Blackwater Founder Erik Prince: What Is He Up To These Days?
It was an abrupt change of direction for Prince, a former Navy SEAL who became the poster boy for private security excesses at the height of the Iraq war. He sold Blackwater — now called Academi — in 2010 to private investors following years of lawsuits, congressional investigations and criminal complaints against the company.
Prince is currently managing director of Frontier Resource Group, a small private equity fund, and also chairman of Frontier Services Group, a Hong Kong-based public company that specializes in construction, road building, trucking, barging and air transport services mostly to companies that want to operate in Africa.
The shift from war contractor to peacetime developer was a straightforward business decision, Prince told National Defense in a recent interview. There are huge opportunities in Africa for investors who are willing to take a risk, he said. "I started investing in Africa and I saw the amount of opportunities there were to build roads, mines, infrastructure, oil fields ... and the large amounts of money that would be needed to do that."
Asian investors, especially the Chinese, are fueling much of the growth and have poured billions of dollars into Africa. They see the continent both as a fountain of natural resources and as an increasingly important trade partner.
"Asian investors have the appetite to take on that level of risk," Prince said. But others, too, see a future in Africa. "Whether it’s a Western mining company or a European oil company or a Chinese firm, they all have similar needs and requirements to operate there."
While everyone recognizes Africa's potential, the operating environment is challenging, with a weak and undependable infrastructure. Travel and transportation in many areas are difficult and expensive, and many countries in Africa create legal and regulatory risks for businesses. Prince's company, he said, is all about making it easier for corporations to do business in Africa. "We have built strong relationships with trusted local partners across the continent."
In a blog post on his company's website, Prince champions the idea that economic development is the key to peace, stability and security. "Fragile countries in Africa have been historically trapped in a vicious cycle of instability and poverty," he said. Development over time can help end the continent's brutal wars. "Even the most basic forms of infrastructure delivered in a quality and reliable manner greatly improve people’s lives. And people who see a path forward for economic development and a future for their families are less likely to fight."
Investors are bullish on Africa despite the tough environment, said Prince. "Africa comes with a higher risk, they expect quicker returns in the projects they invest in. ... Investors are in it to make money. There is not enough charity in the world to develop Africa."
While Prince spends most of this time overseas, he was recently in the United States promoting his book, "Civilian Warriors: The Inside Story of Blackwater and the Unsung Heroes of the War on Terror." Prince said he wrote the inside story of his former company to "dispel myths" and push back on relentless political attacks on the private security industry.
Prince still believes that four Blackwater guards who were convicted in September of killing 17 Iraqi civilians eventually will be exonerated. The guards in 2007 opened fire on a crowd of unarmed people.
He continues to insist that private security employees working for the U.S. government in warzones should be tried under the Uniform Code of Military Justice, instead of the civilian criminal justice system. "It’s quite different for a jury that is 7,000 miles away from the warzone, looking at a split-second decision made seven years earlier in a warzone, minutes after a large car bomb goes off." Prince said he hopes the guards' convictions can be successfully appealed. "The last chapter is not written yet."
Although he quit the business, Prince still sees a future for the private security business. "The world is a much more dangerous place, there is more radicalism, more countries that are melting down or approaching that state." At the same time, the Pentagon is under growing pressure to cut spending and the cost of the all-volunteer force keeps rising, Prince said. "The U.S. military has mastered the most expensive way to wage war, with a heavy expensive footprint." Over the long run, the military might have to rely more on contractors, as it will become tougher to recruit service members. Prince cited recent statistics that 70 percent of the eligible population of prospective troops is unsuitable to serve in the military for various reasons such as obesity, lack of a high school education, drug use, criminal records or even excessive tattoos. In some cases, Prince said, it might make more sense to hire contractors.
Topics: Business Trends, Doing Business with the Government, Service Contracts, International, Logistics