Business Blog: Hoover’s Business Insight Zone

The Company of the Day is Blackwater USA.

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“I’m the best there is at what I do. But what I do best isn’t very nice.” That’s what the superhero Wolverine said by way of introduction in the X-Men comic book. The same might be said for the non-fictional Blackwater USA, the private contractor that has come to prominence because of its role in the US occupation of Iraq. Blackwater is in the news this week after a Baghdad firefight on Sunday in which its agents shot and killed several Iraqis — either insurgents or innocent civilians, depending on who’s telling the story. The Iraqi government has talked about revoking Blackwater’s license to operate in Iraq. It’s not clear, however, that Blackwater needs any such license under its contract with the State Department, whose diplomats it guards in Baghdad’s Green Zone, or that the shaky government of Prime Minister Nouri al-Maliki actually has the power to expel the company.

The larger issue for many Iraq watchers is what role private security companies like Blackwater should play in Iraq. The company’s fighters, who include many former Navy SEALs, Army Green Berets, and other special forces troops from the best militaries in the world, make far more money working for Blackwater than they would for formal military units, and in at least some cases they operate beyond the reach of ordinary US or Iraqi laws, since they are not US military personnel and are exempted from Iraqi legal prosecutions. Yet these mercenaries are also essential to the US occupation, since they take on jobs that lie beyond the ambit of the military or the capabilities of other security services. (Blackwater declines to call its contractors mercenaries, but that’s what they are — fighters for hire.) The work they do isn’t very nice, but given that the US won’t be removing its diplomats from the Green Zone anytime soon, it appears that Blackwater will have to keep doing it.

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See also my colleague Daysha Taylor’s Bizmology writeup on the Blackwater fracas.