Air War for Profit: Inside Erik Prince’s Push to Rule the Skies

In the spring of 2016, representatives from Lancaster 6—a Dubai-based company associated with former Blackwater head Erik Prince—met with representatives of Ukrspetsexport, a Ukrainian state-owned arms-trading firm, to discuss buying a number of transport planes.

The rugged, reliable twin-engine An-26 and An-32 planes are popular with air forces, relief organizations, and cargo companies working in remote, undeveloped regions. So it wasn’t unusual that Lancaster 6, which bills itself as a consulting, security, and construction firm, was interested in the aircraft.

What came next was unusual. According to two sources in the Ukrainian defense sector, Lancaster 6’s reps asked the Ukrainians whether it would be possible to equip the unarmed transport planes with American-made guns.

Capable of pummeling a battlefield with precise gunfire, these “gunships” are among the most powerful warplanes in the world. Only a handful of countries, most notably the United States, possess specially-modified cargo planes fitted with side-firing guns.

If Lancaster 6 were to acquire side-firing An-26 or An-32 gunships, it would become one of the world’s only private gunship operators. Lancaster 6 did not respond to a request for comment on the Ukraine meeting. And a Prince spokesperson said Prince is not connected to Lancaster 6 “in any way,” despite two sources with close knowledge of Prince’s business dealings who claim the former Blackwater head unofficially calls the shots at the company.

The 2016 meeting, which took place at the Intercontinental Hotel in Kiev, did not result in any aircraft sale. But it was an indication that Prince, who became a globally infamous figure after his corporate soldiers became involved in a 2007 Baghdad firefight that killed 17 civilians, was looking to get back into the war-for-hire business.

Today, backed in large part by Chinese money, Prince is proposing to run counterinsurgency campaigns largely from the air, with a private air force he’s acquiring through a kaleidoscope of secretive companies. The for-profit air arm would be composed of scores of heavily-armed airplanes, helicopters, and drones. Some of this proposed private air force is still only in the planning stages, but Prince has already acquired—and through questionable means—at least two attack aircraft.

If he succeeds in acquiring the aircraft and manages to sell the U.S. government on his plan, Prince could find himself at the head of an aerial arsenal on a mission to rid Afghanistan of insurgents and terrorists by way of sheer firepower. “His idea of counterinsurgency is dropping steel on targets,” Sean McFate, a former private military contractor who is currently a fellow at the Atlantic Council, told The Daily Beast.

In attempting to build his private air force, Prince allegedly has engaged in a number of questionable practices, according to former colleagues and one of Prince’s company’s own lawyers.

Most seriously, a former colleague claimed Prince moved a pair of armed aircraft from country to country, and between various companies associated with Prince, all without the approval of the company that actually owned the planes. The lawyers from law firm King & Spalding asserted that Prince tried to sell the same planes’ services in violation of State Department regulations.

The Intercept first reported, in 2016, the details of Prince’s efforts to arm and conceal the two planes.

Prince’s camp categorically denies these claims.

Prince has been trying to get his air-force-for-hire project off the ground for years. Blackwater operated distinctively-painted Little Bird helicopters that flew with armed gunners and were a regular sight over Baghdad during the height of the U.S. occupation of Iraq.

Prince’s current private-air-force plan broke cover in May 2017, when the 49-year-old former Navy SEAL, whose sister, Betsy DeVos, is President Donald Trump’s secretary of education, publicly proposed to corporatize the U.S. war effort in Afghanistan.

Prince personally delivered to Afghan officials a written proposal for a private air force, Military Times reported in 2017. That proposal listed Lancaster 6, the same company that asked about buying gunships in Ukraine in 2016.

A for-profit approach to the Afghanistan war would “use cheaper private solutions to fill the gaps that plague the Afghan security forces, including reliable logistics and aviation support,” Prince wrote in a Wall Street Journal op-ed.

A private war effort could save the United States $35 billion a year in Afghanistan, Prince asserted. In a presentation first obtained by Buzzfeed, he claimed that the corporate combat effort would more than pay for itself by way of “strategic mineral resource extraction” focusing in part on potentially rich deposits of rare minerals in Helmand and Nangarhar, neighboring provinces that are some of Afghanistan’s most dangerous.

