News & Observer | newsobserver.com | Chapter 4: A business gets a start

Published: Nov 28, 2005 08:26 PM
Modified: Oct 22, 2005 04:29 PM

Chapter 4: A business gets a start

Erik Prince thought he saw an opportunity as the U.S. military began to shrink. He was right.

A Blackwater helicopter buzzes through Baghdad about two weeks after the four contractors were ambushed in Fallujah.

Story Tools

Audio and images from a videotape made by insurgents obtained from Time Magazine via APTV.


AUDIO

 Correspondent Charles Crain describes the scene at the bridge in Fallujah (:41)

 Correspondent Charles Crain talks about the Iraqi reaction (:26).

 Correspondent Charles Crain discusses the impact in Iraq (:16).

 Correspondent Charles Crain remembers Jerry Zovko (:35).

GRAPHICS

Map:A fatal journey through Fallujah

Chart:Contract values

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Wesley Batalona and Jerry Zovko had again gone looking for military contracting work, and this time they found it with a relatively new company: Blackwater USA, based in Moyock, N.C.

Set on more than 6,000 acres in the state's northeast corner, Blackwater was known as one of the best of the private military contractors. Its close ties to the elite Navy SEALs grew from its owner, Erik Prince.

Prince, 35, had been a White House intern and was a billionaire's son, yet he volunteered as a firefighter and for the Navy.

Prince, a widower and father of four, was a former member of the SEAL commandos. He maintained the unit's characteristic secrecy while positioning himself at the intersection of free enterprise, activist Christianity, conservative politics and military contracting. He made his first political contribution at 19 -- $15,000 to the Republican Party.

Prince "is one of the richest guys that ever served in the military," said Andy Messing Jr., a retired Special Forces major and director of the National Defense Council Foundation.

Every year, tens of thousands of men and women join the military to get a leg up on life: a job, an education, a career.

Erik Prince didn't have to join to get ahead.

His father, Edgar Prince, started his own company in 1965. He hit it big by making sun visors with lighted mirrors. Business grew, and his factories churned out parts seen in most cars today: overhead consoles, map lamps, headliners for roofs.

When Edgar Prince died in 1995, Prince Automotive employed 4,500 workers in eight factories, including six in Holland, Mich., where Erik Prince grew up.

Edgar Prince was Holland's biggest employer. A tidy city just inland from Lake Michigan, Holland is home to one of the nation's biggest pockets of Dutch-Americans. Nearby Calvin College has one of the few departments of Dutch in the United States. The area hews to the Dutch traditions of frugality and industry.

Edgar Prince ran his business in line with the Calvinist values of the Christian Reformed Church, which dominates western Michigan. Prince factories didn't run on Sundays; corporate jets flew the sales staff home on weeknights for family time.

Edgar Prince and his wife, Elsa, adopted downtown Holland, investing millions of dollars when suburban shopping malls threatened the downtown shopping district. His "business was an engine that generated cash that he could use to do good things," Erik Prince told The Wall Street Journal in 2000.

The Princes spread their wealth around the country as well, pumping tens of millions of dollars into the Christian conservative movement, with big gifts and small grants.

Erik Prince's sister, Betsy, is the chairwoman of Michigan's Republican Party, and married into a family even more generous to the party and the Christian Right than the Princes: the DeVos family, owners of the Amway home marketing company.

'A smart guy'

Erik Prince molded himself after his father: a devout Christian, astute businessman and family man who shunned the limelight.

After Holland Christian School, Prince attended Hillsdale College, a small liberal arts school that champions free markets and individual freedom. Erik Prince fit in at what Gary Wolfram, a professor of political economy who taught him, called a "Mecca of market economy."

"He was a smart guy, and pleasant to be around, and he's well-spoken," Wolfram said. "What's good about him, he understands the interrelationship between markets and the political system."

As Prince studied free market economics, the world was changing. The fall of the Berlin Wall in 1989 heralded the end of the Cold War. The U.S. military began getting smaller. During the 1990s, the Pentagon would shed about 700,000 active-duty troops and 300,000 civilian employees.


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Staff writer Joseph Neff can be reached at 829-4516 or jneff@newsobserver.com.
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