Blackwater Rebrands, But Some Are Still Skeptical

Blackwater helicopter in Baghdad i i

A Blackwater helicopter flies low over the scene of where a roadside bomb exploded near the Iranian embassy in Baghdad on July 5, 2005. Yuri Cortez/AFP/Getty Images hide caption

itoggle caption Yuri Cortez/AFP/Getty Images
Blackwater helicopter in Baghdad

A Blackwater helicopter flies low over the scene of where a roadside bomb exploded near the Iranian embassy in Baghdad on July 5, 2005.

Yuri Cortez/AFP/Getty Images
Blackwater sign

A "No Trespassing" sign marks the drive leading to Blackwater's training facility in Mount Carroll, Ill., on Oct. 2, 2007. Scott Olson/Getty Images hide caption

itoggle caption Scott Olson/Getty Images

Two years ago, Blackwater Worldwide became a symbol for all that was going wrong with military contractors in Iraq when a group of its guards were involved in a shootout that resulted in the deaths of 17 Iraqis. After that, the bad news came in waves.

First, the Iraqi government revoked Blackwater's license to work there, saying the company used excessive force. Then a federal grand jury in the U.S. indicted six Blackwater guards on manslaughter charges related to that 2007 shootout. One of the guards has already pleaded guilty. He's expected to testify against the others.

The publicity got so bad that Blackwater went for an extreme makeover. It dropped its tarnished brand name and giant bear paw logo and renamed itself Xe — pronounced Zee. No one at Blackwater seems to be able to explain what the name means, or exactly where it came from.

In addition to the name change, Blackwater's controversial CEO, former Navy SEAL Erik Prince, stepped down. And Xe claims to be getting out of the international security business altogether — a business that has brought the company literally billions of dollars since the start of the Iraq war.

Xe says it will return to its core mission — training law enforcement in this country.

"We have always been a provider of training and logistics services," says Anne Tyrrell, a spokeswoman for the company. "While we may have been defined by one aspect of our work, it was never the only service we have provided on behalf of the United States government."

But dig a little deeper and the changes still appear to be largely cosmetic. While Xe did lose its billion-dollar contract to protect American diplomats in Iraq about a month ago, the State Department quietly extended another Blackwater contract. This one was to fly planes and helicopters on protective missions in Iraq. That contract runs through Labor Day.

"If there is one thing that drives me crazy in politicians, it is saying one thing and doing another," says Melanie Sloan, the executive director of the watchdog group Citizens for Responsibility and Ethics in Washington. She says that during his presidential campaign, Obama promised to end the government's ties to Blackwater — and then didn't. The State Department, for its part, says it renewed the contract because only Blackwater could provide the air cover they needed to protect their people on the ground.

"So if they were going to have a Blackwater contract, they should have just come clean with us and explained why they still needed to have a Blackwater contract, rather than telling us there wouldn't be any Blackwater contract and have us find out about one remaining," Sloan says.

That said, most of Blackwater's work for the State Department in Iraq is in the process of being handed over to a Virginia-based company called Triple Canopy. It already has about 3,800 people on the ground. But to fulfill the Blackwater contract, it will need to beef up. Experts say Triple Canopy could end up hiring literally hundreds of former Blackwater guards. Xe's Tyrrell says there's nothing stopping former employees from joining Triple Canopy.

"They have 60- or 90-day contracts," she says. "When they expire with us, they can seek employment with whomever, and that might be our replacement."

Susan Burke, an American lawyer who has been representing Iraqis who have filed wrongful shooting lawsuits against Blackwater, worries that the problems with Blackwater will simply be transferred to Triple Canopy.

"One of the real difficulties of the mercenary industry is that it is populated with the same men," Burke says. "Changing the name on the contract is problematic if it is in fact the same underlying people who are not well-trained, who should not be carrying weapons, particularly semi-automatic weapons."

Triple Canopy says it is carefully vetting former Blackwater employees in Iraq and will hire them only on a case-by-case basis. The company also is training new security guards in the U.S. from whom they can draw.

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