AMY GOODMAN: We turn now to the second part of our discussion with investigative journalist Jeremy Scahill, author of the new book, his first, Blackwater: The Rise of the World’s Most Powerful Mercenary Army. On yesterday’s broadcast, we talked about how new lawsuits and congressional efforts are challenging Blackwater’s role as the Bush administration’s leading private security force, from Iraq to Afghanistan to New Orleans.

Jeremy Scahill is a Democracy Now! correspondent and a Puffin Foundation writing fellow at The Nation Institute. Jeremy, before we go to the Caspian Sea area, we talked yesterday about Iraq, about Afghanistan, about the fact that Blackwater is being sued for situations in both cases. Just briefly summarize again for viewers and listeners who didn’t catch yesterday’s show what Blackwater is.

JEREMY SCAHILL: A decade ago this company didn’t exist. It was little more than a 5,000-acre plot in North Carolina near the Great Dismal Swamp and the private fortune of its right-wing Christian bankroller-of-the-president founder, Erik Prince, whose family had a long history of backing Republican Revolution causes and the rise of the religious right. The company was started officially in ’96, began building up in ’97 as a sort of training facility for the federal forces, local and state law enforcement, as well as the military.

After 9/11, it became an all-out mercenary outfit and now has many, many government contracts. One of them alone with the State Department has generated $750 million for Blackwater since June of 2004. The company guards the senior U.S. officials in Iraq, trains forces in Afghanistan, has been deployed in New Orleans. They have 2,300 men actively deployed around the world, another 20,000 contractors at the ready. It’s really the Praetorian Guard for the Bush administration’s global war on terror.

AMY GOODMAN: And it employs Americans, as well as people — yesterday we were talking about the Chileans under the Pinochet regime, those soldiers also included in this guard.

JEREMY SCAHILL: Right. I mean, the Bush administration failed to build an actual “coalition of the willing” in Iraq, and so they built up what some call the “coalition of the billing.” And Blackwater and other mercenary companies, they’re the only internationalizing that’s going on with the occupation.

I document in the book one case where another mercenary company actually hired the exact Honduran troops that had been pulled out of Iraq by the Honduran government after John Negroponte was named as U.S. ambassador. A mercenary company went into Honduras, hired up those troops and redeployed them in Iraq.

And in the case of Chile, this was a country — 92 percent of the population in Chile was against the war. Chile was a rotating member of the Security Council and was against the occupation of Iraq. Blackwater and other firms went in and hired up Chilean commandos and other soldiers and sent them to Iraq in total contravention of the Chilean government’s laws and in contravention of will of the Chilean people.

And this is a scenario we’ve seen replicated over and over with these companies. They recruit in countries that are against the war in Iraq, and they send their forces over there. And this is really not only a subversion of the domestic processes in these countries, but also a subversion of American democracy, because there is a necessary resistance to fighting these, you know, wars of aggression, offensive wars, and when you have a recruitment crisis in the military and you don’t want to have a draft for political reasons, you just hire up soldiers from around the world and build your occupation force.

AMY GOODMAN: Jeremy, what about the Caspian Sea? What does Blackwater have to do with this area? And geographically place it.

JEREMY SCAHILL: This is an incredible story that dates back many decades. It was part of the great game between the U.S. and the former Soviet Union. The Caspian Sea has one of the largest untapped resources of oil and natural gas in the world. The Clinton administration aggressively tried to begin tapping the resources of the Caspian Sea, but was unable to effectively do that.

When the Bush administration came to office — well, let’s just set this up. The Caspian Sea lies in Central Asia, and in addition to former Soviet republics, Iran also borders on the Caspian Sea, and so this is not only a game that the major powers of the world are playing about oil, but it has everything to do with a potential U.S. attack against Iran. This is a very strategic region for the United States, particularly for the Bush administration right now.

And so, when the Bush administration took power a few years ago, the Cheney Energy Commission in 2001 did a study, and they found that there were 20 billion barrels of oil in the Caspian Sea, and its supplies rivaled that of the United States, slightly less than the United States. And so, the Bush administration put it on the fast track to try to open up a pipeline running from Azerbaijan, the port city of Baku, westward, and the resources of the Caspian were intended to go to Western European markets. Russia reacted in a very hostile way to U.S. posturing in the region. And U.S. officials, Energy Secretary Samuel Bodman, made several trips to the region, and he was there for the opening of this pipeline.

Well, a story that’s gotten almost no attention is that, as the Bush administration began to tap the resources of the Caspian Sea, it realized that it needed to have security forces in the region, but they didn’t want to have an overt U.S. military presence, especially with the occupation of Iraq impending and the occupation of Afghanistan. So what they began doing was a program called Caspian Guard, where they started building up the military forces in Georgia, Kazakhstan, Azerbaijan. And this was a program that got very little media attention.

