Erik Prince, an American Commando in Exile
Credit: Preston Keres / The Washington Post / Getty Images

In a humid, 88-degree summer swelter, Erik Prince pulls up on his Cannondale mountain bike drenched in sweat but unwinded. Dressed in a cheap white polo shirt, the 41-year-old ex–Navy SEAL, ex–CIA assassination point man, and avid adventure racer has just pedaled over to meet me from his self-described redneck mansion, a low-key brick affair a few miles away in North Virginia horse country, where he has been raising his seven school-age children. The next day, Prince will board a flight from Dulles International Airport, heading off to begin a new life in Abu Dhabi, the capital of the United Arab Emirates – a nation, some have been quick to note, that lacks an extradition policy with the United States.

Today he needs to pack, and he wants to be with his kids, but he also needs to talk. He has some things he needs to get off his chest, some things he wants everyone to know. He greets me politely, takes a seat, and proceeds to remove the batteries from his cell phone – "It's too easy to eavesdrop these days," he says. Then he checks his Breitling watch and shoots me the impatient look his business associates know only too well: Let's get on with it.

In phone calls leading up to our meeting, Prince was angry – furious, even – that he and Blackwater, the company he built from a ramshackle shooting range into a $1.5 billion one-stop shop for war-zone services to the Pentagon, U.S. State Department, and the CIA, continue to endure what he views as a ceaseless and politically motivated "proctological exam." The company will go on (it recently won a fresh $100 million contract from the CIA), but Prince, seething with betrayal, has had enough: "I'm done. It's all sold or shut down. I'm getting out of the government contracting business."

Since the clumsy February 2009 rebranding effort in which Blackwater was renamed Xe (pronounced "zee"), both current and former executives, Prince says, get deposed regularly by investigators from at least six federal agencies, including Congress, the Pentagon, the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and even the Department of Agriculture. They're looking for dirt to support what Prince dismisses as "baseless" accusations that run the gamut from negligence, racial discrimination, prostitution, wrongful death, murder, and the smuggling of weapons into Iraq in dog-food containers. One witness, Howard Lowry, who traveled to Iraq frequently between 2003 and 2009, testified on September 10 that Blackwater contractors had him procure steroids and other drugs for them, and that he was invited to weekly all-night parties in Baghdad's al-Hamra hotel.

"One of the suites would be absolutely packed with gentlemen running around with either no clothes on, no shirt on," he said in a court document that was leaked to the media almost instantly. "It was like a frat party gone wild. There was cocaine all on the tables. There were blocks of hash, and you could smell it in the air." Lowry gave his testimony as part of a 2008 lawsuit brought by two former Blackwater employees, who allege that Blackwater sent the bill for hookers and strippers to Uncle Sam and that Prince benefited from this fraud. Prince says there's no merit to the charges: "When we found knucklehead behavior, we fired them."

Though Prince stepped down as CEO of Xe on March 2, 2009, the IRS, he claims, is auditing his personal income taxes, all while press reports and blogs call him a "war profiteer," "right-wing crusader," and "mercenary" (a term he despises), and imply that he is fleeing the country to escape justice.

But if he is on the run, his evasion skills need help. Xe/Blackwater recently agreed to pay the Feds a $42 million fine for a series of niggling violations; when we meet, Prince is one week away from a seven-hour deposition (with an attorney who followed him to Abu Dhabi) for a lawsuit financed by the New York–based Center for Constitutional Rights. It's a matter of public record that he's sold off or closed many of the 30-plus companies that he created to handle discreet contracts from the government between 2004 and 2009. Meanwhile, he still fumes that he was outed as a covert CIA operative in August 2009, a leak he blames on his Democratic enemies in Congress and newly appointed CIA director Leon Panetta's incompetence.

"Look at the stink they raised when a low-level agent like Valerie Plame was revealed," he says. "What happened to me was worse," he adds, going on to call the leak criminal. His cover blown, he tells me he has nothing left to hide.

If there is a short version to where it all went wrong, Prince's curt response sums it up: "Nisour happened." On September 16, 2007, Blackwater guards were sent to clear the way for a U.S. State Department convoy and ended up opening fire on a busy traffic circle, killing 17 Iraqis. Because of a special order established in 2004 that exempted Blackwater contractors from Iraqi law, the five Blackwater employees who shot up the square were indicted in the U.S. for voluntary manslaughter; Prince, looking like Ollie North's boyish nephew, appeared before Congress soon after the bloodbath to explain the expanding and deadly role of private contractors in Iraq. (On December 31, 2009, a U.S. district judge dismissed all the manslaughter charges because the case against the Blackwater guards had been improperly built on testimony given in exchange for immunity.) Many of the victims of Nisour Square and their families accepted State Department–approved payouts for their silence, but Prince says a suit may be refiled in North Carolina. "It won't go anywhere," he adds.

At the time of Nisour, Prince and Blackwater had already been engaged in a legal battle for nearly three years with the families of four men who were brutally murdered in Fallujah in 2004 while in Blackwater's employ. The attorneys for the families undertook a negative PR campaign against Blackwater. Because he is wealthy and held sole propriety of the company, Prince himself made an ideal target for their smears.

Although Prince says he's saddened by the deaths of the 33 Blackwater men killed on the job (he teared up about it at a private going-away reception the previous day), he chalks up the loss of life not to his or Blackwater's hubris, but simply to war, and men doing dangerous work in dangerous places. At every turn, he points out, Blackwater followed the orders of its client – U.S. government officials – who, he says, often put his men in harm's way. His one regret? "I wish we had never worked for the Department of State. They're not worth it."

Prince is not a chatty fella, and as he downs a second bottle of spring water, I have to ask him the same question multiple times to get him to answer – like starting a car with a dead battery. You can tell by his manner and the length of his replies what he wants to talk about (his dad) and what he doesn't (the sensational accusations against him that speculate on his plans).

While he allows that taking up residence in Abu Dhabi will "make it harder for the jackals to get my money," he tells me that his move to the Persian Gulf isn't about avoiding the courts, but rather about being home for dinner with his kids. No, he's serious: His real motive for leaving the country, he assures me, is that he can get to Abu Dhabi quickly from his undisclosed new work in "the energy field" – a future that has his detractors wondering what's scarier: Erik Prince running security for the State Department and spying for the CIA or Erik Prince freelancing in the Middle East.