Prince of Darkness: From Blackwater for America to FSG in Africa for China’s BRI + DFC & Development Impact Investing
Sebs Solomon—April 24, 2022
I recently watched a presentation given by Erik Prince in 2017 at Oxford Union. He talks about the history of private military contracting in the United States, resurrecting the British East India Company by modeling private organizations after it, and creating a Development Finance Corporation (DFC) that is less like USAID and more like a mix of the Commonwealth Development Corporation (CDC) and OPIC—which I covered here in a post titled U.S. Fusion Center in Ghana, AGOA, and Trump’s BUILD Act Bolsters Impact Investment Projects.
U.S. Fusion Center in Ghana, AGOA, and Trump’s “BUILD Act” Bolsters Impact Investment Projects
Sebs Solomon—December 28, 2021
It was in Trump’s BUILD Act that the DFC was created to replace OPIC and it got double the funding. So much for “conservatives” being more “fiscally” responsible. Anyway, in this post, I will go through the points made by Erik Prince in his presentation at Oxford Union and give my analysis of what he says and what it could imply for public policy in the “U.S. international development” space because Prince was very close to Donald Trump; thus, his words actually hold quite a bit of weight.
Erik Prince Explains the History of Military Contractors in the U.S.
How America was started: as told by Erik Prince—Massachusetts Bay, Plymouth, and Jamestown colonies were, first, companies listed on the London Stock Exchange. And these companies hired contractors like Captain John Smith and Captain Miles Standish. John Smith was employed by the Virginia Company to lead the 1606 Virginia expedition and Miles Standish was hired by the Plymouth Company to lead the military defense in the Plymouth Colony in 1620. The militia that Standish built became a Minutemen unit which became an army unit that still exists today in the U.S. reserves.
Prince then moves on the the Civil War and explains how Abraham Lincoln hired a private contractor, Allan Pinkerton, to set up a “secret service” that gathered wartime military intelligence in the South. Lincoln then appointed Pinkerton to run counterintelligence operations against Confederate spies who were in Washington, DC because Pinkerton was so “effective” at stopping Confederate espionage—he was later credited with helping win many of the early battles in the Civil War. Erik Prince explains all of this history to make the point that in America’s early years (when they were expanding toward the west) it was private contractors who were responsible for protecting American settlements, railcars, and infrastructure, not “big government” because the U.S. Army did not yet exist.
PSA: I am presenting Erik’s narrative as he frames it and adding my commentary—not necessarily because I am upset that someone is speaking ill of the “big beautiful federal government”—I do not endorse the way the U.S. government has functioned. Moreover, I don’t criticize the “government” for the same reasons or with the same intention as Erik Prince. Do not take my mocking of Prince’s insincere and corrupt stance against “big government” as an endorsement of how governments (anywhere) generally function.
Erik then tells the story about how the Flying Tigers came to be—in 1939, when the Chinese were being attacked by the Japanese, they didn’t have an Air Force, so the Chinese asked FDR for help, but the U.S. was not in the war yet. Again, Prince’s reason for even mentioning the Chinese woes (in this context) is to illustrate how the private military sector came to the rescue and helped the Chinese defend themselves against the Japanese, NOT because he actually cares about the plight of the Chinese people. I believe that if it were more economically favorable to side against China, he would do that. Anyway, back to the narrative: FDR allowed fighters from the Navy, Marines, and Army to take leave from their posts and go work for a private military company in China called CAMCO (Central Aircraft Manufacturing Company) which was established by an American entrepreneur named William D. Pawley in the 1930s. They became known as the First American Volunteer Group (AVG) or the Flying Tigers—they even had reunions in Taipei, Taiwan—their second one was in 1978 (covered in this document).
Erik Prince on the East India Company
After giving his narrowly framed and incomplete rendition of history about private contractors in the United States, Erik pivots to justifying the actions of the British East India Company. He starts off by saying that he does not want to debate
the politics of anything and everything the East India Company did because it did provide a good example that other private organizations could follow (the East India Company was a private organization that developed trade and raised forces—235,000 native forces—led by 14,000 European expats).
Prince believes that the East India Company model is “repeatable” and “cost effective”—much better than what the “big bad government” has been able to do in the recent past. Yes, the East India Company did “overextend” itself and become abusive and exploitative (which lead to its financial troubles and it’s ultimate downfall) but it still built “sustainable” economies and that’s what is necessary for the development of many “failing states” around the world.
These are the failing states (according to Erik Prince):
- Egypt in the Sinai (turquoise/gold mining) — Eritrean refugees are often kidnapped, tortured, raped, and released upon ransom in northern Sinai.
- Central African Republic
- South Sudan
- Mali (Uranium for nuclear power)
Just so we have this clear, Erik Prince is quite literally saying that private companies should be modeled after the British East India Company in order to help “failing states” develop and secure the lines of trade necessary to advance their economies. Prince claims he entered the mining industry in Africa after he “defeated” the pirates in Somalia—this was at a 2019 speech he gave at a 121 Mining Investment event (based in Hong Kong). China looked to Erik Prince to meet its growing demand for security services to guard resource-rich areas in Africa. In 2021, Prince attended African Energy Week (AEW) in Cape Town; AEW is an event committed to helping “resource-rich nations accelerate the development of their oil and gas resources, so as to ensure long-term, sustainable socio-economic growth.” Erik Prince, representing FSG or Frontier Services Group, is to help drive the discussion on improving security measures at key projects in Africa. Below is a presentation Aly and I did on the Doom&Gloom channel on YouTube—it contains more details about Prince’s sinister network, his private security work for China along the Belt and Road, and his ties to old order knighthoods of Malta that are connected to the Vatican.
