March 2, 2009 / 8:49 PM / 10 years ago

Blackwater founder resigns as chief executive

MIAMI (Reuters) - The chief executive of Blackwater Worldwide, the private security firm whose guards are accused of killing Iraqi civilians while protecting U.S. diplomats, is stepping down, the company said on Monday.

Erik Prince had been CEO since 1997 when he founded the company that changed its name to XE just last month.

Although he will stay on as chairman, his resignation comes just over a month after the U.S. State Department told the company it would not renew its contract in Iraq.

The State Department’s move followed Iraq’s decision to deny a license to Blackwater, which drew intense criticism after its guards opened fire in Baghdad traffic killing at least 14 unarmed Iraqi civilians in 2007.

One Blackwater guard has pleaded guilty in U.S. court to voluntary manslaughter and attempt to commit manslaughter over the Baghdad incident, while five others are awaiting trial on manslaughter and other charges. The firm denies wrongdoing.

Prince, 39, did not refer to the shooting incident in an e-mail to employees and independent contractors announcing his decision to relinquish day-to-day control of the company based in Moyock, North Carolina.

But he said the company had conducted more than 35,000 “personal security detail missions” in Iraq and Afghanistan and that “no one under our care was ever killed or seriously injured.”

Privately held Blackwater earned more than $600 million in revenues last year and about a third of that stemmed from its State Department contract to protect diplomats in war zones.

The presence of Blackwater and other security contractors, often as heavily armed as the military itself, has been a signature feature of the war in Iraq since the U.S.-led invasion in March 2003 ordered by then President George W. Bush.

Xe spokeswoman Anne Tyrrell said Prince’s departure came as the company was already in a restructuring mode and focused on returning to its roots as a logistics, aviation and training company rather than a security firm.

She did not elaborate but said Prince would now focus on a private equity venture the details of which have not been made public.

The company named Joseph Yorio as president and Danielle Esposito as chief operating officer and executive vice president and Tyrrell said Yorio was possibly in line to succeed Prince as CEO.

“That (CEO) position is going to remain empty for a period. It is possible that it will be filled by Joe Yorio but that has not been determined yet,” Tyrrell said.

Reporting by Tom Brown; Editing by Leslie Gevirtz

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