Chairman Waxman. Thank you very much, Mr. Prince.
I am going to start off with the questions.
The issue before us that I see that is important to
understand is we have gone now in a major way to contract out
what the Government and what the military ordinarily would do.
Your company started off at the beginning of 2001 with, I
think, around over $200,000 in Government contracts. You now
are making over $1 billion a year. That is quite a success.
Even if I am wrong on the exact numbers, it is quite a success.
Now we are paying a lot of money for privatized military to
do the work that our military people have done, and no one does
this work better than the U.S. military. They are a very able
and brave and courageous people that do a fantastic job for us.
So the question in my mind is are we paying more and
getting less?
In asking that question, I want to focus on a particular
incident. That incident received almost no public attention but
involved the tragic loss of three of our troops, and my staff
has reviewed the documents describing the incident. They
prepared a memo which I would like, without objection, to make
part of the record.
Chairman Waxman. On November 27, 2004, there was a plane
run by Blackwater Aviation that crashed into a wall of a canyon
in the mountains of Afghanistan. This plane was carrying three
military personnel, three active duty U.S. personnel:
Lieutenant Colonel Michael McMahon, Chief Warrant Officer
Travis Grogan, and Specialist Harley Miller.
About 40 minutes after takeoff, Blackwater 61 crashed into
the wall of a canyon and all the occupants were k**ed. The
crash was investigated by a joint Army and Air Force taskforce
and by the National Transportation Safety Board.
The NTSB report found that Blackwater captain and first
officer behaved unprofessionally and were deliberately flying
the non-standard route low through the valley for fun. The
report found that the pilots were unfamiliar with the route,
deviated almost immediately after takeoff and failed to
maintain adequate terrain clearance.
They also had a transcript of the co*kpit voice recording,
and on this recording the flight crew joked with each other,
saying, ``You are an X-wing fighter Star Wars man and you
are,'' expletive ``right. This is fun.''
The captain stated, ``I swear to God they wouldn't pay me
if they knew how much fun this was.''
Mr. Prince, one allegation raised recently about
Blackwater's actions is that your contractors have acted
irresponsibly. One senior U.S. commander told the Washington
Post ``They often act like cowboys.''
Let me ask you about that crash of Blackwater Flight 61. In
this case, did Blackwater's pilots act responsibly or were
they, in the words of the U.S. commander, acting like cowboys?
Mr. Prince. I disagree with the a**ertion that they acted
like cowboys. We provide a very reliable, valuable service to
the Air Force and the Army in Afghanistan. Anytime you have an
accident, it is an accident. Something could have been done
better.
It is not a Part 135 U.S. type flying operation. There are
no flight services. There are no flight routes. There are no
nav aids. It is truly rugged Alaska-style bush flying.
Chairman Waxman. Well, the investigators said from the
National Transportation Safety Board that Blackwater Aviation
violated its own policies by a**igning two pilots without
adequate flying experience in Afghanistan. According to the
military report, it was your policy, Blackwater policy, that
required at least one of the pilots to have flown in theater
for at least a month, but neither pilot had flown for that long
and neither had flown the route they were a**igned that day.
This is clear in the co*kpit voice recording. Right after
takeoff, the Blackwater captain said, ``I hope I am going into
the right valley.''
The first one replied, ``This one or that one?''
The captain then apparently guessed which valley to fly,
saying, ``I am just going to go up this one.''
The flight mechanic later observed, ``We don't normally go
this route.''
Why didn't Blackwater follow its own policies and team two
new pilots with more experienced ones? Why did you have two
inexperienced pilots together?
Mr. Prince. I am not qualified to speak to the experience
level of the pilots. I will tell you that we are operating
under military control. In fact, the aircraft was set to take
off with two pa**engers onboard, and they actually turned
around for the lieutenant colonel who I believe who boarded
late.
There was also it violated. The military violated its
policy by loading both ammunition. That aircraft is also flying
with a large number of illumination mortar rounds, and they are
not supposed to mix pax and cargo. But, again, we followed our
customer's instructions.
Yes, accidents happened. We provided thousands and
thousands of flight hours of reliable service since then. Today
still, we are flying more than 1,000 missions a month.
Chairman Waxman. But on that one, the investigators found
that Blackwater failed to follow standard precautions to track
flights, failed to file a flight plan, failed to maintain
emergency communications in case of an accident, and tragically
these failures may have cost the life of the crash's sole
survivor because one of the military people that you were
escorting or your flight was escorting evidently survived for
at least 10 hours after the crash.
He suffered internal injuries, but he got out of the plane
to urinate. He smoked a cigarette. He rolled out a sleeping
bag. Nobody came, and then he died of cold from inattention.
There was no way, as required, for anybody to know where that
plane had landed even though that is a requirement.
I have an email that I want to read to you. It was sent on
November 10, 2004, 16 days before the crash. It is from Paul
Hooper, Blackwater Afghanistan site manager, and it was sent to
John Hite, vice president for operations for Blackwater
Aviation.
In it, Mr. Hooper says, Blackwater knowingly hired pilots
with background and experience shortfalls.
Here is what he wrote: ``By necessity, the initial group
hired to support the Afghanistan operation did not meet the
criteria identified in email traffic and had some background
and experience shortfalls overlooked in favor of getting the
requisite number of personnel on board to startup the
contract.''
One of the great ironies of this accident is that while the
aircraft was being piloted by an inexperienced Blackwater
pilot, a sk**ed military pilot with an exemplary safety
record, Lieutenant Colonel Michael McMahon was on board the
flight as a pa**enger.
This is what his widow wrote to me. She is Colonel Jeanette
McMahon, and she works at West Point.
She said, ``Mike, like Mr. Prince, was a CEO of sorts in
the military as an aviation commander and as such had ama**ed a
great safety record in his unit. It is ironic and unfortunate
that he had to be a pa**enger on this plane versus one of the
people responsible for its safe operation. Some would say it
was simply a tragic accident . . . but this accident was due to
the gross lack of judgment in managing this company.''
Mr. Prince, Colonel McMahon is asking why the taxpayers
should be paying your company millions to conduct military
transport missions over dangerous terrain when the military's
own pilots are better trained and a lot less expensive. How do
you respond?
Mr. Prince. We were hired to fill that void because there
is a different--it is a different kind of airlift mission going
in and out of the very short strips in Afghanistan. You have
high altitude, short strips, unimproved runways, and you have
transport aircraft that are designed to support a large
conventional battle.
We are doing small missions. The typical CASA payload maxes
out at 4,000 pounds. They can't even hold that because of the
short altitude or the high altitude short strips, they have to
go in and out of, hauling mail, hauling parts.
We are filling that gap because these strips are too small
for C-17s. They are too small for C-130's. They are going in
and out of places that the military can't get to with existing
aircraft they have. That is why we are doing that mission.
Chairman Waxman. You are saying that the military could not
do this job?
Mr. Prince. They did not have the a**ets to do it in
theater or back in the United States, no, sir.
Chairman Waxman. They could have acquired those a**ets,
however. Instead, they hired you.
Mr. Prince. I believe the Congress has seen fit to proceed
with some sort of aircraft acquisition program to fill that
void going forward, but this is a temporary service to fill
that gap.
Chairman Waxman. Well, we have been in Iraq for 5 years
now. The pilots of Blackwater 61 paid for their errors with
their lives, but I am wondering whether there was any corporate
accountability for Blackwater. Were any sanctions placed on the
company after the investigative reports that were so critical
of Blackwater were released?
Mr. Prince. Anytime there is an accident, a company also
should be introspective and look back and see what can be done
to make sure that it doesn't happen again.
Chairman Waxman. Aside from your introspection, were you
ever penalized in any way? Were you ever fined or suspended or
reprimanded or placed on probation?
Mr. Prince. I believe the Air Force investigated the
incident, and they found that it was. It was pilot error. It
was not due to corporate error that caused the mistake or that
crashed the aircraft.
Chairman Waxman. My time is up, but the corporation hired
inexperienced pilots. They sent them on a route they didn't
know about. They didn't even follow your own rules. It seems to
me that it is more than pilot error. There ought to be
corporate responsibility, and Blackwater was the corporation
involved.
Aside from your introspection, you have just been awarded a
new contract for almost $92 million. I want to see whether you
are getting a stick as well as all these carrots.
Mr. Davis, your turn.
Mr. Davis of Virginia. Thank you, Mr. Chairman.
Let me just say I think if there is a question if they
should be in or out, if the private companies are doing work of
the Army, that really ought to be addressed by the Defense
Department and State Department.
Mr. Issa. Mr. Chairman.
Mr. Ranking Member, would you yield for a question?
Mr. Davis of Virginia. I would.
Mr. Issa. Since I wasn't here during the Clinton
administration, did Mr. Waxman and this committee investigate
Secretary Brown's crash in which he was k**ed?
That was a military flight, C-130, I believe. Was that
investigated?
Mr. Davis of Virginia. I wasn't here. I was not here at
that point, but I understand the question.
Mr. Issa. So crashes happen bad weather and in combat.
Chairman Waxman. Will the gentleman yield to me?
That crash was investigated, and the gentleman would be
able to get the report of that investigation.
Mr. Davis of Virginia. Let me yield 5 minutes to the
gentleman from North Carolina.
Mr. McHenry. I thank the ranking member for yielding.
Mr. Prince, can you describe to the committee the nature of
your contract, who your client is in Iraq?
Mr. Prince. In Iraq, we work for the Department of State.
Mr. McHenry. What is the service you provide for the
Department of State?
Mr. Prince. We operate under the Worldwide Personal
Protective Services Contract, and we are charged with
protecting diplomats, reconstruction officials and visiting
CODELs, Members of Congress and their staffs.
Mr. McHenry. In this calendar year, how many missions have
you had in Iraq?
Mr. Prince. 1,873.
Mr. McHenry. How many incidents occurred during those 1,873
movements?
Mr. Prince. Only 56 incidents.
Mr. McHenry. A movement is, for instance, a Member of
Congress lands at the airstrip. They are transported to the
emba**y. That is one movement.
Mr. Prince. Yes, sir.
Mr. McHenry. All right, and 56 incidents out of 1,873
movements in a war zone, is that correct?
Mr. Prince. Resulted in a discharge of one of our guys'
weapons.
Mr. McHenry. Those 56 incidents, does that mean that they
shot at someone? Describe what an incident is.
Mr. Prince. Yes. We don't even record all the times that
our guys receive fire. The vehicles get shot at on a daily
basis, multiple times a day. So that is not something we even
record.
In this case, an incident is a defensive measure. You are
responding to an IED attack followed by small arms fire.
Most of the attacks we get in Iraq are complex, meaning it
is not just one bad thing; it is a host of bad things. Car bomb
followed by small arms attack. RPGs followed by sniper fire.
An incident occurs typically when our men fear for their
life. They are not able to extract themselves from the
situation. They have to use sufficient defensive fire to off
the X, to get off that place where the bad guys have tried to
k** Americans that day.
Mr. McHenry. So in 1,873 missions, 56 incidents occurred
which means potentially the Blackwater individual, the former
soldier in most cases, discharges a weapon. Perhaps in the air,
is that a possibility?
Mr. Prince. It is not likely into the air. It is either
going to be directed at someone that is shooting at us or
another real problem. You know the recent Washington Post
series on IEDs in Iraq, 81,000 IED attacks.
The bad guys have figured out how to make a precision
weapon. You take a car. You pack it with explosives, and you
put a suicidal person in there that wants to drive into the
back of a convoy and blow themselves up.
Mr. McHenry. An additional question here, those 56
incidents pretty much all involved returning fire. A caravan is
being shot at, for instance, and you would return fire or a
potential car bomb is coming at you and you are returning.
Mr. Prince. A potential car bomb, yes. Defensive fire or
potential car bombs going, potentially coming near you, you
have to warn them off.
There is a whole series in the use of force continuum that
our guys are briefed and they abide by. They are briefed on it
through their training back here in the United States.
Every time they leave the wire, every time they launch on
that mission, before they go in the morning, they get the
mission brief on what they are going to do, who they are
protecting, where they are going, the intelligence, what to be
on the lookout for, where have there been particularly bad
areas in the city and the use of force continuum, those rules
of engagement.
Mr. McHenry. The use of force continuum, is that dictated
by the Department of State?
Mr. Prince. Yes.
Mr. McHenry. You use their rules of engagement, the
commonly used term?
Mr. Prince. Yes, sir.
Mr. McHenry. That is similar to the Department of Defense
rules of engagement.
Mr. Prince. Yes, they are essentially the same.
Mr. McHenry. OK. So you had 1,800.
Mr. Prince. Sorry, Department of Defense rules for
contractors. We do not have the same as a U.S. soldier at all.
Mr. McHenry. OK. In the report that I have, in 2006, you
had 6,254 missions and 38 incidents.
Mr. Prince. Yes, sir.
Mr. McHenry. Which means one of the contractors, one of the
former soldiers, who is now in State Department Protective
Service, they returned fire. So that would be less than 1
percent of missions involved returning fire.
The question here, how long has Blackwater been involved in
Iraq? How long have you had this contract in Iraq?
Mr. Prince. We started there first working for DOD under
the CPA, and then I believe in 2005 it transitioned from CPA
over to Department of State.
Mr. McHenry. How many individuals under your protective
service have been injured or k**ed?
Mr. Prince. Twenty-seven dead and hundreds wounded.
Mr. McHenry. How many individuals?
Mr. Prince. Oh, under our care?
Mr. McHenry. Under your care that you are protecting.
Mr. Prince. Zero.
Mr. McHenry. Zero?
Mr. Prince. Zero, sir.
Mr. McHenry. Zero individuals that Blackwater has protected
have been k**ed in a Blackwater transport.
Mr. Prince. That is correct.
Mr. McHenry. Zero?
Mr. Prince. Zero.
Mr. McHenry. That is, I think, the operable number here.
Your client is the State Department. The State Department has a
contract with you to provide protective service for their
visitors, for instance, CODELs, Amba**adors and runs the gamut,
and you have had zero individuals under your care and
protection k**ed.
Mr. Prince. Correct.
Mr. McHenry. I think that is a very important number that
we need to discuss here, Mr. Chairman, and that should be a
testament to the service that these former veterans, these
veterans that are currently working for Blackwater.
Chairman Waxman. The 5 minutes that was yielded to you is
over.
Mr. McHenry. I am happy to yield back to the ranking
member.
Mr. Davis of Virginia. Mr. Prince, let me just continue
with that. Are there any other security firms in Iraq that
provide the services that involve as much danger as your escort
services that your company provides in Baghdad?
Mr. Prince. Sir, we certainly have a high profile mission.
We protect the U.S. Amba**ador. We protect all the diplomats in
the greater Baghdad area which is the hottest part of the
country by far.
Mr. Davis of Virginia. How is your firm paid under the
current task order contract for security details? Is it by the
mission, by the hour or some other method?
How do you bill the Government?
Mr. Prince. It is generally billed on a per man day for
every day that the operator is in the country.
Mr. Davis of Virginia. Is it a cost plus fee or is it just
like a time and materials?
Mr. Prince. It is blended. Most of it is firm fixed price.
There are a few things that are directly cost reimbursable like
insurance.
Mr. Davis of Virginia. Does the contract provide for
monetary penalties for any performance difficulties like
shooting incidents that were reported to have occurred and the
like?
Mr. Prince. Yes, there are sorts of penalty clauses, if we
don't have it fully manned, if they are not happy with the
leadership. We are very responsive. If there is someone that
doesn't agree or is not operating within the standards of the
Department of State, they have two decisions, window or aisle.
Mr. Davis of Virginia. Do you work just for the Department
of State or do you work for the Defense Department as well?
Mr. Prince. In Iraq, we essentially work for the Department
of State. There are one or two folks here or there in a
consultant type position but nothing, nothing significant,
nothing armed.
Mr. Davis of Virginia. It is important for the committee to
understand there are two different contracting entities that
are contracting in Iraq, and you work for State.
Do you think the contract provisions and the State
Department contract management personnel provide sufficient
guidance for the use of force under the contract?
Mr. Prince. Yes, sir. We have seen the full gamut of
contracting and contract management in the stabilization
section or stabilization phase of the Iraq War, and there is a
whole host of differences in oversight.
I will tell you the State Department is the highest. They
are the GE-like buyers, the most sophisticated oversight
standards that we have to comply with on the front end for our
personnel and management in the field.
Mr. Davis of Virginia. When your teams are operating on the
ground in Baghdad, what entity has the authority to control
your activities? Is it the State Department or is it the
military commander who is responsible for the battle space?
Mr. Prince. We work for the RSO, the regional security
officer. He is the chief security official for the State
Department in Iraq.
Mr. Davis of Virginia. So it is the State Department
ultimately for whom you are contracting.
Mr. Prince. Yes.
Mr. Davis of Virginia. Can you describe the process that is
followed under the contract when a shooting incident occurs?
Have you dismissed any employees for shooting incidents
under your security contracts in Iraq and what happens to
dismissed employees? Are they sent out of Iraq?
Mr. Prince. OK, let me answer the last one first.
If there is any sort of discipline problem, whether it is
bad attitude, a dirty weapon, riding someone's bike that is not
his, we fire them. We hold ourselves internally accountable,
very high. We fire them. We can fine them, but we can't do
anything else.
So if there is any incidents where we believe wrongdoing is
done, we present that incident, any incident, any time a weapon
is discharged, there is an incident report given to the RSO.
Mr. Davis of Virginia. Any idea how many employees you have
fired over the time?
Mr. Prince. I think in the committee's report, they said
122 or something over.
Mr. Davis of Virginia. So you have taken action when it has
come to your attention.
Mr. Prince. Say again, sir.
Mr. Davis of Virginia. So you have taken action when it has
come to your attention.
Mr. Prince. It generally comes to our attention first. We
as a company, we fire them. We send the termination notice to
the State Department as to why we fired someone.
Mr. Davis of Virginia. Thank you.
Chairman Waxman. The gentleman's time has expired.
Mrs. Maloney for 5 minutes.
Mrs. Maloney. Thank you, Mr. Chairman.
I would like to ask you, Mr. Prince, about one of these
employees whom you fired, and this was an employee who got
drunk on Christmas Eve of 2006. According to documents that we
got yesterday from the State Department, this particular man,
while he was drunk, shot and k**ed the guard to the Iraqi Vice
President, obviously causing great tensions between the Iraqi
government and the U.S. military.
I would like to ask you about his firing. You fired this
individual for handling a weapon and for being intoxicated, is
that right?
Mr. Prince. The men operate with a clear policy. If there
is to be any alcohol consumed, it is 8 hours between any time
of consumption of alcohol.
Mrs. Maloney. Was he fired or not?
Mr. Prince. Excuse me?
Mrs. Maloney. Was he fired?
Mr. Prince. Oh, yes, ma'am, he was fired.
Mrs. Maloney. Have any charges been brought against him in
the Iraqi justice system?
Mr. Prince. I don't believe in the Iraqi justice system. I
do believe. I know we referred it over to the----
Mrs. Maloney. Justice Department, they told us they are
still looking at it 9 months later.
Have any charges been brought against him in the U.S.
military justice system?
Mr. Prince. I don't know.
Mrs. Maloney. Have any charges been brought against him in
the U.S. civilian justice system?
Mr. Prince. Well, that would be handled by the Justice
Department, ma'am. That is for them to answer, not me.
Mrs. Maloney. Other than firing him, has there been any
sanction against him about any Government authority?
