Published on April 25th, 2016 | by David Isenberg2
What Makes Erik Run?
by David Isenberg
The Intercept recently revealed Erik Prince’s attempts to sell military services in Libya and other countries in Africa. He has done so even though his newest company, Frontier Services Group (FSG), has repeatedly stated that it only provides non-military, logistics, and aviation services, and if Prince is selling military services he is doing it strictly on his own, without their knowledge or approval. The Intercept has also written on Prince’s efforts to build a private air force for defeating terrorists and insurgencies in Africa and the Middle East by converting crop dusters into light attack aircraft.
These articles, about a man who is arguably the best known corporate honcho of the private military and security contracting (PMSC) industry, provide an excellent opportunity to reflect on what lies ahead in the world of military and security outsourcing.
Prince served honorably in the Navy Seals, inherited a fortune, and built one of the most iconic private security companies in the world. He long ago could have retired. But ordinary life seems to drive him bonkers. He just can’t seem to leave the world of guns and bang bang behind him.
Much of his drive can be attributed to sheer egoism. As an example, the first Intercept article wrote about Prince’s efforts to raise a private military force to battle the Boko Haram terrorist group in Nigeria. The article noted that:
Nigeria later hired Eeben Barlow, the legendary South African special forces mercenary — and Prince’s longtime business rival — to conduct a three-month operation inside the country to fight Boko Haram. Two sources close to Prince said that, as Prince saw it, Barlow had taken his plan and effectively stole the contract. “Erik was smokin’ hot” over that, said one of the sources.
As it happens, I have periodically been in touch with Barlow since the early 1990s, when Executive Outcomes was still operating. Anyone familiar with Barlow, a native South African, knows he has forgotten more about fighting African insurgents than Prince will ever know. He replied to my query:
‘I am astonished that he (EP) thinks I will steal his proposal that is excessively costed to implement a plan that will obviously fail. I have absolutely no reason to do that. Submitting a proposal does not automatically imply that you will be awarded a contract—this is Africa and not the Middle East where contracts are/were awarded regardless of a successful track record. Besides, perhaps he ought to do his homework—we were subcontractors to a prime contractor who, in turn, was awarded the contract. I have no gripe with EP but for him to suggest that we will steal his poorly-conceived plan that was doomed to fail is preposterous to say the least.’
Another notable aspect of Prince’s businesses is the tendency to stretch the rules and regulations to the limit, and sometimes break them. Whether that is due to the chaos of the conflict zones his companies have operated in, bad oversight on the part of the client, or deliberate intent is something I leave to future historians to decide. But his past business activities have unquestionably made lots of money for lots of lawyers who defended him and his companies against numerous lawsuits.
When Blackwater was first starting out, Prince may have been relatively unfamiliar with the vast array of rules and regulations governing the industry. But by now he has had decades to study up and hire the experts on the subject to advise him on what is kosher. And yet, he still pushes the boundaries.
For instance, the Austrian company that converted the crop dusters sold them to a front company in Bulgaria, a country not known for strict arms export regulations. The first of these converted planes was supposed to operate in South Sudan. According to the second Intercept article:
It was already apparent to most of the staff working on the plane that the modifications, requested by a company they knew only as Frontier, were deeply problematic. “It was clear they didn’t care about certification,” the former Airborne employee said, describing the attitude of Prince’s team. “If you make a modification to an aircraft and you do not certify it, then the operation of the aircraft is completely illegal. In Europe, it is very illegal. You are breaking a lot of laws.”
It seems pretty clear that Prince knew that such activities were skirting the edge of what is legal and for that reason sought to have the conversions done as secretly as possible.
A History of Bending the Rules
Someone who knows Prince well is Robert Young Pelton. He was the first person to interview him back in 2004 for his book, Licensed to Kill. He has worked with Prince and has been deeply immersed in Prince’s current covert activities through his litigation with Prince. Pelton stays in touch with a number of Prince’s employees in his various front companies. Reached by email he replied:
It is no secret that the UN has spent at least three years investigating Prince with an eye to sanctioning his global travel and funds along with brushing back his proxy sponsors. It appears that Erik is immersed in both business… and mercenary ventures, sanctioned and unsanctioned using real and fictitious projects ever since he secretly went to Nicaragua in April, 1991 during the Bush Sr. administration to find evidence of mass graves.
People on the inside have explained to me in depth on how Prince’s CIA-style “proprietary” model of non-official cover via business fronts has existed. They began with Greystone supporting the CIA in the Royal Hotel in Amman Jordan, creating a UAE-based spy network to go after Iran, propping up dictators via the creation of R2 [Reflex Responses]in Abu Dhabi, fielding a pirate fighting army and airfare in Somalia and even, transporting weapons, and doing medevacs from oil facilities in Northern South Sudan.
His obsession with private armies or “relief with teeth”, as he called the private army that he announces in the opening chapter of my book, has been pitched in powerpoints from Libya to Somalia to Darfur. What his employees believe is that his “cause for cover” companies are funded via proxies using real offshore business ventures but according to these employees, operate directly in support of JSOC [Joint Special Operations Command] in Libya, supporting U.S. proxies like the UAE in Yemen and it appears he is engaged in other dual purpose projects in other places like Libya, Djibouti, South Sudan, Malta, UAE, Jordan, CAR, Kenya and many other nations.
