Scandal-Ridden Blackwater CEO Steps Down

Erik Prince departs the company he founded as it tries to improve its image.

January 30, 2009, 1:30 PM

March 2, 2009— -- The CEO and founder of the scandal-ridden security firm once known as Blackwater USA resigned Monday morning as part of the company's attempt to rebrand itself after being fired earlier this year by the State Department from its job protecting diplomats in Iraq. The firm officially changed its name last month from Blackwater to Xe.

Erik Prince, a former Navy SEAL and the son of a wealthy Republican campaign donor, founded Blackwater in 1997. He said today that he will now focus on a private equity venture unrelated to the company.

Prince's departure caps the list of executives who have recently left the company, including the Vice Chairman, Chief Operating Officer, President, and Executive Vice President, as the company attempts to move past the scandals of the last few years.

Blackwater, now Xe, has been the target of at least four grand jury investigations and accusations of tax fraud, improper use of force, arms trafficking and overbilling. The firm has denied any wrongdoing.

The firm is best known for its automatic weapon-brandishing diplomatic protection force in Iraq. Officials there recently refused to license Blackwater to operate in Iraq citing lingering outrage over the September 2007 shooting deaths of 17 civilians by Blackwater guards.

Five former Blackwater guards have pleaded not guilty to federal charges that include 14 counts of manslaughter and 20 counts of attempted manslaughter. No charges were brought against the corporation.

Xe's New Management

Xe has created an independent panel of outside experts to advise the company since last fall to help build new company compliance structures.

Joseph Yorio, a former Army special forces officer, will now serve as Xe's President. Danielle Esposito will be the new Chief Operating Officer and Executive Vice President.

"I am confident that Joe and Danielle can guide this team to new heights, while I will have the opportunity to take on some new challenges that I have not yet had the opportunity to tackle," said Prince.

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