And so, beginning in July of 2004, the Bush administration sends Blackwater into the most strategic part of this operation, into the port city of Baku, which juts out from Azerbaijan’s coast into the Caspian Sea. And Blackwater quietly went in there on a $2.5 million original contract, and they set up a 90-man special forces unit of the Azerbaijani military, modeled after the U.S. Navy Seals. So they were exporting training for the most elite forces in the U.S. Blackwater goes in, sets up what was called the 90-man high-end Azeri unit, and they also build up from an old special forces base of the Soviet Union in Baku a command and control center that was modeled after the Department of Homeland Security’s Command and Control Center.

When the Iranian government got wind that Blackwater was in the Caspian Sea and that it was engaged in these kinds of operations, it deployed its own special unit of the Iranian navy into the Caspian Sea as a direct response to Blackwater’s presence there. And what this mission did was allow the Bush administration to send in loyalist forces from the private sector, have plausible deniability that there was an active U.S. military presence and build up not only defense for the pipeline project, which is now open and flowing, but also some have suggested that it could be used, that facility that Blackwater built up, as one of several forward operating bases for a potential attack against Iran.

AMY GOODMAN: Jeremy Scahill, yesterday you talked about being in New Orleans after Katrina, seeing the Blackwater guards come in, being paid $350 by Blackwater, but Blackwater charging $950. What about other places in the United States, deploying here, like the border?

JEREMY SCAHILL: Well, Blackwater really viewed New Orleans as an opportunity to begin a whole new division, and they started, after Hurricane Katrina, a domestic operations division. Blackwater representatives, a few months ago, met with California Governor Arnold Schwarzenegger about doing disaster response in the event of an earthquake. The company has simultaneously applied for operating licenses in all of the coastal states of the United States.

Their new training facility, they call it — I call it a private military base — is opening up now in Illinois. In fact, they just released yesterday their new training schedule, and there’s grassroots resistance in Illinois happening to the opening of this private military base in Mount Carroll, Illinois, which is a few hours outside of Chicago. Blackwater is also struggling to open a new facility in San Diego — near San Diego, California. Once again, local people are rising up and saying, “We don’t want these men with heavy weapons coming into our community. We don’t want the rattle of machine gun fire.” So Blackwater really, I think, views the domestic feeding trough in the United States as a frontier to conquer.

Simultaneously, Blackwater also is manufacturing surveillance blimps that they’re marketing to the Department of Homeland Security perhaps for use in monitoring the U.S.-Mexico border. It’s increasing its training of federal law enforcement and trying to get more contracts to train domestic forces inside of the United States.

AMY GOODMAN: Aero Contractors in North Carolina — Blackwater is also based there. We just read a headline at the top of the show about grassroots activists demanding accountability. Aero Contractors, contracted by the CIA to transport prisoners to Third World countries involved in extraordinary rendition. Is there a connection between Aero and Blackwater?

JEREMY SCAHILL: No. No, Blackwater has an aviation division — not that I know of. Blackwater has an aviation division, and they have at least 20 aircraft. And one of the things that I did in the book was to look at the commonalities between the extraordinary rendition flights, the patterns of the aircraft that are engaged in extraordinary renditions, and Blackwater’s aircraft. And several of Blackwater’s aircraft, as I document in the book, fit the pattern, the flight patterns, of these flights that were engaged in extraordinary rendition.

Now, I have to say, I’ve tried to get all of Blackwater’s contracts. Some of them are classified. In fact, Blackwater’s president, Gary Jackson, has said that some of their contracts are so secret that Blackwater can’t tell one federal government entity what it’s doing for the other. I think this is a story that really needs to be examined much more thoroughly. I think it’s something that Congress should be investigating. The European Union, when it began to do its investigations, Blackwater’s name popped up in their study. And this is something I’m going to continue to follow.

Just as a side to this, I find it interesting that Blackwater has this thriving aviation division and the vice chairman of the company is Cofer Black, the man who really kickstarted the widespread use of extraordinary renditions after 9/11, where prisoners are taken on the battlefield, zipped up — or not on the battlefield, out of JFK Airport — zipped up, a diaper placed on them, shackled and sent to a third country hell-hole to be tortured.

AMY GOODMAN: And this was Cofer Black in a previous position within the CIA?

JEREMY SCAHILL: Yes, he was the head of the CIA’s Counterterrorism Center, the man who told Congress that after 9/11 the gloves came off.

AMY GOODMAN: This is the vice chair now of Blackwater.

JEREMY SCAHILL: He’s now the vice chair of Blackwater and one of the people behind this new intelligence company that Blackwater executives are at the core of. And they’re marketing their services to private companies. This is one of the frightening new frontiers of private warfare.

AMY GOODMAN: Jeremy Scahill, thanks very much for coming back. Tonight, we’ll be together at the Ethical Culture Society in New York at 7:00, where Jeremy will be launching this first book, Blackwater: The Rise of the World’s Most Powerful Mercenary Army. We will be joined by Naomi Klein, Nation writer, as well. Jeremy, thank you. Puffin Foundation writing fellow at The Nation Institute, author of Blackwater.