Today, Explained - The Prince of Blackwater

Episode Date: July 16, 2019

Betsy DeVos’s baby brother made a name for himself running one of America's top mercenary companies. The Intercept's Matthew Cole explains how Blackwater founder Erik Prince has reinvented himself since falling out of favor with the US government. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Last week, I was in the middle of this interview about Libya when the guest said something about Eric Prince. Eric Prince. And I was like, Eric Prince? Betsy's baby brother? The Blackwater dude? I thought his career would have ended with all that bad business.

Blackwater, the secretive private army that for critics came to represent the ugliest face of American power. I was wrong. He's got nine lives. You know, if you've got enough money and enough political clout, you can convince anyone of how successful you are, even when you're not.

Matthew Cole writes for The Intercept, he's done a better job of keeping up with Eric Prince. Turns out Blackwater was just the end of a chapter for Prince, and he's been busier than ever making friends in China and the Middle East. And maybe some of this will start to sound familiar. Yeah, so about a week before the inauguration of Donald Trump, Eric Prince was invited to the Seychelles for what was a very private and very exclusive confab

being held by Mohammed bin Zayed, who's the crown prince and the de facto ruler of Abu Dhabi and the United Arab Emirates. And Eric Prince, he has sort of two purposes. One, the more overt purpose was to pitch MBZ, as he's known, on what can be done in the Middle East with a new administration. That's the overt. And then on the side, secretly, he's there to meet with Kirillov Dmitriev, who is a Russian banker tasked by Vladimir Putin to act as a back-channel emissary to the new incoming administration. And a member of Mohammed bin Zayed's royal court had arranged this meeting

selling the Russian banker on the notion that Eric Prince was Steve Bannon's guy and would represent the Trump administration and could be the facilitator of back-channel communications as the new administration was about to take office. And it's not clear anyone other than Bannon knew that he was going to the Seychelles for this meeting. And so you have this very dramatic and unique moment where Eric Prince is coming in to try to be the back-channel

for the Trump administration and Putin government. And it's not clear who really knows or has authorized him to do it because he was never a member of the Trump campaign. And there was at that time no indication that he was going to be anyone in a new Trump administration. And that meeting, after it gets leaked and published in the Washington Post, becomes a very important clue in the Mueller Post, becomes a very important clue in the Mueller investigation, in the Trump-Russia investigation, as to whether or not the secret meeting indicated some kind of coordination or conspiracy between the Trump campaign and the Russian government. Why was Mueller interested in you? Anyway, what do you think that relates to?

Because I went to see an old friend, the leadership in the UAE after the election, and there was a Russian there. So I had no contact with him before, no contact after. What did you tell Mueller? I answered their questions and I haven't talked to me since. What did they ask you? What was I doing there? Matthew, let's go back to the start. Eric Prince is actual Michigan royalty, right? Yeah. Eric Prince is the only son of the Prince family. Their patriarch, Edgar Prince, was the founder of Prince Automotive Group, I think, who created a massive business. And most people will

know one element of what he created, and it's probably responsible for most of the wealth that the company generated during his lifetime, which is the light that switches on on the visor on a passenger or driver's seat in a car. That was created by Edgar Prince and Prince Automotive. And when he died in the mid-90s, the company was sold for about $1.35 billion. They, along with the DeVos family, controlled a good portion of Western Michigan and were very reliable in bringing votes, including the Christian conservative movement, into the Republican Party. And when Betsy Prince marries into the DeVos family, they merge. So Eric Prince grew up in a very wealthy family, a very politically active, very conservative family. And he ends up going to Hillsdale College in Michigan, which is a very conservative private university. And so he eventually enlists and joins the Navy SEALs. And he is in the Navy SEALs for about three years, not a very long time, but he never is engaged in active hostilities.

And that's an important thing to understand, to understand him later. People who know him best, I mean, it's actually sort of amazing is that everyone who has known him for decades will all reference the fact that he never heard a shot fired in anger and that he never saw any kind of battlefield experience is one of the most motivating factors for what he does later in his professional career. How does he get into mercenary work? Is it the fact that he never actually saw combat and he ended up with a ton of money and he was like, oh, maybe I can pursue active combat or was it something else? Well, it's important to understand that Blackwater, as it was originally created, was not mercenary in the proper definition, which is that he wasn't selling soldiers or serving or acting as a fighter for some other country.