You mentioned you fined people for bad behavior. Was he
fined for k**ing the Iraqi guard?
Mr. Prince. Yes, he was.
Mrs. Maloney. How much was he fined?
Mr. Prince. Multiple thousands of dollars, I don't know the
exact number. I will have to get you that answer.
Mrs. Maloney. OK.
Mr. Prince. Look, I am not going to make any apologies for
what he did. He clearly violated our policies.
Mrs. Maloney. OK. All right. Every American believes he
violated policies. If he lived in America, he would have been
arrested, and he would be facing criminal charges. If he was a
member of our military, he would be under a court martial. But
it appears to me that Blackwater has special rules. That is one
of the reasons of this hearing.
Now, within 36 hours of the shooting, he was flown out of
Iraq. Did Blackwater arrange for this contractor to leave Iraq
less than 2 hours after the shooting?
Mr. Prince. I do not believe we arranged for him to leave
after 2 hours after the shooting. He was arrested.
Mrs. Maloney. OK, what about 2 days? It was 2 days after
the shooting.
Did Blackwater arrange for him to leave the country?
Mr. Prince. That could easily be.
Mrs. Maloney. OK.
Mr. Prince. IZ Police arrested him. There was evidence
gathered. There was information turned over to the Justice
Department office in Baghdad. We fired him. He certainly didn't
have a job with us.
Mrs. Maloney. Well, in America, if you committed a crime,
you don't pack them up and ship them out of the country in 2
days.
If you are really concerned about accountability, which you
testified in your testimony, you would have gone in and done a
thorough investigation. Because this shooting took place within
the Green Zone, this was a controllable situation. You could
have gone in and done forensics and all the things that they
do, but the response was to pack him and have him leave the
country within 2 days.
I would like to ask you, how do you justify sending him
away from Iraq when any investigation would have only just
begun?
Mr. Prince. Again, he was fired. The Justice Department was
investigating. In Baghdad, there is a Justice Department office
there.
He didn't have a job with us anymore. We as a private
company cannot detain him. We can fire, we can fine, but we
can't do anything else. The State Department----
Mrs. Maloney. What evidence do you have that the Justice
Department was investigating him at that time?
Mr. Prince. From talking to my program management people in
the country, they said it is in the hands of the IZ Police,
which is Air Force, arrested him. They took him in for
questioning. It was handled by the Justice Department.
He was fired by us. The State Department ordered.
Mrs. Maloney. Well, it has been 10 months, and the Justice
Department has not done anything to him. Again, I repeat, if he
was a U.S. citizen or in America, he would have been arrested
immediately. He would have faced criminal charges.
We know about the chain of command in the military. They
are court-martialed immediately.
But if you work for Blackwater, you get packed up and you
leave within 2 days and you face a $1,000 fine.
So I am concerned about accountability and really the
unfairness of this, and I am concerned about how Blackwater--if
I could just say, Mr. Chairman--your actions may be undermining
our mission in Iraq and really hurting the relationship and
trust between the Iraqi people and the American military.
Chairman Waxman. The gentlelady's time has expired.
Mr. Burton.
Mr. Burton. Can you tell us, Mr. Prince, how many people
witnessed the incident she just referred to?
Mr. Prince. I don't believe anyone did, sir.
Mr. Burton. So the only people who were involved was the
man who was shot and your employee?
Mr. Prince. Yes, sir.
Mr. Burton. Can you, in some detail, go into the rules of
engagement?
I have talked to some of the people at State Department
about this, and I have talked to people within your
organization. As I understand it, on the back of every one of
your vehicles, in both Arabic and English, there is a warning
to not get 100 meters of that vehicle, is that correct?
Mr. Prince. Yes, that is right, sir.
Mr. Burton. If somebody is coming at your vehicle at a high
rate of speed, do your employees have any actions that they
should take especially if it might be a car bomb or something
like that?
Mr. Prince. Yes, sir. There are generally lights and sirens
on the vehicles, air horn. The personnel, whose security sector
is facing back toward that oncoming threat, will be giving hand
signals, audible yelling, stop, qif, Arabic for stop.
There is a pin flare, which is a signaling device kind of
like a bottle rocket. It is the device used for a pilot to
signal his whereabouts on the ground to be rescued, but it is a
bright incendiary device that flies by the vehicle or it hits
the vehicle. It is not lethal at all, but definitely you know
something is happening.
Water bottles are sometimes thrown at vehicles to warn them
off.
If you have to go beyond that, they take shots into the
radiator. You hear that hitting the car. It disables the car.
Definitely, you know something is happening.
If they go beyond that, they spider the windshield. You put
a round through the center of the windshield away from the
occupants so that the safety gla** in the windshield makes it
difficult to see through.
Only after that do they actually direct any shots toward
the driver. So there is a whole use of force continuum.
Mr. Burton. The questions that I have heard today from the
other side indicate that there ought to be perfection in your
organization. Now you are a Navy SEAL, and you served in the
military. Do you believe that any kind of military operation of
this type or any type can be absolutely perfect all the time?
Mr. Prince. I am afraid not, sir. We strive for perfection.
We try to drive toward the highest standards, but the fog of
war and accidents and the bad guys just have to get lucky once.
Mr. Burton. I think it is very important that everybody who
is involved in this hearing today understand that you have high
public officials, Congressman and others, whom you have to
protect, and you have indicated that nobody has been k**ed or
hurt under your protection. Yet, you are going through all
kinds of zones where there are car bombs going off, small arms
fire, cars coming at you at high rates of speed.
Can you explain to me why in the world there wouldn't be
some precautions taken when those sorts of things take place?
Mr. Prince. Again, the bad guys have figured out k**ing
Americans is big media, I think. They are trying to drive us
out. They try to drive to the heart of American resolve and
will to stay there.
So we have to provide that protective screen. We only play
defense, and our job is to get those reconstruction officials,
those people that are trying to weave the fabric of Iraq back
together, to get them away from that X, the place where the bad
guys, the terrorists, have decided to k** them that day.
Mr. Burton. One of the Members on the other side indicated
that when there is a firefight or when there is a car bomb
going off or something, there is an attack on your convoy, that
you don't stay there.
Can you explain to me what would happen if you stayed there
when you were under attack?
Mr. Prince. Again, there would be a lot more firefight.
There would be a lot more shooting.
Our job is to get them off the X. The X is what we refer to
in our business about the preplanned ambush site where bad guys
have planned to k** you. So our job is to get them away from
that X, to get them to a safe place. So we can't stay and
secure the terrorist crime scene investigation.
Mr. Burton. You are in a war zone.
Mr. Prince. Yes, sir.
Mr. Burton. So, the instructions, I want to get this
straight. If your people come under fire or there is a car bomb
or RPG fired at them, they are supposed to turn around under
some rules and get out of there to protect the people that they
are guarding.
Mr. Prince. Yes, sir, defensive fire, sufficient force to
extricate ourselves from that dangerous situation. We are not
there to achieve firepower dominance or to drive the insurgents
back. We are there to get our package away from danger.
Mr. Burton. Thank you.
Chairman Waxman. The gentleman's time has expired.
The Chair now recognizes Mr. Cummings for 5 minutes.
Mr. Cummings. Mr. Prince, you are a very impressive
witness. I just want to ask you a few questions that cause me
some concern that seems to go counter to some of the things
that you have said.
I am wondering whether Blackwater is actually helping our
military or hurting them. Frankly, I am concerned that the
ordinary Iraqi may not be able to distinguish military actions
from contractor actions. They view them all as American
actions.
Now I want to go back to this incident that we have been
talking about for the last few minutes, the 2006 Christmas Eve
incident where the drunken Blackwater official shot and k**ed
a guard of the Iraqi Vice President, which is basically like
k**ing a Secret Service person guarding our Vice President.
When this incident first happened, an Arab television
station ran an incorrect story, saying that a ``drunken U.S.
soldier'' k**ed the Iraqi Vice President's guard.
Were you aware of this incorrect press report?
Mr. Prince. No, sir, I was not.
Mr. Cummings. Of course, you can see how a media report
like that makes it more likely that Iraqis will blame the U.S.
military rather than Blackwater for the k**ing of the Iraqi
Vice President's guard. Again, what if it were our Vice
President?
Did Blackwater take any steps to inform the press that it
was actually a Blackwater employee who k**ed the Vice
President's guard?
Mr. Prince. By contract, we are not allowed to engage with
the press.
Mr. Cummings. All right, and why is that?
Mr. Prince. That is part of the stipulations in the WPPS
contract.
Mr. Cummings. After this report aired, an official who
works for you--and this is what really concerns me and I just
want to know your reaction to this--at Blackwater sent an
email.
This is an employee of yours sent an email internally to
some of his colleagues. He did not suggest contacting the
station, I guess, for the reason you just said. He didn't
suggest putting out a press release, and he didn't suggest
correcting the false story in any way.
Instead, this is what the email said: ``At least the ID of
the shooter will take the heat off of us,'' meaning Blackwater.
In other words, he was saying: Wow, everyone thinks it was
the military and not Blackwater. What great news for us. What a
silver lining.
Mr. Prince, you said in your testimony that Blackwater is
extremely proud of answering the call and supporting our
country. Did anyone in your organization ever raise any
concerns that a lying, a false story to continue might lead to
retaliation or insurgent activity against our troops?
Mr. Prince. I don't believe that false story lasted in the
media for more than a few hours, sir.
Mr. Cummings. But the fact still remains that it was a
false story, and we are trying to be supportive of the Iraqi
government, trying to get this reconciliation, trying to make
sure that they, as President Bush says, that they stand up so
that we can stand down.
But, at the same time, when these stories are put out--I
think you would agree--that the Iraqi people then say, well,
wait a minute, the United States is supposed to be supporting
our Government.
President Bush talks about how we have gone over to export
democracy. Here is the very symbol. The Vice President of a
country, k**ed by a drunken Blackwater employee.
The question is then what lies in the mind of the Iraqi?
What lies in the minds of those people who may have wanted to
cooperate with our security over there?
Then they say, well, wait a minute, if they, U.S. soldiers,
but really Blackwater is doing this to the very Government that
we are supposed to be supporting. Then what does that say and
why should we support the United States? Fair question?
Mr. Prince. Yes, sir. Look, I am not going to make any
apologies for the----
Mr. Cummings. I am not asking you to make any apologies.
You are the president of this company, is that right?
Mr. Prince. The CEO.
Mr. Cummings. CEO, well, you are the top guy. You are one
of the top guys, is that right?
Mr. Prince. Pretty much, yes, sir.
Mr. Cummings. All right. So I am just asking you a question
about what your policies are. That is all.
Mr. Prince. We have clear policies. Whether the guy was
involved in a shooting that night or not, the fact that he
violated the alcohol policy with firearms would have gotten him
fired on the spot. That is why we fire people. We hold them
independently accountable.
The guy slipped away from the party. He was by himself. I
am confident that if he had been with another guy from
Blackwater, the other guy would have stopped him and said,
enough. You know.
Mr. Cummings. So contrary to what Mr. Burton said, this was
after hours in the Green Zone, wasn't it? This wasn't some
mission, was it?
Mr. Prince. Correct.
Mr. Cummings. Right.
Mr. Prince. He was on his own time. It was a Christmas Eve
party.
Mr. Cummings. Do you understand what I mean? I have heard
not a lot of complimentary things about what you all are doing.
I am sure you are doing a great job, but it is not about what
you do well. It is a question of when things go wrong, where is
the accountability?
Mr. Prince. And, sir, we fired him. We fined him. But we,
as a private organization, can't do any more. We can't flog
him. We can't incarcerate him. That is up to the Justice
Department. We are not empowered to enforce U.S. law.
Mr. Cummings. Do you think more should be done?
Mr. Prince. I would be happy to see further investigation
and prosecution by the Justice Department, yes, sir.
Mr. Cummings. Thank you.
Chairman Waxman. I am going to call Mr. Mica next.
How much did you fine him?
Mr. Prince. Multiple thousands of dollars, sir. I don't
know the exact number, but whatever we had left due him in pay,
I believe we withheld and plus his plane ticket.
Chairman Waxman. Thank you.
Mr. Mica.
Mr. Mica. Thank you.
Mr. Prince, in your testimony earlier, you said, ``k**ing
Americans, I guess, in Iraq is big media.''
You said that?
Mr. Prince. Yes, sir.
Mr. Mica. Did you have any idea that wounding American
contractors in a congressional hearing would be this big media?
Mr. Prince. More than I bargained for, sir, yes.
Mr. Mica. I described you are here because you are sort of
in the chain of command to be attacked next by some folks who
want to discredit what you are doing. I might say that I don't
know if there were criminal acts committed, and there will
probably be ways in which we can go after folks. One of those
would be to have the Department of Justice pursue the case.
Would that be the normal procedure?
Mr. Prince. Yes, sir. We welcome it. We encourage it. We
want that accountability. We hold ourselves internally
accountable, but you know we put 1,000 guys out in the field.
Humans make mistakes and they do stupid things sometimes. We
try to catch those as much as we can, but if they go over the
line.
Mr. Mica. Well, they criticized you. I guess we could start
with the pilots and the NTSB investigation. They should go back
and look at the Comair crash in Kentucky with the accounts of
the pilots which was a distraction and led to the crash
according to their findings. I have chaired the Aviation
Subcommittee and followed that very closely.
Basically, as Al Gore would put it, there is no controlling
authority for airspace in Afghanistan.
Mr. Prince. There is no FAA in Afghanistan.
Mr. Mica. Then you were criticized, too. You left the
pilot. I guess he survived but was not found. Is that it?
Mr. Prince. No. There were two of the DOD personnel in back
survived the crash.
Mr. Mica. Survived, OK. Well, two survived and weren't
found, and I guess they perished.
Mr. Prince. They perished before they were found.
Mr. Mica. I guess in the United States, like we have an
experienced pilot like Fossett. He is lost. Have we found him
yet?
Mr. Prince. No, sir.
Mr. Mica. OK, but this is in the terrain.
Mr. Prince. Terrain very similar to what is in Nevada.
Mr. Mica. I just want to try to put things in perspective.
There is also some argument that you cost the Government
too much and that you are getting paid too much and maybe this
is something that the military should be doing. Could you
respond to that?
Mr. Prince. Yes, sir. I think there are three arguments for
or against privatization. There is reliability, there is
accountability, and there is cost.
Accountability issues can be handled by exercising MEJA.
Congress expanded MEJA at the end of 2004 to any DOD
contingency operation, I believe. So any time a U.S. contractor
is abroad, they can be brought up on charges on behalf of the
U.S. Government. They can be brought up on charges back here in
the States.
There is reliability. That comes down to, I think,
individual vendor reliability. How well does that company
execute? Are they complete, correct and on time?
And then there is cost. The American automotive industry,
any manufacturer in America has to deal with that cost issue
all the time, whether they should make something. It is that
make versus buy argument.
I greatly encourage Congress to do some true activity-based
cost studies. What do some of these basic Government functions
really cost? Because I don't believe it is as simple as saying,
well, this sergeant costs us this much because that sergeant
doesn't show up there naked and untrained. There are a whole
bunch of other costs that go into it.
So, figure out if the Army does the job, how many of those
people leave the wire every day? What is their tooth to tail
ratio? How many people are operators versus how many people are
support people? That all drives into what your total cost is.
Now American industry got pushed by the Japanese car makers
and you know by foreign competitors because you have to focus
on cost and being efficient in delivering a good or a product
or a service at a better competitive price.
Mr. Mica. Finally, you were criticized for not detaining
someone who committed a criminal act. Now if an employee
commits a criminal act in the United States, and you fire him,
are you responsible in the United States for detaining him and
handling?
Mr. Prince. Well, that would be a crime that we committed
then because we are not allowed to detain.
Mr. Mica. You are not allowed to detain?
Mr. Prince. No, sir.
Mr. Mica. OK. So, in that situation, you were criticized
for providing someone transport back. Was it to the United
States?
Mr. Prince. It was.
Mr. Mica. Or wherever.
Mr. Prince. We acquired an airline ticket for him back to
the States. That is all by direction of the State Department.
Chairman Waxman. The gentleman's time has expired.
Now the Chair recognizes Mr. Kucinich.
Mr. Kucinich. Thank you very much, Mr. Chairman.
In my opening remarks, I pointed out that if war is
privatized, private contractors have a vested interest in
keeping the war going. The longer the war goes on, the more
money they make.
I want to, for my time here, explore the questions
regarding how Blackwater got its contracts.
Mr. Prince, your company has undergone a staggering growth
just over the past few years. The committee's attention can be
directed to the chart. In 2000, your company was bringing in
only about $200,000 in Government contracts but since then,
according to the committee, you have skyrocketed to something
in the nature of $1 billion in Government contracts.
The real increase in Blackwater's contracts began with the
Iraq War. In fact, if you look at the chart, you can see how
from 2004 on, the amount of taxpayer dollars Blackwater was
awarded by the administration began to go through the roof from
about $48 million in 2004 to $350 million in 2005 to over $500
million last year.
This is really an unprecedented rate of increase, and I
want to understand how this happened, Mr. Prince.
We have been informed that one of your first contracts in
Iraq was for the Coalition Provisional Authority. Amba**ador
Paul Bremer awarded you a contract to protect officials and
dignitaries. That was at the end of 2003, toward the end of
2003. It may have been in August. Is that right, sir?
Mr. Prince. I believe it happened right after the U.N.
facility in Baghdad was blown up by a large truck bomb. Yes,
sir, they then feared for the U.S. officials.
Mr. Kucinich. Now that contract was no-bid, is that right,
sir?
Mr. Prince. It was off the GSA schedule.
Mr. Kucinich. Can you tell us how you got this no-bid
contract?
Mr. Prince. Off the GSA schedule is considered a bid
contract, sir. The GSA schedule is a pre-bid program kind of
like catalogue of services that you put out, like buying
something from the Sears catalog.
Mr. Kucinich. Did you talk to anyone in the White House
about the contract?
Mr. Prince. No, sir.
Mr. Kucinich. Did you talk to anyone in the Congress about
the contract?
Mr. Prince. No, sir.
Mr. Kucinich. Did anyone, to your knowledge, connected with
Blackwater talk to anyone in either the White House or the
Congress about the contract?
Mr. Prince. Not to my knowledge, no.
Mr. Kucinich. Did anyone in the DeVos Family talk to anyone
in the White House or the Congress about the contract?
Mr. Prince. No.
Mr. Kucinich. As a taxpayer, do you think it is proper that
no other companies were allowed to bid?
Mr. Prince. That, I am not aware of, sir. It is a
requirement, Government officials had. They came to us, asked
if it could be fulfilled. I don't know what other companies
they went to as well. I am not aware of that.
Mr. Kucinich. In 2004, the State Department awarded
Blackwater a $332 million task order under its diplomatic
protection contract. Are you familiar with that?
Mr. Prince. I am familiar about the amount. I know that we
transitioned over to working for the State Department from the
CPA. I am not sure exactly when that happened.
Mr. Kucinich. Thank you, sir.
According to the Federal Contracting Data base, you didn't
have to compete for that one either, is that correct?
Mr. Prince. Again, I believe they continued that off the
GSA schedule which is an approved contracting pre-bid method.
Mr. Kucinich. Who at the State Department were you dealing
with in order to get this contract?
Mr. Prince. I don't know. I presume it was under the
diplomat.
Mr. Kucinich. Excuse me?
Mr. Prince. It was under the Diplomatic Security Service.
That is the folks at State we were working for.
