BLACKWATER: EL EJERCITO MERCENARIO MAS GRANDE DEL MUNDO

Blackwater Press Releases
02.01.08
Blackwater Saves 600 Lives
For Immediate ReleaseFebruary 01,2008 Click here to view article

01.11.08
What Others Are Saying About Blackwater Worldwide
For Immediate ReleaseJanuary 11,2008 “…I can assure you these are dedicated men, professionals who know how to help people in times like this.”Dean VanderMey, whose daughters were trapped in Kenya amidst post-election violence and were rescued by a team from Blackwater The Washington Times, January 10, 2008“Clearly, we don’t have the forces to provide that kind of security right now, which is one of the reasons Blackwater is there. Blackwater is providing security for the State Department...”- Adm. Mike Mullen, Chairman, Joint Chiefs of Staff Transcript of Military Times editorial board meeting, November 27, 2007“Blackwater does a fantastic job. I have actually been protected by Blackwater when I was over there and going around with American officials there. They are very good, they are very professional. Most of their work is done by competitive bidding. They are not overpaid. They often get killed. They have had casualties, and they do a job that it would take 15,000 troops to do. Why is this an issue? Because the war is going well. Democrats do not want to talk about that, so they have made up a Blackwater scandal.”- Fred Barnes, Executive Editor, Weekly StandardSpecial Report with Brit Hume, November 01, 2007“Blackwater professionals are not just important to our mission in Iraq, they are essential – they're loyal Americans who are deeply committed to our objectives there.”- Peter McHugh, former transportation counselor at the U.S. Embassy in BaghdadChicago Tribune, October 12, 2007Responding to a question about security contractors’ performance… “I will be anxious to see the analysis of their performance. There’s a lot of studying going on, both inside Iraq and out, as to whether or not people violated rules of engagement. I will tell you, though, that a firm like Blackwater provides a valuable service. They protect people's lives. And I appreciate the sacrifice and the service that the Blackwater employees have made. And they, too, want to make sure that if there’s any inconsistencies or behavior that shouldn’t – that ought to be modified, that we do that. And so we’re analyzing it fully.”- President George W. BushWhite House Press Conference, October 17, 2007“Blackwater's 1,000 contractors protect key State Department diplomats — prized targets for insurgents. They have never lost a single person they were assigned to protect, yet 30 Blackwater contractors have given their lives in executing their mission. Hundreds more have been seriously injured. . . . Contractors serve a vital purpose in Iraq. Most are either military veterans or former law enforcement professionals who have made great personal sacrifices in our mission. There are simply too many of them serving in critical roles — and far too few service members to take their place — to take the misguided push for expulsion seriously.”- LTC Steve Russell USA (Ret.), Chairman, Vets for Victory Stars & Stripes, October 13, 2007“Blackwater has protected dozens if not hundreds of members of Congress, including myself and members of this committee, when they travel to Afghanistan and Iraq. I for one am grateful for their services. Not one single member of Congress has been injured nor killed under Blackwater protection, and for that I am grateful.” - Rep. Patrick T. McHenry, R-N.C.House Committee on Oversight and Government Reform hearing, October 2, 2007“…the people I worked with in Iraq, including veterans working for Blackwater, were hardly rogue cowboys. I did, however, meet some trigger-happy journalists over there.”- Ben Ryan, former U.S. Navy SEAL officer, former Triple Canopy employeeWall Street Journal, October 1, 2007“…consider Blackwater’s most-common job — the protection of high-value U.S. civilians. Today’s insurgents know that any successful killing of a U.S. diplomat would make the front pages of every U.S. paper, thus driving down support for the war. So insurgents are putting a great deal of effort into such operations. That’s why so many Blackwater units are comprised of former elite Special Operations Forces. Indeed, not one diplomat has died while being guarded by Blackwater.”