Senior Defense Department officials, in particular then-National Security Advisor H.R. McMaster, rejected Prince’s proposal. Siding with McMaster and other senior officials, Trump announced in late 2017 that the United States would send thousands of additional troops to Afghanistan to reinforce the 8,500 service members already there.

But McMaster, a popular former U.S. Army general and combat veteran, left the administration in March. Hardliner John Bolton replaced the more cautious McMaster. Prince told The Daily Beast in June of this year that he believed Bolton would be more receptive than McMaster to his pitch to privatize the Afghanistan war.

In mid-2018, Prince again floated his idea of a corporate air war, this time hoping for a more receptive audience. “I know he’s frustrated,” Prince said of Trump in an interview with NBC News. “He gave the Pentagon what they wanted… And they haven’t delivered.”

Prince told USA Today that his private army in Afghanistan would include 5,500 contractors and a 90-plane air force and would cost just $3.5 billion. In one of his written presentations from 2017, Prince described in detail the aircraft that would operate in mineral-rich Helmand and Nangarhar. This aerial contingent presumably is indicative of the kinds of aircraft Prince envisions deploying across Afghanistan.

The Helmand and Nangarhar force would total 19 airplanes, helicopters, and blimps operated by 73 pilots and mechanics, according to a page from Prince’s proposal that The Daily Beast reviewed. The force would include four “Lionseye” surveillance drones, two An-26 gunships, and two T-Bird planes for “armed reconnaissance,” a mission that involves slowly flying over a battlefield, waiting to attack any enemy forces that appear.

The aircraft mostly are “primitive,” McFate said. But primitive might be just fine for remote Afghan provinces, where ground support could be minimal.

Tom Cooper, an aviation expert and founder of the Air Combat Information Group, told The Daily Beast, “His choice of platforms [is] a very sound selection, actually—good, reliable platforms.”

Well, at least some of them. The Lionseye drone Prince pitched doesn’t actually exist anywhere but on paper and in Prince’s imagination. The drone is meant to be “some weird modification” of the Chinese Wing Loong, which itself is a copy of the American Predator drone, according to Robert Young Pelton, author of Licensed to Kill: Hired Guns in the War on Terror and a former business partner of Prince who is embroiled in a long legal battle with the former Blackwater chief. (A jury in December ordered Pelton to pay Prince $2.6 million in damages, including for fraud and breach of contract. Pelton said he might appeal.)

Prince has strong ties to Chinese companies. A Prince spokesperson said there is “zero Chinese technology considered in Mr. Prince’s proposal for Afghanistan.”

“Operations and budget analysis has been done for every stage of the plan for Afghanistan from recruiting vetting procurement logistics and accountability measures,” the spokesperson said. “This is proprietary information and will not be disclosed.”

The An-26 gunships likewise do not exist except as a topic of conversation between Prince’s associates and various Ukrainians. It’s unclear whether the An-26 airframe or similar Ukrainian aircraft models can support the addition of a side-firing gun, which demands some kind of permanent opening in the side of the aircraft and a floor strong enough to withstand the weight of the weapon and related equipment.

The U.S. Air Force, which has operated AC-130 gunships since the Vietnam War, still struggles to get its own gunships to work properly.

If Ukrspetsexport or another foreign firm were to agree to add U.S. guns to Ukrainian planes, as Lancaster 6 officials asked about, the firm would first need State Department approval, as required by the International Traffic in Arms Regulations, the federal law that governs American military exports.

In pitching his private air force plan, Prince does not appear to have seriously addressed the associated technical and regulatory risks. “No one with any serious ground experience has looked at this mish-mash of old aircraft and insider conversions to point out it’s a scam,” Pelton said.

It’s the T-Bird aircraft, which Prince listed among the aircraft in his proposed air contingent for Helmand and Nangarhar provinces, that potentially is the most problematic. The tale of two T-Birds is a particularly convoluted one involving many of Prince’s companies, several of his closest associates, and possibly the most serious allegations of wrongdoing directed at Prince.

