Erik Prince, chairman of Blakwater USA, at the House Oversight and Government Reform Committee hearing October 2, 2007

Suzanne Simons
CNN Executive Producer

There's a lot of head-scratching at the CIA over an article in Vanity Fair magazine that dubs Erik Prince, the founder of the notorious private military contractor Blackwater, a "tycoon, contractor, soldier, spy."

In the piece, he comes across as so entrenched with the CIA that the agency needs him to perform the most sensitive secret missions, including those involving hunting down and taking out al Qaeda operatives.

It's true that Prince, as the sole owner of one of the most well-connected private military contractors in modern history, is in a position of enormous trust within the government. So why is it that he's lashing out publicly at that same government?

Prince, a 40-year-old former Navy SEAL, inherited what he called a sizable amount of money when his father died in the late '90s. He's used that money to help climb to the top of an industry that has mushroomed since the invasion of Afghanistan in 2001.

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Potential recruits play virtual-combat games at an Army recruiting center in Philadelphia, Pennsylvania.

Suzanne Simons
CNN Executive Producer and Author

Just over a year ago, a U.S. staff sergeant in Iraq decided to practice his shooting skills. His target: the Koran, Islam's holiest book. The military issued a formal apology, promptly dismissed the soldier from his regiment and reassigned him back to the U.S.

But news of the shooting had already made its way onto YouTube, and a firestorm of outrage ignited across the Islamic world. Protests turned deadly in Afghanistan, with several people killed, including one of the NATO soldiers trying to control the crowds.

Back at the Army's Intelligence and Cultural Awareness Center at Fort Huachuca in Arizona, commanders knew they had a problem. The Army is no longer living in the age of the old-fashioned boots and firearm soldier. Now it's sending young soldiers into cultures they don't know.

And the meteoric rise of social networks, on which anyone can post messages or video, means whatever these soldiers do can be reported - or undermined - instantly around the world.

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Heavily armed Blackwater guards scan downtown Baghdad, Iraq, from a helicopter in 2003.

Suzanne Kelly Simons
CNN Executive Producer, Author

It's a significant end to operations in Iraq for one of the war's most controversial private security providers. Blackwater (renamed "Xe" earlier this year) is handing over responsibility for its part of a highly-lucrative security contract to another company, Triple Canopy, though Xe won't be entirely leaving Iraq just yet.

The exodus from Iraq follows a deadly shooting in a Baghdad traffic circle in September 2007. More than a dozen Iraqis were killed, and five former Blackwater contractors were charged in the United States with manslaughter. All five have pled not guilty, a sixth has pled guilty and is cooperating with investigators.

An outraged Iraqi government demanded that the company be kicked out after the shooting, but U.S. officials were able to convince them that that couldn't happen right away, arguing Washington relied heavily on the company to keep its diplomats alive, and it would take time to find a replacement to absorb the added work. But even this handover is not quite the end of all of Xe's operations in the country. Xe will continue to service an avionics task order that provides security and aviation support for diplomats. The small army of planes and helicopters it leases to the State Department offers aerial support if ground teams come under fire. But even that work is expected to evaporate once a replacement is chosen. There are only two other companies eligible to bid for that work, Triple Canopy and DynCorp and their bids were due to the government this week.

Back in the U.S., the loss of the Iraq portion of the State Department contract has had a huge impact on the North-Carolina based company. Several top executives have left, there has been a significant downsizing in the number of employees overall. The company's President Gary Jackson has stepped down and owner Erik Prince has stepped away from day to day operations. In public statements, the company has said that it always knew this part of its business would come to an end someday. Under its new name, the company will continue to provide training for military and law enforcement clients.

Many of the individual Blackwater/Xe contractors working in Iraq may not have to pack up and head home though. Triple Canopy is expected to hire many them on in order to fulfill the large number of trained bodies the contract requires.

Editor’s Note: Suzanne Simons is author of “Master of war: Blackwater’s Erik Prince and the Global Business of War.” (Collins/Harpercollins June, 2009)

Blackwater founder Erik Prince testifies at a congressional hearing in October 2007.

Suzanne Kelly Simons
CNN Executive Producer, Author

The man who built private security contractor Blackwater into a global force is stepping down, as controversy continues to swirl about the company's conduct in Iraq. CEO Erik Prince is ending his day to day involvement in running the company, and his long-trusted President Gary Jackson is going with him. Company sources say a federal investigation into some of its activities is underway; the Justice Department won't comment.

Last month, the State Department announced it would not be renewing Blackwater's lucrative contract in Iraq. Soon afterwards the company changed its name to Xe in an attempt to distance itself from a disastrous bout of publicity that began one September afternoon in Baghdad back in 2007. That was when a Blackwater team shot and killed at least 14 Iraqis in a traffic circle, some of the Blackwater men saying they had come under what they believed was enemy fire.

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Companies falling under the Blackwater umbrella are now being called 'Xe.'

Heavily armed Blackwater guards scan downtown Baghdad, Iraq, from a helicopter in 2003.

Suzanne Kelly Simons
CNN Executive Producer, Author

Something had to give. Some 17 months after a deadly shooting involving its contractors in Baghdad's Nisoor Square in which at least 14 Iraqis were killed, private security contractor Blackwater is no more. Company President Gary Jackson put rumor to rest by announcing that the companies falling under the Blackwater umbrella are now being called "Xe". (Pronounced "Z").

The former Blackwater Lodge and Training Center has already been renamed on the company's website. It's now called the "U.S. Training Center" but still uses the old Blackwater bear paw log. Similarly, Blackwater Airships is now Guardian Flight Systems, and Blackwater Target Systems will now be called GSD Manufacturing.

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Tribesmen and activists of Pakistani Islamist party, Jamaat-i-Islami, shout during a demonstration in Islamabad on January 23, demanding an end to Pakistan military operations and US missile attacks against Taliban militants in lawless areas bordering Afghanistan.

Suzanne Simons
CNN Executive Producer

Politically, it looked like the perfect one-two combination. Just hours after President Obama signs an executive order mandating the closure of the Guantanamo Bay detention facility (the jab), the U.S. launches a double missile strike against targets in Pakistan (the right hook). Just as the skeptics were grumbling that the order to close Guantanamo and other secret CIA prisons meant the new Administration was "soft on terror," Wham! Hellfire from above.

The strikes that killed at least 17 people made me think of a question posed yesterday by a trusted source, who also happens to be a former top official at the CIA. We were talking about the President's desire to close the detention facilities and what implications that could have. He asked me a very pointed question: Why is it that people do so much hand-wringing over what to do with detention facilities for terror suspects, but nobody bats an eyelash over a missile strike?

Interesting question.

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