- Richard W. Carlson, Vice Chairman, Foundation for the Defense of DemocraciesNewsmax.com, October 1, 2007“I personally was grateful for the presence of my Blackwater security detail, largely comprised of ex-Special Forces and other military, when I served as Ambassador to Iraq. Their alert and controlled posture kept me safe – to get my job done.“I have a great deal of respect for their work. Without the dedicated service of our PSDs and their willingness to expose themselves to the risks that they do, the civilians of the Department of State would not be able to carry out our critical responsibilities in places like Iraq and Afghanistan. Yet I think there is broad agreement that we need to be there to help win the peace.”- Deputy Secretary of State John Negroponte, former ambassador to IraqSenate Appropriations Committee hearing, September 26, 2007“There is no avoiding the fact that these bodyguards do work that is both extremely hazardous, and indispensable. Blackwater’s involves a State Department contract to protect American officials, including the ambassador.“Such officials are among the most endangered individuals in Iraq; nevertheless, no senior American officials have been assassinated, while the murder of senior Iraqi officials has become almost commonplace. “Together with other security contractors — notably the American companies DynCorp International and Triple Canopy, and the British-run Aegis Security and Erinys International — Blackwater operates in a nightmarish landscape.“No trip outside the Green Zone is remotely safe. The enemy lurks everywhere among the population. Attackers show no mercy for innocent bystanders, who commonly outnumber intended targets. Each mission carries the threat of roadside bombs, suicide attacks by explosives-packed cars and trucks, and ambushes by insurgents.”- “The Deadly Game of Private Security,” John F. BurnsNew York Times, September 23, 2007Commenting on what would happen if Blackwater were to be pulled out of Iraq…There would be “a security vacuum that will demand pulling some troops off the battlefield… This will create a security imbalance in securing Baghdad.”- Tahseen Sheikhly, Iraqi civilian spokesman Associated Press, September 23, 2007“The reality is, for example, on the security function, much of our security – most of our security is provided by contractors. It is overseen by diplomatic security officers – Foreign Service officers, but there is simply no way at all that the State Department’s Bureau of Diplomatic Security could ever have enough full-time personnel to staff the security function in Iraq. There is no alternative except through contracts.“And I would have to say that the capability and courage of the individuals who provide security under contract is worthy of respect of all Americans. One of Blackwater's helicopters went down yesterday – a hostile fire incident. Fortunately no one was killed in that accident, but over 30 of our contract security Americans have been killed keeping the rest of us safe. So it is something that we've got to do because we don't have enough people in the State Department to do this, but I think it's being done very well.”- Ambassador Ryan Crocker Senate Armed Forces Committee Hearing, September 11, 2007“The Coast Guard has sent about 250 personnel through weapons training at Blackwater as part of a five-week course to prepare them for joining the operations in Iraq. “The level of training and facilities are second to none.” - Senior Chief Petty Officer John Moss, spokesman, Portsmouth Coast Guard Daily Press, April 2, 2004

12.05.07
Blackwater Statement Regarding Private Security Companies in Iraq
For Immediate ReleaseDecember 05,2007 Moyock, NC -- Blackwater fully supports the memorandum of agreement signed today by the Department of State and the Department of Defense regarding private security companies operating in Iraq on behalf of the US Government. Blackwater has always supported the identification of contractor standards and clear rules of accountability. Increased coordination and constant review of procedures will provide even better value to the Government. Blackwater looks forward to complying with new rules as we continue to serve the United States Government.

12.03.07
Blackwater's Model Of Using Independent Contractors Is Consistent with Law and Good Practice.
