Blackwater creates oversight committee

RALEIGH, N.C. --

Amid a federal probe into whether Blackwater Worldwide smuggled weapons into Iraq, the private security contractor said Thursday it has established a panel of defense experts and former prosecutors to ensure it follows U.S. export laws.

In a move that acknowledges the company may not have adequately complied with those laws in the past, founder and CEO Erik Prince said the creation of a three-person oversight committee directly responds to some of the challenges the company has faced in following U.S. controls.

"Our company has experienced remarkable growth in the last few years," he said in a news release. "This growth, our work for the U.S. government around the world, and the nature of the services we offer have created compliance challenges."

Federal authorities have been investigating since last year whether Blackwater improperly brought weapons into Iraq, allegations the company has strongly denied. Earlier this year, two former employees were sentenced on gun-running charges after the company said they stole from Blackwater's armory. And in June, federal agents seized 22 automatic rifles from a company vault.

Export control laws limit how companies and individuals handle sensitive resources, including weapons and information.

Andrew Howell, Blackwater's general counsel, said the company has had trouble integrating compliance controls into a global business that works under tight time constraints and in dangerous environments.

"Ongoing reviews by the Departments of Justice, State and Commerce have highlighted the need for a significant and systems-wide initiative," Howell said in a release.

A federal grand jury has also been investigating the fatal shooting of 17 Iraqi civilians who were killed in September 2007 when Blackwater guards opened fire in a crowded Baghdad square.

The compliance committee will include two former U.S. attorneys - Robert C. Bonner and Asa Hutchinson - and former Lockheed Martin Corp. ethics executive Carol R. Marshall. Karen Jones, who oversaw import and export operations at Raytheon Co.'s missile division, will serve as Blackwater's new vice president of export compliance.

Blackwater's rapid growth spurt, which began following the bombing of the USS Cole in 2000, has placed the company on the track to reach $1 billion in annual revenues. The company protects U.S. diplomats in Iraq and helps train authorities and military at its 7,000-acre compound in northeastern North Carolina.

Blackwater executives said in July that they never intended for its security business to make up such a large chunk of its operations. The company will fulfill its remaining contracts but would like to scale back its security business as it focuses on other areas of growth, such as international training and aviation logistics.


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