While private military firms on the ground in Iraq battled each other for contracts, Blackwater was quietly rewarded with the attachment of a U.S.-taxpayer funded I.V. to the company’s headquarters in Moyock. In June 2004, at the end of Bremer’s tenure, Blackwater was handed one of the most valuable and prestigious U.S. government contracts on the market, through the State Department’s little-known Worldwide Personal Protective Service (WPPS) program.123 State Department documents describe the WPPS program as a government “diplomatic security” initiative to protect U.S. officials and “certain foreign government high level officials whenever the need arises.” In the government documents, the work is described as “providing armed, qualified, protective services details” and, if ordered, “Counter Assault Teams and Long Range Marksman teams.” The companies might also provide translators and perform intelligence work. The State Department warned the companies to “Ensure that contractor-assigned protective detail personnel are prepared to, and in fact shall operate and live in austere, at times unsettled conditions, anywhere in the world.” The contract also said that if necessary, “personnel, who are American citizens, will be issued an appropriate, official or diplomatic passport.” Private contractors were also authorized to recruit and train foreign nationals and to “conduct protective security operations overseas with them.”
In soliciting bids for the 2004 global contract, the State Department cited a need born of “the continual turmoil in the Mid East, and the post-war stabilization efforts by the United States Government in Bosnia, Afghanistan and Iraq.” It said the government “is unable to provide protective services on a long-term basis from its pool of special agents, thus, outside contractual support is required.”
The WPPS contract was divided among a handful of well-connected mercenary companies, among them DynCorp and Triple Canopy. Blackwater was originally slated to be paid $229.5 million for five years, according to a State Department contract list. Yet as of June 30, 2006, just two years into the program, it had been paid a total of $321,715,794. A government spokesperson later said the estimated value of the contract through September 2006 was $337 million.124 By late 2007, Blackwater had been paid more than $750 million under the contract. A heavily redacted 2005 government-commissioned audit of Blackwater’s WPPS contract proposal charged that Blackwater included profit in its overhead and its total costs, which would result “not only in a duplication of profit but a pyramiding of profit since in effect Blackwater is applying profit to profit.”125 The audit also alleged that the company tried to inflate its profits by representing different Blackwater divisions as wholly separate companies.126
For Blackwater, the WPPS contract was a milestone that solidified the company’s role as the preferred mercenary firm of the U.S. government, the elite private guard for the administration’s global war. In late November 2004, Blackwater president Gary Jackson sent out a mass e-mail celebrating President Bush’s reelection and Blackwater’s new contract: “Well, the Presidential elections are over, the masses spoke, the liberals are lined up at health clinics receiving treatment for Post Election Selection Trauma, and President Bush’s war on terror will continue to move forward for the next four years. Our military is doing a fabulous job in fighting the war on terrorism as is apparent by the results of the most recent victory in the Battle of Fallujah. As Iraq continues to become more stable the Department of State will be sending in more U.S. Government Officials to assist Iraq in becoming a democracy. Even though the majority of Iraqis want democracy there will still be those terrorist[s] who do not, and they are a high-threat to the safety of our Officials. These Officials need professional protection and the Department of State, Bureau of Diplomatic Security has chosen and contracted Blackwater Security Consulting to assist their organization in providing that protection.”127 Jackson excitedly announced that for qualified candidates wishing to “get involved in stabilizing Iraq and supporting the President’s war on terrorism . . . now is the time to join Blackwater.”128
CHAPTER TWELVE
CASPIAN PIPELINE DREAMS
ALTHOUGH BLACKWATER’S name recognition in 2004 was almost exclusively centered on the Fallujah ambush and the company’s role in Iraq, it was not the only “war on terror” front line where the Bush Administration dispatched the company. Beginning in July 2004, Blackwater forces were contracted to work in the heart of the oil- and gas-rich Caspian Sea region, where they would quietly train a force modeled after the Navy SEALs and establish a base just north of the Iranian border as part of a major U.S. move in what veteran analysts in the region call the “Great Game.” As it won more contracts in Iraq in the aftermath of Fallujah, Blackwater simultaneously found itself helping to defend another high-stakes pet project of some of the most powerful figures in the U.S. national security establishment, including Henry Kissinger, James Baker III, and Dick Cheney.
