In shift, Blackwater dumps tarnished brand name

[February 14, 2009]  RALEIGH, N.C. (AP) -- Blackwater Worldwide is still protecting U.S. diplomats in Iraq, but executives at the beleaguered security firm are taking their biggest step yet to put that work and the ugly reputation it earned the company behind them.

Blackwater said Friday it will no longer operate under the name that came to be known worldwide as a caustic moniker for private security, dropping the tarnished brand for a disarming and simple identity: Xe, which is pronounced like the letter "z."

It's a rare surrender for a company that cherished a brand name inspired by the dark-water swamps of northeastern North Carolina, one that survived another rebranding effort about a year ago, following a deadly shooting in Baghdad's Nisoor Square. The decision to give it up underscores how badly the Moyock-based company's brand was damaged by that incident and other security work in Iraq.

"They have established themselves as the bad guys," said Katy Helvenston, who sued the company following her son's death during a mission in Fallujah while working for Blackwater in 2004. "They've established such a horrible reputation. Why else would they change their name?"

Blackwater acknowledged last year in an interview with the The Associated Press the damage to its reputation had persuaded the company to focus on lines of business other than private security contracting.

The issue came to a head last month, when the State Department said it would not rehire Blackwater to protect its diplomats in Iraq after its current contract with the company expires in May. The company has one other major security contract, details of which are classified.

"It's not a direct result of a loss of (that) contract, but certainly that is an aspect of our work that we feel we were defined by," said spokeswoman Anne Tyrrell.

The company is also replacing its bear paw logo with a sleeker black-and-white graphic based on letters that make up the company's new name. In a note to employees, president Gary Jackson said the name change reflects the company's new focus, and he indicated Xe would not actively pursue new security business.

"This company will continue to provide personnel protective services for high-threat environments when needed by the U.S. government, but its primary mission will be operating our training facilities around the world," Jackson said.

It has expanded other businesses such as aviation support, recently building a fleet of 76 aircraft that it has deployed to such hotspots as West Africa and Afghanistan. The company got its start in training and continues to build up that business. Last year, some 25,000 civilians, law enforcement and military personnel attended a Blackwater class.

The company's changes aren't entirely voluntary. The 2007 shooting in Nisoor Square involving Blackwater guards left at least a dozen Iraqi civilians dead, infuriated politicians in Baghdad and Washington, triggered congressional hearings and increased calls that the company be banned from Iraq.

Late last year, prosecutors charged five of the company's contractors - but not Blackwater itself - with manslaughter and weapons violations. In January, Iraqi officials said they would not give the company a license to operate. The State Department responded by informing Blackwater it would not renew a contract that comprises a third of the company's nearly $1 billion in annual revenue.

"It would hurt us," company CEO Erik Prince said in an interview before losing the State Department deal. "It would not be a mortal blow, but it would hurt us."

Blackwater has rebranded before, introducing a new name - Blackwater Worldwide - and slight changes to its logo about a year ago. But Friday's announcement cuts ties entirely with a name created in 1997 when Prince and some of his former Navy SEAL colleagues launched the company.

Xe will cover the parent brand for the two-dozen subsidiaries, and none of those subsidiaries will retain the word "Blackwater" in their names.

Illinois Rep. Jan Schakowsky, chair of the Intelligence Subcommittee on Oversight and Investigations and a longtime Blackwater critic, said the new name won't change the fact that its actions have resulted in the deaths of innocent civilians.

"Blackwater's notorious reputation will outlast its name," she said.

[Associated Press; By MIKE BAKER]

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