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You got a problem with mercenaries? Get over it.
Joseph Neff at the News and Observer has a great round-up story on the trials, tribulations and triumphs of Erik Prince, dark lord over all things Blackwater. Mr. Prince, as you know, is the top dog among mercenary mongrels here in the states. I hope you'll go read the article and learn how the Democratic Congress is continuing to pour money into Prince's pockets.
Still, Blackwater is thriving because of its aggressive and entrepreneurial business culture and a strong network of Republican connections. The company has hired extensively from the top levels of the CIA, Defense Department and State Department, and it named the former No. 2 official at the CIA to its board of advisors.
"Their connections certainly help a lot," said Peter Singer, an expert on military contractors at the Brookings Institution. "But they may be a vulnerability in the future, if the regime changes in Washington."
Republican connections? You mean like this guy who used to run interference for this guy? Blackwater's cancerous reach isn't limited to the Party of Greed. It's everywhere.
And to top it all off, little Erik continues the charade that his company is a small business:
A company that has banked more than $1 billion in federal payments since Sept. 11, 2001, doesn't sound like a small business, but Blackwater says it is. For a company providing security services, the threshold for a small business is $17 million in annual revenue. Blackwater passed that threshold in 2003, yet continued to list itself as a small business.
In 2006, Blackwater's aviation division won a $91 million contract for air charter work in Guam, a contract the Navy had set aside for small businesses. Two losing bidders challenged the award, saying Blackwater had more than 1,500 employees, the threshold for an aviation contract. An administrative judge ruled for Blackwater, saying the company's 1,000-plus guards working overseas did not count as employees.
Blackwater's contention that its guards are not employees is controversial. Last year, an Internal Revenue Service hearing officer ruled that a Blackwater security guard was an employee, not an independent contractor. U.S. Rep. Henry Waxman has asked the IRS to investigate whether the company used the independent contractor designation to avoid paying federal taxes. Blackwater disputes Waxman's complaint. If that ruling were applied to Blackwater's entire work force, the company could be on the hook for $50 million in unpaid Medicare and Social Security taxes.
Thanks to Henry Waxman, there may be some movement on that small front, but in case you're inclined to get in a tizzy about all this, don't bother. With representation by one of North Carolina's prestigious law firms, Blackwater USA is about as locked into the inside power structure as you can get. Aside from a few candidates in the primaries (none of whom won), no politician in North Carolina has spoken out the full-blown frenzy of Blackwater war profiteering. Not David Price. Not Brad Miller. Not Holier-Than-Thou Walter Jones. Not Mel Watt. Not G.K. Butterfield. Not anyone.
But it's not just the federal hand-washers who give Blackwater cover. The problem extends to business interests right here in North Carolina:
In North Carolina, the Department of Commerce approved a $120,000 grant for Blackwater to support the company's production of its Grizzly armored vehicle. The department projected that Blackwater would file for $637,500 in tax credits for the same project.
Despite the phenomenal growth, Prince has been quietly looking for investors. At the end of April, the giant hedge fund Cerberus said it had decided against investing as much as $200 million in Blackwater. After news broke of Cerberus' interest, Blackwater President Gary Jackson sent e-mail saying the company was anticipating more growth, the Wall Street Journal reported. "The company has "had two successive quarters of unprecedented growth," Jackson wrote, and is "exploring multiple avenues to finance our continued expansion."
Mr. Jackson misspoke. The correct word is not "exploring," it's "exploiting." And you can thank your friendly Congressman for being part of the problem.
- James Protzman's blog
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