China Business Ventures Tied To Blackwater Founder Erik Prince Raise Questions

MARY LOUISE KELLY, HOST:

Erik Prince the controversial founder of the security firm Blackwater is generating more controversy, this time in China. Another company he founded, Frontier Services Group, recently announced on its website that it had signed a deal to build a training center in Xinjiang province. That's in the far west of the country. It is where the Chinese government has detained as many as a million Uighur Muslims. Later, the statement was taken down.

So to figure out what might be going on, we turn to Emily Rauhala of The Washington Post. She wrote about the company's plans to build in Xinjiang last year.

Hey, there.

EMILY RAUHALA: Hi.

KELLY: Start with what we know Erik Prince and his company, Frontier Services Group - what they're already doing in China. They operate a training center outside Beijing, and you've actually been there. Tell us what it looks like, what's going on.

RAUHALA: That's right. His company invested in a school just outside Beijing. It's built like a compound with high black walls, a castlelike gate. And inside, there's a variety of training facilities - a mock village for drills about hostage negotiations, gym facilities and courses in self-defense, that type of thing. And we toured the school, and they gave us a sense of the type of training they give, both for Chinese military and Chinese police. And they said they'd trained about a couple thousand personnel already and had plans for expansion.

KELLY: OK. Stay with the plans for expansion because you were reporting on this. And those plans for expansion include opening this training center in Xinjiang. What is the vision for that as you've been able to discern?

RAUHALA: So what we found when we went to speak to them in May was that they had plans to build what they were calling a forward-operating base in Xinjiang Uyghur Autonomous Region in China's far northwest. This is an area that's really tightly controlled by the Chinese government - by Chinese security personnel, both military, intelligence and regular police. So we were immediately like - wow, the Chinese government's going to let you go out there and build a school? And they said, yep, there is a really - a strong need for expertise in anti-terror operations, in how to protect logistics and supply chains. And we have plans to open a school. It's under construction.

KELLY: Now, a spokesman for Frontier Services Group says that this whole statement announcing that Xinjiang was going ahead was posted by mistake and says Erik Prince was not involved. Do we know? I mean, does that seem plausible to you given your reporting?

RAUHALA: Well, I'm unable to know, you know, what he does or doesn't know.

KELLY: Sure.

RAUHALA: But what I can tell you is we visited this school, interviewed the founder and also interviewed a ton of sort of former executives from this company last spring for our - ahead of publication. We took those findings to Frontier Services Group. Erik Prince's personal spokesman got back to us and said, sure, we'll answer questions if you send an email. We sent an email. And then a spokesperson for Frontier Services Group, the company, got back to us saying they would not, in fact, answer the questions.

So as early as May, we know that his personal spokesman knew about this. You know, then of course, there was the announcement posted on the company's own website last week and then taken down.

KELLY: Erik Prince, as we noted, is a controversial figure. There's the history with Blackwater. He is under scrutiny for a meeting he took in the Seychelles with associates of Vladimir Putin. And he is highly connected with the current administration, just to note. Are his connections with the Trump administration - his sister is President Trump's education secretary - are those a factor at all here? Are they in play?

RAUHALA: I think they're certainly a factor in terms of why people are so interested in this guy. The fact that someone like this could be going into business with Chinese companies that are closely tied to the Chinese Communist Party raises a lot of questions. U.S. law stipulates that you cannot, in fact, you know, sell U.S. defense information or secrets - make money off them - to a foreign government. And so I think there was a lot of concern among his associates and others that this project could potentially violate those rules, though, just to be clear, there's been no sort of concrete allegation or evidence of that to this point.

KELLY: And to be clear, the mere training of security personnel in China would not be a violation of U.S. law. It would be if national security information were compromised in some way.

RAUHALA: Right. You can't sort of sell U.S. know-how overseas. So people were concerned that because he had such close ties to the U.S. defense sector that doing business and making money with Chinese companies could potentially run him afoul of these rules.

KELLY: Emily Rauhala, she was Beijing correspondent for The Washington Post. Now she covers foreign affairs from here in Washington.

Thanks so much.

RAUHALA: Thank you.

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