In my opinion, he just made a big deal in the media about leaving the U.S. in 2010 to deepen his cover.
Legal and covert issues aside, it is not clear that Prince’s proposed air force makes good tactical or operational sense. After all, the U.S. military and other advanced air forces have been bombing ISIS since June 15, 2014 and have struck over 22,000 targets. Yet the Islamic State is very much alive and kicking.
Those who remember Blackwater in its heyday remember that it threw a lot of money into developing its own armored personnel carrier, the Grizzly, which has not had great success, to put it mildly, and its own private maritime security ship, the M/V McArthur, which was eventually sold for a fraction of its price due to lack of business.
The War is Boring website reported that:
To be feasible, Prince’s hypothetical private air force would have to be considerable [sic] cheaper or, for political reasons, more desirable than simply sourcing competing airframes on the official international arms markets. Moreover, Prince’s Thrushes?—?rugged planes that are best suited for operations from dirt airstrips?—?are an odd choice of platform for the high-tech surveillance gear Prince added to them.
Despite the additional armor, a Thrush wouldn’t be able to defend against anything beyond small arms and small-caliber anti-aircraft fire. And to play to the strengths of Airborne’s advanced surveillance equipment, friendly forces would have to be trained and equipped with modern communication tools.
Instead of relying on a shady mercenary outfit and its hacked hardware, African governments could simply purchase?—?legally and without hassle?—?any of a wide range of advanced military aircraft specialized in the type of missions that Prince envisioned.
In the 1990s, when other private military and security companies began attracting public notice, questions were frequently asked how much control could effectively be exercised over such companies. After all, since these “stability operations, as the industry likes to call them, make their money by providing services in war zones, wouldn’t there be a danger of their going rogue or at least operating in the murky shadows?
The stock answer by their defenders was that there might be a bad apple here and there, but the vast majority of companies were reputable. And given their continuing quest for profit, they had every reason to comply with all relevant national and international laws and policies.
Twenty-odd years later, that defense seems pretty lame. There have been some advances in regulation, both nationally and internationally, but they have more to do with unenforceable norm setting.
For instance, back in 2010, Ignacio Balderas, the CEO of Triple Canopy, among the largest U.S.-based private security contractors, testified before the Commission on Wartime Contracting about the benefits of employing American private security companies in foreign theaters of war. Using U.S.-owned private firms provided value and accountability, he testified, because they are “subject to a host of laws designed to enforce U.S. legal and policy considerations.” Foreign firms posed a risk because they could “avoid paying U.S. taxes, avoid U.S. criminal investigations and jurisdiction, and avoid having to appear before Congress.”
But that, it turned out, was an example of do what I say, not what I do:
What Balderas didn’t mention in his two and a half hours before the commission—what the Panama Papers now reveal—was that, just weeks prior, Triple Canopy had acquired Edinburgh International, a Dubai-based military contractor, operating out of a suite of offshore companies in the British Virgin Islands, registered for a time through the Panamanian law firm Mossack Fonseca….
That acquisition—run through an offshore shell company, Trifecta International Holdings Inc., that Triple Canopy created specifically for the purchase—gave one of America’s larger and more controversial security contractors a business structure with the potential to sidestep the very same U.S. oversight and accountability that Balderas had made a selling point to the commission.
This month, the Guardian reported that a former senior director of Aegis Defence Services, a major British private security contractor, said “that it employed mercenaries from Sierra Leone to work in Iraq because they were cheaper than Europeans and did not check if they were former child soldiers.”
James Ellery, a director of Aegis Defence Services between 2005 and 2015, said that contractors had a “duty” to recruit from countries such as Sierra Leone, “where there’s high unemployment and a decent workforce,” in order to reduce costs for the US presence in Iraq.
Contract documents say that the soldiers from Sierra Leone were paid $16 (£11) a day. A documentary, The Child Soldier’s New Job, to be broadcast on Monday in Denmark alleges that the estimated 2,500 Sierra Leonean personnel who were recruited by Aegis and other private security companies to work in Iraq included former child soldiers.
The company was recruiting from Africa in 2011. This was years after the so-called Baghdad bubble, when private security companies were winning contracts with few questions asked and hiring standards were very lax.
By 2011 all the major companies like Aegis, the ones that industry defenders like to say wouldn’t allow their reputations to be besmirched by unethical labor practices for fear of losing future contracts, should have had vetting practices stringent enough to weed out former child soldiers.
If the captains of the PMSC industry have been willing to bend or break the rules despite considerable scrutiny—as Aegis did when “vetting” its employees or as Erik Prince did when creating actual fighting forces and not just defensive armed security details—then their competitors are likely doing the same. This is all part of Erik Prince’s deadly legacy.
In a world where the means of destruction grow steadily deadlier and the ability to obtain them is increasingly easier, this can only bring serious problems down the road.