For Immediate ReleaseDecember 03,2007 Executive SummaryIn an October 22, 2007, letter, Congressman Henry Waxman, the Chairman of the House Committee on Oversight and Government Reform, accused Blackwater Security Consulting, LLC (“Blackwater”) of “significant tax evasion,” claiming that Blackwater “violated federal tax laws” by treating its security personnel as independent contractors, rather than employees. Chairman Waxman fails to cite a single decision by a federal court or a precedential ruling from the Internal Revenue Service (“IRS”) in support of his position. Instead, the Chairman’s entire argument rests on a non-precedential form determination letter – a letter issued by a low-level IRS technician in response to an inquiry from a single disgruntled contractor. This is hardly the kind of foundation upon which to build such serious allegations. As further explained below, the Chairman’s allegations are incorrect. Blackwater has fully complied with federal law. Blackwater has more than 500 workers in the United States that it classifies as “employees” for tax purposes. These workers perform the kinds of jobs performed by workers throughout America. They include secretaries, IT professionals, paralegals, landscapers, and accountants. Along with the more than 500 employees, however, Blackwater also hires highly-specialized military veterans to serve as security for American officials throughout the world. These men and women only work several months at a time. They are deployed thousands of miles from home, often to war zones, where they are subject to the control, supervision, standards, and protocols of the United States government. It is these workers Blackwater classifies as independent contractors. One result of this classification is that the applicable income, unemployment, Medicare, Medicaid, and other taxes are paid to the U.S. Government via the tax returns of the contractors rather than Blackwater.Contrary to the Chairman’s allegation, this classification is in complete compliance with federal law. Section 530 of the Revenue Act of 1978 - a provision not discussed in the Chairman’s letter - provides a Congressionally approved “safe haven” for a business that considers its personnel “independent contractors” as long as the business has a “reasonable basis” for doing so. A taxpayer has a “reasonable basis” if, among other things, it acts in reliance on the advice of an accountant. Blackwater’s decision to treat its security personnel as independent contractors falls within the scope of Section 530’s “safe haven” and is not, therefore, “tax evasion.” First, when it decided to classify its security personnel, Blackwater obtained the advice of a large, nationally-recognized accounting firm on this issue. Over the years, it has relied upon that advice to develop and extend its policy on the treatment of its security personnel. Second, since that time, it has received further legal analysis from a law firm confirming that it is entitled to the protections of Section 530. Though the Chairman’s letter does not address Section 530, that provision proves that Blackwater has complied with the law. So, too, Blackwater’s decision to treat its security personnel as independent contractors is good practice. For both Blackwater and its personnel, the independent contractor model provides the kind of flexibility that the employer/employee relationship does not. Most contractors being sent into a war zone do not wish to sign on for years on end. Instead, they prefer to have the flexibility to schedule their work in a way that is convenient for them and their families. Under Blackwater’s system, they can do just that. Such a system also benefits the government. Without having to force personnel to serve for years in a war zone, Blackwater can greatly reduce burnout, thereby providing more effective service to its government partners. For all involved, therefore, the model works. Just as with thousands of other businesses, Blackwater’s use of independent contractors is a reasonable, effective, and legal business model.Blackwater takes its obligations under the Internal Revenue Code very seriously. Over the years, it has satisfied its required federal tax filing obligations and paid the government the taxes that it owes. When Blackwater classified its security personnel as independent contractors, it acted in compliance with the law and in a manner that made sense for its business and its workers. Any allegations to the contrary are incorrect. I. Blackwater Is Entitled to Section 530’s “Safe Haven” For Those Employers With a “Reasonable Basis” For Treating Their Personnel As Independent Contractors. Although Chairman Waxman’s letter spans 13 pages, he never once cites the guiding legal provision: Section 530 of the Revenue Act of 1978, Pub. L. No. 95-600. That provision came into existence in response to what Congress perceived as overly aggressive efforts by the IRS to reclassify independent contractors as employees. Section 530 established a moratorium on the reclassification of workers as employees for federal employment tax purposes if the taxpayer had a “reasonable basis” for treating the workers as independent contractors. Originally intended as an “interim” relief measure while Congress studied the issue, Section 530 was soon extended indefinitely by the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248.In simple terms, Section 530 provides a “safe haven” for a business that classifies its personnel as “independent contractors” for tax purposes as long as the business has a “reasonable basis” for doing so. A taxpayer has a “reasonable basis” if its treatment of the worker as an independent contractor was in reasonable reliance on (A) judicial