Erik Prince describes the evolution of warfare as follows:
1.First Generation War: American Revolution and Napoleonic Wars—slow moving at horse speed (no electronic communication).
2.Second Generation War: U.S. Civil War and WWII—Trench warfare, firepower, and massive casualties bc of lack of ability to manuever. (Industrialized war)
3.Third Generation War: Blitzkrieg and first Gulf War—high tempo, advanced technology, enemy is easy to find and hard to kill, and these are the wars that the DOD and MIC want to continue to fight. (Big state on state warfare)
4.Fourth Generation War: Chechnya, Afghanistan, Vietnam, and Iraq—No masses of “conventional” enemies, hit & run/guerrilla/terror tactics, enemy is easy to kill but hard to find, enemy moves at internet speed, and battles fought at squad or platoon levels. Since fourth generation war moves at speed of the internet, one can use Google Earth to plan a terror attack. According to Prince, America is fighting fourth generation wars with a third generation military—kind of like mowing the lawn with a Porsche.
He then said that America has an Obamacare or NHS (National Health System of UK) approach to national security planning and innovation—even though the U.S. is a country of people who believe in a “free, independent, and entrepreneurial” economy.
Development Finance Corporation (DFC)
When Afghanistan comes up, Erik Prince complains that there are not even mining laws in place to attract investments and business after over a decade of U.S. occupation and it’s a shame because Afghanistan has trillions of dollars worth of untapped resources (his framing). So, Prince suggests that instead of following the USAID model, the U.S. should follow the Overseas Private Investment Corporation (OPIC) model or the UK’s Commonwealth Development Corporation (CDC) model. Coincidentally, the BUILD Act, passed in 2018, created the Development Finance Corporation (DFC)—a year after Erik Prince talked about a similar type of agency as the answer to the private sector’s woes—at the Oxford Union. The DFC was permitted to participate in private sector, market-based transactions in order to address both development challenges and foreign policy priorities of the United States. It was described as:
A modern, consolidated agency that brings together the capabilities of OPIC and USAID’s Development Credit Authority, while introducing new and innovative financial products to better bring private capital to the developing world.
This is more or less how Erik Prince described it a year prior to its passing—peculiar timing. The BUILD Act was passed as part of a larger bill to reauthorize the Federal Aviation Administration—not really sure what those two have to do with one another, but that bill also contained quite a bit of information regarding FEMA protocols involving flooding and clearing emergency routes (I may dig deeper into that in another post at a later date).
The DFC authorized deals and loans to be made in local currencies—which is interesting because Trump preached “America first” while actually making moves similar to those he claimed to oppose (namely China because they, too, make deals/loans with local currencies and not just the yuan). Furthermore, similar to AGOA (which is basically Africa’s NAFTA) countries that embrace private enterprise receive preferential consideration for U.S. sponsered projects. I wrote about AGOA in this post last December. DFC has quite the budget—a $60 billion limit, which is more than double OPIC’s $29 billion limit. Most of this money will be spent in Africa as I have covered in this post written last year.
I wrote this post for a few reasons:
1.First, I wanted to show that what we think of as warfare is definitely evolving faster than we are understanding it. The wars are still being waged with the same nefarious intentions, but the tactics are definitely changing from large “state vs. state” warfare, to smaller and more “decentralized” special operations lead by private security companies. Erik Prince is at the forefront of this pivot toward privatizing warfare—he is one of the “entrepreneurs” who scaled this concept, globally, via Blackwater. And as we move toward a more “globalized” society, the trajectory seems to be a world that places less and less emphasis on nation-states.
Hence, why it is important to keep tabs on the types of moves made by Erik Prince and his ilk. And not just to give the same old summary about what Blackwater did in Iraq and Afghanistan, but what they are doing NOW in different African countries via Frontier Services Group through their partnership with China and UAE—and the security services they provide them.
2.Second, I went into Prince’s rendition of the history of private mercenaries because his narrative is closest to the official narrative that will come out of the State Department in order to justify why the federal government has contracted out most of its defense operations to private transnational security firms.
3.Last, I wanted to show how influential these big players in the private industry space are at influencing the type of policies that come out of congress. Of course, most people are aware that the lobbyists and cretins at the Chamber of Commerce essentially write the legal documents passed in congress, but it’s also just fun to find then point out a direct connection like Erik Prince casually “predicting” the creation of a new government agency (DFC). Furthermore, the fact that the DFC places emphasis on pushing private impact investment projects (that have loan guarantees) will play a central role in accelerating the global impact investing space. And as I’ve stated before:
the impact investing space is not intended to help anyone in need; it is simply a lucrative loophole for already wealthy multinational corporations to make even more money, while further centralizing control of the global economy under the guise of “doing good” while making a profit.
Peace and Blessings,