Building Blackwater

The company's first training contract came in 1998. A Seal unit in California had heard about the camp through word of mouth in the close-knit special forces world, and it came to practice combat, shooting and other skills. For the next few years, the company worked with law enforcement and small military units. It considered a $40,000 contract a big deal.

All that changed after the October 2000 al-Qaeda attack on the USS Cole in the Yemeni port of Aden. The suicide bombing not only killed17 sailors and crippled a high-tech destroyer, but it also exposed how unprepared the Navy was to defend against a new, unpredictable kind of threat. The top brass demanded better training.

Blackwater employees, many of them former Navy pilots and special forces, heard that demand and called everyone they knew in the military to promote the company.

It eventually won a $46 million training contract in September 2002. It was the pivot-point in the company's brief history because it gave Blackwater credibility in Washington.

"It was our first big-volume, predictable customer," Prince said. "It conferred legitimacy. . . . At that point, we became a government contractor."

By then, the other key event shaping Blackwater's history had occurred. The Sept. 11, 2001, terrorist attacks changed the security landscape. Suddenly, everyone from corporate America to agencies across the Defense Department and the rest of the government felt the need for protection against looming terrorist threats.

Once again, Prince and his Blackwater colleagues put out the word in the special forces community. "We made it known to them that we have a lot of capacity and we're ready to help in any way we can," he said.

Not long after Sept. 11, 2001, he received a call from an agency he won't name. He went to a meeting in a room filled with people seeking urgent and classified help in Afghanistan. He was told that a couple of secret buildings in Afghanistan needed protection.

Prince himself was among a small group of Blackwater contractors who made the initial trip. Although he still declined to name the agency, Prince said officials were so satisfied with the performance of Blackwater contractors that they hired the company to do similar work in Iraq at the beginning of the war.

"We're a service business. We bend over backwards," he said. "Our direction to the guys is to make themselves indispensable."

'They're Greatly Disliked'

In August 2003, the company won a $25 million contract to protect L. Paul Bremer, administrator of the Coalition Provisional Authority. It was a step into the center of the conflict in Iraq -- and undreamed-of revenue for Blackwater.

The scene of Blackwater guards moving throughout Baghdad became a familiar, menacing sight. The entourage looked like something out of a movie. A dozen bodyguards wearing assault rifles joined U.S. soldiers to flank Bremer. A Blackwater helicopter or two hovered over their convoys of dark sport-utility vehicles.