precedent, published rulings, technical advice or a letter ruling to the taxpayer, (B) a past Internal Revenue Service audit in which there was no assessment attributable to the treatment (for employment tax purposes) of the individuals holding positions substantially similar to the position held by this individual ; or (C) long-standing recognized practice of a significant segment of the industry in which such individual was engaged. A taxpayer who does not meet any of the three “safe havens” may nevertheless still obtain legal protection if it can demonstrate, in some other manner, a reasonable basis for treating the individual as an independent contractor. As Congress has explained, a “reasonable basis” should be construed liberally in favor of the taxpayer. H.R. Rep. No. 95-1748, 95th Cong., 2d Sess. 5 (1978), 1978-3 (Vol. 1) C.B. 629, 633.Without question, Blackwater meets the requirements of Section 530, and is, therefore, entitled to treat its security personnel as independent contractors. Blackwater has consistently filed all required Forms 1099 MISC for its security personnel and has not treated these individuals as employees. In addition, several years ago, it consulted a large nationally-recognized accounting firm regarding the treatment of its personnel. It relied upon the advice of this accounting firm to develop and extend its policy on the treatment of its security personnel as independent contractors. Shortly after receiving the October 22, 2007, letter from Chairman Waxman, Blackwater again consulted with this accounting firm and received consistent advice. This accounting firm is not the only tax professional that agrees that Blackwater is entitled to the protections provided by Congress under Section 530. In May of this year, Blackwater retained the services of a law firm to represent it in a matter before the IRS. In a filing with the IRS, that law firm concluded that Blackwater had reasonably and correctly classified its workers as independent contractors and, therefore, was entitled to the protections of Section 530’s “safe haven.” (Exhibit A). Finally, the Small Business Administration (“SBA”), as part of a routine size determination, considered whether certain Blackwater security workers should be classified as independent contractors. The SBA applied its own standards, including the criteria used by the IRS in making its determination. It found that the workers in question were properly classified as independent contractors. Although the SBA size determination is for government procurement purposes, this determination further validates Blackwater’s prior classification of its deployed professionals as independent contractors for tax purposes.For these reasons, Blackwater’s decision to classify its security workers as independent contractors was a reasonable one, entitled to protection under Section 530’s safe haven. Based on this provision alone, Blackwater has no underpaid employment taxes and it may continue to classify its security workers as independent contractors. II. In His Letter, The Chairman Incorrectly Relies On An Unreliable SS-8 Determination Letter.Rather than apply Section 530, Chairman Waxman’s letter relies, instead, on a form letter written by an IRS technician from a field office. There are significant problems, however, with the Chairman’s reliance on such a document.A. The SS-8 Determination Is Unreliable.First, the SS-8 determination letter relied on by the Chairman has little, if any, legal effect. As the letter itself states, it “may not be used or cited as precedent.” (Exhibit B, at 5). Unlike letter rulings issued by the IRS National Office involving common law issues, these SS-8 determinations are not published. They are not considered an examination, and therefore no assessment of employment taxes can be made based upon a conclusion reached in one of these letters. Compared to Section 530, a well-established, reliable, and Congressionally-imposed “safe haven” designed for cases like this one, an SS-8 determination letter is of significantly less legal weight. B. The IRS Field Office Did Not Have a Full and Open Adversarial Process Before Issuing Its Determination.Second, the SS-8 determination letter was not the result of a full and open adversarial process. The IRS determination was not the result of a lawsuit or even a formal administrative proceeding. Instead, it was the result of a request from a contractor who, in an effort to obtain a determination of his status for tax purposes, completed a Form SS-8 and filed it with the tiny IRS SS-8 office in the small town of Newport, Vermont. Nothing more. Unfortunately, these SS-8 determinations are frequently one-sided. In this case, for instance, the IRS field office made its decision based only upon information provided by the worker. Occasionally, individuals classified as independent contractors become disgruntled and file SS-8 Forms with the hope that the IRS will grant them a tax refund. Many are motivated to provide one-sided or, in some cases, completely fabricated factual assertions in order to obtain a ruling that they are employees. There is little to stop them from doing so since, unlike other requests, there is no fee for obtaining an SS-8 determination. In the present case, the IRS provided Blackwater with little meaningful opportunity to participate in the process. At the time of the determination, Blackwater had not seen the facts provided by the independent contractor and had no way to evaluate whether the contractor’s answers were accurate and complete. At no time during the process was Blackwater afforded the opportunity to explain or explore any bias or motivation on the part of the contractor making the request. To make matters worse, the IRS did not