The United States’ quest for domination of the world’s petrol reserves certainly did not begin with the 1991 Persian Gulf War or the subsequent 2003 invasion of Iraq. While Iraq and the war on terror have dominated the headlines, the U.S. government and American corporate interests have long been quietly engaged in a parallel campaign to secure another major prize, this one located on the territory of what was once the Soviet Union: the Caspian Sea, which is believed to house well over 100 billion barrels of oil.1 After the collapse of the Soviet Union in 1991, Washington and its allies saw an opportunity to snatch one of the great deposits of valuable natural resources from Moscow’s grip. Multinational oil giants swooped in like vultures as the United States and its allies moved quickly to shore up the repressive regimes of the littoral ex-Soviet republics of the Caspian region. Unocal spent much of the 1990s trying to run a pipeline from Tajikistan through Afghanistan, a project on which Erik Prince’s friend (and Blackwater’s lobbyist) Paul Behrends had worked, but there was also great interest in the nations of Kazakhstan and Azerbaijan, as well as the strategically important Republic of Georgia. While the route from Tajikistan proved very complicated, it was by no means the only one being explored by Big Oil, the White House, and a powerful cast of political players from past U.S. administrations.
Complicating a swift U.S. domination of the landlocked resources of the Caspian was the fact that two powerful nations—Russia and Iran—also border the sea and viewed the U.S. incursion into the area as a hostile threat. By 1997, a powerful U.S. consortium was hard at work exploring multiple ways to get to the Caspian resources. “American oil companies—including Amoco, Unocal, Exxon, Pennzoil—have invested billions of dollars in Azerbaijan and plan to invest billions more. As a result, they have developed a strongly pro-Azerbaijan position,” reported New York Times correspondent Stephen Kinzer in a dispatch from Azerbaijan. “The list of private American citizens who are seeking to make money from Azerbaijani oil or to encourage investment here reads like a roster of the national security establishment. Among the most prominent names are former Secretaries of State Henry A. Kissinger and James A. Baker 3d, former Defense Secretary Dick Cheney, former Senator and Treasury Secretary Lloyd Bentsen, former White House chief of staff John H. Sununu, and two former national security advisers, Brent Scowcroft and Zbigniew Brzezinski.”2
While the Clinton administration worked feverishly to secure Caspian resources, hosting Azerbaijan’s president at the White House for a two-hour meeting in August 1997 and courting his cooperation,3 it was not until the Bush administration took power that these onetime “pipe dreams” became a reality. In May 2001, Dick Cheney’s energy task force estimated that proven oil reserves in Azerbaijan’s and Kazakhstan’s sectors of the Caspian alone equaled “about 20 billion barrels, a little more than the North Sea and slightly less than the United States.”4 The Cheney group estimated that if the United States could get a major pipeline flowing west from the Caspian Sea—away from Moscow’s control—daily exports from the Caspian to world markets could go as high as 2.6 million barrels per day by 2005, “as the United States works closely with private co
mpanies and countries in the region to develop commercially viable export routes.”5 By contrast, in 2005 Iran exported 2.6 million barrels of oil per day, Venezuela 2.2, Kuwait 2.3, Nigeria 2.3, and Iraq 1.3.6
Since the collapse of the Soviet Union, getting at the Caspian region’s oil had proved extremely difficult for Washington. Dating back to the Clinton administration, the United States and its allies envisioned a plan wherein Washington would essentially prop up the repressive regime in Azerbaijan and establish a state-of-the-art oil exploitation operation off the coast of the Azerbaijani capital, Baku, a peninsula that juts into the western Caspian. The oil would then flow through a massive pipeline stretching from Baku to Tbilisi, Georgia, through Turkey to the Mediterranean port city of Ceyhan. From there, the Caspian oil could be easily transported to Western markets. The project would mean an end to Moscow’s de facto monopoly on transporting Caspian oil, while at the same time providing Washington with an unparalleled opportunity to exert its influence in the ex-Soviet territories. When the project began in 1994, some analysts celebrated it as a “new Persian Gulf”; estimates projected as much as 230 billion barrels of oil in the region—eight times the proven U.S. reserves.7
