Murky waters of arms trade: Ex-Blackwater to fork out up to $7.5 mln in fines

A picture taken on July 5, 2005 shows contractors of the US private security firm Blackwater securing the site of a roadside bomb attack near the Iranian embassy in central Baghdad (AFP Photo / Ahmad Al-Rubaye)
The American private military company Academi, formerly known as Blackwater, has just agreed to pay between $5 and $7.5 million in a settlement for illegal arms trading and operating in countries where sanctions prohibited it.

­It was accused by the US Justice Department of seventeen counts of selling arms and owning illegal weapons. But it was agreed prosecution would be deferred as long as the company pays the fines to the US government. It must also reform its conduct and comply with government audits and export rules not to supply prohibited weapons or security services without permission.

The list of Blackwater’s wrongdoings is extensive. In the US they held unregistered weapons including AK-47 assault rifles. Internationally, employees lied to federal regulators about guns as gifts for the King of Jordan, saying they owned them. They sold satellite phones to Sudan in 2005 and tried to set up security services there in 2006 without approval from the US government. From 2006 to 2008 they helped Sweden and Denmark with secret plans for armored personnel carriers. They exported ammunition to Iraq and Afghanistan and helped train the Canadian military – all without the required permission.

The company’s new management points out that this all happened under previous owners and that they are keen to clear up these old cases and move on. An Academi spokesman said that an admission of events taking place is not the same as an admission of guilt. But it seems, at least from these settlements, that Blackwater was a very different company from what Academi is now.

When it came to making money from security, Blackwater did the business. Diplomatic security, protection for civilian contractors and armed forces facilities alike in places like Iraq, law enforcement support, training for soldiers and police, even weapons research and development. Blackwater has held billions of dollars in security contracts. It operated its own planes, helicopters and armoured personnel carriers.

Blackwater rose to notoriety when it won huge security contracts from the US government at the start of the Iraq war. But before long the company became embroiled in major controversies about its practices. In 2004 four Blackwater guards were ambushed and killed by Iraqi insurgents. Their bodies were then burned and two of them were hung from a bridge, which brought accusations the men had been sent into a death trap without proper protection.

In 2007 a huge row erupted between the US and Iraqi governments after five Blackwater guards were accused of wildly opening fire at a Baghdad road junction. Seventeen Iraqis died. The guards argued they thought they were under attack. Charges against the five men are pending in a Washington D.C. federal court.

Dr. Joseph Fitsanakis, a coordinator of the Security and Intelligence Studies Program at the US-based King College, believes that conflicting interests among government agencies over this issue may help the company overcome its difficulties.

“What you are seeing here is that parts of the American government are in a cozy relationship with the company, but other parts are trying to prosecute it for violations of the US Criminal Code. And that’s the tension between the American government’s agencies fighting in this particular interesting situation,” he told RT.

Still, the company will have to work hard to shed its checkered past, and that is why it is trying to keep a very low profile right now, Fitsanakis says.

“It wasn’t the biggest or the most active military contractor in Iraq but it was most certainly trigger-happy and most high-profile, which is counterintuitive – when you are in this kind of business, you want to keep a very low profile. The company is trying to do this now very carefully,” he said. “My feeling is that it is going to have to try very, very hard to try to disassociate itself from its background.”