even acknowledge Blackwater’s own position on the matter when it issued its determination on March 30, 2007. Blackwater’s responses to the questions on the Form SS-8 were provided to the IRS on March 29, 2007. (Exhibit C). The IRS letter at issue, however, was dated March 30, 2007 and did not reference any of Blackwater’s facts or analysis. (Exhibit B). At that point, Blackwater had only one option: to request that the IRS reconsider its findings. With the assistance of tax counsel, Blackwater submitted a request for reconsideration to the Internal Revenue Service Office in Newport, Vermont, on May 15, 2007. (Exhibit A). Consistent with the advice that Blackwater received from its tax advisors, this legal submission concluded that Blackwater’s decision to classify its workers as independent contractors both fell within Section 530’s “safe haven” and was correct under the “20-factor test” established by the IRS and frequently used by the federal courts. (Exhibit A). To date, the IRS field office has neither responded to Blackwater’s submission nor altered its one-sided March 30, 2007, determination letter. C. The IRS Technician Made Several Significant Errors In the SS-8 Letter.The SS-8 determination letter relied on by the Chairman is riddled with legal and factual errors. Some of these errors are obvious. The IRS technician reached a conclusion without reviewing or considering Blackwater’s own filings in the case; and, when faced with a legal opinion that Blackwater’s decision was correct, the technician remained mute. Standing alone, these errors are sufficient to undermine the reliability of the SS-8 determination. Nonetheless, the IRS technician made several other significant missteps that cast doubt on the Chairman’s sole reliance on the SS-8 determination letter. First, the technician failed to properly apply the IRS’s own training materials on two of the three testing elements that the IRS now employs when deciding whether a worker is an independent contractor. See Independent Contractor or Employee? Training Materials (“IRS Training Materials”) Training 332-102 (10-96) TPDS 84238I. The IRS Training Materials mandate that the IRS’s approach to worker classification focuses on three elements: (1) Behavioral Control, (2) Financial Control, and (3) Intent of the Parties. Id. at 2-7. On the issues of “behavioral control” and “intent of the parties” the technician misapplied IRS guidance. Although Blackwater retains some degree of control over its independent contractors, most if not all of the operational controls over Blackwater’s contractors are either carried out or imposed by the United States government. In fact, under the contract with the Department of State at issue in the IRS determination letter, the government required Blackwater to impose significant conditions and controls on its contractors. Under that contract, the United States government established or controlled: the selection, qualifications, and performance of security professionals; their work assignments; the rules, regulations, and manner in which they can operate in a war zone; where they live; and even their off-duty conduct. (Exhibit D, at C.3 – C.4). Blackwater’s contract with the Department of State provides that a “[federal Agent-in-Charge (“AIC”)] will have on-site authority over the operational units.” (Exhibit D, at C.7.1). Likewise, Blackwater’s subsequent WPPS contract with the Department of State provides that “[t]he Contractor shall ensure that all work performed under this contract is accomplished with the applicable standards/standard operating procedures, general orders and specific orders issued by [the Department of State] . . . .” WPPS Contract (No. S-AQMPD-05-D-1098) (“WPPS II Contract”), SOW at C.4.1.1. Under the established contract terms and protocols, therefore, the government imposed the vast majority of the operative controls. In making his determination, the IRS technician failed to consult the IRS’s own internal position on controls imposed by governmental agencies. In discussing the Behavioral Control element, the IRS has specifically addressed the relevance of controls imposed or otherwise mandated by governmental agencies such as the State Department. If a business requires its workers to comply with rules established by a governmental agency, “the fact that such rules are imposed by the business should be given little weight in determining the worker’s status.” IRS Training Materials at 2-11. For this reason, the technician misapplied the IRS training materials on the issue of “behavioral control.” The technician also misapplied IRS training materials on the issue of “intent of the parties.” In this case, the parties voluntarily signed a contract expressly classifying the worker as an independent contractor, not an employee. Under the IRS training materials, the contract is evidence of the parties’ intent that an independent contractor relationship was formed. In close cases, in fact, the contractual designation not only has merit, but is “very significant.” IRS Training Materials at 2-22; see Ill. Tri-Seal Products, Inc. v. United States, 353 F.2d 216, 218 (Ct. Cl. 1965). Unfortunately, the technician ignored this clear guidance as well. Instead, the technician stated that “any contractual designation of the employee as a partner, coadventurer, agent or independent contractor must be disregarded.” (Exhibit B, at 2). It is true that the parties cannot create an independent contractor relationship merely by saying so, if all other evidence compels the conclusion that the worker is an employee. But, that is not the case here. An accounting firm and a law firm have concluded that Blackwater had a reasonable basis for its determination that its worker was