Blackwater Cutout Companies and the Spies Who Love Them

[Tara Carreon]

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September 8, 2010

Hi folks, I’m LoFi Nikita, and I’m here to talk with you about that company that renamed itself “XE” but everyone insists on calling “Blackwater.” Founded by Erik Prince, a guy who bankrolled his Rambo fantasy of training killers better than anybody else in the world by selling off his Dad’s auto parts manufacturing empire, the company seems to be obsessed with concealing its identity. On Saturday, September 04, 2010, on the cover of the New York Times there was an article entitled "30 False Fronts Won Contracts for Blackwater." Believe me, that’s just the beginning. Hang on, because we’re gonna be movin’ fast to get this all done in under ten minutes.

It says "Blackwater Worldwide created a web of more than 30 shell companies or subsidiaries in part to obtain millions of dollars of American government contracts after the security company came under intense criticism for reckless conduct in Iraq, according to congressional investigators and former Blackwater officials."

Now there’s an advantage a corporation has over a person. If you change your name, or create 30 aliases to cover your identity, so you could get government contracts despite some legal infirmity, like being accused of crimes like murder and gun-running, that would be called “false personation,” or “forgery.” But it you’re a company, it’s okay.

What’s really funny to me, though, is that this big bombshell gets dropped just two weeks after Blackwater dodged a bullet when it agreed to pay a $42 Million fine to avoid being indicted for “illegal weapons exports to Afghanistan, making unauthorized proposals to train troops in South Sudan and providing sniper training for Taiwanese police officers.” That was in the August 20th edition of the New York Times, that says that “the State Department dealt with the violations as an administrative matter, allowing the firm to avoid criminal charges.” Gee, isn’t that nice. If they’d done that for Manuel Noriega, he wouldn’t have had to go prison for all those years for his gun and drug-running activities. But then again, Noriega was only human, and you don’t have to worry about going to jail when you’re a corporation? No, Blackwater was worrying about being banned from government contracting. At least that’s what the article says.

Wait a minute. I gotta shit or go blind. Why the hell were they worried about being banned, when they could just do business through false-front corporations? And when Hillary Clinton’s State Department was cutting this deal with Blackwater, how the hell is it that they didn’t know that the flinkin’ Senate fer crissakes – the last people to know anything in Washington -- was hot on the trail of these thirty phony companies? This Blackwater thing is like an 800 pound gorilla with diarrhea, leaking crap all over Washington, and everyone in power is cleaning up after them.

Actually, the New York Times, that has the motto “All the news that’s fit to print,” seems to have run out of room on this story, because they forgot to mention that in mid-July, just a month before they agree to pay the $42 Million fine to the State Department, they got a new contract with the State Department for $120 Million. Well, I can do math in millions as well as the next guy, in fact I can hear the dealing going on right now – “Okay, says the State Department lawyer to the Blackwater lobbyist, look – we’ll just make that check out for $78 Million right now, since you owe me for that speeding ticket I had to give you on the gun-running thing, and then we’ll kind of leak it to the press a little at a time. And please don’t tell me about those front companies – I don’t want to know, even if Senator Levin is going to figure it out eventually.”

So who was that Blackwater lobbyist? Seems to be a guy named Stuart Eizenstat, a partner at Covington & Burling, a former ambassador to the European Union, a member of the Carter and Clinton administrations, a grandpa who has written extensively about the Holocaust, including a book about how he recovered Nazi gold, titled “Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II”. Well, just because we’re not done with one war doesn’t mean you can’t make money on a new one. Something strange though, although his website at cov.com/seizenstat says he represented Boeing, Kellogg Brown and Root – oh, good people! -- British Petroleum, and Coca Cola, it doesn’t mention Blackwater. Maybe he got retained by a shell company – his only other two listed clients here are “BT” and something called “Neptune Orient Lines.” That sounds obscure enough to be a Blackwater cutout. Maybe Mr. Eizenstat was fooled, and thought he was working for a Chinese cruise line.

If so, he was not the only smart person to be so deceived. The New York Times "At least three [of these Blackwater shells] had deals with the United States military or the Central Intelligence Agency … include[ing] several businesses located in offshore tax havens…."

Hmmm, nifty – these phony companies fooled the CIA, the “Central Intelligence Agency.” Say here "the CIA's continuing relationship with the company, which was recently awarded a $100 million contract to provide security at agency bases in Afghanistan, has drawn harsh criticism from some members of Congress...." Well, hell, they needed that, since they got cheated out of $42 Million by the State Department and only netted $78 Million after hush money was paid.

You may have heard that the CIA used to pay Blackwater to load the Hellfire missiles on the Predator drones they use to assassinate people in Pakistan, but they don’t do that anymore. CIA spokesman Paul Gimigliano says Blackwater currently provides “security for agency operatives … and are 'held to the highest standards of conduct.'" You kind of wonder how the CIA, that has standards of conduct so low that it managed to fabricate evidence of Iraq’s nonexistent Weapons of Mass Destruction to justify attacking a nation that had never attacked the United States, then took the terrorball and ran with it like lunatics, opening secret torture prisons around the globe, torturing people, videotaping the torture sessions, and finally destroying the videotapes so as to protect the safety of the torturers – you gotta wonder how those people can enforce any standard of conduct short of the type that gets most people sentenced to death row. Like I say, you gotta work for government.

Or have worked for government. You gotta remember that little old revolving door between Blackwater and the CIA. Seems a top Blackwater exec named Enrique Prado is a former CIA agent, and he knows what kind of services his former bosses appreciate, like “deniability,” also known as “freedom to lie – ability.” Senor Prado wrote to another Blackwater, just brainstorming about marketing, you know, about whether the "Drug Enforcement Administration might be interested in using the network, because these are all foreign nationals … so deniability is built in and should be a big plus."

Okay, hold that thought and let’s connect some dobts.

First dot, the State Department and CIA are giving contracts to companies that are based in offshore tax havens, and giving them classified information that is classified.

Second dot, the IRS has some information about offshore tax havens on its website, warning American citizens not to use them to avoid taxes. It says:
“The promoter may simply create initial documents that create a "paper shield" behind which the taxpayer/client can control everything.”

Third dot, the IRS employs specialists to poke through those paper shields working in its Offshore Identification Unit.

Fourth dot, the State Department and the CIA gave some of the Blackwater fronts classified information. Not that we’ll ever get the details, because in the one criminal case now pending against five top Blackwater executives, "the Obama administration won a court order limiting the use of classified information."

Now, connect! We have State and the CIA unwittingly passing classified information to offshore companies owned by Blackwater, believing that instead of Blackwater they were actually dealing with ... well who did they think they were dealing with? A stack of papers and a post office box in Barbados, Antigua, Bermuda or the Marshall Islands? The guys signing contracts for the State Department and the CIA are happy to contract and share classified information with paper thin companies from Tuvaloo? Shouldn’t companies doing intelligence work and receiving classified information have all kinds of fancy equipment, secure computers, encrypted email, banks of shredders, and memos written in disappearing ink?

Whoa, we’re thinking like spies now. Cool, huh? So keep connecting those dots. Imagine the possibilities. (RUSSIAN ACCENT – “I see a new era in spying. I hear opportunity knocking, and maybe Comrade Putin has interest! Hear me out – we just pretend to be Blackwater, create some front companies in the Bahamas, and with a nod and a wink, we’ll be getting checks for millions and emails stuffed with the inside dope. You will see – that dacha on the Black Sea is still in reach!”