Blackwater Founder Resigns as Chief Executive
Tuesday, March 3, 2009
RALEIGH, N.C., March 2 -- Erik Prince, who used an auto-parts inheritance to build Blackwater into one of the world's most successful defense companies, said Monday that he has stepped aside as chief executive.
Prince appointed a new president and chief operating officer in a management shake-up that he said was part of the company's "continued reorganization and self-improvement." It came just a few weeks after changing its name to Xe in an effort to repair its severely tarnished name and reputation.
Joseph Yorio, recently a vice president at DHL and a former Army special forces officer, will serve as president, replacing retiring executive Gary Jackson. Danielle Esposito, who has worked at Blackwater/Xe for nearly 10 years, will be the new chief operating officer and executive vice president.
Prince, who will retain his position as chairman but remove himself from day-to-day operations, founded Blackwater in 1997, initially to provide training to law enforcement and military. But after Sept. 11, the bombing of the USS Cole and the start of the Iraq war, the company built a large presence in providing private security.
The company's lucrative contract to protect U.S. diplomats in Iraq comprises about one-third of Xe's revenue, but the State Department announced that it would not rehire the firm after its contract expires in May. The company has one other major security contract, the details of which are classified.
A 2007 shooting in Iraq involving Blackwater guards drew outrage from politicians in Baghdad and Washington and demands that the company be banned from operating in Iraq.
Late last year, prosecutors charged five of the company's contractors -- but not Blackwater itself -- with manslaughter and weapons violations. In January, Iraqi officials said they would not give the company a license to operate.
In the meantime, Xe has been expanding into other lines of business. It has built a fleet of 76 aircraft that it has deployed to such hotspots as West Africa and Afghanistan.
The firm continues to expand training for law enforcement, with a renewed focus on international clients. Last year, some 25,000 civilians, law enforcement and military personnel were trained by the company.