an independent contractor (Exhibit A), the 20-factor test shows that Blackwater’s designation was correct (Exhibit A), and the contracts between Blackwater and its personnel clearly state that the workers are independent contractors. In such a case, the intent of the parties not only matters, but is “very significant.” Ill. Tri-Seal, 353 F.2d at 218. Finally, the technician did not consider the many cases relied upon by Blackwater in its common law analysis. In assessing whether a business has properly classified a worker as an independent contractor, the IRS typically applies its “20-factor test.” In fact, in its letter request for reconsideration, Blackwater’s outside tax counsel exhaustively analyzed this test and the case law that applies it, concluding that Blackwater’s security workers are independent contractors, not employees. (Exhibit A, at 7-15). Instead of applying this case law, however, the technician inappropriately relied on three very old IRS revenue rulings relating to driving instructors, car rental agencies and used car dealers. All predate Section 530. In fact, the most of recent of these rulings is almost 40 years old. When ruling on the SS-8 determination in this case, the IRS technician did not apply Section 530, did not mention an exhaustive 15-page analysis of the issue by Blackwater’s tax counsel, misapplied the IRS training guidance, and overlooked relevant case law. A decision fraught with such legal, factual, and procedural errors is not entitled to any deference. Perhaps that is why the IRS itself has indicated that such a determination is not precedential. For the same reasons, Chairman Waxman was wrong to use that decision as his sole basis for a public allegation of “tax evasion.” III. Blackwater’s Treatment of Its Workers As Independent Contactors Did Not Result In An Underpayment of Taxes. In his letter, Chairman Waxman stated that Blackwater’s classification of its workers as independent contractors somehow resulted in a massive underpayment of federal taxes. Once again, the Chairman’s claim is incorrect. Treatment of the workers as independent contractors does not result in employment taxes being underpaid to the Department of Treasury. Whether Blackwater’s workers are employees or independent contractors, all employment taxes are still owed and are paid to the Department of the Treasury. If the workers are employees, Blackwater merely acts as the intermediary or conduit temporarily holding trust fund taxes on behalf of the workers and the United States. If the workers are independent contractors, however, then the contractors themselves must pay these taxes to the United States directly. The issue, therefore, is not whether taxes are paid to the Treasury. It is whether Blackwater withholds those taxes and transmits them to the Treasury or whether the workers bear that responsibility. Even if we were to assume that Blackwater mistakenly classified its workers as independent contactors for purposes of argument, it would not alter the total taxes owed or the amount of revenue flowing into the United States Treasury. What would alter the flow of revenue, however, is Chairman Waxman’s incorrect position that the IRS technician’s SS-8 determination should control. Right now, Blackwater owes no employment taxes to the United States Government because it falls squarely within Section 530’s “safe haven” for those businesses that have a “reasonable basis” for classifying their workers as independent contractors. (Exhibit A). The SS-8 letter does not change Blackwater’s protection under Section 530’s “safe haven.” If, however, Chairman Waxman had his way and the SS-8 letter applied to all Blackwater personnel, it would have a significant effect on the amount of taxes flowing into the Treasury by Blackwater’s independent contractors. As for taxes paid in the past, the field determination letter would erase the contractors’ obligation to pay Self-Employment Contribution Act (“SECA”) taxes and would cut in half their obligation to pay FICA taxes. In other words, Blackwater would owe no employment taxes, but the U.S. Treasury would owe those contractors a substantial refund. As for taxes due in the years to come, under the SS-8 determination letter, the contractors will only owe one-half of future FICA taxes, but will still be entitled to full social security benefits. In short, if the technician’s informal and non-precedential decision is given the weight that the Chairman accords to it, this could result in a significant underpayment of federal employment taxes. IV. ConclusionFortunately, the U.S. Treasury need not suffer such adverse consequences. The IRS technician’s SS-8 letter is not precedential, and it has no reach beyond the specific facts at issue in that letter. (Exhibit B, at 5). Any claim that the SS-8 letter is entitled to significant weight is simply incorrect.What is entitled to weight in this case are the precautions taken by Blackwater to ensure that its classification of its security personnel was correct. Over the past several years, Blackwater has engaged an accounting firm and a law firm to assess its classification of its security workers as independent contractors. Both reached the same conclusion: Blackwater’s classification was reasonable and correct. Under Section 530 – a provision never analyzed by the IRS technician or even mentioned by Chairman Waxman – Blackwater’s decision is legally protected. Reliance on the advice of outside advisors on complex worker classification issues that have remained unresolved by Congress, the courts, and the IRS for more than 50 years cannot constitute tax evasion. For these reasons, and the ones set forth above, the Chairman’s allegations to the contrary are simply incorrect.

