Erik Prince, an American Commando in Exile
Credit: Preston Keres / The Washington Post / Getty Images
Prince's original plan, created with help from veteran Navy SEAL Al Clark, was to build the dream training facility – a place all his buddies from Norfolk could use. "We needed 3,000 acres to make it safe," Prince recalls. After searching for a location for six months, he ended up paying $900,000 for 3,100 acres (or about $300 an acre) in Moyock, North Carolina. The swampy, tannin-stained "black water" and the bears on the property inspired both the name and the famous bear-paw logo. By the time the Blackwater Lodge and Training Center officially opened on May 15, 1998, the footprint had doubled in size, to 6,000 acres, and Prince was into it for $6.5 million. Over the next few years, he would invite a number of influential members of the military, FBI, local law enforcement, and even the CIA to visit and play "Blackwater."

At first, locals didn't pay the range or Prince much notice. "To the degree that [Prince] was thought of, it was as this patriotic guy who had built this Hail Mary facility to help the SEALs, and who probably hoped to break even," recalls Jay Price, staff writer for Raleigh's The News & Observer, who tracked Blackwater's rise to prominence. "The big contracts weren't on the horizon, not even a glimmer, and I don't think anyone in their right mind was thinking of him as a greedy military-industrial profiteer…. Maybe as a kid from money who was looking around to see what his role in life would be." Prince could have spent the next few decades in eternal adolescence, impressing and entertaining his shooting friends at the "Lodge" and staying out of the limelight, but 9/11 would change that.

Before 2001 the term contractors referred to retired agency and special operations vets who knew each other by reputation or service. The small pool of retired "Tier One" operators, usually middle-aged men with smeared tattoos and worn SF or SEAL rings, were discreetly hired and signed up for overseas gigs with few questions asked and little to no public divulgence.

Shortly after 9/11, Cofer Black, the former CIA head of Counter Terrorism, put out the word to hire more than a hundred "shooters" for Afghanistan. The CIA would "sheep dip" (reassign under false cover) active operators and activate "green badgers" (cleared agency contractors) for the CIA Special Activities Division. Once the agency moved from using small mobile paramilitary operations in Afghanistan to larger, fixed installations, it quickly realized that it needed a more robust type of protection: The tiny old boy's network was soon tapped out. That's when the CIA turned to Prince and his clubhouse.

In the spring of 2002, Buzzy Krongard, the number three at the agency, presented Prince with Blackwater's first "mission": Could Prince provide 20 men with top-secret clearances and have them on a plane to Kabul within a few days? Their job in Afghanistan would be to protect the CIA headquarters and one remote OGA base, in Shkin, supporting the hunt for Bin Laden. Friends were called, and Prince quickly had his team. A six-month, $5.4 million contract was rushed through as "sole source, urgent and compelling need." What's more, Prince assigned himself to be part of the group so he could make sure his customer was being well served.

Once in Afghanistan, Prince couldn't wait to get back to the States: He realized right away that he could make millions more providing security teams than he could running a shooting range. His new "private military company" would be to the Pentagon as FedEx was to the Postal Service. And his sales pitch to CIA bureaucrats was about as sophisticated as his $17 haircut. "We did it cheaper and better," he boasts. Blackwater was paying each man $550 a day and billing the agency $1,500 all in. It was hard for Prince to lose money.

Then came Iraq. By spring of 2003, an old-fashioned land war had given way to a robust State Department and CIA political mission. Hundreds of young U.S. diplomats and case officers, many of them straight out of college, were posted to Iraq to shape a new nation. The Bush administration initially expected the same jubilant response from liberated Iraqis that they had seen in Afghanistan, but they would be proved wrong. Newly assigned viceroy Paul Bremer, tasked by President Bush with creating a transitional government (the Coalition Provisional Authority), needed a dramatically different form of protection, and so did all the diplomats. Normally, the government is responsible for its own security, but it simply didn't have the staff for such a high-risk personal-protection detail overseas. From the government's point of view, contracting for this protection also outsourced the political risk in the event of a screwup or fatality. The contractor, not the client, would take the heat – and the bullets.

In the fall of 2003, Blackwater was awarded the $27.7 million "Bremer Detail," a Department of Defense contract that essentially created a Frankenstein brigade of highly visible hired guns. Blackwater provided the security to the Iraq Survey Group (the ISG was the CIA group looking for proof of weapons of mass destruction), allowing the ISG to travel anywhere in the country with the guarantee of safety.

By the time I first visited Blackwater, in July 2004, to lead a course on how to think like a terrorist for a bunch of special-forces types who were about to be deployed to Afghanistan, the Lodge was well on its way to becoming a networking center for U.S. and foreign special operations and anyone else hoping to be recruited for security work in Iraq and Afghanistan. The place reeked of Prince's weakness for Boy's Own derring-do – from the hunting lodge/summer camp/club house–type decor to the main office, which featured trophy animals and gun-enthusiast magazines.

Outside on the many shooting ranges, brass glittered in the gravel; the popping of bullets was ever present, as were the sounds of screeching tires and explosions from the driving track. Fifty-caliber rounds fired from the sniper range echoed off the portable buildings with a metallic shriek. Well-muscled men in tan T-shirts and crushed ball caps methodically cleaned their M4s and pistols outside the chow hall. Inside, a long line of plaques and mementos from police and special operations groups decorated the entry to the offices. Off in the distance were aircraft fuselages, Navy ship towers, and a village built from Conex containers. Longtime Blackwater president Gary Jackson even had a desk made out of armored steel. Jackson and Prince were proud of the tactics they had developed to operate in Iraq – Prince still is.

"We were using low-profile, armored indigenous vehicles with teams of two and four," Prince says, explaining that he chose the "low profile" look to protect the ISG. That look consisted of operators wearing local dress moving in beat-up yet armored taxis, with weapons held below the windows. "You can't shoot at what you can't see," he says. Blackwater was suddenly guarding arguably the most hated man in the most violent country on Earth – and Prince rose to the challenge. "Not one State Department employee was killed while we were protecting them," he says.