Mr. Kucinich. Now SIGIR reported that this was a no-bid
contract. Was SIGIR incorrect? It was a no-bid contract or not?
Mr. Prince. I am not sure how they are defining bid or no-
bid. In my understanding, they used, we used pricing off the
GSA schedule, and I believe that is considered, regarded as a
biddable contract.
Chairman Waxman. Will the gentleman yield to me?
Mr. Kucinich. I yield to the Chair.
Chairman Waxman. It is on the GSA schedule. Did they come
to you to put your offer of services on the GSA schedule? Did
you go to them? How did that get on the GSA schedule?
Mr. Prince. Oh, most companies in our kind of work have a
GSA schedule. We have a GSA schedule for target systems. We
have a GSA schedule for----
Chairman Waxman. So you offered services and you are on the
list of services that they can purchase?
Mr. Prince. Yes, sir.
Chairman Waxman. You don't know if anybody was on the list
for these kinds of services?
Mr. Prince. Oh, I am sure there are lots of companies that
are.
Chairman Waxman. For some of the services.
Did you go to anyone else or did anyone else from the
Government go to you to ask you to do the work?
Mr. Prince. I don't know, sir.
Chairman Waxman. Did they ask you to see if you could put
together this operation and then they put you on the schedule?
Mr. Prince. I would say we were present in the country
already. We already had significant presence with the CPA under
a bid contract. I believe that contract was called Security
Services Iraq. So we had a large presence of static guards and
PSD kind of work for them.
So I think they probably just wanted to transition from DOD
work to Department of State work.
Chairman Waxman. Thank you.
Mr. Shays.
Mr. Shays. Thank you, Mr. Chairman.
Mr. Chairman, I didn't make an opening statement. I was
chairman of the National Security Subcommittee and ranking
member, and so I have a keen interest in this issue, but other
Members had important statements to make. So, first, I would
like to make an observation.
I want to align myself with the statement of Tom Davis, my
ranking member now. I thought it adequately and perfectly
expresses my view.
I want to thank both the chairman and Mr. Davis for
honoring U.S. Department of Justice's request not to discuss an
incident we don't have enough facts to discuss, and we will
deal with that later. I think that is responsible.
I think this hearing, the way we are dealing with it, is a
very important effort, given what we are doing.
Now, saying that, during the Vietnam War, I was a
conscientious objector. I was a Peace Corps volunteer, so I try
to be very careful when I evaluate the performance of men and
women under fire. Frankly, many of those behind you at this
desk are exactly that. We are behind a desk, never been shot
at, never tried to understand what it is like to be under fire.
Blackwater, I want to say, has a reputation of being a bit
of a cowboy, but I know we absolutely need protective security
contractors. The role of security contractors is much different
than the role of the military.
But I also want to say that I feel that the State
Department could do a better job of enforcing and holding
contractors accountable, and I think they are going to make a
point that they are willing to have this reviewed by an outside
party and then have us look at it.
Now, saying that, I also want to say the number of times
that you all have to protect Members of Congress is
infinitesimal compared to all the civilians you have to
protect.
One of the outrages, in my judgment, is that there haven't
been more Members who have gone there and, frankly, that some
Members who have never been there are pa**ing judgment on what
we are doing there. They are behind a desk with no sense of
what is happening there.
I am in awe of what your men and women and they have been
mostly men, have done to protect our civilians. I am absolutely
in awe of it. You know you can't be perfect, but in one way you
have been perfect if this is true.
Tell me, from June 2004 to the end of that year, how many
missions you protected or let me say it this way, if you don't
know how many missions you protected, how many people you
protected were wounded or k**ed in 2004?
Mr. Prince. No, sir, we have never had anyone seriously
injured.
Mr. Shays. I am going to do year by year. Did you have
anyone wounded or k**ed in 2004?
Mr. Prince. No, sir.
Mr. Shays. Did you have anybody wounded or k**ed in 2005?
Mr. Prince. No, sir.
Mr. Shays. These are the people you are trying to protect.
Mr. Prince. I mean wounded, yeah. A big IED ruptured an
eardrum. That is the most serious level there.
Mr. Shays. Did you have anyone wounded or k**ed in 2006?
Mr. Prince. People that we were protecting?
Mr. Shays. Yes.
Mr. Prince. No.
Mr. Shays. Did you have anyone who was wounded or k**ed in
2007 that you were to protect?
Mr. Prince. No, sir.
Mr. Shays. That is a perfect record, and you don't get any
credit for it for some reason.
Now, were any of your people k**ed in 2004, trying to
protect the civilians?
Mr. Prince. Yes, sir.
Mr. Shays. Were any of your people k**ed in 2005, trying
to protect civilians?
Mr. Prince. Yes, sir.
Mr. Shays. Were any of your people k**ed in 2006, trying
to protect civilians?
Mr. Prince. Yes, sir.
Mr. Shays. Were any of your people k**ed by trying to
protect the civilians in 2007?
Mr. Prince. Yes, sir.
Mr. Shays. Every year, you have had men who have risked
their lives and who have been k**ed, fulfilling their mission,
and they have succeeded 100 percent, and I just want to be on
record as thanking you for an amazing job that you do.
I have been to Iraq 18 times. I have been outside the
umbrella four times. It is one dangerous place. I have seen
films where vehicles come up to our troops or to our security
people, and they are blown up in it.
You have done an amazing task, and there is a huge
difference from being a police officer or protective and being
the military, a totally different role.
I have had no one in the military say to me, I want to
guard all these civilians. The last thing you want is to have
humvees and Army take civilians who are meeting other civilians
like our State Department with that kind of precedent, and the
military would not do it. They are not going to be in a
Suburban. They are going to be in what their protocol requires.
The protocol is totally different. We need security people
who do their job.
Thank you for doing a perfect job in protecting the people
you are required to protect.
I yield back.
Mr. Prince. Thank you, sir. It is an honor to do the work.
Chairman Waxman. The gentleman's time has expired.
Before I recognize Mr. Davis, I want to put in the record,
a statement from the Special Inspector General in Iraq from
July 2004, that indicates that the security guards and two
helicopters for Bremer, sole source directed; the security for
inner ring Republican Presidential compound, Al Rashid Hotel,
sole source; the security for Al-Rashid Hotel, sole source to
Blackwater.
Mr. Shays. I reserve my right to object. Would the
gentleman say was that under Bremer or after Bremer?
Chairman Waxman. This is in 2004. It would have been
Bremer.
Mr. Shays. So it was under Bremer, not since we transferred
power to the Iraqis.
Chairman Waxman. I don't know the answer to that. This
document only refers to the period of time.
Mr. Shays. Under Mr. Bremer. I don't object.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T5219.036
Mr. Ryan. Mr. Chairman, may I have minute, please? May I
have a minute, please? One minute, please?
Chairman Waxman. Yes.
Mr. Prince. Thank you, sir.
Chairman Waxman. Thank you.
Mr. Davis.
Mr. Davis of Illinois. Thank you, Mr. Chairman.
Mr. Prince, throughout your testimony and in other comments
attributed to you, you have praised the Blackwater personnel on
the ground in Iraq, but mistakes do, in fact, happen. You do
admit that Blackwater personnel have shot and k**ed innocent
civilians, don't you?
Mr. Prince. No, sir. I disagree with that.
I think there have been times when guys are using defensive
force to protect themselves, to protect the package they are
trying to get away from danger. There could be ricochets. There
are traffic accidents. Yes. This is war.
You know since 2005, we have conducted in excess of 16,000
missions in Iraq and 195 incidences with weapons discharged. In
that time, did a ricochet hurt or k** an innocent person? That
is entirely possible.
Again, we do not have the luxury of staying behind to do
that terrorist crime scene investigation to figure out what
happened.
Mr. Davis of Illinois. Well, according to a document we
obtained from the State Department on June 25, 2005, Blackwater
guards shot and k**ed an innocent man who was standing by the
side of the street. His d**h left six children alone with no
one to provide them support.
Are you familiar with this incident?
Mr. Prince. I am somewhat familiar with that incident.
I believe what happened, it was a car bomb or a potential
car bomb had rapidly approached our convoy. I believe our guys
shot rounds at the car, not at the driver, to warn them off.
One of those rounds, as I understand, penetrated through the
far side of the car, ricocheted and injured that innocent or
k**ed that innocent man.
Mr. Davis of Illinois. Well, again, according to the State
Department document, this was a case, ``involving the PSD
personnel who failed to report the shooting, covered it up and
subsequently were removed from Al-Hillah.''
The State Department described the d**h as ``the random
d**h of an innocent Iraqi.''
Do you know why Blackwater officials failed to report this
shooting and later tried to cover it up?
Mr. Prince. I can clarify that fully, sir. Thanks for
asking that question.
There was no cover-up because our people reported it to the
State Department. They did look into the shooting and the
justification of it, and it was deemed to be an appropriate use
of force. The man was fired because he had tried to cover it
up. He panicked and had asked the other team members to cover
it up and to not report it.
We discovered that through our, I mean our policy worked.
We reported the incident to the State Department, and that is
why you folks have it in the committee because we fired the
guy. He was terminated not for an inappropriate shooting but
for not following the reporting procedure.
Mr. Davis of Illinois. Well, was there any reason this
report was not provided to the committee?
Mr. Prince. I don't know, sir. I will have to. I will look
into that and get back to you.
Mr. Davis of Illinois. Well, the same document states that
the State Department contacted Blackwater headquarters to
encourage you to offer this man's family, compensation. After
this shooting of an innocent man and after the attempted cover-
up, Blackwater paid $5,000 to the family.
Is that not correct?
Mr. Prince. I believe that was paid through the State
Department. That is similar to what DOD does, what the Army
does if there is an accidental d**h from whether it is an
aerial bomb, a tank backs over somebody's car or injures
someone. There is compensation paid to try to make amends, but
that was done through the State Department.
That was not paid to try to hush it up or cover it up. That
is part of the regular course of action. There was no cover-up
because our guys reported the incident, and the company fired
him for not reporting the incident.
Mr. Davis of Illinois. Can you tell me how it was
determined that this man's life was worth $5,000?
Mr. Prince. We don't determine that value, sir. That is
kind of an Iraqi-wide policy. We don't make that one.
Mr. Davis of Illinois. Do you know how many payments
Blackwater has made to compensate innocent Iraqis or their
families for d**hs or injuries caused by Blackwater personnel?
Mr. Prince. I do not know that, sir.
Mr. Davis of Illinois. Do you know what the total value of
those payments might be?
Mr. Prince. No, sir.
Mr. Davis of Illinois. Could you supply the committee with
that information?
Mr. Prince. Yes, sir. I will make sure we get it back to
you.
Mr. Davis of Illinois. Thank you very much.
Mr. Chairman, what I am concerned about is the lack of
accountability. If one of our soldiers shoots an innocent
Iraqi, he or she can face a military court martial. But when a
Blackwater guard does this, the State Department helps arrange
a payout to make the problem go away. This seems to be a double
standard, and it is causing all kinds of problems in Iraq.
Chairman Waxman. The gentleman's time has expired.
Mr. Platts.
Mr. Platts. Thank you, Mr. Chairman. I appreciate your
holding this hearing.
Mr. Prince, I appreciate your testimony and want to thank
you personally for your 5 years of service to our Nation as a
Navy SEAL and also, having been to Iraq five times, for the
dedication of your colleagues for delegations I have been part
of and certainly many others as well. We are grateful for their
courageous service.
Your contract, and it has been discussed already, is under
the Worldwide Personal Protective Services Contract. My
understanding is under that contract, there are specific terms
of conduct including rules of engagement with the use of force.
Is that correct?
Mr. Prince. Yes, sir, that is correct.
Mr. Platts. You testified about, as an example of the
seriousness with which your company takes the conduct of your
employees, of 122 individuals that have been fired for
misconduct. Are you able to give us what number of those were
related to violations regarding use of force rules of
engagement, specifically?
Mr. Prince. I believe the committee report listed it. Don't
quote me on it. I think it says in the committee report around
10 or 15. I am not sure. It is in the committee report.
Mr. Platts. You accept that information as accurate?
Mr. Prince. That is a weapons violation. That could mean a
dirty gun or possession of some unauthorized firearm. We have
very clear rules. We are only issued. The Government issues us
our weapons, even down to scopes. We are specified as to which
optical device we can put on the weapon. Some guys get fired
because they put, they like an aimpoint instead of an ACOG.
Mr. Platts. Of those 10 to 15, they may not all be related
to use of force, misuse of force.
Mr. Prince. Yes, sir, correct.
Mr. Platts. A number of times you were asked about in
addition to firing and fining and removing the person from your
employment and from Iraq, about what criminal actions you took,
and you appropriately stated you are not a law enforcement
entity. You are a private company.
That being said, though, is it accurate to say that where
there is a criminal investigation by the Department of Justice
of Department of State pursuing, that you provide any
information that your company has about misconduct?
Mr. Prince. Yes, we fully cooperate in the Christmas Eve
incident and any other ones that State Department or Justice
Department wants to look at.
Mr. Platts. Thank you, Mr. Chairman. That is all of my
questions.
Again, my thanks to Mr. Prince and his colleagues for their
service.
Chairman Waxman. Would the gentleman yield some of his time
to me?
Mr. Platts. Yes, Mr. Chairman.
Chairman Waxman. Thank you.
The point I want to ask you, Mr. Prince, is we appreciate
what you have done, but it looks like a lot of people in the
U.S. military don't appreciate it. One man, an Army colonel,
Teddy Spain, said, ``I personally was concerned about any of
the civilians running around on the battlefield during my time
there. My main concern is with their lack of accountability
when things went wrong.''
Another senior U.S. military official said, ``We had guys
who saw the aftermath,'' meaning the aftermath of your
activities there. ``It was very bad. This is going to hurt us
badly.''
Then we had Secretary of Defense Robert Gates: ``These
incidents may be uncommon. We don't know how common they are,
but let's a**ume that they are uncommon. I believe that they
still have disproportionate impact on the Iraqi people. We have
people who are conducting themselves in a way that makes them
an a**et in this war, not a liability.''
You are not answerable to the U.S. military, are you?
You report to the State Department? You are under contract
with State, isn't that right?
Mr. Prince. In Iraq, we report to the State Department, but
if I could just add.
Chairman Waxman. So your people are under the same rules as
the U.S. military.
Mr. Prince. We operate under defensive rules of engagement.
Mr. Davis of Virginia. Will the gentleman yield?
Mr. Platts. Actually, Mr. Chairman, if I could reclaim my
time in responding.
Mr. Prince, you provided the committee a detailed list of
the regulations, treaties, laws that you operate under, is that
correct?
Mr. Prince. Yes, sir.
Mr. Platts. That includes items that relate to both
Department of State and Department of Defense?
Mr. Prince. It includes laws like MEJA, the UCMJ, all of
which we can be held accountable. Our people can be held
accountable for while operating overseas.
Let me just ask, answer, Mr. Chairman, about whether we are
adding value to the military or not.
I have to say my proudest professional moment was about a
year and a half ago. I spoke at the National War College. After
my speech, a colonel, a full bird colonel, came up to me
afterwards. He said, I just came back from brigade command in
Baghdad, and he had 4,000 or 5,000 guys working for him.
He said, as his guys were driving around the city, on the
top of their dashboards of their humvees were the Blackwater
call signs and the frequencies because his soldiers knew that
if they got in trouble, the Blackwater guys would come for
them. They would come to their aid and a**ist them, med evac
them and help them out of a tough spot.
So if that is the reputation we have, I----
Chairman Waxman. The Brigadier General Karl Horst said,
``These guys run loose in this country and do stupid stuff.''
Mr. Platts. Mr. Chairman.
Chairman Waxman. ``There is no authority over them, so you
can't come down on them when they escalate force.''
Mr. Platts. Mr. Chairman.
Chairman Waxman. ``They shoot people, and someone else has
to deal with the aftermath. It happens all over the place.''
Security contractors in Iraq are under scrutiny after
shootings.
What do you say?
Mr. Prince. Sir, I can also tell you there is 170-some
security companies operating through Iraq. We get painted with
a very broad brush of a lot of the stuff they do.
On almost weekly basis, we get a contact from someone in
DOD, some talk somewhere that says, oh, three Blackwater guys
were just taken hostage here. Four guys were k**ed there. Oh,
you were involved in a shooting over here.
When we fully investigate, we didn't have any teams of guys
within 100 miles of that location, but if a private security
contractor did it, it often gets attributed to us.
Chairman Waxman. Regardless of what private security
contractor does it, it is a problem for the United States.
Mr. Platts, you were kind enough to yield me time. Without
objection, I would like to give to you another 30 seconds.
Mr. Platts. If you could, I was going to yield to the
ranking member. Thank you, Mr. Chairman.
Mr. Davis of Virginia. I appreciate your questions, but let
me just say, Mr. Chairman, for the sake of argument, you are
right. If we are paying too much and getting too little, what
is the answer? More troops in Iraq? Less safe troops? Less safe
diplomats or less safe Members?
I mean this is the tradeoff. This is what we are trying to
explore here. They are contractors.
At the end of the day, we have to look to the Government
who is contracting this out, putting down the rules of
engagement, and they will be on our next panel. He is just
performing his contract at this point, and I think we have
questions that we can ask the State Department.
But the alternatives, none of them are attractive when you
are in a war zone.
Chairman Waxman. The gentleman's time has expired.
Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman.
Mr. Ryan. Mr. Chairman, may I have 1 minute, please? We do
not need to leave. One minute, please.
Chairman Waxman. Yes, go ahead.
Mr. Ryan. Thank you.
Chairman Waxman. Without objection, I would like to ask
that Mr. Davis and I, during this moment, have a minute each
because I would like to say something that doesn't involve a
question and you might want to respond to it.
The point I want to make, you raise that very essential
question, what do we do if we don't have enough troops there?
Well, I think we have to look at the fact that this isn't a
short term war. We have been there 5 years. It looks like we
may be there another 10 years. Even General Shinseki said we
need more troops.
At some point, you have to make a decision in this
battlefield, in this war. If we don't have enough troops to do
the job, then we should get more troops. But if we are going to
go on the cheap to get private contractors, we are not on the
cheap at all. It is costing us more money, and I believe it is
costing us problems, causing us problems with the Iraqi people.
Let's let the military replan this. It seems to me we have
had bad decisions from this administration too much of the time
in handling this whole war, planning for it adequately and
staffing it adequately with the U.S. military. They are the
ones that ought to be doing this job.
Mr. Davis.
Mr. Davis of Virginia. Mr. Chairman, I understand, but let
me just say troops that are there are not paid to protect
civilians. That is not what military troops are trained for.
I went through officer basic course in Georgia at Fort
Benning. I went through basic training at Fort Ord. That is not
what troops are trained for when they go out into the battle
zone.
This is a unique responsibility. It is through the State
Department, not the Department of Defense. As we will hear from
the next panel, our troops are not, at this point, being
trained to do this kind of work. This is a different kind of
process.
Now if we want to train them to do that, we can do that,
but that hasn't been the history throughout the last 50 years
of the military that I am aware of. So we then have to decide
from a cost-benefit perspective.
I think this is an important conversation to have, but to
date that is not the contractors' fault. I think our argument
would be with the State Department.
Chairman Waxman. I want to yield to Mr. Tierney, but
Blackwater and the private military recruit from our military.
So these people are trained to the job that Blackwater and
other private military people are asking them to do. So why
can't the military do it?
I think they could do it if we had enough military
personnel.