11.28.07
Blackwater Harnesses Wind Energy
For Immediate ReleaseNovember 28,2007 Blackwater Harnesses Wind EnergyBy Eric R. PooleThe state of North Carolina has long been known for farming and Blackwater Worldwide is introducing a new crop, wind. Well, Blackwater isn’t exactly farming wind but the ten-year-old firm known for its training and contracting will be generating electricity by means of harnessing wind energy through a wind turbine. A ribbon-cutting ceremony at Blackwater’s headquarters in Moyock, N.C. is expected by March 1, 2008.Ted Vogel, alternative energy officer for Blackwater’s renewable energy program states, “This will be the largest grid-connected wind turbine in the state and the first for a commercial, light industrial location. “This will be the largest wind turbine by a factor of 20, with a rated capacity of 50 kilowatts. The nearest turbine at the Coquina Beach Bathhouse, a parks and recreation area, has a generation capacity of only 2.5 kilowatts. The turbine chosen for Blackwater’s needs is manufactured by Entegrity Wind Systems of Canada. Blackwater was granted a special use permit at a hearing by Camden county commissioners on November 19th. This project has drawn many letters of support and advice from local conservation and renewable energy leaders including the N.C. Coastal Wind Working Group, North Carolina Audubon Society, the North Carolina Sustainable Energy Association and the North Carolina Solar Center. Blackwater has promoted and encouraged appropriate legislation on wind turbines that benefit the local business economy as well as residential applications of wind energy technologies on the North Carolina Coast. The North Carolina Solar Center at N.C. State University has expressed interest in working with Blackwater to gather data regarding power output. “They have programs on anything having to do with renewable energy. We have discussed setting up a web site that will permit tracking and real time data sampling on wind energy projects in North Carolina.” Not only does Blackwater look to benefit by lowering its $40,000-a-month power bill, but they hope to train and teach other potential benefactors about installation of renewable energy in businesses and homes. Blackwater is living up to its name with expectations of growing this technology in a new business format. “Wind energy is an undervalued resource and we are planning to introduce wind and additional renewable technologies to private and governmental clients in the coming months,” Vogel states. We have had interest from several nations where business operations are already in place,” he adds. How much of an investment is a wind turbine? While every installation varies based on location, a 50 kilowatt wind turbine installed in the United States can range from $155,000 to $210,000 per unit. International applications tend to cost more for materials but less in labor. What sounds like an expensive way to save money works for growing companies like Blackwater. “This type of application causes the power meter to spin slower. Annual savings is estimated at $9,000 and $11,000.” With a turbine in place, Blackwater will also be eligible for a 35 percent state investment tax credit. If the proposed federal tax credit of 30 percent is passed into law, the overall tax advantage for commercial installations like that at Blackwater averages between 50 to 55 percent of the installed cost in North Carolina. Without the federal investment tax credit (ITC), payoff for the system is around 12 year. With a life expectancy of nearly 40 years, that translates to more than $280,000 in energy savings at today’s price of electricity. Unless standing directly under or behind it, the turbine is no louder than a refrigerator. One effect in particular that most will never notice is the 4,000,000 pounds of greenhouse gasses that will never be put into the atmosphere, a benefit of wind turbine systems. “Smaller wind energy systems like ours can have an impact on climate change that many people never realize,” Vogel suggests. This project should come at no surprise to the government, especially when one considers that the Department of Defense has been challenged with sourcing 25 percent of its power from renewable energy at all stateside installations by 2025. As the government looks to meet this goal, they can look to Blackwater for assistance in placing wind energy in more locations. Wind energy has the potential to help stabilize areas around the world that are currently strained for power like Iraq, Afghanistan, and other remote locations. Places such as these currently rely heavily on increasingly expensive diesel fuel power generation. With planned completion of Blackwater’s first wind turbine slated to happen before the end of 2007, the winds of change are blowing in North Carolina.