During the latter years of Clinton’s tenure, however, the project came to be viewed as a white elephant likely to fail. The Caspian countries were governed by corrupt, unstable regimes that remained under Moscow’s sway despite their nominal independence. The pipeline would be extremely costly and vulnerable to sabotage. To top it off, early Western explorations in the Caspian turned up estimates of the sea’s potential resources far more modest than previous projections.8 While the United States remained committed to tapping the Caspian, the program moved forward at a slow pace. That changed when Bush took office and oil executives were welcomed into the White House like cousins at a family reunion. By September 2002, construction on the massive eleven-hundred-mile Caspian pipeline was under way. The BBC described it as a project that U.S. officials favored because it would “weaken Russia’s stranglehold on regional pipeline network and leave Iran on the sidelines.”9
A potential problem for the project lay in what the White House saw as the dangerous geography of the neighborhood—located not far from Chechnya and Iran. The Bush administration, therefore, made a number of moves that would result in at least one regime change in the region and the deployment of forces from Blackwater and other U.S. war-servicing firms to protect what would be one of Washington’s most ambitious power grabs on former Soviet territory.
In 2003, the Bush administration helped overthrow the government of a longtime U.S. ally, President Eduard Shevardnadze of Georgia. Once considered Washington’s closest strategic partner in the region and affectionately referred to as “Shevy-Chevy” by U.S. officials like James Baker, Shevardnadze had fallen fast out of favor with the administration of George W. Bush, as Shevardnadze began increasingly doing business with Moscow after years of U.S. patronage.10 Among his sins: granting new drilling and pipeline concessions to Russian firms and obstructing Washington’s grand Caspian pipeline plan. Soon after those transgressions, he was forced to resign in November 2003 as the so-called Rose Revolution brought to power a more staunchly pro-U.S. regime. The first telephone call the new acting president, Nino Burdzhanadze, made when she took over from Shevardnadze was to oil giant BP to “assure them the pipeline would be OK.”11 Just prior to taking power in Georgia, the new U.S.-backed leader, Mikhail Saakashvili, announced, “All strategic contracts in Georgia, especially the contract for the Caspian pipeline, are a matter of survival for the Georgian state.”12 That regime change resulted in the closure of Russian bases in Georgia and an increase in U.S. military aid to the country. In early 2004, Defense Secretary Rumsfeld deployed private military contractors from the Washington firm Cubic on a three-year $15 million contract to Georgia “to equip and advise the former Soviet republic’s crumbling military, embellishing an eastward expansion that has enraged Moscow,” reported London’s Guardian. “A Georgian security official said the Cubic team would also improve protection of the pipeline that will take Caspian oil from Baku to Turkey through Georgia. Georgia has already expressed its gratitude by agreeing to send 500 troops to Iraq.”13
The Bush administration knew that the controversial pipeline would need to be protected in each country it passed through. While Washington increased its military aid to Georgia, it faced a decade-long U.S. Congressional ban on military assistance to Azerbaijan, where the oil would be extracted. In 1992, Congress banned such aid because of Azerbaijan’s bloody ethnic and territorial conflict with Armenia in the Nagorno-Karabak region. But on January 25, 2002, President Bush “waived” that section of the Congressional Act, thereby allowing U.S. military aid to Azerbaijan to resume. The White House said the waiver was “necessary to support United States efforts to counter international terrorism [and] to support the operational readiness of United States Armed Forces or coalition partners to counter international terrorism”14—in other words, to protect oil interests. In the fall of 2003, the administration officially launched a project it called “Caspian Guard,” under which the United States would significantly bolster the military capabilities of Kazakhstan and Azerbaijan.15 Similar to the U.S. plan in Georgia, the $135 million program would create a network of commando and special operations forces that would protect the lucrative oil and gas exploitation being plotted out by transnational oil corporations and patrol the massive pipeline project that would allow an easy flow of the hydrocarbon resources of the Caspian to Western markets.