Mr. Davis of Virginia. Sir, I would like Mr. Prince to
respond, but I am sure they retrain them. They don't just take
raw recruits out. Could I just ask him to respond?
Mr. Prince. Yes, sir. There was an earlier allegation about
companies like us raiding the ranks of the Special Operations
community for this kind of work, and the GAO report found that,
yes, they are getting out and working for companies like us,
but they are not getting out at any higher rate than they ever
did before.
So, they are, instead of becoming a financial an*lyst or an
accountant or some other kind of businessmen, they come to work
for companies like Blackwater, but they are not getting out at
any rate higher than they ever did before.
If I could just correct two slight errors I made. We did
not have any fatalities of Blackwater personnel in 2006.
One of the contracts I testified to as being under the GSA
schedule was, in fact, sole source. We will get you the very
detailed information as to which contracts were GSA and which
were sole source. I am not qualified to answer that right now.
Chairman Waxman. Thank you. We will receive any documents
you have.
Mr. Davis of Virginia. Mr. Chairman, if I could just have a
minute. I think that one of the things we want to get to in
this and later hearings is if the mission is going to be 4 or 5
or 6 years, do you want to change the mission of the military,
but that is not the contractors' fault. Our argument there is
with the Defense Department and the State Department.
Mr. Prince. I strongly encourage the Congress to sponsor
true activity-based cost studies. What does it cost the Air
Force to move a pound of cargo in a war zone? What does it cost
to put a brigade in the field or train it and to equip it? All
these basic functions, even what is the hourly cost of aircraft
doing refueling?
Chairman Waxman. We are going to have you answer some more
questions, I am sure, along those lines.
Mr. Tierney, it is your turn.
Mr. Tierney. Are you certain, Mr. Chairman?
Thank you.
Mr. Prince, thank you for being here today. We have been
discussing a little bit here about the goal of this particular
venture here. I think that General Petraeus has been pretty
clear that he would like to change it from the type of war it
has been to one where he wants to defeat insurgents, and that
entails, in significant part, winning the hearts and minds.
So I want to read to you this quote: ``Counterinsurgents
that use excessive force to limit short term risk alienate the
local populace. They deprive themselves of support or tolerance
of the people. This situation is what insurgents want. It
increases the threat they pose.''
Do you know who made that statement?
Mr. Prince. Do I know who made that statement?
Mr. Tierney. Yes.
Mr. Prince. No, sir.
Mr. Tierney. That was General Petraeus. You know he was the
one who wrote the official counterinsurgency manual.
It does appear from some of the evidence here, though, that
Blackwater and other companies, sometimes at least, conduct
their missions in ways that lead exactly in the opposite
direction that General Petraeus wants to go, but that doesn't
mean you are not fulfilling your contractual obligations.
In a recent report, there was a quote from Ann Exline Starr
who is a former Coalition Provisional Authority Advisor. She
talks about the fact that the private mission is different from
the overall public operation. ``Those, for example, doing
escort duty are going to be judged by their bosses solely on
whether they get their client from point A to point B, not
whether they win Iraqi hearts and minds along the way.''
She goes on to talk about the fact that soldiers, when they
escorted her because they are able to escort people in training
for that, often times also interacted with the Iraqi community
and did things to ingratiate themselves to the Iraqis.
The contractors, by contrast, focused only on the contract.
She said what they told her was our mission is to protect the
principal at all cost. If that means pissing off the Iraqis,
too bad, her language, not mine.
Another counterinsurgency expert is Army Colonel Peter
Mansoor. Earlier this year, he made a statement about private
military contractors, and he said, ``If they push traffic off
the roads or if they shoot up a car that looks suspicious, they
may be operating within their contract, but it is to the
detriment of the mission which is to bring people over to our
side.''
So when we look at Blackwater's own records that show that
you regularly move traffic off the roads and you shoot up cars
in over 160 incidents of firing on suspicious cars, we can see,
I think, why the tactics you use in carrying out your contract
might mitigate against what we are trying to do in the
insurgency.
Retired Army officer, actually, he is a conservative
an*lyst now, Ralph Peters. He was more blunt about it. He said,
``Armed contractors do harm COIN, counterinsurgency efforts.
Just ask the troops in Iraq.''
We have had complaints from military leaders over and over
again that the ways that some contractors operate in Iraq are
causing danger and anger against the U.S. forces. Let me give
you one example. For most of 2005, the Army's Third Infantry
Division was in charge of security in Baghdad.
Here is what the deputy commander of this division,
Brigadier General Karl Horst, said about Blackwater and other
private military contractors: ``These guys run loose in this
country and do stupid stuff. There is no authority over them,
so you can't come down on them when they escalate force. They
shoot people, and someone else has to deal with the aftermath.
It happens all over the place.''
Are you familiar with General Horst, sir?
Mr. Prince. No, sir. I have never met him.
Mr. Tierney. Well, here is what Colonel Hammes said when he
was an officer in Iraq. He said, ``The problem is in protecting
the principal, they had to be very aggressive and each time
they went out, they had to offend locals, forcing them to the
side of the road, being overpowering and intimidating, at times
running vehicles off the road, making enemies each time they
went out.''
So they were actually getting our contract exactly as we
asked them to, at the same time hurting our counterinsurgency
effort.
This goes on again back to Colonel Peter Mansoor who said,
``I would much rather see basically all armed entities in a
counterinsurgency operation fall under the military chain of
command.''
The CENTCOM Commander, Admiral James Fallon, who we all
know now for his current work, his quote is: ``My instinct is
that it is easier and better if they were in uniform and
working for me.''
Can you see and appreciate, Mr. Prince, why there might be
some contradiction between what we are asking your organization
and others like it to do under the contract as opposed to what
we are trying to do as a military force in counterinsurgency?
Mr. Prince. Sir, I understand the challenges that the
military faces there.
Like I said before, there is 170 some companies doing
business in Iraq. Most of those security contractors are DOD. I
think the DOD officers would even complain about their lack of
reach over their own DOD Corps of Engineers, MNSTC-I type
contractors.
Second, we know we are part of the total force in trying to
get the mission accomplished. Of the 16,000 missions our guys
have done, only 195 resulted in any kind of discharge of a
weapon. That is less than 1 percent. So we strive for
perfection, but we don't get to choose when the bad guys attack
us.
You know the bad guys have figured out. The terrorists have
figured out how to make a precision weapon with a car loaded
with explosives with a suicidal driver.
Mr. Tierney. Just to interrupt you for a second, you are
not a**erting that every time that you take affirmative action
it was somebody firing at you first. You do acknowledge that,
on some occasions at least, it was a preventive act on your
part of your people.
Mr. Prince. Yes, sir, but this is what happens when our
guys are not able to prevent a suicide car bomb. This happened.
This blew up three Blackwater personnel and one State
Department security officer up in Mosul.
It tossed a 9,000 pound armored Suburban 50 feet into the
side of a building, followed by a whole bunch of small arms
fire from the rooftops, a very serious ambush, k**ed four
Americans that fast.
Mr. Tierney. My question was that you are not disputing the
fact that on some occasions when your people might be afraid
that something like that is going to happen, that they may fire
first, ask questions later.
Mr. Prince. Sir, like I said the bad guys have made a
precision weapon. The Air Force has a system called a DIRCM,
Directional Infrared Countermeasures. It is used to break the
lock of an incoming surface to air missile. It shines a laser
in the seeker head. The missile breaks lock, and it veers away.
We have to go through a use of force continuum to try to
break the lock of this potential deadly suicide weapon: hand
and arm signals, sirens, signs at the back of the vehicles,
water bottles, pen flares, shots to the radiator, shots to the
windshield before we even go to a lethal force option.
So our guys do go through it, but they----
Mr. Tierney. Well, some of the evidence indicates that----
Chairman Waxman. The gentleman's time has expired.
Mr. Tierney. Mr. Waxman, I would like to just finish up my
thought if I might. I think there has been fairly good
estimation on the part of the committee here.
Chairman Waxman. If you can do it in seconds rather than
minutes.
Mr. Tierney. Thank you.
The point being made is that there are instances--you are
not denying--when people shoot first on that.
When you multiply that by the number of times it happens
and the number of people and Iraqis, that are implicated in
those situations, the number of people that they tell, it goes
against our counterinsurgency effort and it goes to the issue
of whether or not we ought to have military personnel doing the
job, whether this is an inherently Government function that we
ought to have done on the public side of it as opposed to
having contractors who, by what we are seeing here today,
really don't have much accountability being exercised over them
by either the State Department or the Department of Defense.
I yield back, Mr. Chairman.
Chairman Waxman. The gentleman yields back the rest of his
time.
The Chair now recognizes Mr. Duncan.
Mr. Duncan. Thank you, Mr. Chairman.
Mr. Burton. Excuse me, Mr. Chairman.
Mr. Prince, did you want to respond to what was said?
Chairman Waxman. That wasn't a question. That was a
statement by the Member.
Mr. Burton. Well, I know, but when an allegation.
Chairman Waxman. Mr. Duncan is recognized.
Mr. Burton. Mr. Chairman, when an allegation is made.
Chairman Waxman. Mr. Duncan is recognized. You are using
his time.
Mr. Prince. I will get it, Mr. Burton. It is all right.
Mr. Duncan. Thank you, Mr. Chairman.
The Washington Post reported yesterday. It said Army
General David H. Petraeus, the top U.S. Commander in Baghdad,
overseeing more than 160,000 troops, makes roughly $180,000 a
year or some $493 a day. That comes out to less than half the
fee charged by Blackwater for its senior manager of a 34-man
security team.
Our committee memorandum says using Blackwater instead of
U.S. troops to protect emba**y officials is expensive. That is
putting it lightly. Blackwater charges the Government $1,222
per day for the services of a private military contractor. This
is equivalent to $445,000 per year, over six times more than
the cost of an equivalent U.S. soldier.
This war has produced some of the most lavish, most
fiscally excessive and most exorbitantly profitable contracts
in the history of the world. It seems to me that fiscal
conservatives should feel no obligation to defend this type of
contracting. In fact, it seems to me that fiscal conservatives
should be the ones most horrified by this.
I notice in the table that Blackwater's contracting has
gone from $25 million in 2003, $48 million in 2004, to $593
million in 2006. If we are going to be there another 10 years,
as some have said, I surely hope that we are not going to
continue to see these types of ridiculously excessive increases
in the contracts that are being handed out.
I also notice that Blackwater is a subsidiary of the Prince
Group, of Prince Group Holdings and that another one of the
holdings of that firm is Presidential Airways, an aviation
company that has held a contract with the U.S. Air Force Air
Mobility Command.
Mr. Prince, can you tell me what percentage of Prince Group
Holdings comes from Federal contracts of all or any types?
Mr. Prince. Could you say the question again, sir? I didn't
quite hear you.
Mr. Duncan. Can you tell me? I don't know all the companies
that are in your Prince Group Holdings. Apparently, there is a
Presidential Airways. I don't know how many other companies
there are.
What I am wondering about is how much of Prince Group
Holdings comes from Federal contracts of any and all types?
Mr. Prince. Most of Prince Group Holdings comes from
Federal contracts, but if I could just come back and answer
your statement about prices that we charge, that $1,222.
Mr. Duncan. When you say most, does that mean 100 percent?
Mr. Prince. No.
Mr. Duncan. Rough guess, what percentage?
Mr. Prince. Rough guess, 90 percent.
Mr. Duncan. Do you still have a contract with Presidential
Airways with Air Force Mobility Command?
Mr. Prince. Yes, sir.
Mr. Duncan. Rough guess, how much is that contract each
year?
Mr. Prince. I don't know what the exact number is, sir. It
is for eight aircraft right now. I don't know what they price
out at.
Mr. Duncan. What other companies are in Prince Group
Holdings?
Mr. Prince. There is a long list. I have a manufacturing
business that has nothing to do with Federal stuff, and we make
pieces and parts for automotive, appliance, industrial, power.
We compete with the likes of the Japanese and Koreans and
European companies every day.
Mr. Duncan. All right.
Mr. Prince. But if I could just answer the question about
how much we charge, those are competitively bid prices. The
$1,222 cited in the report is not accurate.
You also, the committee should have received this. I don't
know if you have seen that. It lays out base year bill rates
for an average security guy. Base year is $981, not $1,222, and
our profit on that, projected to be 10.4 percent, nothing
higher.
And on top of that, I can tell you we have three
helicopters that have been shot down this year, a Little Bird
and two Bell 412s. Those are company helicopters, and when they
go down that comes out of our hide. We have to self-insure on
those.
So the risks we take, the financial risks, whenever an
aircraft is doing a mission for the State Department or
responding to some med evac need, above and beyond the
statement of our contract, trying to pull a U.S. soldier out of
bad, wounded situation, we take that risk as a company, and our
guys do themselves at great personal peril.
So it is not just about the money. We are a business. We
try to be efficient and excellent and deliver a good service.
We are happy to have that argument, sir, not the argument,
the discussion. Sponsor an activity-based cost study. What
would it cost the Diplomatic Security Service to bring all
those folks in house as staff?
Look at it. We are happy to have that argument. If the
Government doesn't want us to do this, we will go do something
else, but there is plenty of case to be made and plenty of
spreadsheets to be an*lyzed.
Chairman Waxman. The gentleman's time has expired.
The Chair now recognizes Mr. Clay.
Mr. Clay. Thank you, Mr. Chairman.
Mr. Prince, I am truly disturbed by reports of Blackwater
contractors wreaking havoc on innocent Iraqi citizens. I am
equally troubled that taxpayers have been taken for a ride by
paying six times the cost of a U.S. soldier for Blackwater
contractors.
Now, Mr. Prince, you have argued that Blackwater provides a
cost-effective service to the U.S. Government in part because
by hiring private contractors the Government can avoid paying
carrying costs such as training, salaries and benefits.
Yet, in your written testimony, you state that Blackwater
personnel are all military veterans and law enforcement
veterans, many of whom had recent military deployments. Since
so many of your employees have recently left Government
service, doesn't that mean they have received years of
specialized training at the expense of the Federal Government?
Mr. Prince. People serve the U.S. Government for different
periods of time, and that is a choice they make and have been
making since the United States has had a standing military.
They serve for 4 years. They serve for six. They serve for 20
or 30.
Mr. Clay. So the U.S. taxpayers are paying for that
training.
Mr. Prince. They are paying for that anyway. We provide a
vehicle, a mechanism for the U.S. Government to utilize that
sunk cost that they have put into the training for these
people. We reorganize it and package in a way to fill these
gaps that the U.S. Government has in these kinds of contingency
operations.
To stand up a 1,000-man or actually you need a 3,000-man,
at least, military police brigade to do this kind of work
because for every person that is deployed, they are going to
have two more back stateside, one in training and one in
standdown.
So you spin that meter, and the costs get big very quickly.
So we are just reorganizing those sk**s that the Government
has already paid for and putting them back to work.
Mr. Clay. Last week, Defense Secretary Robert Gates
expressed concern that Blackwater and other private military
contractors are actually poaching the military's ranks, luring
service members away with much higher salaries.
When Secretary Gates testified before the Senate
Appropriations Committee, he said he asked Pentagon officials
to work on drafting non-compete clauses in order to put some
limits on the ability of these contractors to lure highly
trained soldiers out of our forces to go and work for them.
How do you feel about non-compete clauses, Mr. Prince?
Mr. Prince. I think that would be fine, but the fact is
everyone that joins the military doesn't necessarily serve 20
years. So, at some point, they are going to get out after four,
six, eight, whatever that period of time is, whatever they
decide because we don't have a draft. We have a voluntary
service.
I think it would be upsetting to a lot of soldiers if they
didn't have the ability to go use the sk**s that they have
accumulated in the military to go work in the private sector
because you could make the same case about aviation mechanics,
jet engine mechanics, guys that work on a reactor on a
submarine. All those sk**s have direct correlation to the
private sector. I don't think putting in non-competes for them
would do well to draw guys into the military in the front side
either.
Again, the GAO study found that the Special Operations
community, yes, folks are getting out and they go to MBA
school. They become some other private sector job. Yes, a lot
of them come to work for companies like us but not at any
higher rate than they ever did before.
Mr. Clay. Well, I mean if the Pentagon adopts the non-
compete clause, it certainly indicates to me that the Secretary
is really concerned about you all poaching on our service
personnel, and that is what it indicates to me.
Let me also say to the viewers of C-SPAN today. This
Congress, some in this Congress and the administration seem to
be steeped in hypocrisy as far as taking these frequent flies
to the Green Zone in Baghdad. When you look, they are some of
the same ones who would never lift a rifle to defend this
country in Vietnam but yet ridicule and criticize those who
have not traveled to Baghdad.
I just want the American public to be aware that some in
here are steeped in hypocrisy.
I yield back my time, Mr. Chairman.
Chairman Waxman. The gentleman's time has concluded.
The gentleman from Idaho, Mr. Simpson.
Mr. Turner. Thank you, Mr. Chairman.
I come from Ohio, and Ohio is known frequently as the
Heartland, and in the Heartland there are a few things that are
easy that are not so easy in Washington, DC. Even in Hollywood,
some of these things are easy, and those are the issues of who
is on our team and who is on their team.
Today, I am a little saddened by this hearing because I am
absolutely a supporter of congressional oversight and believe
this committee has incredible functions that we have to do. Our
witness today even talked about being a contractor, the
questions that we should be asking of reliability,
accountability, cost. A lot of the information we have before
us is about dollars, rules of engagement and the like.
But what unfortunately dissolves into our team versus their
team, by any account, by Hollywood's account, by the
performance account, Blackwater is our team. They are our team
working in the trenches and in a war zone.
I haven't heard many questions on this committee about the
rules of engagement or the limits on the work of Al-Qaeda or
the insurgents. In fact, I don't recall one hearing in this
committee where there has been indignation or troubling
responses as a result of the senseless and heartless k**ings
of Al-Qaeda and the insurgents, but I hear today huge concerns
over what we must exert as oversight on Blackwater. I think it
crosses the line between our team and their team.
Blackwater has questions to answer, and I believe that they
are prepared to do that and today have come forward to do those
things, but we should not go to the extent of undermining
Blackwater's ability to perform as our team.
The Washington Post today, in its editorial in reviewing
how this issue has come to light, stated, ``Congressional
Democrats despise the firm because it symbolizes the private
contracting of military missions that many oppose in
principle.''
This is the Washington Post saying that the congressional
Democrats are despising this firm because of its engagement in
military missions that they oppose.
The Washington Post goes on to say, ``At the same time, it
is foolish''--that is a pretty strong word for the Washington
Post.
``At the same time, it is foolish to propose the
elimination of private security firms in Iraq and Afghanistan,
at least in the short term.''
I would hope as we continue our important functions of
oversight that we don't undermine our team.
Now, Mr. Chairman, you made a comment that I have to
respond to in your opening statement. It is written in your
opening statement, and it says, ``As a general rule, children
from wealthy and politically connected families no longer serve
in the military.''
Mr. Chairman, that is an attack on our team. I can tell you
that Duncan Hunter, former chairman of the Armed Services
Committee, currently ranking member, whose son served in Iraq,
would disagree with you. Joe Wilson with the Armed Services
Committee, whose son served, would disagree with you.
I can tell you that the DOD in its report on social
representation in the U.S. military services and the GAO in
their September 22, 2005 report would disagree with you.
Quoting from the DOD report, it says, ``Our Population
Representation Report shows both a diversity and quality of the
total force. Men and women of various racial and ethnic groups,
of divergent backgrounds, from every State in our country serve
as active and selective reserve, enlisted members and officers
of the Army, Navy and Marine Corps and Air Force and Coast
Guard.
