The world's largest private army, Blackwater USA, has quietly created an affiliate that the press has largely ignored and I've been content to forget about it as well--until last week's post on the use of offshore corporations by private spy companies started me thinking about how the industry could use offshore shell corporations. So when I was reading Jeremy Scahill's interesting new book, BLACKWATER, a fact that Scahill uncovered jumped out at me: Greystone is an offshore corporation incorporated in Barbados.
As an offshore corporation, Greystone offers Blackwater multiple advantages and the largest could be a workaround for US restrictions upon the export of military services. [To be fair, please see comments by the Greystone, Ltd.'s Director in a separate post.] Through its Greystone shell, Blackwater could offer its Special Forces and Special Operations services to any individual, country or corporation that can afford it. Or as they put it:
Greystone is an international security services company that offers your country or organization a complete solution to your most pressing security needs.
According to the shell company's initial website:
Greystone is prepared to deploy assets and materials forward to assist in training indigenous resources in developing a capability to conduct defensive and offensive small group operations, including firearm training requirements. Off-the-shelf standard field operations packages consist of 30 days of training to support raid, reconnaissance, and small unit tactics.
Translation: not only can we train your country's Special Forces, we can train groups for raids and sabotage missions, should your company or country decide to create an insurgency to destabilize an unfriendly government.
In addition to its training services, its mobile security teams are prepared to provide:
Physical static and mobile security operations including static compound security, large-scale event support, and sensitive facilities protection,
Maritime training, security, and ride-along services in high-threat environments
Translation: we'll go to war for you or with you.
Blackwater has reportedly developed a gunship variant of a CASA-212 for use by Greystone. Its new 767s are most likely intended to fly for Greystone missions. And the purpose of its new training facility in the Philippines is becoming much clearer: it's not a jungle training facility for US troops, but an offshore training facility for troops that could not get visas to enter the US. It seems that Blackwater is using Greystone to hire Third Country Nationals who are much cheaper than US former military personnel:
We believe in and specialize in creating layered security packages that use personnel from numerous nationalities...The synergistic advantages of combining locals, third country nationals and Expats far outweigh any additional required effort.
Translation: Cheap, Third World grunts, working under American officers. American BW trigger-pullers, your jobs are being outsourced.
Greystone was launched with strong international interest and limited corporate interest. Representatives from over two dozen countries attended its inauguration, along with executives from ExxonMobil, Morgan Stanley and UBS Investment Bank.
As a major US defense contractor, Blackwater more or less abides by US export licensing requirements. At the moment Blackwater is searching for a new export compliance officer, although their standards of a high school degree with less than a year's experience for the 91k-142,000 job dealing with some of the government's most complex export requirements does raise questions about just how seriously they take the position. (It took about three sentences of the State Department guidelines for my eyes to cross and keep in mind I spent years in grad school reading commie propaganda in the original Russian and German.) Nonetheless, Blackwater USA plays by US law or at least its American entities do.
If it is indeed recognized as a foreign person under ITAR, Part 120, Greystone doesn't have to worry about State Department export licenses, sanctions or taxes for that matter. It's free to openly market its services and it can respond quickly, without the long delays for the State Department to determine if the deployment was within US interests.
Greystone, Ltd. is officially an affiliate of Blackwater, not a subsidiary. Its real ownership is obscured, but obviously Erik Prince and the Prince Group are behind it and its true relationship with Blackwater was not as hidden in its earliest days. Its early promotional literature gave its address as a PO Box in Moyock, NC, home of Blackwater USA and on its first website, the "employment" button was even hyperlinked to Blackwater's website. The"affiliate status" most likely means that an arrangement exists whereby Greystone pays Blackwater a percentage of gross profits as some form of "management fee" for various consulting services and most likely pays Blackwater other fees for leasing equipment, aircraft, facilities, etc. This would allow them to bring the revenues back into the US, revenues from activities that would be prohibited for an US registered firm.
Blackwater has long proclaimed itself a security company, denying that it was a mercenary firm, with its founder Erik Prince wrapping himself in the American flag. One things is clear: Like its predecessors--Sandline, Executive Outcomes and the White Company, Greystone is an army without a flag.
Coming soon, Part II: 1001 Uses of a Mini-CIA Combined with an Offshore Special Forces Unit
And FYI, you can also find out more about Jeremy Scahill's book, BLACKWATER, at www.Blackwaterbook.com.