But oil and gas were only part of the story. While the Caspian’s resources were undoubtedly viewed by Washington as a major prize to be secured, Azerbaijan’s geographic proximity to the center of the administration’s broader attempt at conquest of the Middle East was also incredibly valuable. With open talk of the possibility of a U.S. attack on Iran and several reports detailing military planning for such operations as part of the “war on terror,” many of Tehran’s neighbors, particularly those directly on its border such as Azerbaijan, were very resistant to the overt presence of U.S. forces on their soil. Iran had made clear that it would retaliate against any state that supported the United States in an attack. As the Caspian Guard program got under way in 2004, “the Azerbaijani parliament adopted a law prohibiting the stationing of foreign troops on the country’s territory, a move widely believed to be a gesture towards Moscow and Tehran, which both oppose any strengthening of military ties between Azerbaijan and the US,” reported the EurasiaNet news service.16 But despite the overtures to Washington’s foes, the reality was that Azerbaijan was on the receiving end of a massive new pipeline of U.S. military assistance.
Enter Blackwater
In early 2004, with the United States ratcheting up its rhetoric against “axis of evil” member Iran, Blackwater USA was hired by the Pentagon under Caspian Guard to deploy in Azerbaijan, where Blackwater would be tasked with establishing and training an elite Azeri force modeled after the U.S. Navy SEALs that would ultimately protect the interests of the United States and its allies in a hostile region. The $2.5 million Army contract for a one-year project indicated that it was open for competition but that Blackwater was the only company to bid on it.17 On Pentagon documents, the nature of Blackwater’s work in Azerbaijan was kept vague—only mentioning “training aids” and “armament training devices.” Despite the secrecy, one thing was clear: Blackwater had once again found itself at the forefront of a pet Bush administration project. “We’ve been asked to help create, for lack of a more educated term, a SEAL team for Azerbaijan, both to help them with their oil interests in the Caspian but also to kind of monitor what goes on in the Caspian during the wee hours of the night,” said Blackwater’s Taylor. “These are very, very politically . . . sensitive issues.”18 Blackwater joined a U.S. corporate landscape in Baku that included other Bush administration-linked corporations such as Bechtel, Halliburton, Chevron-Texaco, Unocal, and ExxonMobil.
Some analysts viewed C
aspian Guard and the Blackwater contract as a backdoor U.S. military deployment. “We were hired to come in and build by the U.S. government, to build a maritime special operations capability in Azerbaijan,” said Blackwater founder Erik Prince at a U.S. military conference in 2006. “We took over an old Spetsnaz (Soviet special forces) base and built about a ninety-man Azeri high-end unit.”19 Prince called Blackwater’s Azerbaijan work “a great small footprint way to do it.” Instead of sending in battalions of active U.S. military to Azerbaijan, the Pentagon deployed “civilian contractors” from Blackwater and other firms to set up an operation that would serve a dual purpose: protecting the West’s new profitable oil and gas exploitation in a region historically dominated by Russia and Iran, and possibly laying the groundwork for an important forward operating base for an attack against Iran. “Compared with the U.S. efforts to train and equip troops in neighboring Georgia, training Azerbaijan’s commandos was a relatively low-profile program,” observed Central Asia correspondent Nathan Hodge. “It’s understandable: The country is sandwiched between Russia and Iran, and sending a contingent of uniformed U.S. military trainers would be a provocative move. A private contractor helps keep things under the radar.”20
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