11.21.07
Blackwater Worldwide Joins International Association of Peacekeeping Training Centers
For Immediate ReleaseNovember 21,2007 Blackwater Worldwide Joins International Association of Peacekeeping Training CentersMoyock, NC - Blackwater Worldwide, a global leader in advanced law enforcement and military peacekeeping training is pleased to announce its membership in the International Association of Peacekeeping Training Centers (IAPTC). The aim of the Association is to facilitate communication and an exchange of information among various peacekeeping training centers and/or among people responsible for and interested in peacekeeping training. It is intended to broaden contacts between various international organizations, peacekeeping training centers and institutions, universities, and other interested groups, leading to more effective peace operations.Guided by integrity, innovation, accountability, and a desire for a safer world, Blackwater Worldwide leverages state-of-the-art training facilities, professional program management teams, and innovative manufacturing and production capabilities to deliver world-class, customer-driven solutions.

11.14.07
Blackwater Worldwide Response to False New York Times Report
For Immediate ReleaseNovember 14,2007 Blackwater Worldwide Response to False New York Times Report November 14, 2007Blackwater supports stringent accountability for our industry. If official findings conclude that someone was complicit in wrongdoing, we will support holding that person accountable. However, the investigation remains underway and to the best of our understanding, the key people involved in the incident have yet to even speak with authorities. The unnamed "civilian and military officials" sourced in the story have leaked law enforcement sensitive information before the FBI has completed its investigation and Blackwater will thus withhold further comment until official findings by the FBI are made available.

11.13.07
Blackwater Unveils Its Airship
For Immediate ReleaseNovember 13,2007 Lighter-Than-Air Vehicle Completes Successful Test FlightsMoyock, NC - Blackwater Airships, a division of Blackwater Worldwide, is pleased to announce the successful initial test flights of the Polar 400 Airship. The Airship will add to Blackwater's capabilities as a technical service provider to government and non-government clients. The first flight of approximately forty-five minutes was conducted on Thursday, November 8 and the second flight, also of about forty-five minutes, was conducted on Monday, November 12. Both flights were manned by an experienced airship pilot and a flight observer to record flight data, but the vehicle is intended to be used as a remotely piloted vehicle.The Polar 400 will provide military, law enforcement, and non-government customers a low-cost lighter-than-air vehicle that is both a long-duration alternative to traditional fixed and rotary-wing UAVs, manned aircraft, and other persistent surveillance assets. It is intended for a wide variety of persistent missions - battlefield surveillance, facility/installation/port security, border security, communications relay, and others. The Polar 400's innovative airship technology will perform tasks normally done by costlier manned and unmanned aircraft with minimal ground crew and will provide persistent surveillance measured in terms of days rather than hours.A key feature of this new design airship includes the multiple thrusters of its groundbreaking hydraulic propulsion system which provides excellent low speed control and maneuverability, along with easier ground handling compared to traditional airships. In the coming weeks, Blackwater will continue to test, innovate, and prepare the Polar 400 for production in 2008.Guided by integrity, innovation, accountability, and a desire for a safer world, Blackwater Worldwide leverages state-of-the-art training facilities, professional program management teams, and innovative manufacturing and production capabilities to deliver world-class, customer-driven solutions.

11.07.07
Customer satisfaction letter to Blackwater
For Immediate ReleaseNovember 07,2007 Customer satisfaction letter to Blackwater Rob,Just wanted to take a minute to acknowledge the great job done by Jeff Edwards and the team of instructors headed by Dennis Dorshimer this past weekend. My group of 14 Seabees from Pennsylvania was unanimous in the opinion that they would rather drive seven hours again in the future to train with Blackwater than to drive an hour and a half to Camp Dawson, West Virginia, where we had trained in the past. The quality of instruction made all the difference. For each event the range was ready, the weapons and ammunition were ready and the instructors were ready. I’m sure this is the expected norm for you, but it’s not like that anywhere else that I’ve trained. As a measure of comparison, I trained at Fort Bragg for four months in 2006 prior to deploying to Iraq. Every time we went to a range you would think it was the first time they ever ran a range in their lives. The amount of time wasted drawing weapons, waiting for ammunition and waiting for instructors was painful. When I say “instructors” I mean range safety officers. Actual instruction was almost non-existent.Your instructors, on the other hand, were well organized, well prepared, very knowledgeable and also fun to work with. We enjoyed our training and qualified all 14 Seabees.Keep up the good work!Bill MarshCaptain, United States Navy