``One particular note, the mean cognitive ability and
educational levels of these Soldiers, Sailors, Marines, Airmen
and Coast Guardsmen are above the average of comparatively aged
U.S. citizens.''
The GAO, in their report, similarly confirms that between
1974 and 2000, the force became older and better educated.
So I would hope that the comments by the chairman are not
interpreted as what I heard them as, as diminishing the
abilities and the backgrounds of those who serve in our
military.
Mr. Prince, my question for you, you are free of some of
the limiting acquisition rules that our military is subject to.
A general has a different ability to be able to acquire
something as you do corporately.
Could you give us some insight as to how our acquisition
rules inhibit our military in performing some of the things
that you do and ways in which we can change those acquisition
rules to deliver to them the things that they need?
Mr. Prince. Thanks for that question.
I would say we find that the requirements process for the
military constantly looks for the 120 percent solution, and it
overspecs the electronic capability. I mean there is an
enormous amount of extra stuff and capability put on a vehicle
that might not be necessary to just fulfill that job.
I mean if you are going to, you could almost buy vehicles
just planned on for Iraq right now, almost off the shelf,
without having to plan about net-centric warfare and all the
other bells and whistles that sometimes the DOD wants to put on
things. So we buy to solve the situation at hand.
Chairman Waxman. The gentleman's time has expired.
I want to apologize to the gentleman for indicating that he
is from a different State than Ohio. He is a proud Ohioan, and
I certainly want to agree with him. I hope nobody misinterprets
my comments.
I would like to now call on Ms. Watson.
Ms. Watson. Then I want an apology for the reference to
Hollywood. That is the area that I represent here.
I heard the Chair apologize. I just had to tail-in on that
one.
I want to commend Mr. Prince for his duties, for his sk**
and for his heading up Blackwater.
However, when I hear that one of the patron saints of some
people, Rush Limbaugh, called our soldiers, who have been
critical of the experience in Iraq, phony soldiers, I am
offended and you should be offended too.
There was a sign over there earlier, Mr. Chair, the General
Petraeus satire, and I had sent a message that it should be
taken down because it was insulting to people.
I think that people that call our soldiers, who speak from
experience, phony, ought to be made to apologize.
Mr. Issa. Would the gentlelady from Hollywood yield for a
question?
Ms. Watson. No, I will not yield because I have just a
little time.
Let me say this. I am really concerned when it comes to
privatizing the various struggles that we are having in a war
zone.
I am looking at a book here that says Blackwater: The Rise
of the World's Most Powerful Mercenary Army. That is really
disturbing to me because I feel that every young man and woman
or every man and woman in the military ought to be paid for
their service, and I think you are making a good argument for
the amount of money that you have been paid, your organization.
I think my question is do you feel that we ought to
continue on with privatizing the kinds of duties that our
military should be trained to execute?
Mr. Prince. Ma'am, the U.S. military is the finest, most
powerful military in the world, bar none.
Ms. Watson. Absolutely, and they should be paid
accordingly.
Mr. Prince. It is designed for large-scale conventional
operations, what they did to Saddam in 1991 and then again in
2003.
Ms. Watson. Well, then there is something wrong with the
design, and that is my point. I think you responded, and I hear
you clearly. You are providing a service, and I commend you.
Let me just continue on.
You are providing a service, and those little voids, Mr.
Chairman and committee members, ought to be filled by the
young, the people who volunteer. We have no draft. These are
volunteers.
Why should they put their lives on the line for this
country and not be compensated, so their families back at home
don't have to go on welfare and are living in housing that is
substandard?
I am just infuriated, not with you, but with the fact that
our State Department and our Department of Defense cannot see
their way. They talk about we don't have the money, saving
money. This war is costing $1 trillion.
You have been paid over $1 billion and will continue to be
paid so that you can buy the helicopters that are shot down.
And so, my question to you, are we going to have to
continue to privatize because we are not training to do what
you do and would it not be better to hire you to train our
military to do the kind of guarding of VIP personnel?
Whenever there is a CODEL, you have to guard them. When
people from the State Department come, you have to guard them
because we say that our military is not prepared and not
trained to do that.
Mr. Prince. Well, ma'am, I am happy to say that we do a
significant amount of training for the U.S. military every day
at our couple of facilities we have around the country.
Ms. Watson. But you are saying that you fill in a specialty
area.
Mr. Prince. It is a specialty gap, high-end personal
security.
Ms. Watson. My question that I throw out to all of us is
why can't we train these people who are willing, who have
courage to go into the military, but then we have to bring on a
private firm to do the job they should be trained to do and pay
them three or four times more than we pay those who choose to
serve their country by fighting in theater?
Mr. Prince. The military could do that, but the U.S.
military can't be all things to all people all the time.
Ms. Watson. Why not?
Chairman Waxman. The gentlelady's time has expired.
Mr. Prince. The tyranny of shortage of time and distance. I
mean you can't have an anti-air missile guy also be doing PSD
missions and knowing how to be an aviation mechanic. It is too
broad of a base of sk** requirement.
Ms. Watson. We need more people.
Chairman Waxman. Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman.
Mr. Ryan. Mr. Chairman, may I have 1 minute?
Chairman Waxman. Thank you.
Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman.
Boy, there are so many inaccuracies, so little time.
Perhaps let's start with something from the gentlelady from
Hollywood. Isn't it true that, in fact, the military's mission
has historically not been to guard either VIPs or the State
Department as a whole?
Mr. Prince. Correct, yes, sir.
Mr. Issa. Isn't it true that, in fact, your organization
works under the regional security officer for Baghdad?
Mr. Prince. Yes, sir.
Mr. Issa. Isn't it true that contractors have been used
directly and indirectly, in other words, non-Federal employees
in places Beirut, Afghanistan, Bosnia, under the Clinton
administration, routinely?
Isn't there a historic time in which we used non-career
RSOs or foreign service officers for these jobs?
Mr. Prince. Since the founding of the republic.
Mr. Issa. OK, so, we are not talking about the military
here at all including, with all due respect, to Secretary
Gates. Somebody, if the State Department recruited for the
positions you are presently providing, they would be in all
likelihood recruiting either current or prior military,
wouldn't they?
Mr. Prince. Yes, sir.
Mr. Issa. Is it reasonable for the State Department to own
attack helicopters or Bell helicopters that are weaponized?
Mr. Prince. Well, that is up to them, and our helicopters
aren't weaponized.
Mr. Issa. Let's look at it another way. Outside of the two
theaters, Afghanistan and Iraq, do you know of any place in
which the State Department owns or directly controls weapons,
gunships, if you will, to protect convoys?
Mr. Prince. They do some crop eradication, some c**aine
eradication work in Colombia. That is the only place I know.
Mr. Issa. OK. So this is an unusual mission and one that
begs for not creating a career position for foreign service
helicopter pilot. There would only be about two or three places
they would ever be, isn't that true?
Mr. Prince. Well, actually, those are all flown by
contractors as well, sir, down in Colombia.
Mr. Issa. I am very well aware of that, and that is the
point, I guess. We are having a hearing that is supposed to not
be about your company and supposed to not be about one incident
on September 16th. It is supposed to be about cost
effectiveness of contractors, isn't it?
Mr. Prince. Yes, sir.
Mr. Issa. I wish we were bringing in facts and figures
about let's say $600 billion of DOD contracts or DOD costs into
one million soldiers so that we could go, well, isn't that
about $600,000 for every soldier?
Isn't, in fact, the cost of the Department of Defense, the
military far greater than what we pay our men and women in
uniform at the time that they are in combat?
Mr. Prince. I don't know what those numbers are, sir, but
that would be a great, fully burdened cost study that Congress
could sponsor. They don't have to do the whole thing, just take
some key nodes and really study it.
Mr. Issa. Well, and hopefully, we will. Hopefully, we will
get to serious discussion on these issues because I think
looking at the costs-benefits should always be done. For
permanent requirements, I don't want to use contractors if, in
fact, Federal employees would be more appropriate.
I will mention one thing. If you are feeling a little
pressure today, if it is a little tough, just be glad you don't
make a diabetes drug.
Mr. Prince. To where, sir?
Mr. Issa. Be glad you don't make a diabetes drug. Compared
to what we did to the Avandia makers, GlaxoSmithKline, you are
getting off easy. Trust me. They had their product destroyed by
jury-rigged testimony and studies that were essentially co-
opted in advance.
But let's just go to one area that I think hasn't been
discussed and others might not discuss it. Is your sister's
name, Betsy DeVos?
Mr. Prince. DeVos.
Mr. Issa. Yes. Is that your sister?
Mr. Prince. It is.
Mr. Issa. Was she a former Michigan Republican Party
Chairwoman?
Mr. Prince. Yes, she was.
Mr. Issa. Was she a pioneer for Bush?
Mr. Prince. I don't know. Could be.
Mr. Issa. Was she a large contributor to President Bush?
Mr. Prince. They probably were.
Mr. Issa. And raised a lot of money for President Bush?
Mr. Prince. Could be.
Mr. Issa. Went to the Republican conventions in 2000 and
2004?
Mr. Prince. I would imagine they did, yes.
Mr. Issa. Isn't it true that your family, at least that
part of the family, are very well known Republicans?
Mr. Prince. Yes.
Mr. Issa. Wouldn't it be fair to say that your company is
easily identified as a Republican-leaning company and, in fact,
the Amway Co. somewhat so because of family members there?
You don't have to speculate overly, but isn't that
generally something you understand?
Mr. Prince. Blackwater is not a partisan company. We
haven't done any, you know. We execute the mission given us,
whether it is training Navy Sailors or protecting State
Department personnel.
Yes, I have given individual political contributions. I
have done that since college, and I did it when I was an active
duty member of the Armed Services, and I will probably continue
doing that forward. I don't give that. I didn't give up that
right when I became a defense contractor.
Mr. Issa. Right.
Chairman Waxman. The gentleman's time has expired.
Mr. Issa. Mr. Chairman, just to finish like we did on the
other side of the aisle, I think you are exactly right, that in
fact being identified as partisan Republican, in fact your
company appears to have done what all companies do which is in
fact to operate, to do the job they are doing in a non-partisan
way.
I would hope that this committee and the public take note
that labeling some company as Republican-oriented because of
family members is inappropriate, and I would hope that we not
do it again.
I yield back.
Chairman Waxman. Well, the only one who has done it is you.
[Laughter.]
Mr. Issa. Mr. Chairman, I think it has been made. I think
the report made it very clear.
Chairman Waxman. Maybe that is why all the Republicans are
defending the company.
Well, Mr. Yarmuth, it is your time.
Mr. Yarmuth. Thank you, Mr. Chairman.
Mr. Prince, welcome. Thank you for your testimony.
Mr. Prince. Thank you, sir.
Mr. Yarmuth. I want to focus on the whole issue of cost and
profitability, and I want to clarify something. You talked at
one point about the fact that what you are essentially doing is
bidding for people who would otherwise be able to make as much
money as you would be paying them in the private sector.
First of all, some of that defies imagination because we
are talking about essentially $400,000 to $500,000 worth of
cost per individual per year to the Government which would put
that individual or that job category in the highest 1 percent
of income earners in the country.
So my question to you would be, and this is not in any way
to impugn or to minimize the value of Navy SEALs, but outside
of a military setting, where could a Navy SEAL, for those
talents, make $400,000 to $500,000 if it weren't for a
Government contract?
Mr. Prince. I don't know of any of our people that have
made $400,000 to $500,000 working as a contractor. They are not
getting paid that much.
They get paid for every day they are in the hot zone. So it
is very much like a professional mariner's existence. They go
to sea. They get paid every day they are in the hot zone. They
day they leave, their pay goes to zero.
Average pay, hypothetically, around $500 a day. We don't
pay the $1,000 a day. That is a huge misperception. It is a
flat-out error in the media.
So if you take $15,000 a month and they work for 6 months,
it is $90,000.
Mr. Yarmuth. But that is not the cost of that job to the
American taxpayer.
Mr. Prince. Yes, sir, but they are not showing up at the
job naked. They need uniforms, equipment, body armor, boots,
everything you wear from head to toe, their training, their
travel, their insurance, sometimes their food.
I mean there are very, very sophisticated price models that
we bid competitively for, hundreds and hundreds of line items.
Believe me, our folks earn a lot of electrons putting those
price models together because you really got to know what you
are doing on the front end. But, again, it is a competitively
bid product.
Mr. Yarmuth. Well, I appreciate that, and I want to pursue
that a second, but I do have in front of me an invoice from
Blackwater to the Department of State in which one of the items
is invoice quantity, 3,450 units each at a cost of $1,221.62.
That is your invoice.
Mr. Prince. I am not sure what that invoice is. Could I see
that, sir?
Mr. Yarmuth. I would be happy to submit that for the
record.
We dealt several months ago with a situation in which I
don't believe your company was a subcontractor for the State
Department or a contractor. You were a subcontractor. I am
talking about the incident in Fallujah where four of your
employees were ambushed and k**ed, and we had testimony from
two of their wives and two of their mothers several months ago.
In the course of that testimony, it was we were told that
they had actually contracted, each of them, at a rate of $600 a
day. That is what they were to be paid. By the time it got to
the American taxpayer, it was around $1,100 a day. You were the
third subcontractor under a contract given to KBR, as I recall,
Halliburton, then a Halliburton subsidiary. And we asked the
question of all of those subcontractors, did anybody add value
up the ladder for that additional $500 based on--and we asked,
did they provide any special equipment, any special services,
whatever. And the answer was no.
So in that case, that is not your profit, but it appeared
to us that by and large that additional $500 that the American
taxpayer paid for that one person was largely profit to three
different corporations. Now, can you shed any light on that
situation? And I don't believe, that was, I think, a Defense
Department contract and KBR was just delivering supplies to
troops and you were guarding the convoys.
Mr. Prince. That could easily be. I am not completely
familiar with the contracting and subcontracting arrangement
that you are speaking of. But I can tell you, with our work
with the State Department, we are direct to the State
Department and there is no other intermediary adding cost or
not adding value.
Mr. Yarmuth. One other question I want to ask. You made the
comparison, again, about that we have to bid for these people.
But isn't there a significant distinction, I understand if we,
the military trains a pilot and then the pilot goes out and is
bid for by commercial aircraft and so forth, that is the
private sector bidding. But in this situation, the American
taxpayers are bidding against themselves. Because we trained
Navy SEALs, Navy SEALs then go into your employ, then the Navy
has to bid, as I understand, in one report, $100,000 to get
them back.
But we are bidding against ourselves, aren't we? We are not
bidding against another external competitor.
Mr. Prince. The nature of the demand of this, especially a
group of Blackwater, even before 9/11, it grew after the Cole
was blown up, that Navy ship. Now, in a post-9/11 world, you
have a lot of different demands for those kinds of sk** sets
that are in much higher demand than they were in the late
1990's. So that is the changing nature of the market.
Chairman Waxman. The gentleman's time has expired.
Mr. McHenry. Oh, I am sorry. Mr. Westmoreland.
Mr. Westmoreland. Thank you, Mr. Chairman.
Just to clarify a little bit about who is calling who a
Republican company, I want to read from a December 13, 2006
letter from Callahan and Blaine to Ms. Pelosi, Mr. Waxman,
Senator Dorgan, Senator Reid, Representative Chris Van Hollen:
``Nonetheless, as American citizens, we hereby petition to you
to initiate support and continue the congressional
investigations into war profiteering and specifically
Blackwater's conduct. Now that there has been a shift in power
in Congress, we are hopeful that your investigation, as well as
the investigations by Senator Dorgan and Senator Waxman, will
be taken seriously by these extremely Republican companies such
as Blackwater, who have been uncooperative to date and that
these investigations will be fruitful and meaningful.''
And Mr. Prince, you may recognize that name, because I
believe they also are the attorneys for some people who are
suing you.
Mr. Prince, first of all, let me give you a little
background, probably, as to why you are here. There is a party
in Congress that does not like companies who show a profit. If
you are wealthy, they figure you should have paid more taxes or
that you are a crooked businessman. They do not understand
someone who is an entrepreneur and offers a valuable service
that is above its competitors and that is based at a
competitive price.
They want to fight a war with no casualties. They exploit
our children, whether it is with a plan that will socialize
medicine in this country or the horrible situation when
innocent children are victims of an act of war. They often have
hearings such as this to bias lawsuits that their crony lawyer
friends may be handling.
There is no cost too high for them for citizens to pay,
citizens of this country, whether it is the price of personal
integrity or more of their wealth, as long as it moves forward
with the ultimate goal of distribution of wealth of the
successful for the takers of this world.
They love to have their cake and eat it too, though. For
instance, they think the Iraqi government is corrupt and inept,
but yet they question you about taking one of your former
employees out of the country with the government's permission.
Another example, they say the military should be doing your
job, yet they don't want additional troops sent to the theater.
One more example, Mr. Prince, is they complain about what
our military personnel make, and then they complain about what
you pay the same people that they complained about making so
little. So you can see that there is some confusion.
I also want to point out to you that 9 of the 22 Members on
this panel that voted voted that they agreed with MoveOn.org's
attack on General Petraeus.
Let me ask you, Mr. Prince, well, let me say, some of
Blackwater's critics have stated that the firing of personnel
has been surprisingly frequent. Have you or your managers ever
fired an employee for doing a good job?
Mr. Prince. Not that I know of.
Mr. Westmoreland. I don't think anybody does, do they? So
if one of your employees was doing a bad job or not meeting
your criteria, then those were some of the people that you got
rid of, right?
Mr. Prince. If they don't hold to the standard, they have
one decision to make: window or aisle.
Mr. Westmoreland. And Mr. Prince, what kinds of
professional backgrounds do most of your security personnel
have?
Mr. Prince. All of our personnel working on the WPPS-type
contract come from the U.S. military or law enforcement
community. They have a number of years of experience doing that
kind of work, ranging from 5, 8 years up to 20 or 30 years of
experience. They are discharged honorably, most of them are
decorated. They have gotten out of the military to choose to
take another career path. So we give them the ability to use
those sk**s back again working for the U.S. Government.
And let me just say, we are not a partisan organization.
That is not on the interview form when you come to work for
Blackwater, what party you affiliate with at all. We affiliate
with America. And the idea that people call us mercenaries, we
have Americans working for America, protecting Americans.
Mr. Westmoreland. And I think you do a very good job.
Mr. Prince. And the Oxford Dictionary defines a mercenary
as a professional soldier working for a foreign government. And
Americans working for America is not it. Yet we have a handful
of, we call them third country national folks, folks from Latin
America, they guard some gates and they guard some camps. They
don't leave that area, they are static guards. Our PSD guys are
Americans working for America.
Chairman Waxman. The gentleman's time has expired.
Mr. Braley.
Mr. Braley. Thank you, Mr. Chairman. Mr. Prince, my best
friend married Mary Lubbers, whose father and grandfather were
the presidents at Hope College.
Mr. Prince. Small world.
Mr. Braley. So I want to start by asking you about a
statement you made on page 3 of your written statement that you
shared with the committee, ``The company and its personnel are
already accountable under and subject to numerous statutes,
treaties and regulations of the United States.'' And then you
went on and attached to your statement a list of existing laws,
regulations and treaties that apply to contractors and their
personnel. Is that the document that I am holding up that you
attached?
Mr. Prince. Yes, sir.