He was trying to provide training services for the U.S. Navy and local law enforcement and the CIA. Did the U.S. Navy and local law enforcement and the CIA need training from a third party? Yes, by all accounts, absolutely, actually. And one of the main events that occurred that demonstrated it actually was the 2000 bombing by al-Qaeda of the USS Cole. October 12, 2000, the Cole was attacked as it ported in Yemen, the suicide mission using a small boat and hundreds of pounds of explosives. 17 sailors died, 39 injured. After the coal, Blackwater got a contract to train the sailors on security, maritime security. And that in that way, Prince is a visionary.

He's a very bright guy and he figures out where there's a business opportunity. And in that regard, he's often ahead of the curve. And Blackwater was, was ahead of the curve. Ahead of the curve, because of course, 9-11 happens, and then the need for his particular service just skyrockets. Yeah, I mean, he really falls into a very, what actually should have been an incredibly successful business. And it was in some regards. And the first contract he gets is a small contract with the CIA to provide security guards for two facilities in Afghanistan after the US goes in to topple the Taliban. And, you know, in a lot of ways, a lot of what Blackwater provided initially was pretty mundane stuff.

I mean, it was, you know, former military personnel acting as security guards, static security guards. And after the war in Iraq starts to stumble in 2004, Blackwater just explodes. They got basically close to a $500 million contract in 2004 for the State Department. And, you know, at their height, they're over 1,000 employees. They're shuttling people by the plane loads into Iraq to serve as security guards. And they, in a lot of ways, invented the private security contractor business or model. How does the tide turn on Blackwater? Well, there are sort of two big bookend incidents in Iraq for Blackwater.

The first was in 2004 when four of their black water contractors who were doing a logistics run in Fallujah were ambushed and killed by locals and their bodies were burned and then dragged through the streets of Fallujah and then hung on a bridge in Fallujah. For most people it was the first that they've ever heard of private military contractors operating in Iraq. And what happened to them was shocking. That was the Mogadishu moment of the Iraq War. In many ways, it was the day the war turned.

And that incident, which was displayed all over the world, shook then-President George Bush, who ordered the Marines to go in for the first siege of Fallujah. Easy. And then the war takes a new turn. It increases and the insurgency, it happens.S. government forces and personnel in the country. And their security team is responsible for the Nisar Square massacre in Baghdad in 2007, in which some trigger-happy security guards erroneously believe that they're under attack and... Fired into a crowded Baghdad intersection, killing 17. The head of Blackwater appeared before the United States Congress

soon after the attacks to testify under oath he believes his men acted responsibly. To the extent there is any loss of innocent life ever, let me be clear that I consider that tragic. Every life, whether American or Iraqi, is precious. I stress to the committee and to the American public, however, that I believe we acted appropriately at all times. But even he understood the day after Nisr Square

that the name of the company was going to have to change and he was probably going to have to sell the company, which ultimately he did. The Nine Lives of Eric Prince, after the break. For the uninitiated, KiwiCo offers a subscription. Each month, the kid in your life will receive a fun, engaging new project, which will help develop their creativity and confidence. If it helps, the projects were designed in-house in Mountain View, California, and rigorously tested by kids, hopefully also in Mountain View, California. I hear they have great kids. Every crate includes all the supplies needed for any month's given project,

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You can find out more about KiwiCo's projects for kids and maybe hook it up for the kid in your life at KiwiCo.com slash explain. Right now, they're offering today, Explain listeners the chance to try them out for free. What does Eric Prince do once he basically becomes a pariah in the U.S. defense world after these incidents with Blackwater? Eric Prince is in the process of settling with the U.S. government for weapons violations, trafficking violations during their time working for the U.S. government. And by 2009, the new administration wants nothing to do with Eric Prince. The CIA, which is where he had at that point, his last significant contract with Blackwater,

