On Friday the former president of Blackwater and four senior executives were charged in a federal court in North Carolina with weapons violations and making false statements, the New York Times reported Friday.  --  It is "the first criminal inquiry to reach into the top management ranks of the private security company," James Risen and Mark Mazzetti said.  --  "While the indictment is somewhat limited in scope, it could be the government’s opening salvo in a broader offensive," which "could include charges for bribery and export violations, according to officials familiar with the case, perhaps under a strategy of turning former and current executives of the company against one another."  --  The Los Angeles Times gave details of the case and explained how it derived from "a March 2005 visit by King Abdullah II of Jordan to the company's 7,000-acre complex in Moyock, N.C., which includes classrooms, offices, shooting ranges, an armory, and an airstrip."[2]  --  Ken Dilanian and David S. Cloud also noted that Blackwater (now renamed Xe) continues to hold and bid on contracts that run into the hundreds of millions of dollars.  --  The London Guardian called the indictment "a blow to Blackwater, which has been trying to rebuild its reputation under its new name Xe Services following a series of damaging allegations about its conduct in Iraq."[3] ...

1.

World

Middle East

U.S. INDICTS 5 BLACKWATER EX-OFFICIALS

By James Risen and Mark Mazzetti

New York Times

April 16, 2010

http://www.nytimes.com/2010/04/17/world/17XE.html?hp


WASHINGTON -- Federal prosecutors charged the former president of Blackwater Worldwide and four other former senior company officials on Friday with weapons violations and making false statements in the first criminal inquiry to reach into the top management ranks of the private security company.

The executives were some of the closest advisers to Blackwater’s founder, Erik Prince, and helped him steer the company during its swift rise to become the leading contractor providing security for American diplomats in Iraq and Afghanistan, working for the State Department, the C.I.A. and the Pentagon.

They were also the senior executives in charge during the company’s most turbulent period, after its security guards were involved in a series of shootings, including one in Baghdad in 2007 that left 17 Iraqi civilians dead.

Mr. Prince, who was not charged, remains at the helm of the company, now known as Xe Services, while many other executives have left as the company has sought to reshape its public image in the face of mounting legal and political scrutiny.

While the indictment is somewhat limited in scope, it could be the government’s opening salvo in a broader offensive to bring criminal charges against the company.  They could include charges for bribery and export violations, according to officials familiar with the case, perhaps under a strategy of turning former and current executives of the company against one another.

A federal grand jury in Raleigh, N.C., issued the 15-count indictment against Gary Jackson, Blackwater’s former president; William Matthews, the former executive vice president; Andrew Howell, the former general counsel; Ana Bundy, a former vice president; and Ronald Slezak, a former weapons manager, charging that they conspired to skirt federal weapons laws and then tried to hide their actions.

The charges stem in part from a 2008 raid by the Bureau of Alcohol, Tobacco and Firearms of Blackwater’s Moyock, N.C., headquarters complex, where agents seized 22 weapons, including 17 AK-47s.

The former officials are charged with trying to hide the company’s purchases of the weapons by making it seem as if they had been bought by a North Carolina sheriff’s office.  Blackwater sought to have the sheriff pose as the owner of the weapons because federal firearms law made it illegal for Blackwater to have so many of them, according to the indictment.

Other charges relate to the company’s large inventory of short-barrel rifles, deadly and especially useful in tight spots, which by law must be registered.  Federal prosecutors charge that Blackwater shipped the weapons overseas with the barrels detached in an effort to avoid export regulations.

The executives are also charged with trying to hide gifts of expensive weapons to Jordanian officials who were visiting Blackwater at a time when the company was trying to win contracts from Jordan’s government.

Former Blackwater officials say that Mr. Jackson ran the company on a day-to-day basis, along with his top aide, Mr. Matthews, and would be knowledgeable about virtually all of the company’s actions.

Reached by telephone, Mr. Jackson declined to comment.  His lawyer, Kenneth Bell, did not return a call seeking comment.  Mr. Bell told the Associated Press that the charges against Mr. Jackson were false.

Mark Corallo, a spokesman for Xe Services, said that the company had been cooperating.  “The company is aware of the charges against former executives,” he said in a written statement.  “As we’ve stated before, the company has fully cooperated with the Department of Justice investigation.  Given the pending criminal charges, the company will not comment further.”

The charges against the top former officials follow lengthy federal investigations of lower-level Blackwater personnel.  Five former Blackwater guards were charged with manslaughter in the September 2007 shooting in Nisour Square in Baghdad, but those charges were dismissed last December.

Two guards who worked for a Blackwater subsidiary in Afghanistan were arrested in January on murder charges in connection with a shooting in Kabul last May.  Other shootings have also been the subject of lengthy federal investigations, including one in 2006 in which a Blackwater guard killed an Iraqi guard.

But prosecutors have recently begun to focus on the company’s management as well.  The Justice Department has opened a criminal investigation into whether Blackwater officials bribed Iraqi officials so the company could continue to operate in Iraq after the 2007 shooting.

2.

FORMER BLACKWATER EXECUTIVES CHAREGED IN WEAPONS CASE

By Ken Dilanian and David S. Cloud

** Federal prosecutors accuse them of illegally acquiring firearms in a scheme to obtain government contracts. **

Los Angeles Times

April 17, 2010

http://www.latimes.com/news/nationworld/nation/la-na-blackwater17-2010apr17,0,4058816.story

Five former Blackwater security firm executives were charged Friday in North Carolina with illegally acquiring automatic weapons and filing false documents in a scheme to obtain government contracts.

The company, now known as Xe Services, continues to do work for the federal government and has bid on contracts for more.