Mr. Braley. Is it your testimony today, under oath, that
all Blackwater employees working in Iraq and Afghanistan are
subject to the Uniform Code of Military Justice, the Military
Extra-Territorial Jurisdiction Act and the War Crimes Act?
Mr. Prince. It is my understanding that is the case, yes,
sir.
Mr. Braley. All right, well, let's look at this document, I
want to ask you about it. This document, the Uniform Code of
Military Justice, applies in the time of declared war. You
would agree that there has been no declared war in Iraq or
Afghanistan?
Mr. Prince. No, but I believe it has been amended to
include contingency operations.
Mr. Braley. Is it your understanding that a contingency
operation would apply to what is going on in Iraq and
Afghanistan?
Mr. Prince. I am not a lawyer, but my layman's
understanding is yes.
Mr. Braley. All right. And then it says to persons serving
with or accompanying an armed force in the field. Do you see
that?
Mr. Prince. I don't have it in front of me, but you are
reading from it.
Mr. Braley. Well, I am just reading from the document that
you provided to us.
Mr. Prince. Right.
Mr. Braley. If that is what the Uniform Code of Military
Justice provides, you would agree that based upon your own
description of the activities of your company, there are times
when your employees are not serving with or accompanying armed
forces in the field.
Mr. Prince. There are times when U.S. military units are
actually embedded in our motorcades.
Mr. Braley. But to answer my question, there are times when
your employees are not serving with or accompanying armed
forces in the field, isn't that correct?
Mr. Prince. Sir, I am not a lawyer. So I am not going to
give you that level of detail. If you want a clear written
statement as to the accompanying opinion, I am sure the State
Department can answer what their opinion is on that. But we
have looked at it and we feel comfortable that our guys could
be brought under investigation with those ruling legal
authorities over their heads.
Mr. Braley. Then let's look at the Military Extra-
Territorial Jurisdiction Act, Section 3261, Criminal Offenses
Committed by Certain Members of the Armed Forces and by Persons
Employed by or Accompanied by the Armed Forces Outside the
United States. You would agree that there are circumstances
where your employees would not meet that definition based upon
their service in Iraq and Afghanistan.
Mr. Prince. I believe that was changed yet again to include
any U.S.-funded contract.
Mr. Braley. Well, that is the definition that applies to
U.S.-funded contracts from the statute.
Mr. Prince. Again, I am not a lawyer, sir. I am sorry.
Mr. Braley. Then let's look at the War Crimes Act of 1996,
which applies if the perpetrator is a U.S. national or a member
of U.S. armed forces. You would agree based upon your testimony
today that there would be circumstances when some of your
employees would not meet the definition of perpetrator to be
covered by the War Crimes Act.
Mr. Prince. Again, I am not sure, sir.
Mr. Braley. Well, you testified that you hire some third
country nationals. They would not be U.S. nationals, would
they?
Mr. Prince. That is correct.
Mr. Braley. And they would not be members of the U.S. armed
forces.
Mr. Prince. But they are serving in a U.S. DOD contingency
operation.
Mr. Braley. Then let's talk about these payments that have
been made as a result of d**hs that were related to the
conduct of Blackwater employees. One of the payments that we
have been provided information about was this $15,000 payment
to the guard's family who was guarding Iraqi Vice President
Mahdi. Are you familiar with that payment?
Mr. Prince. Yes, sir.
Mr. Braley. Did you have any input into the determination
of the amount of that payment?
Mr. Prince. I discussed it with some State Department
officials, yes.
Mr. Braley. Did you feel that it was a satisfactory level
of compensation for the loss of that individual?
Mr. Prince. I believe the cash that was paid was actually
$20,000, not $15,000.
Mr. Braley. All right, $15,000 or $20,000. Based on the
information that we have been provided, one of the things we
know is that Blackwater charges the Government $1,222 a day for
the services of some of its employees, is that correct?
Mr. Prince. I believe that number is lower. The chart that
we provided the committee shows a blended average significantly
less than that.
Mr. Braley. Assuming that figure is correct, if you take
someone your age in the United States and look at the U.S. life
table, you will find that somebody your age in this country has
a life expectancy of 40 years. So if you were to take that rate
of $1,222 a day, multiply it times 365 days a year, multiply it
by a 40 year life expectancy, you would get a total lifetime
earnings payout of $17,841,200. You would agree with me that
pales in comparison to a payment of either $15,000 or $20,000.
Chairman Waxman. The gentleman's time has expired. You can
answer the question.
Mr. Prince. Your calculations there don't make any sense to
me, because that charge, that $1,200 charge that you are
talking about, claiming that we charge the Government, that
includes aviation support. Some of those helicopters that got
shot down, that comes out of our hide. Gear, training, travel,
all the rest. So I am not quite sure how that math works out.
But I would be happy to get back to you if you have any written
questions.
Chairman Waxman. The gentleman's time has expired.
Mr. McHenry.
Mr. McHenry. Thank you, Mr. Chairman.
I want to go through a few facts and make sure we have this
on the record. The gentleman is discussing cost, and I want to
sort of understand all the facts before we get to a conclusion
here. You were previously in the Navy SEALs. How long were you
in the military, sir?
Mr. Prince. In 1992 through the end of 1996.
Mr. McHenry. What is the average time, having been in the
SEALs, perhaps you would know this, what is the average time a
special forces operator is in the service?
Mr. Prince. Five or 6 years, up to 20. It really varies.
Mr. McHenry. But based on your experience?
Mr. Prince. Guys really make a decision point at about 12
years whether they are going to stay for a career or get out.
So I would say 10 to 12 years.
Mr. McHenry. All right. Let's say an operator retires from
the military, at which point a Navy SEAL, average Navy SEAL is
doing a much more, a much different operation, they are dealing
with explosives rather than defensive caravans and convoys.
What do you do with those individuals? Do you take Navy SEALs
and put them right in there, onto the streets? Is there
training for Blackwater?
Mr. Prince. The personnel that deploy for us, they go
through, obviously we have the resumes, we do a criminal
background check on them. When they have been accepted, when
the resume has been accepted by the customer, they come in for
training, they go through another 164 hours of training,
embedding at Blackwater, tactics, techniques, procedures,
driving, firearms, defensive tactics. They go through a full
psychological evaluation, medical/dental exam, physical tests,
shooting tests. There is a very, very rigorous pre-deployment
program they all have to do.
Mr. Braley. A significant amount of expense?
Mr. Prince. Yes. And that is all baked into that daily
cost.
Mr. Braley. Just for the record, when was Blackwater
formed?
Mr. Prince. In 1997.
Mr. Braley. At what point did you receive your first
Government contract?
Mr. Prince. For the first number of years, our customers
were individual SEAL platoons or a Marine recon platoon or an A
team. It was down to the individual team sergeant or warrant
officer paying with a credit card. Our first big Government
contract that we won competitively was the Navy force
protection contract that they started off after the Cole was
blown up. We had a $1\1/2\ billion ship blown up by two guys in
a Zodiac.
Mr. Braley. What year was that?
Mr. Prince. We started that in 2001.
Mr. Braley. OK. Who is your client in Iraq?
Mr. Prince. Department of State.
Mr. Braley. OK. How many competitors do you have within
this contract?
Mr. Prince. There are two others. There was a big
competition before then to be down-selected for the WPPS
contract.
Mr. Braley. How is that contract awarded?
Mr. Prince. It is awarded competitively. You go through an
enormous proposal process, they come and inspect your
facilities, your training standards, the resumes of each of
your personnel. They even have to accept and inspect the
resumes of the instructors you are going to have. And they come
and audit the program on an almost weekly basis.
Mr. Braley. So let's go forward. There are roughly 1,000
Blackwater contractors, operators, these former veterans that
you now have trained that are out securing emba**y staff and a
number of civilians in Iraq. Let's say it is 1,000, just for
our purposes here. Roughly how much administrative staff do you
have a**ociated with those 1,000 individuals?
Mr. Prince. We run that whole program, instructors, program
management people, that sort of thing, with less than 50
people.
Mr. Braley. With less than 50 people?
Mr. Prince. Yes, sir.
Mr. Braley. So roughly it is 1,000 to 50, is the ratio from
operators in the field to administrative staff?
Mr. Prince. Yes, sir.
Mr. Braley. All right. Now, there is this notion, we are
not the Armed Services Committee here, but there is this notion
of tooth to tail ratio, which means how many operators do you
have in the field and the expense of them, how much
administration function do you have. In active duty military,
based on your recollection, what is that rough estimate?
Mr. Prince. What is the DOD's tooth to tail ratio?
Mr. Braley. Yes.
Mr. Prince. I have seen as high as 8 to 1 or even 12 to 1.
One tooth, 8 to 10, 12 tails.
Mr. Braley. So one individual in the field, 12 individuals
outside of operating. So the ratio, when these people on the
committee talk about the expense of having that one operator in
the field, it is far less for an individual contractor, when
you are a private security contractor like you are in Iraq, it
is far more efficient for the total program to have a
contractor, because their tooth to tail ratio is far better
than what it is in the active duty military.
Therefore, the cost of that one operator in the field for
all the support services they have a**ociated with them is far
less for a company like Blackwater than it is for the active
duty military. And can you, and my time is up, but if you can
actually discuss this with the committee and maybe in a minute
or so explain the expense of the overall operations.
Chairman Waxman. The gentleman's time is up, but Mr.
Prince, you may go ahead and answer.
Mr. Prince. I would just encourage the committee, and would
be happy to make some suggestions on areas where you could do a
true activity-based cost study, what does it cost the U.S.
Government to do X, Y, Z functions in the field, and do an
accurate drill-down. Because unless you know what something
costs, everything before that or after that is hyperbole.
Mr. Braley. Is it your contention that it is far cheaper--
--
Chairman Waxman. The gentleman's time really has expired.
Mr. Braley [continuing]. For you to operate in the field? I
just want him to answer this question, if I could, Mr.
Chairman. Is it your contention that it is much cheaper to the
taxpayers for your activities as a contractor with the
Department of State than it would be for active duty military
to do the very same task because of that tooth to tail ratio?
Mr. Prince. Yes, and because it is tough for the military
to be all things to all people all the time. If they are going
to have air defense artillerymen, all the other conventional
warfare specifications they have to have, it is tough for them
to do all things all the time.
Chairman Waxman. If you have some kind of document that
backs up your statement, we certainly would like to see it, and
we would like to ask you to provide it to our committee.
Mr. Prince. Yes, sir.
Chairman Waxman. Thank you.
Ms. McCollum.
Ms. McCollum of Minnesota. Thank you, Mr. Chair. Mr.
McHenry and I had the opportunity to go to Afghanistan
together, where in fact the military did provide, when we went
out on visits, did provide our security. I also had the
opportunity of being in Iraq, where we had a private security
detail take us from point to point. And I just, there has been
some discussion about who is more caring about getting on the
ground and seeing what is going on, and I just wanted people to
know for the record here that I have been both places and under
both circumstances.
I would like to followup a little more on what Mr. Braley
was talking about. You provided this chart on contractor
accountability. And you have made the statement that the DOD
can bring charges against your contractors. Can the Department
of State bring charges against your contractors?
Mr. Prince. I believe that would be done by the Justice
Department. They do the prosecuting of those laws.
Ms. McCollum of Minnesota. Under the CPA Order 17,
contractors have immunity from the Iraqi legal system, is that
correct?
Mr. Prince. That is my understanding, yes.
Ms. McCollum of Minnesota. So if a Blackwater contractor
would commit, as what an investigation might determine would be
murder, on their own time, it was a Christmas Eve holiday that
you were describing, or Christmas holiday, do you believe the
Iraqi government would not be able to charge that individual
with a crime, even on their own time?
Mr. Prince. That is my understanding, yes.
Ms. McCollum of Minnesota. Do you believe that immunity
should be repealed, if something happens when someone is ``off
duty'' and an Iraqi is murdered?
Mr. Prince. I believe U.S. laws should be enforced, and you
can have that justice system back here in America work.
Ms. McCollum of Minnesota. So you believe that the immunity
under CPA Order 17 should stand?
Mr. Prince. I believe so. I am not sure any foreigner would
get a fair trial in Iraq right now. I think they would at least
get a fair trial here in the United States.
Ms. McCollum of Minnesota. Your charts indicate that
contractors are accountable under the Uniform Code of Military
Justice. Your contractors work for the Department of State. Is
the Department of State accountable under the Uniform Code of
Military Justice?
Mr. Prince. I will not be presumptuous to answer for the
Department of State, ma'am.
Ms. McCollum of Minnesota. Well, you have provided this.
You told Mr. Braley that all your employees are under this
chart. So then you are saying that----
Mr. Prince. Well, ultimately that is for the Justice
Department to decide which avenue of jurisdiction they have.
Ms. McCollum of Minnesota. So this is just what you feel
that people might be held under accountability with your
contract? This is just a feeling you have? You don't know any
of that for a fact, do you?
Mr. Prince. I have legal opinions that I respect, put that
together and they gave their opinions that those were laws that
State Department contractors, DOD contractors, contractors for
the U.S. Government could be held accountable under.
Ms. McCollum of Minnesota. So whether it is a feeling or an
opinion, you cannot state for a fact, for a fact, that any of
your contractors that have a State Department contract can be
held accountable under the Uniform Code of Military Justice?
Mr. Prince. That is correct, ma'am, because that is for the
Justice Department to decide.
Ms. McCollum of Minnesota. I think that is important to
clear that up. Do you operate in a military capacity or a
civilian capacity?
Mr. Prince. Civilian capacity.
Ms. McCollum of Minnesota. So now you are saying that
civilians----
Mr. Prince. Our men are not serving members of the U.S.
military.
Ms. McCollum of Minnesota. So you are saying that civilians
can be held accountable to the Uniform Code of Military Justice
in your opinion?
Mr. Prince. And I believe that is why they extended that,
not just to wars that were declared but also to contingency
operations as well.
Ms. McCollum of Minnesota. To your knowledge, have there
been any military courts or civilian courts that have held any
of the contractors who have been charged or been accused of a
crime in Iraq?
Mr. Prince. It is my understanding there is a conviction of
a contractor that was working for the CIA that was convicted in
North Carolina for actions in Afghanistan.
Chairman Waxman. The gentlelady's time is expired.
Ms. McCollum of Minnesota. Thank you, Mr. Chairman. Thank
you for answering my questions. I appreciate it.
Chairman Waxman. Mr. Jordan.
Mr. Jordan. Thank you, Mr. Chairman.
Mr. Prince, I too want to thank you for your service to our
country and for the good work that your company has been doing
in Iraq and Afghanistan.
I just want to pick up on a couple of things that the
Congressman from North Carolina had talked about, just some
general questions. I know you have been sitting there for 3
hours. Just a few questions, then I am going to yield some time
to the gentleman from California.
How many employees, you mentioned before a little bit
earlier, 1,000 in the field, 50 administrative, but does that
represent the entire work force at Blackwater?
Mr. Prince. We have about 550 full-time folks in the United
States, 1,000, 1,100 or so in Iraq, and then hundreds more in
little pockets around the world. The next greatest
concentration would obviously be Afghanistan, there are about
300, 400 there.
Mr. Jordan. So a couple of thousand?
Mr. Prince. More or less, yes, sir.
Mr. Jordan. And you mentioned the extensive training, some
of the special operations individuals who come to work for you
after they leave military service and the training they
undergo, I believe you said earlier that there was a study done
that shows there is no higher exit rate, or quicker exit rate,
we will say, because of your company versus what typically
happens. Is that true?
Mr. Prince. Right. It was a GAO study and it was not just
directed at us, it was directed at the private security
industry.
Mr. Jordan. And real quickly, in your testimony, your
opening paragraph, you talk about you provide training to
America's military and law enforcement communities who then
risk their lives to protect Americans in harm's way overseas.
So are there several types of contracts that your company does?
You do training contract with the Government, protective
contracts, or do you do one contract per year? Tell me how
those work.
Mr. Prince. We have a number of different contracts. We
never started this operation to be a security provider. We
started as a training facility. The SEAL teams, special forces,
Marine recon, SWAT teams, those were our customers for the
first few years. The Navy came after the Cole was blown up. We
have trained well over 100,000 sailors since then on how to
protect their ships.
Through one of our affiliates, we do aviation support in
Afghanistan.
Mr. Jordan. Mr. Prince, how many contracts would you have
right now with the Federal Government? Any idea?
Mr. Prince. More than 50.
Mr. Jordan. OK.
Mr. Prince. Some are very small, some are very big.
Mr. Jordan. Again, I want to thank you for your service.
And Mr. Chairman, if I could yield to the gentleman from
California.
Mr. Issa. I thank the gentleman.
I just wanted to point something out, Mr. Prince. Did you
see the memorandum dated October 1st, that is yesterday, that
is entitled Additional Information about Blackwater USA? It
comes out of Mr. Waxman's office, it is 15 pages.
Mr. Prince. I did see that, yes.
Mr. Issa. OK. Did you note that on page 5, Mr. Waxman and/
or his staff said the following: ``Blackwater is owned by Erik
Prince. Mr. Prince is a former Navy SEAL who owns the company
through a holding company.'' After that, it begins to talk
about the White House, your father, your father-in-law, your
sister, etc., and basically talks about everything I asked you,
the Michigan Republican party, the donations.
So Mr. Chairman, hopefully you will appreciate that it was
your staff that created everything that I brought up, and you
put it out in writing 1 day before this hearing. My question to
you, Mr. Prince, is have you ever seen a bio about your life
that starts off, you were a Navy SEAL and then goes on to
everything your sister did on behalf of the Michigan party and
your Republican credentials? Is this the first time you have
seen a bio like this?
Mr. Prince. I love my sister very much, but it is not often
our bios get printed together. [Laughter.]
Mr. Issa. And you know, it is interesting, because I am
noticing that for this committee, a donor search done on
September 29th, at opensecrets.org, was done to find out how
much money you gave to who. Did you know that?
Mr. Prince. I did not know that.
Mr. Issa. Do you think that is really germane to today, or
do you think that attempts to paint you as a Republican
supporter?
Mr. Prince. I don't think it is germane to today. I think
we do good work and I am mighty proud of the folks we have
doing the work.
Mr. Issa. OK, I heard a rumor that your company or someone
in your company had given to the Green Party. Do you know about
that?
Mr. Prince. It could have been.
Mr. Issa. OK. I just wanted to know that there were people
on both the far left and the far right relative to the chairman
who may have benefited by your company.
But Mr. Chairman, I would ask that page 5 of your memo be
considered as what I called it, an attempt to pain this
gentleman and his company through Republican eyes to a Democrat
base for political purposes. And I stand by my statement, Mr.
Chairman, and yield back to the gentleman from Ohio.
Mr. Davis of Virginia. Could I just ask one clarification,
Mr. Chairman?
Chairman Waxman. Yes.
Mr. Davis of Virginia. Your first contract, Mr. Prince,
Government contract, was in 1997, wasn't it?
Mr. Prince. Yes. Well, no, our first customer, we started
the business in 1997, first customer was January 1998.
Mr. Davis of Virginia. First Federal customer----
Mr. Prince. That was the SEAL team.
Mr. Davis of Virginia [continuing]. That was under the
Clinton administration?
Mr. Prince. Yes, sir.
Mr. Davis of Virginia. Thank you.
Chairman Waxman. The gentleman's time has expired.
I would like to now recognize Mr. Cooper.
Mr. Cooper. Thank you, Mr. Chairman.
Mr. Prince, in the charter or by-laws of your corporation,
either the holding company or Blackwater, does it say
explicitly that it will only work for the United States of
America or its entities?