basically helping run an assassination program for the CIA. And then director of the CIA, Leon Panetta, discovers that Blackwater is part of this program, and he shuts the program down, and he fires Blackwater. And they make it very clear inside the discovers that Blackwater is part of this program, and he shuts the program down, and he fires Blackwater. And they make it very clear inside the administration that Blackwater will not be getting any new U.S. government contracts outside of the State Department stuff that they do. And he moves to the United Arab Emirates, where he starts a new gig, which is trying to sell similar services to the Emirati royal family. Why the UAE? Why does he go there? Well, the UAE is one of America's biggest importers of arms. They're an extremely wealthy country, very small, and they are very aggressive. And at the time, we're becoming more aggressive

in their regional foreign policy. And theirs was very aligned with the U.S. positions in the Middle East, which was anti-Iranian, pro-Saudi, anti-Muslim brotherhood, and the de facto leader of the Emirates, Mohammed bin Zayed. And Eric Prince hit it off. And he proposed a presidential guard, something like a Praetorian guard for Mohammed bin Zayed and the Emirati government. And so he sells the Emirati government on a $500 million program to create a army of foreigners. And now he gets into, for the first time, real mercenary work. And he quickly builds a program of mostly ex-Columbian soldiers and some South African trainers.

And that is the beginning of Act II for Eric Prince that leads him down the road of trying to sell his services all over the world, almost exclusively in predominantly Muslim countries, because what he was really selling is, you know, he comes in and describes it as counterinsurgency, but what he's doing is he's selling counterterrorism against Islamists. And, you know, wherever he could see a conflict,

he saw a business opportunity. Was he successful in this sort of second phase of his career? Initially, he was in that he got the contracts he set up and the people that he hired set up this unit of Colombian soldiers for the Emiratis. He sets up a anti-piracy force in Somalia. But ultimately, his involvement in them was not successful. It was rife with mismanagement, with financial improprieties, with questions about his own financial improprieties, as well as the people that he managed or brought in. And then later, especially in the case of the anti-piracy program in Somalia, total incompetence. And with everything that Eric Prince does,

because at that time time in Act II, he's toxic with the U.S. government, anything that he does becomes exposed and ends up on the front page of the New York Times or the Washington Post. On Sunday, the New York Times said it obtained documents showing that the crown prince of Abu Dhabi has hired the founder of the private security firm Blackwater Worldwide. Eric Prince will set up an 800-member battalion of foreign troops there. And the Emiratis in particular, who were his benefactors at that time, are completely allergic to public scrutiny. And so he is essentially forced out of the Emirates.

And so he sort of fumbles around as he's selling his ideas around the world. And he convinces the Chinese to invest about $110 million into a logistics and transportation company. You have a tough job. You need to get material to a work site or goods to market. And so in a lot of ways, Frontier Services Group, which is what that company becomes, and it becomes a publicly traded company based in Hong Kong, was a very straightforward trains and planes and automobiles company that was just hauling things. Frontier Services Group, FSG, is the solution. We are a different kind of logistics company. Essentially, it had no security work.

It didn't have any security clearances from the U.S. government. But as that company is doing sort of very vanilla stuff, Eric Prince is traveling all over Africa and the Middle East under the banner of Frontier Services Group, secretly trying to sell paramilitary services, mercenary services to leaders in Africa and the Middle East, unbeknownst to most of the people in his legitimate company and the Chinese, and doing so without any licenses, basically because of the scandals with Blackwater. And at the time with the Obama administration, he had no ability to get the licenses he would need from the State Department to sell military services or military goods.

How does he always get away with it? Is he like the Jeffrey Epstein of mercenary work? Is he just well-connected and really rich? Well, wealth helps because it buys you good lawyers. That's the first thing. It is a gray area, but Eric Prince is a man with a lot of money who spends it on lawyers who help minimize his legal exposure to what would otherwise be considered illegal conduct. But secondly, everyone who has known him for a long time, who has worked with him or for him him inevitably says the same thing. This guy has a richie rich complex and that his personality is absolutely shaped by the fact that he grew up

never hearing the word no. And sometimes that can be beneficial, which is to say that he thinks of things that, you know, other people don't because he doesn't care that everyone else previously has been told no or tells him no, it's not possible. But that also runs true when things get into legal gray areas, which is he doesn't care. And he will go and do it anyway and then ask lawyers afterwards to make it so that he can do it. Does his toxicity in the United States defense apparatus and the United States government change with the rise of Donald Trump? And if so, how much does it change? Well, it certainly changes with the election of Donald Trump.

