the recent story about the crew which was murdering civilians. The contractor system is certainly flawed, but in the wake of 9-11 it seemed--and seems, despite its flaws--like a reasonable way to draw on the skills of retired personnel. I would point out that one reason that private contractors are hired is precisely because they are not as tightly hemmed in by laws and regulations. I would submit that the country is a bit schizophrenic on this issue, on the one had demanding the best possible security services, on the other deploring the inevitable excesses.

Posted by: scientist1 | October 4, 2010 2:56 AM | Report abuse

I was hired to be one of their medical officers. I called them thugs, goons and murderers to their faces and lived.
I'm no bleeding heart liberal. It felt good. Needless to say I was not hired.

Posted by: kenpomed | October 4, 2010 1:00 PM | Report abuse

Protecting US embassies abroad is a job that belongs to the US Marine Corps. Blackwater, or "Xe," or any of its affiliates have no business protecting US embassies.

Posted by: naeruat | October 5, 2010 3:00 PM | Report abuse

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