Mr. Prince. No, it doesn't. If I could clarify, anything we
do for any foreign government, any training, of anything from
law enforcement training to any kind of aviation training,
tactical flying, any of that stuff, all of that is licensed
back through the State Department, another part of the State
Department.
Mr. Cooper. But you are the owner of the company, the CEO.
If limitations like this are not in the charter and by-laws,
isn't there a risk that should something happen to you that
different management, in order to maximize profits, might seek
contracts from any number of other foreign countries, like of
Vladmir Putin offered a lot of money, why would you want to
turn that down as a business entity?
Mr. Prince. Because we would be violating Federal law and
the whole place could be shut down very, very quickly.
Mr. Cooper. But you are a**uming a State Department license
would apply.
Mr. Prince. Oh, it does.
Mr. Cooper. You are a regular, private company. You can----
Mr. Prince. No, sir, I am sorry. We have to have a license
to train----
Mr. Cooper. I am not talking about training other people's
private police. Say you took some of your former people who
were former Navy SEALs, special forces, whatever, and they were
working for hire, what prevents you in your current company
charter or by-laws, prevents you from hiring out those people
to foreign governments?
Mr. Prince. U.S. Federal law does.
Mr. Cooper. Which law?
Mr. Prince. Defense Trade Controls Act. Any training, any
security services, any export of any weapons, any equipment you
would use to do that job requires a license. And on top of
that, this idea that we have this private army in the wings is
just not accurate. The people we employ are former U.S.
military and law enforcement people, people who have sworn the
oath to support and defend the Constitution against all
enemies, foreign and domestic. They bleed red, white and blue.
So the idea that they are going to suddenly switch after having
served honorably for the U.S. military and go play for the
other team, it is not likely.
Mr. Cooper. But these are independent contractors or
employees, they are supposed to do what they are told. And is
your omission of this key bit of information from the charter
or by-laws only due to the fact that it would be redundant? If
it is a**umed, why don't you go ahead and put it in the charter
and by-laws that these people, this company will only work for
the United States of America and its entities? Why wouldn't
that be a nice addition to the charter and by-laws?
Mr. Prince. That wouldn't make any sense, because we have
NATO allies helping in Afghanistan, helping the U.S. mission
there. And there might be opportunities for us to support,
provide them with training or aviation support or logistics or
construction, a lot of other things that allies need,
especially as the United States is trying to build capacity
around the world. There are a lot of countries that need help
building out their police departments, giving them more
counter-terrorism capability.
Mr. Cooper. Twenty-six NATO allies. So you could work for
any of them?
Mr. Prince. Twenty-six NATO allies, but more and more, the
United States is doing FID missions, foreign internal defense.
We have done a number of successful programs for them working
with the U.S. Government, where they hire us, we go in and we
build that capacity and train them and provide the equipment,
all of which is licensed by the State Department. When we apply
for that license, it goes to the State Department and they farm
it out to the relevant part of the DOD to control and authorize
that licensing. What is the curriculum going to be, what
tactics, even down to which individual in which country is
going to be trained, so they can do a check on them. So that is
all controlled by the U.S. Government already, sir.
Mr. Cooper. On your Web site, it says that you were
contracted to enhance the Azerbaijan Naval Sea Commandos
Maritime Interdiction capability. Is Azerbaijan a member of
NATO?
Mr. Prince. No, but that was paid for by the U.S.
Government.
Mr. Cooper. Well, let me ask another question.
Mr. Prince. It was part of their regional engagement
policy. I don't make that policy, sir.
Mr. Cooper. Wouldn't it be nice to put in your charter and
by-laws that you only work for United States or U.S.-approved
entities? Why would that be harmful to your company?
Mr. Prince. We would be happy to do that. But it is
absolutely redundant, because we can't work for someone that is
not U.S.-approved.
Mr. Cooper. Redundancy is a small objection to making sure
that you are a loyal U.S. company.
Let me ask another question. What if a large company inside
the United States of America wanted to hire your company for
services, say, to break a strike or for other purposes like
that? Is that allowed under your charter and by-laws?
Mr. Prince. That is not something we have even explored.
Mr. Cooper. But it would be permissible under your current
company charter? It is a new line of business possibly?
Mr. Prince. No.
Mr. Cooper. It might be very profitable?
Mr. Prince. It is not something we are looking at, not part
of our strategic plan at all, sir.
Mr. Cooper. I know, but you are a mortal human being. Your
company would allow it, according to its current charter and
by-laws?
Mr. Prince. Well, I have five boys I am raising, so one of
them perhaps will take over some day.
Mr. Cooper. Why not put it in the charter and by-laws?
Thank you, Mr. Chairman. I see that my time is expired.
Chairman Waxman. Mr. Cooper, your time is expired.
Mr. Hodes.
Mr. Hodes. Thank you, Mr. Chairman.
Mr. Prince, thank you for being with us today.
Mr. Prince. Thanks for having me sir. I am glad I could
come here and correct some facts.
Mr. Hodes. There has been some discussion from the other
side of the aisle about whether or not these hearings are
partisan. Do you agree that it is not a partisan issue to
examine whether or not the use of private contractors,
including Blackwater, is advantageous to American taxpayers?
Mr. Prince. It is certainly part of the Congress to make
sure the money is spent well that taxpayers pay.
Mr. Hodes. And do you also agree that it is not a partisan
issue to inquire whether failures to hold Blackwater personnel
accountable for misconduct undermine our efforts in Iraq?
Mr. Prince. It is a fair enough thing to look into.
Mr. Hodes. Earlier today you were asked what action
Blackwater took to penalize an employee who while drunk, shot
and k**ed and Iraqi security guard for the Iraqi vice
president on Christmas Eve of 2006. Do you recall those
questions?
Mr. Prince. Yes, sir.
Mr. Hodes. And you responded that Blackwater fired and
fined the employee, but you are not sure of the amount of the
fine. Do you recall that?
Mr. Prince. Yes, sir.
Mr. Hodes. Blackwater, at the committee's request, provided
the committee an internal Blackwater e-mail that appears to
reflect a discussion of what Blackwater did to this employee.
It is dated Monday, January 8, 2007, approximately 2 weeks
after the incident in question. And it says, ``Regarding
termination, he has forfeited the following compensation that
he would have otherwise been authorized: return airfare,
$1,630; completion bonus, $7,067; 4th of July bonus, $3,000 and
a Christmas bonus of $3,000.'' Now, it appears to me that the
so-called fine consisted of taking away the contractor's
bonuses and making him pay his own way home. Is that accurate?
Mr. Prince. And any forthcoming compensation that he had. I
don't know when the guy's contract would have ended, but yes,
we took away whatever else we could.
Mr. Hodes. How long had he worked for your company?
Mr. Prince. I have no idea.
Mr. Hodes. Do you know what he had been paid during the
time of his employment up to the time he shot and k**ed the
Iraqi guard?
Mr. Prince. I have no idea, sir.
Mr. Hodes. Do you have any idea what your profit on that
employee had been up until the time of this incident?
Mr. Prince. Probably in keeping with the 10, 10\1/2\
percent indicated on our chart.
Mr. Hodes. Would you have records that would show us what
you had paid him up until that time and from which we could
find out what profit you had made?
Mr. Prince. I am sure we could dig through that and find
it, yes, sir.
Mr. Hodes. And would you be willing to provide that to us?
Mr. Prince. I will get my people right on it.
Mr. Hodes. I am asking for it now, so I would like to have
that sent. Thank you very much.
Chairman Waxman. Without objection, the document you used
for your questioning will be made part of the record.
Mr. Hodes. Thank you.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T5219.037
Mr. Hodes. Mr. Prince, you also said that Blackwater is
extremely scrupulous in enforcing your standards. And you have
told us that you did basically all you could to this employee
and that the rest was up to the Department of Justice. What you
did was you took away his bonuses, July 4th, completion bonus,
Christmas bonus, he paid his own way home and he couldn't work
for you any more.
Mr. Prince. And made sure his clearance was canceled as
well.
Mr. Hodes. Is that your idea, Mr. Prince, of corporate
accountability?
Mr. Prince. Could you say the question again, sir, please?
Mr. Hodes. Is that your idea, Mr. Prince, of corporate
accountability?
Mr. Prince. This employee, I can't make any apologies for
what he did. He clearly violated the rules that he knew. We
give each of our guys an independent contractor handbook. It is
all the dos and don'ts of what they are expected to do and not
do.
Beyond firing him for breaking the rules, withholding any
funds we can, we can't flog him, we can't incarcerate him, we
can't do anything beyond that. That is the sole reservation of
the U.S. Justice Department.
Mr. Hodes. The Justice Department has not acted against
this individual?
Mr. Prince. I believe their investigation is ongoing.
Mr. Hodes. They haven't done anything so far, right?
Mr. Prince. We are not privy to that information, sir.
Mr. Hodes. This was a potential murder, was it not?
Mr. Prince. It was a guy that put himself in a bad
situation.
Mr. Hodes. Would you agree with me that this was
potentially a murder, sir?
Mr. Prince. Beyond watching detective shows on TV, sir, I
am not a lawyer, so I can't determine whether it would be a
manslaughter, a negligent homicide, I don't know. I don't know
how to nuance that. But I do know he broke our rules, he put
himself in a bad situation and something very tragic happened.
Chairman Waxman. Thank you, Mr. Hodes.
Mr. Sarbanes.
Mr. Sarbanes. Thank you, Mr. Chairman.
Actually, I want to followup on that line of questioning a
little bit more. I think you said that when people violate the
rules in a significant way, they have one decision left to
make, which is aisle or window, right?
Mr. Prince. Because they are fired.
Mr. Sarbanes. They are on their way out, they have one
decision, and that is whether to sit on the aisle or sit by the
window.
And then the other consequence that Mr. Hodes spoke to was
the financial penalty that they would experience. But it just
seems like a few thousand dollars, particularly against a
pretty lucrative contract that they would have had. And it
strikes me that if that is the only deterrent that is at work
in terms of people performing at a high level, that is not
much. In other words, you can say, well, let me get in here,
let me make a good living here. And if I screw up, and if I
screw up in a terrible way, as this one incident illustrates,
then the worst that is going to happen to me is I am going to
have to choose between an aisle seat or a window seat and maybe
give up a bonus and my last paycheck, I mean, that is
essentially the consequence that they face, isn't that right?
Mr. Prince. I would also add that we endeavor to get their
security clearance pulled, canceled. And once that is done,
they will never work in a clearance capacity for the U.S.
Government again, or very, very unlikely.
Mr. Sarbanes. OK. But you would agree that it is not, it
doesn't have the same kind of deterrent effect that it would
have if they thought that they were going to be subject to
prosecution, if there was a clear set of rules in place, a
clear context in which they could be prosecuted, they could
face something akin to a court martial, or all the other kinds
of measures that can occur if you are in a traditional military
setting? You would agree that provides an extra level of
deterrence?
Mr. Westmoreland. Mr. Chairman, I think the witness has
already testified that he did everything that his company could
to this person----
Chairman Waxman. I'm sorry----
Mr. Westmoreland [continuing]. And that he is not the
prosecutor.
Chairman Waxman [continuing]. You are not acting in
accordance with the rules.
Mr. Sarbanes. Well, I am actually, I am headed in the
direction----
Chairman Waxman. This is not a court case. The gentleman
has time and I am going to restore his time. He can ask
whatever he wants and to say whatever he wants. Some people on
this committee have said completely outlandish things. Nothing
we can do about it. They have their right, including you. You
read a whole blasphemous statement about Democrats, but no one
objected to that.
So the gentleman is going to be recognized for an
additional minute.
Mr. Sarbanes. In any event, would you agree that would
provide some extra deterrence, some extra reason for people to
exercise their conduct in a careful way?
Mr. Prince. We welcome that level of accountability. Most
of our people have already served in the U.S. military or they
served in a law enforcement capacity. They are used to that
kind of accountability and transparency into what they are
doing.
Mr. Sarbanes. Well, I appreciate your saying that, because
I----
Mr. Prince. We are not hiding anything.
Mr. Sarbanes. Yes. I would like to leave aside the question
of whether you should be, Blackwater should be in this space
that you are in. I don't know enough about the history of
whether providing the sort of protective services that you do
is something that isn't done by the military traditionally, or
is. So I am going to leave that aside. I am also leaving aside
the issue of the cost, which strikes me as exorbitant, in terms
of what the taxpayers are paying here. You keep calling for, I
think, an activity-based cost an*lysis or a**essment, which I
think we would be happy to get more information about. I have
to believe there is a less expensive way, even to hire private
contractors like yourself.
And so I am really left with the accountability issue as
the one that strikes me as front and center here. And as I have
listened to your testimony, in particular you are saying with
respect to this one person who was drunk and committed this
homicide, I will characterize it that way, I think you said you
would be happy to see that person prosecuted, something akin to
that. And I would like to enlist you as an advocate to
strengthen whatever the rules of engagement are, whatever the
statutes are that are out there. Mr. Braley took us through
these various things and you indicated that you weren't sure
whether each of those necessarily reached as far as they could
in providing that kind of penalty environment. I would like you
to speak to whether it would be a good thing to make sure that
it does.
Mr. Prince. I believe Congressman Price from North Carolina
has been pushing to amend some of that language. And we support
that fully.
Mr. Sarbanes. Thank you.
Mr. Cooper [presiding]. The gentleman yields back his time.
The next questioner on the list from the chairman looks
like Mr. Welch.
Mr. Welch. Thank you, Mr. Chairman.
Mr. Prince, thank you for coming. I want to ask a few
questions about the finances. My understanding is that
Blackwater had contracts with the Federal Government in 2001 in
the amount of $736,000.
Mr. Prince. It could easily be, yes, sir.
Mr. Welch. And in 2006, that number had exploded to $593
million.
Mr. Ryan. May I have just 1 minute, please?
Mr. Prince. I am not sure.
Mr. Welch. Well, you don't dispute it. This is what is in
the report that was referred to earlier.
Mr. Prince. Well, some of the later years on that report
aren't quite accurate. So I am not going to discount the whole
thing.
Mr. Welch. OK. According to the report, 51 percent of the
Blackwater contracts were no-bid contracts, $493 million that
were explicitly no competition, and $30 million were awards
after limiting or excluding qualified bidders. Is this more or
less correct? Any reason to dispute it?
Mr. Prince. It could be, sir. I don't know.
Mr. Welch. All right. And since 2003, when the war began,
Blackwater contracts have exceeded $1 billion, correct?
Mr. Prince. I don't know the answer, sir. If you have
specific questions on financials, we will get you the answers.
Mr. Welch. Well, these are facts that are in the record.
You can check them out. But I will just advise you----
Mr. Prince. Well, there is some stuff in the committee's
report that is not accurate. So I can't agree to the entire
committee report.
Mr. Welch. Let me continue going through this. One of the
concerns that has been expressed is that a sergeant who
provides security services in a full military setting is paid
$50,000, $60,000. If it is an employee from Blackwater, the
cost to the taxpayer is about $445,000. Is that more or less
correct?
Mr. Prince. Could I have a copy of what you are reading
from, at least?
Mr. Welch. Well, you have been asked about this by several
Members already. Let me just continue.
Let's talk a little bit about training. You were a SEAL and
served with distinction, as I understand it, as a SEAL,
correct?
Mr. Prince. Yes.
Mr. Welch. And your training as a SEAL was beneficial to
you in the work that you are doing now as the head of this
company?
Mr. Prince. It helped form me in my life, absolutely.
Mr. Welch. And you had also I think indicated that
Blackwater hires our military veterans and law enforcement
veterans, many of whom have recent military deployments,
correct? It makes sense to do that?
Mr. Prince. Yes.
Mr. Welch. So it is fair to say that Blackwater as a
company in recruiting personnel has benefited from the
taxpayer-financed training of people that Blackwater hires,
correct?
Mr. Prince. We have people that have prior honorable
military service and provide them an opportunity to use those
sk**s again at their highest and best use.
Mr. Welch. And it is fair to say that Blackwater contracts
have in fact surged since 2003 when the war began, correct?
Mr. Prince. The nature of the security environment around
the world has changed, yes.
Mr. Welch. And it is true, or is it true that as reported
by the Center for Responsive Politics, you did make, as you
have a right to make, contributions of $225,000 to the, that
include $160,000 to the Republican National Committee and the
National Republican Campaign Committee?
Mr. Prince. I don't know that sitting here right now.
Again, I can go back and dig through our contribution records
to figure out exactly what we gave in what period.
Mr. Welch. Well, that is the report that we have been
given. And again, you have a right to do that. My concern is
the nature of the contracts.
Now, you are also aware that General Petraeus, who is in
command of 160,000 troops, is paid by taxpayers $180,000 for
the extraordinary responsibilities that he bears for our
security in Iraq, correct?
Mr. Prince. I don't know what General Petraeus gets paid.
Mr. Welch. Well, that is what it is. Blackwater has 861 or
so personnel, according to this report in 2006, in Iraq. Is
that more or less right?
Mr. Prince. It could be, yes, sir.
Mr. Welch. All right. General Petraeus is paid $180,000 for
supervising 160,000 troops. How much were you paid in 2006?
Mr. Prince. I'll get back to you with that exact answer. I
don't know.
Mr. Welch. Well, you can give me an estimate.
Mr. Prince. More than $1 million.
Mr. Welch. Well, as I remember, when my colleague, Mr.
Hunter, asked you about your contracts, you indicated 90
percent of your Blackwater contracts came from the Federal
Government, correct?
Mr. Prince. Yes.
Mr. Welch. I.e., the taxpayer. And he asked you what your
profit margin was, and my recollection of your testimony today
was about 10 percent?
Mr. Prince. That is what the report that we submitted to
the committee says, yes.
Mr. Welch. So walk through the math with me. If Blackwater
has had $1 billion in contracts since the war began in 2003,
and there is a 10 percent profit margin, that is $100 million
in profit, is it not?
Mr. Prince. This is representative of one of the WPPS
contracts. Some contracts we lose money on, some we lose all
kinds of money on. Some we make money on.
Mr. Welch. Mr.----
Mr. Prince. Understand we have significant variables.
Mr. Welch. You were asked a question and you gave an
answer. And the question was very simple. It is the kind of
question that a CEO pays real attention to: what is your profit
margin. Your answer was, 10 percent. I am doing the math, $1
billion, 10 percent, $100 million.
Mr. Cooper. The gentleman's time is expired.
Mr. Prince. Some contracts we lose money on. Losing three
helicopters this year is certainly beyond the scope of math.
Mr. Cooper. The next questioner is Mr. Murphy.
Mr. Murphy. Thank you very much, Mr. Chairman.
Let me just followup on Mr. Welch's question. Certainly, as
a CEO of a company, you can tell us what your profit has been
in the past several years as a company.
Mr. Prince. I can give approximate numbers, but we are a
private company. And I am sure it is the Congress's main
interest in maintaining healthy competition amongst Government
vendors. So we are a private company, and there is a key word
there, private.
Mr. Murphy. And so you will not disclose to us what the
profit, what the annual profit or----
Mr. Prince. No, that is not what I just said. We gave you
an example of what the profitability of a WPPS contract looks
like. But I am not going to go into our full financials.
Mr. Murphy. And I guess, I am a new Member of Congress, but
as a representative of my constituents that pay 90 percent of
your salary, pay 90 percent of the salaries of your employees,
I think it is a little difficult for us to fathom how that
information isn't relevant to this committee or this Congress.
