Obama won't charge Blackwater with violation of Sudan sanctions

06-26-2010 • Warren P. Strobel, J. S. Landay and Joseph Neff

WASHINGTON — The security contractor Blackwater Worldwide tried for two years to secure lucrative defense business in Southern Sudan while the country was under U.S. economic sanctions, according to current and former U.S. officials and hundreds of pages of documents.

The effort to drum up new business in East Africa by Blackwater owner Erik Prince, a former Navy SEAL who had close ties with top officials in the George W. Bush White House and the CIA, became a major element in a continuing four-year federal investigation into allegations of sanctions violations, illegal exports and bribery.

The Obama administration, however, has decided for now not to bring criminal charges against Blackwater, according to a U.S. official close to the case.

Instead, the U.S. government and the private military contractor are negotiating a multimillion-dollar fine to settle allegations that Blackwater violated U.S. export control regulations in Sudan, Iraq and elsewhere. Prince renamed the company Xe Services in an apparent attempt to shake off a reputation for recklessness, and this month put it up for sale.

Had the company been indicted, it could have been suspended from doing business with the U.S. government, and a conviction could have brought debarment from all government contracts, including providing guard services for the CIA and the State Department in war zones. In recent weeks the Obama administration awarded the company a $120

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million State Department security contract, and about $100 million in new CIA work.

The story of Blackwater's efforts in Sudan is a tale of mixed motives that echo an earlier era of overseas empires, of evangelical Christians who offered to help defend Christian and animist Southern Sudan from the Muslim Arab military dictatorship in the north, but also sought to exploit the region's oil and mineral wealth.

According to two former senior U.S. officials, the company headed by Prince, who's long been active in evangelical groups, at one point proposed a broad defense package that would have required Southern Sudan to pledge as much as half its mineral wealth to pay for Blackwater's services.

It's also a story of a divided Bush administration. Prince personally lobbied Vice President Dick Cheney to lift the sanctions on Southern Sudan, according to the documents and a former senior U.S. officia. Cheney supported Blackwater's sales pitch, according to the documents.