Government Is Still Doing Business with Reinvented Blackwater

International Developments Solutions was recently awarded a State Department contract to provide protective security in the Israeli controlled West Bank. The one-year contract was awarded on January 3 and contains the possibility for four more one-year renewable options. The total value of the contract could reach $84 million over five years.

International Developments Solutions is part of a joint venture that includes U.S. Training Center Holdings – the same group that recently purchased Xe Services, formerly known as Blackwater Worldwide.

The training for the new contract will almost certainly be held at the USTC's facility in Moyock, North Carolina that previously served as the headquarters for both Blackwater and Xe Services.

This contract marks the third that Blackwater-associated organizations have won since last February when Sen. Carl Levin (D-MI) asked the Attorney General to take a closer look at Blackwater. In June, Xe Services won a $100 million contract from the CIA to provide protective services in Afghanistan and in October Xe partnered with another company to secure a piece of a $10 billion State Department contract for worldwide protective services.

We can probably expect more government contracts for the remnants of Blackwater as its new owners try to scrub away all traces of Erik Prince, the controversial founder of Blackwater. U.S. Training Center Holdings bought Xe in mid-December for a reported $200 million. The sale removed Prince's equity stake in the company, as well as any operational or managerial role he had. In reporting the sale, The New York Times noted that the US State Department had threatened to cease awarding contracts to the company – regardless of what it called itself – so long as Prince remained as the owner of the firm.

However, the extent to which Prince is stepping away from the company is questionable.  Prince will still have a financial interest in the company’s future. Part of the sale dictates that Prince will receive payouts depending on the company’s performance over the next few years.

Additionally, one of the lead investors with USTC Holdings – Jason DeYonker – has had a long history with both Prince and Blackwater. DeYonker was an advisor to Prince during the founding of Blackwater.  He played a role in the development of the company's business plan and also helped in the negotiations of Blackwater's first contracts with US government agencies. DeYonker also managed the Prince family's money from 1998 through 2002.

What is not known is whether the creative accountants who helped Blackwater overcharge the government for its work in Iraq are still part of the new team.