Mr. Ryan. Mr. Chairman, may I have a minute with the
witness, please?
Mr. Cooper. Yes.
[Witness and counsel confer.]
Mr. Prince. I am sorry. Go ahead.
Mr. Cooper. Mr. Murphy has 4 minutes left. The hearing will
resume.
Mr. Murphy. Thank you, and I want to wrap up so Mr. Lynch
can ask some questions before we break. So let me ask the
question again after your consultation with your colleague. It
is your position that you don't believe that it is in the best
interests of your company or this committee to have discussions
with the U.S. Congress about the profit that you make off of
U.S. Government contracts?
Mr. Prince. We can have that discussion, but I am not fully
prepared, sitting here today, to answer each and every one of
your questions down to that level of detail.
Mr. Murphy. I am not asking for a level of detail. I am
asking for an approximation of your annual profit, based on the
fact that you make 90 percent of your money from U.S.
taxpayers.
Mr. Prince. Again, we will come back to you. If you have
written questions, we will give you written answers after the
hearing is done.
Mr. Murphy. Because you testified today that you are not
sure of that number?
Mr. Prince. I am not sure of that number. How can I
calculate in depreciation on a**ets when our helicopters parked
around near the emba**y in Baghdad get hit by rockets all the
time, that they get fragged, that three of them have been shot
down? There is a whole host of variability to our
profitability, depending on when an a**et is expended or
destroyed.
Mr. Murphy. Mr. Prince, I am not a businessman. But I find
it pretty hard to believe that the CEO of a major company in
this country, whether it be privately financed or publicly
financed, can't give an approximation of your annual profit on
a year to year basis.
Mr. Prince. I think when the committee meets with any of my
finance folks, they will tell you I am not a financially driven
guy.
Mr. Murphy. Let me just ask one other quick question before
I yield back. You made a comment before that you had a handful
of third country nationals working for you. And not to
disparage the need to have third country nationals working for
the company, but I just want to get a better handle on what a
handful has. The memo that we have before us, and I understand
you draw issue with some of those numbers, so I want to get it
straight, suggests that of the 861 Blackwater personnel in Iraq
today, 243 of them are third country nationals. Does that sound
right?
Mr. Prince. Your best bet is drawing off of page 1 of what
we submitted to the committee, where it says, ``UCTCN or HCN.''
Mr. Murphy. What percentage of those serving in Iraq under
Blackwater are third country nationals? By your numbers.
Because by our numbers, it is just less than one third, which
doesn't sound like a handful. That sounds like one third of all
your personnel are not U.S. citizens.
Mr. Prince. Well, I am looking at one here. It shows 576
United States, 129 TCN and 16 locals.
Mr. Murphy. So again----
Mr. Prince. So divide 129 by 576 and you get your
percentage.
Mr. Murphy. OK. Sounds like a little bit more than a
handful, but I appreciate your testimony and I yield back.
Mr. Cooper. The gentleman yields back his time. The next
questioner is Mr. Lynch.
Mr. Lynch. Thank you, Mr. Chairman. And I want to thank the
witness for his perseverance here today and for helping the
committee with its work.
We have heard a lot today about the loss of accountability
when an inherent Government function, in this case duties that
are incidental to the prosecution of war, are subcontracted out
to private entities. And as Mr. Shays and Mr. Platts have
mentioned earlier, my Republican colleagues, I also have had an
opportunity to view first-hand on more than a few occasions the
work of Blackwater employees. I would guess that in the dozen
or so occasions when I have traveled with my colleagues to Iraq
and Afghanistan, your area of operations, principally, I would
bet at least half of those times, or at least a portion of time
there, we have been protected by Blackwater employees.
And based on my own personal experience, I have to say,
from personally what I have seen, and what I have experienced,
those people who were protecting us who were Blackwater
employees did a very, very good job. I have to give you credit
for that. They are brave employees, brave Americans in a very
hostile environment.
I find myself right now with this committee having a
difficult time criticizing those employees, because I am in
their debt. That is a very hostile environment and they do a
good job on our behalf.
Which brings me to my problem. If I have a problem
criticizing Blackwater and criticizing the employees and some
of the times that you have fouled up, what about the State
Department? The State Department employees, you protect them
every single day. You protect their physical well-being, you
transport them, you escort them. And I am sure there is a heavy
debt of gratitude on the part of the State Department for your
service.
And yet they are the very same people who are in our system
responsible for holding you accountable in every respect with
your contract and the conduct of your employees. And I know
from my own experience, in the time there, that is an
impossible conflict for them to resolve.
I have here in my possession, I am going to ask that they
be entered into the record in a minute, some internal e-mails
from the State Department. These documents that the committee
has received raise questions again about the State Department's
oversight of Blackwater's activities under the contract. Even
in the cases involving the d**h of Iraqis, it appears that the
State Department's primary response was to ask Blackwater to
make monetary payments to--this is from the e-mails--``to put
these matters behind us,'' that is, the d**hs of Iraqi
civilians, ``rather than to insist upon accountability or to
investigate Blackwater personnel for potential criminal
liability.'' The most serious consequence faced by a Blackwater
personnel for misconduct appears to be termination of their
employment.
Even though Secretary of State John Negroponte a**erted
that every incidence in which Blackwater fires its weapons is
``reviewed by management officials to ensure the procedures
were followed,'' the documents that we have before the
committee don't indicate that. I do have some e-mails, though.
And this one is dated--I will ask these to be entered into the
record, Mr. Chairman.
Mr. Cooper. Without objection, so ordered.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T5219.038
[GRAPHIC] [TIFF OMITTED] T5219.039
[GRAPHIC] [TIFF OMITTED] T5219.040
[GRAPHIC] [TIFF OMITTED] T5219.041
[GRAPHIC] [TIFF OMITTED] T5219.042
Mr. Lynch. This one is dated July 1, 2005 from RSO Al-
Hillah. This is a situation where Blackwater personnel fired
and k**ed. It says, ``This morning, I met with the brothers of
an adult Iraqi male who was k**ed by a gunshot to the chest at
the time and location where the PSD, in this case, Blackwater
team, fired shots in Al-Hillah on Saturday, June 25th of
2005.'' The gentleman in question was k**ed. And then it says,
``Gentlemen, allow me to second the comments on the need for
Blackwater to provide funds ASAP. For all the reasons
enunciated in the past, we are better off getting this case and
any similar cases behind us quickly. Again, the Department of
State needs to promptly approve and fund an expedited means of
handing these situations. Thanks.'' And it mentions $5,000 for
the family there.
Again, another e-mail dated December 26, 2006. And it says,
this is again a situation where Blackwater personnel k**ed an
individual civilian innocently, standing near an area where the
convoy was traveling, it criticizes the way the charge
d'affaires was talking about ``some crazy sums. Originally she
mentioned $250,000 and later, $100,000. Of course, I think that
a sum this high will set a terrible precedent. This could cause
incidents with people trying to get k**ed by our guys to
financially guarantee their families' future.''
Mr. Cooper. The gentleman's time has expired.
Mr. Lynch. I am going to wrap up here. And again, I am
going to ask these to be placed in the record.
Mr. Cooper. I am afraid----
Mr. Lynch. The question is, based on that arrangement----
Mr. Cooper [continuing]. The gentleman's time has expired.
Mr. Lynch [continuing]. Does it not make sense that an
independent inspector general, instead of the State Department
inspector general, review these? I think it would help the
credibility of the company to have an independent inspector
general reviewing these cases instead of having the State
Department basically make you pay up $5,000 every time----
Mr. Burton. Mr. Chairman, I have high regard for the
gentleman from Ma**achusetts but has gone 2 or 3 minutes over
his time.
Mr. Cooper. The gentleman's time has expired.
I need to ask the witness, we have two questioners
remaining. If you would like to take a break now, that would be
fine. Or there are about 10 minutes of questions remaining. It
is your call.
Mr. Prince. If there are two questions left, I will take
them and let's be done.
Mr. Lynch. Mr. Chairman, do you want to give the witness a
chance to answer that last question?
Mr. Cooper. Well, the gentleman considerably exceeded his
time limit. We had actually given you considerably more than
the 5-minutes due to a mistake in the clock. So I think we need
to keep this in regular order.
The gentlelady is recognized, Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Prince, I want to be clear that however you serve your
country, whether as a member of the armed forces or now as a
contractor in time of war, the American people are indebted to
you. We understand that the risk is the same.
I want to avoid confusing the higher purpose of the
volunteer army with what some nations, how some nations
candidly operate. However you define mercenary armies, some
nations have long used mercenary soldiers to deal in foreign
countries with unpleasant tasks. The more dependent we become
on contractors, the more we risk falling right off the cliff
into a mercenary army that is nothing that you would have
responsibility for.
But it must be said, people fight wars that, countries
fight wars where the people support them. And the people
support them by being willing to provide the troops to fight
those wars. That is a risk we have.
I want to ask you a question or two about your contract
with the State Department. Under this contract, you employ
security personnel as independent contractors rather than as
your own direct employees, isn't that right?
Mr. Prince. Yes, ma'am.
Ms. Norton. You don't have to provide employee benefits,
such as health or disability insurance, vacation or retirement
and the like as a result?
Mr. Prince. Each of the individuals that deploys for us has
a very robust insurance package that is with them every day
they are working for us.
Ms. Norton. You also can avoid making Social Security
contributions or withholding taxes, is that not true?
Mr. Prince. I am not sure on that.
Ms. Norton. I believe that is true, sir.
By contrast, DynCorp and Triple Canopy and other security
firms that support the State Department treat their personnel
as employees entitled to these benefits. Why do you treat your
personnel differently from these two companies?
Mr. Prince. I don't know the differences in how they
compensate their people. I will tell you we have the highest
retention in the industry. We have guys that sign up for us at
a very, very high rate. So we don't get losses. Men and women
seem to feel very well treated by us.
Ms. Norton. Well, of course one of the differences is in
the employee benefit package I have just named. Does Blackwater
hire personnel as independent contractors in order to avoid
legal responsibility for the company?
Mr. Prince. No, it is actually really what the men that
deploy for us prefer. We find it is a model that works.
Ms. Norton. Well, Mr. Chairman, it may in fact----
Mr. Prince. They like the flexibility of signing on for a
certain period of time and being able to schedule their off
time around an anniversary, a child's birthday, being home for
Christmas, etc. So it gives them flexibility as to when they
are going to deploy, when they are going to go to work. Just
like----
Ms. Norton. Does it really give them more flexibility than
the other two companies who have them as employees? Those
people don't have the same kind of flexibility? What kind of
flexibility can you have if you need your employees at a time
of engagement, for example?
Mr. Prince. I don't know, ma'am.
Ms. Norton. Well, I think the fact is, when you need them,
you need them. You don't say, you can go home for Christmas,
sir.
Mr. Chairman, I think we should, I am very disturbed, very
disturbed by this confusion, which amounts to legal confusion
about the responsibilities of contractors. I will concede the
notion that employees can choose whether they want to work for
a company that in fact requires them to save for their own
benefits or not. My confusion----
Mr. Prince. Ma'am, let me just add, we have a program that
allows them, it is like an individual 401(k) plan. So they are
able to, while working for us, able to have a 401(k)-like
program.
Ms. Norton. I understand that. Probably the other
employees, excuse me, companies, that I mentioned probably also
have 401(k) programs. And again, my major concern is not what
private employees decide to do.
Mr. Chairman, my concern is that these Blackwater
contractors, so far as I can see, operate under the direct
command or are supervised by Prince, Mr. Prince and his
company. They are, they operate under the law of the United
States in some fashion. It is simply unclear, after a full
day's hearings, whether these employees, whether this company
is subject to law in the way that the American people expect
anybody in a field of combat to in fact be subject to the law
of some place. I believe we need an investigation, Mr.
Chairman, by the GAO to clarify what law if any such companies
and their employees, whether contract employees or not, should
answer to.
Mr. Prince. If I could just answer, ma'am, I think the FBI
investigation regarding the September 16th incident proves that
there is a measure that accountability is in place, that
process is working. And as for us----
Chairman Waxman [presiding]. That remains to be seen.
Mr. Prince [continuing]. Working for us overseas, we
provide the trained person with the right equipment, the right
training, the logistics to get them in and out of theater, when
they get to Iraq or to Afghanistan, they work for the State
Department. We work under that, the RSO's operational control,
they are not under our operational control.
Chairman Waxman. Thank you, Ms. Norton.
Ms. Schakowsky.
Ms. Schakowsky. Thank you, Mr. Chairman. I really
appreciate your allowing me to participate in this hearing, and
I thank the committee for their indulgence.
I wanted to let everyone know that I am shortly going to be
introducing legislation to carefully phaseout the use of
private security contractors, for-profit companies that carry
out sensitive missions that have repeatedly and dramatically
affected our mission. I want to recognize the mother of Jerry
Zovko, who is here today. Jerry was an Army Ranger before
becoming a Blackwater employee. He died in Fallujah in an
infamous mission, fraught with mistakes on the part of his
Blackwater supervisors. That was over 3\1/2\ years ago, and led
to the Battle of Fallujah during which many of our U.S. forces
lost their lives.
As Mr. Davis, the ranking member, said, we need a
conversation in this Congress about that, and I am hoping that
my legislation will provide that.
Mr. Prince, in your testimony you stated Blackwater
personnel supporting our country's overseas missions are all
military and law enforcement veterans. You did not state that
they were all Americans, all American military and law
enforcement veterans. Is it true that Blackwater hires foreign
security personnel?
Mr. Prince. One of your colleagues previously asked that
question. Yes. Some of the camp guards, gate guards, static
locations are indeed third country national soldiers.
Ms. Schakowsky. And in 2004, Gary Jackson, the President of
Blackwater USA admitted that your company had hired former
commandoes from Chile to work in Iraq, many of which served
under General Augusto Pinochet, the former dictator of Chile.
As you must know, his forces perpetrated widespread human
rights abuses, including torture and murder of over 3,000
people. Did Blackwater or any of its affiliated companies at
that time, at any time, use any Chilean contractors with ties
to Pinochet?
Mr. Prince. Well, I can say Mr. Jackson did not admit to
hiring some commandoes. Yes, we did hire some Chileans. Any
foreign national soldier that works for us now, for the State
Department, has to have a high public trust clearance. It is
basically a security clearance for a third country national
soldier where you take their name, it goes back through the
U.S. emba**y in that country and their name is run, kind of
like a national agency check here, which is what someone does
for a security clearance. That way we can ensure that they have
no criminal record, ma'am.
Ms. Schakowsky. I understand that one of your business
a**ociates, Jose Miguel Pa**aro, was indicted in Chile for his
role in supplying commandoes to serve Blackwater. Is that
correct?
Mr. Prince. He was not an a**ociate. He might have been a
vendor to us.
Ms. Schakowsky. In your written statement today, you state
that Blackwater mandates that its security professionals have a
security clearance of at least the secret level. Did any
Chilean contractors who worked for Blackwater ever get a
security clearance?
Mr. Prince. I believe what I said is for the WPPS contract,
the Americans working on that are doing the PSD mission are
required to have a secret clearance.
Ms. Schakowsky. Did any Chilean contractors get a security
clearance?
Mr. Prince. I don't know, ma'am.
Ms. Schakowsky. Because if yes, they were provided with
cla**ified information, if no, then it is not true that all
Blackwater personnel in Iraq have security clearances.
On your Web site, I don't know if it is still there, there
was a recent one, there was a jobs fair advertised in
Bucharest. And we have heard allegations that Blackwater
recruited Serbians and former Yugoslavs with combat experience
from the Balkan wars, some linked to atrocities committed in
Croatia and Kosovo and in Bosnia and a**ociates of Milosevic. I
am wondering if you could talk to me about that for a minute.
Mr. Prince. To my knowledge, we have never employed anyone
out of those countries.
Ms. Schakowsky. Would you know?
Mr. Prince. There are some Romanians that were on a
contract that we took over from a previous vendor, competitor.
But we phased them out and we use guys out of Latin America
now.
Ms. Schakowsky. Would you know if people have been
a**ociated with Pinochet or Milosevic before you hired them? Is
this part of your inquiry?
Mr. Prince. Again, for the State Department, for the static
guards that were utilized, third country national soldiers, a
high public trust clearance is required----
Ms. Schakowsky. I heard you say that.
Mr. Prince [continuing]. Where their name, their
background, their address, their date of birth, whatever
information is available on them, is run back through the
equivalent country that they are from, a national agency check,
to ensure that they don't have any criminal record, human
rights abuses, or any other bad marks against their name.
Ms. Schakowsky. OK, well, we should check into that
process. But let me ask a question. You said that you as a
company would not work overseas in any way that is not
a**ociated, that the United States does not approve. However,
Chile has made a decision not to participate as part of a
coalition member in this war. They won't send any troops. Do
you have any qualms about hiring people out of Chile to
participate actively in this war?
Mr. Prince. We don't hire anybody from Chile right now, to
my knowledge.
Ms. Schakowsky. Have you ever?
Mr. Prince. I previously just said that we had, previously.
Yes.
Ms. Schakowsky. And so the answer is you don't have any
qualms about doing that, based on the fact that Chile has made
a public policy decision not to participate?
Mr. Prince. I believe the persons of that country have a
free right to contract. I will give you an example. The
Philippines doesn't allow their personnel to go to Iraq. So we
don't hire their people to go to Iraq.
Ms. Schakowsky. OK, but you do hire Chileans. Thank you. I
appreciate it.
Chairman Waxman. Thank you very much, Mr. Schakowsky.
Mr. Prince, let me thank you very much. You have been very
patient. You have been here a long time.
I do want to acknowledge the presence today of Rhonda
Teague and Kristal Batalona, the daughter and wife of Wesley
Batalona. Ms. Schakowsky acknowledged the mother of Jerry
Zovko, who is in the audience today. These are people from
Fallujah. I am sorry we didn't get a chance to ask you more
questions about Fallujah. I might, with your permission, send
you some questions and ask you to respond for the record.
Because that was an example, we had a hearing on that
issue, and that was an example where one of the ways
corporations could make money is not to have fully trained
personnel. I don't know if that was the case or not, but it
certainly appeared to us that the people were not given
adequate protection and training for that Fallujah mission and
it had an unprecedented consequence in the battle of Fallujah
that followed.
In closing, let me just say that we really have a
remarkably unprecedented experiment going on in the United
States today by having private military contractors. It raises
a lot of issues. It raises issues about costs, it raises issues
about whether it interferes with our military objectives. And I
think this hearing and with you and the next witnesses will
help us continue to sort through what that means for our
Nation. We have never had anything of this magnitude before
where we have turned so much of our military activity over to
private military that used to be, for the most part, provided
by the U.S. military itself.
I want to thank you. If Mr. Davis has any last comments, I
will recognize him.
Mr. Davis of Virginia. Mr. Prince, thank you very much. I
think you have--is there anything else you would like to add
after all this? Would you like to add anything you didn't get
to say?
Mr. Prince. Thanks for having me. I would invite some of
the leadership of the committee, if they would like, to come
and visit our operations. We would be happy to show you what we
do.
Mr. Davis of Virginia. Fine. Let me just say, I think we do
need a dialog, and our next panel will tell us the State
Department's rationale and the large number of contractors and
why they are utilizing that versus active duty. I think that
will give more clarification to Members.
Thank you very much.
Mr. Prince. Thank you, sir.
Chairman Waxman. We will proceed to our next panel, but we
want to give Mr. Prince and his group an opportunity to leave.