One of the interesting things that people like myself, and there are a few reporters out here who are sort of on the Eric Prince beat, did not see or did not know was his relationship to the Trump campaign during the election. He was someone who had previously been on Steve Bannon's Breitbart radio show several times. He became sort of close with Bannon. And with the rise of Bannon into the Trump campaign, Eric Prince gets a place at the table. And when Trump wins election, that's when Eric's fortunes really change both politically and potentially, you know, his business fortunes. And he becomes this sort of shadow player advising the Trump team, certainly the transition team for sure, and into the Trump administration once they take office on all things related to the Middle East and defense. And he immediately

starts selling the White House on a new approach to Afghanistan. I reported in late 2017 his efforts to sell a private CIA service to the director of the CIA and to the president himself, which was eventually nixed, but it was very real and very serious. And it's really important to understand that the Prince family was a huge financial backer and supporter of Mike Pence when he was both in Congress and later as the governor of Indiana. And so coming into the election date in 2016, Eric Prince is on Breitbart radio making claims about, you know, how the NYPD had evidence that Hillary Clinton had committed all of these awful crimes. Including money laundering, including the fact that Hillary went to this sex island with convicted pedophile Jeffrey Epstein. Bill Clinton went there more than 20 times. Hillary Clinton went there at least six times. And after the Mueller report was revealed, we learned that during that same period of time, Eric Prince was paying for an effort to authenticate emails, hacked emails, as the 30,000 emails that were missing from the Hillary Clinton private server.

And so we realize now, looking back, that he was working aggressively to try to help the campaign in areas that he had skills and expertise in using his wealth. But does this sort of cozy relationship with Pence, with even Trump, translate once Trump enters office into, I don't know, sort of like a welcome home to the Department of Defense for Eric Prince? What I would say is that Eric Prince, with the election of Donald Trump, was allowed back in to the U.S. government. He became influential again. He was someone who was offering his ideas.

They were getting in front of the president and the vice president directly. And this is a man who still today can walk into the White House and get a meeting with John Bolton. Any other administration would have given him no quarter. They would not have picked up the phone. But with this administration, Eric Prince really returns to the game. He gets some kind of seat at the table. You know, I wonder, you mentioned that he's currently working mostly with Muslim countries in the Middle East and Northeast Africa and, of course, China. Is he just a guy who sells his services to the highest bidder?

Or is there some sort of foundational belief system going on? Does he want to see the world move in a certain direction? Well, to be fair to Mr. Prince, I'll answer that question first by describing what I think he would argue or defend himself with, which is that he has a very deep-rooted belief in freedom and democracy and progress. And then the other part of Eric Prince that has to always be understood is that he is very religious, conservative religiously. He views the world in very stark terms in terms of what's going on in the Middle East as a battle between good and

evil. And in that way, Eric Prince is a crusader, beating back a rising caliphate. And while being a crusader, despite years of incompetence and even legal trouble, there's still a market for what Eric Prince is peddling. Well, I mean, as long as there's conflict in the world, there'll be someone who is selling some kind of services, right? And one thing I would say after spending so much time reporting on Eric Prince is that there are a lot of similarities between Eric Prince and the current president of the United States. they both are the son of rich men who have failed upwards and who's you know maybe their greatest talent is selling the notion that they're a success and that is very much a defining

attribute of eric prince He's got nine lives. And in that way, I think of Eric Prince as being a very American story. You know, if you've got enough money and enough political clout, you can convince anyone of how successful you are, even when you're not. Matthew Cole is an investigative reporter at The Intercept. If you want a whole lot more detail on what Prince has been up to lately, look for Matthew's recent piece titled The Complete Mercenary. We reached out to Eric Prince via Frontier Services Group to ask if he wanted to weigh in on this episode, but once we got into the specifics, they sort of ghosted us. I'm Sean R a bubble wand. Do you have a bubble wand?

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