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New owners for XeServices - Private army sold but rotten apple doesn't fall far

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Xe Services LLC, originally known as Blackwater USA and then Blackwater Worldwide, one of the largest of the US State Department's private "armies', was ostensibly sold at the end of 2010 to USTC Holdings LLC, an investor consortium led by private equity firms Forte Capital Advisors and Manhatten Partners.

Speculation is that the serial company renaming and change of ownership is little more than a complex shell-game to rebrand the soiled reputation of one of the nation's most notorious mercenary outfits. Although highly successful in the short-term with some of its functions such as protecting US diplomats and other contractors in dangerous conflict zones, little serious thought has been given to the long-term negative foreign policy implications of privatizing US military/security tasks. In fact the Obama administration appears to be in lock step with this sector of the economy

Blackwater/Xe has long been mired in controversy over some of its extra-curricular activities. The deal is said to be worth approximately $200 million and probably includes the new owners inheriting an agreement with the government to pay $42 million in fines due to hundreds of violations of US export control regulations.

Erik Prince the founder & owner of Blackater/Xe Services was clearly relieved to be rid of the company that has caused so much controversy and has   come under scrutiny for a wide variety of offences - too many to mention here but includes unlawful killings and worldwide arms smuggling

Forte describes itself as an "independent financial business management firm dedicated to simplifying client's lives' with offices in New York City and Santa Monica, CA.   .

Manhatten Partners is headquartered in Manhatten Beach, CA, with offices also in New York City and claims to be an "opportunistic private equity firm pursuing investments for significant value appreciation'.

Central to the takeover of Xe is Jason DeYonker who until becoming a managing partner of the Forte team had worked closely with and for Mr.Prince right back to the founding days of Blackwater in the late 1990's, advising on the development of its early business plan, expansion of the firm's Moyock, NC training facility and negotiations for the first training contracts with the US government. Between 1998 and 2002 he also assisted in the wealth management of the Prince family.

Other members of the Forte management team appear to be emphasizing their military street-cred to top up their more traditional experiences in the fields of arts, entertainment, and fashion. Greg DeYonker's webpage says he served as a Captain with US Airforce Special Operations and in-house legal council Aaron Kanter claims to have been "a speechwriter and analyst for the Assistant Secretary for Defense for Economic Security'. No such position could be found on the DoD website

In addition to inheriting the $42 million in government fines, the new owners will continue to have Wendy Wysong, a partner at Clifford Chance LLP, serving as Special Compliance Officer to oversee the firm's export compliance program. In a previous life Ms.Wysong was the US Commerce Department's Deputy Assistant Secretary for Export Enforcement when Blackwater was -- yes, you guessed it -- illegally exporting weapons!

Conducting strategic due diligence on USTC Holdings' behalf was the Chertoff Group, a risk management firm set up by former U.S. Department of Homeland Security secretary - no stranger to high-profile deals with national security implications and who did such a stellar job at FEMA in the wake of Hurricane Katrina.

 

Ted Newcomen is a citizen-journalist - someone who is tired of the lazy 'lamestream' media circus which is obsessed with the cult of celebrity and just recycles press releases for the establishment.

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The names may change but it's the same old faces... by Ted Newcomen on Friday, Feb 11, 2011 at 10:12:10 AM