Blackwater CEO quits in shake-up

Erik Prince. Photo / AP

RALEIGH - The Blackwater name is gone. So is the focus on the security business that made it famous.

Now the founder who built the private company into one of the world's most respected - and reviled - defence contractors is stepping aside as its chief executive.

Erik Prince's decision to relinquish his role underscores how hard the company now called Xe - pronounced "zee" - is working to bury the Blackwater brand and move its focus further away from the security contracting that tarnished its reputation.

Prince appointed a new president and chief operating officer in a management shake-up that he said was part of the company's "continued reorganisation and self-improvement". It comes less than a month after changing the company's name to Xe.

Although Prince will retain his position as chairman, he is removing himself from day-to-day operations. Spokeswoman Anne Tyrrell said he planned to spend more time with his family of seven children and planned to open a private-equity venture.

With a car-parts inheritance, Prince founded Blackwater in 1997 with some of his former Navy SEAL colleagues. They initially envisioned a world-class training facility to support law enforcement and military.

But, after September 11, the bombing of the USS Cole and the start of the Iraq War, the company developed a large presence in providing private security.

The company's lucrative contract to protect US diplomats in Iraq comprises about one-third of Xe's revenues, but the State Department said it would not rehire the firm after its contract expired in May.

The company has one other major security contract, details of which are classified, and executives have said it will continue doing such work at the US Government's request.

A 2007 shooting in Nisoor Square involving Blackwater guards drew outrage from politicians in Baghdad and Washington.

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 licence to operate.

Xe is still training for law enforcement with a focus on international clients

- AP