VF exclusive: Blackwater's Erik Prince to step down, reveals CIA role

'Power struggle' inside Blackwater over Prince's successor

Blackwater's Erik Prince was recruited as a CIA agent in the years after the 9/11 attacks, says an exclusive report at Vanity Fair that also reveals the billionaire ex-Navy SEAL plans to step down from Blackwater to teach high school.

For the past six years, Prince "appears to have led an astonishing double life," writes Adam Ciralsky. "Publicly, he has served as Blackwater’s CEO and chairman. Privately, and secretly, he has been doing the CIA’s bidding, helping to craft, fund, and execute operations ranging from inserting personnel into 'denied areas'—places US intelligence has trouble penetrating—to assembling hit teams targeting al-Qaeda members and their allies."

Ciralsky reports that Prince became a CIA "asset," or spy, who became a "Mr. Fix-It" in the war on terror.

"Prince wasn’t merely a contractor; he was, insiders say, a full-blown asset," Ciralsky reports. "Three sources with direct knowledge of the relationship say that the CIA’s National Resources Division recruited Prince in 2004 to join a secret network of American citizens with special skills or unusual access to targets of interest. As assets go, Prince would have been quite a catch. He had more cash, transport, matériel, and personnel at his disposal than almost anyone Langley would have run in its 62-year history."

Prince also told Vanity Fair he believes that people inside the US government sold him out when news of Blackwater's involvement in the CIA's secret assassination program went public. Last summer, CIA director Leon Panetta informed congressional intelligence committees that the CIA had kept secret an on-and-off assassination program that many people believe was run during the Bush administration by Vice President Dick Cheney.

Later, news reports emerged alleging that Blackwater, which recently renamed itself Xe Services, was involved in the program which sought to assassinate high-value terrorist targets.

Prince "confesses to feeling betrayed," Vanity Fair reports.

“I don’t understand how a program this sensitive leaks,” he says. “And to ‘out’ me on top of it?”

Ciralsky reports:

Prince blames Democrats in Congress for the leaks and maintains that there is a double standard at play. “The left complained about how [CIA operative] Valerie Plame’s identity was compromised for political reasons. A special prosecutor [was even] appointed. Well, what happened to me was worse. People acting for political reasons disclosed not only the existence of a very sensitive program but my name along with it.” As in the Plame case, though, the leaks prompted CIA attorneys to send a referral to the Justice Department, requesting that a criminal investigation be undertaken to identify those responsible for providing highly classified information to the media.

Prince told Ciralsky that he was engaged in work for the CIA "up until two months ago—when Prince says the Obama administration pulled the plug." That would seem to confirm recent news reports that the Obama administration was using Blackwater for assassinations in Pakistan.

Prince also told Ciralsky he plans to step down as chairman and CEO of Blackwater -- a move Ciralsky reports has started a "power struggle" within the company over who will succeed its founder.

“I’m through,” Prince told Vanity Fair. “I’m going to teach high school. ... History and economics. I may even coach wrestling. Hey, Indiana Jones taught school, too.”

Read the full Vanity Fair report here.