But prosecutors issuing a federal indictment Friday in Raleigh, N.C., said that the company officials attempted to gain a competitive bidding advantage by amassing high-powered weapons, which they used for training and, in one case, as gifts to the king of Jordan.

The 15-count indictment accused Gary Jackson, the company's former president, and four others of conspiracy to violate firearms laws, making false statements and possession of unregistered firearms between 2003 and 2009.

Company employees converted as many as 227 weapons into short-barrel rifles without registering them, as required by law, prosecutors said.  They also bought other restricted firearms by using the stationery of a local sheriff's department, the indictment charged.

The indictment is the latest in a mounting series of legal difficulties for the company, which prospered with the proliferation of government contracts for security and other paramilitary services since 2001.  Blackwater has faced intense scrutiny for its security work in Iraq and Afghanistan.

The firm has "sort of become the poster child for the industry and all the controversy that surrounds it," said Peter Singer, author of a 2003 book about the private security industry.

Blackwater is perhaps best known for a September 2007 shooting in Baghdad's Nisoor Square in which 17 civilians were killed.  In December a federal judge dismissed criminal charges against five former Blackwater guards in connection with the shootings, and the Justice Department has appealed the dismissal.

But the firm has continued to work for the government.  One Xe subsidiary, U.S. Training Services, held $354 million in contracts last year, according to government records, mostly for guard services.

At times, however, the company has confronted difficulty obtaining new business.  In March, the Government Accountability Office overturned U.S. Army plans to award a $1-billion contract to the firm to train Afghan police officers, concluding that other companies were unfairly excluded from bidding on the job.

Friday's indictment alleged that the former Blackwater executives wanted to acquire fully automatic weapons and short-barrel rifles -- both of which are restricted under federal firearms laws -- to improve its chances of winning and keeping contracts with the U.S. and foreign governments.

"The object of the conspiracy was to gain an advantage over competitors in the defense contracting field and thereby profit from obtaining and keeping government contracts," the indictment stated.

The indictment charges that Blackwater enlisted the Camden County, N.C., sheriff's office, near its headquarters, in a scheme to acquire the weapons.

Prosecutors did not accuse the department of wrongdoing.

Prosecutors said the company used the weapons in carrying out government contracts to train security personnel.

The indictment refers to a March 2005 visit by King Abdullah II of Jordan to the company's 7,000-acre complex in Moyock, N.C., which includes classrooms, offices, shooting ranges, an armory, and an airstrip.

The visit, which apparently was not previously reported, came days after Abdullah visited then-President George W. Bush at the White House.  Prosecutors did not specify the purpose of the king's trip.

Prosecutors said Jackson and the others presented the Jordanian monarch or his entourage with five firearms "to gain favor" with them.

After presenting the weapons as gifts, executives later realized they were unable to comply with federal laws requiring disclosure of where the weapons went, prosecutors said.

To cover up the lapse, prosecutors allege, the executives filed false federal firearms forms claiming they had purchased the weapons.

George E.B. Holding, the U.S. attorney for North Carolina's eastern district, stressed that the Jordanian officials were not suspected of any wrongdoing.

In 2008, investigators raided the company's Moyock headquarters, seizing 22 weapons, including 17 AK-47 assault rifles.

Charged along with Jackson in the 15-count indictment were the company's former general counsel, Andrew Howell; former executive vice president William Mathews; former vice president of logistics and procurement Ana Bundy; and former weapons specialist Ronald Slezak.

Attorneys for Jackson, Mathews and Howell told the Associated Press that their clients are innocent, and they criticized the government investigation.  A spokesman for Xe would say only that the company has cooperated with the investigation.

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3.

World news

Xe (Blackwater)

BLACKWATER STAFF 'VIOLATED WEAPONS LAW'

By Ed Pilkington

** Embattled security company faces new legal difficulties after its former president and four other former employees were charged with federal weapons charges **

Guardian (London)
April 17, 2010

http://www.guardian.co.uk/world/2010/apr/17/blackwater-weapons-iraq-legal-charges


The embattled security company Blackwater, which became known as the privatized face of warfare in Iraq, faces new legal difficulties after its former president and four other former employees were charged with federal weapons charges related to the alleged stockpiling of automatic rifles.

The charges come from a 2008 raid by the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives on the firm's sprawling ranch in North Carolina.  Agents found 22 automatic weapons, including 17 AK-47s, on the property in potential violation of a law that bans private individuals or companies buying such weapons registered after 1986.

Among those facing charges are Gary Jackson, the company's former president until last year; its former general counsel, Andrew Howell; and former vice president Bill Mathews.

The fresh round of federal legal trouble is a blow to Blackwater, which has been trying to rebuild its reputation under its new name Xe Services following a series of damaging allegations about its conduct in Iraq.  In 2005 Blackwater guards became embroiled in controversy after they shot into an Iraqi civilian car, and the following year a drunk employee killed an Iraqi security guard.

In the most serious incident in 2007, its guards were involved in a Baghdad shooting in which 17 unarmed Iraqi civilians died.  Several of the Blackwater people were prosecuted but the accusations were thrown out of court.

Blackwater claims that the weapons found at its North Carolina headquarters were the legitimate result of a deal struck in 2005 between the firm and the local police department, in which Blackwater would hold the guns at its armory on behalf of the sheriff, who was legally permitted to own them.  The company told Associated Press at the time of the raids that the storage of the weapons was nothing more than a "professional courtesy" to the police department.

Apart from the ongoing struggle to revive its reputation, Xe Services is likely to find the timing of the latest charges uncomfortable.  It is currently trying to win a Pentagon contract to train police in Afghanistan, worth up to $1bn.