In short, Prince had one of his companies—Frontier Services Group (FSG), a Hong Kong-based company that began offering security, logistics, and insurance services in 2013—buy a pair of civilian planes, and then proceeded to modify the planes for war without Frontier’s knowledge and in violation of State Department regulations, according to Gregg Smith, a former CEO of the company. And when he got caught, Prince allegedly moved the aircraft in order to maintain control of them, again without the company’s knowledge.

“Gregg Smith was fired from FSG as CEO for poor performance,” a Prince spokesperson said. Smith told The Daily Beast he quit.

Smith “has made repeated allegations against Mr. Prince, which are biased and without foundation,” the Prince spokesperson continued. “Any assertion that FSG or Mr. Prince violated any laws in this matter is categorically false. FSG voluntarily filed a report with the DDTC [Directorate of Defense Trade Controls] back in September 2016 to assist with their enquiries to which there has been no follow up whatsoever making it crystal clear that this matter has ended.”

Today the two T-Birds feature prominently in Prince’s plans for private air war.

The T-Birds are modified agricultural aircraft, which industrial farms use to spray fields. A few militaries have acquired former “ag” planes for combat duties, most notably the United Arab Emirates, which equipped a few Air Tractor ag planes with armor, sensors, and bombs and deployed them to Libya to support troops fighting under Gen. Khalifa Haftar, the Emirates' preferred warlord in the country.

Prince frequently does business in the Emirates and even lived there for a time after leaving Blackwater. In 2014 he jumped into the market for military ag planes under Frontier’s auspices. It all began when Frontier, with Prince as board chairman, acquired two single-engine ag planes from Georgia manufacturer Thrush.

A Prince spokesperson said Frontier “has no plans for any armed aircraft whatsoever.” Technically speaking, that could be true, as Prince relies on front companies to handle the modification of unarmed planes into armed warplanes and also uses fronts to market the planes’ services to government clients. That was apparently his plan with the T-Birds.

Rather than having Frontier employees add armor, sensors, and weapons and other military equipment to the planes, Prince transferred the aircraft to a series of European firms—some of which he partially owned—that did the actual work, according to a legal document obtained by The Daily Beast.

Meanwhile, a separate set of companies—at least one of which Prince had an ownership stake in—have put their names on Prince’s various proposals to send the planes into combat, according to the legal document and media reports.

Soon after Frontier bought the T-Birds in 2014, Prince shipped the planes to a facility in Austria run by Airborne Technologies. Prince owned a quarter of that company, according to The Intercept. Airborne Technologies did not respond to a request for comment.

The plan, Prince told his fellow Frontier board members, was for Airborne to modify the T-Birds with special sensors for surveillance missions, according to the legal document The Daily Beast obtained.

A year later in March 2015, Prince traveled to Baku, the capital of Azerbaijan, to promote his “Project Zulu,” a proposal to bundle up several of Prince’s companies in order to provide security and logistical services to the Azerbaijan government for an initial $216 million, a fifth of which would have gone directly to Prince and his partner on the project.

According to the Frontier legal brief, Prince emailed Smith, then Frontier’s CEO, to say he’d found a buyer for the T-Birds. But it wouldn’t be a direct sale. Instead, Frontier would sell the T-Birds to Airborne for $13 million. Airborne would, in turn, sell the aircraft—along with other, similarly-modified ag planes—to Project Zulu.

Prince tapped one of Frontier’s pilots, Christiaan “Serge” Durrant, to oversee the T-Bird sales effort, the same document explains. What had begun as a modest, two-plane endeavor was rapidly ballooning.

Some of Frontier’s other board members grew suspicious of Prince’s work on the T-Birds. They hired international law firm King & Spalding to investigate. King & Spalding’s report, dated Oct. 6, 2015, was a red flag. “Our analysis indicates that FSG faces potential liability stemming from apparent unlicensed brokering of defense services and materials,” the report stated.

Asked for comment on the King & Spalding report, a Prince spokesperson said, “FSG voluntarily made disclosures to the DDTC as part of dealing with the matter and took it very seriously including engaging expert law firms. That nothing further has arisen on this matter since these filings in 2016 shows that the matter is now long concluded. K&S remained engaged and were part of the team right up to the final disclosure. Any speculation resulting from the report is old news that was false when we were asked about it a few years ago and is still false now.”

As The Intercept first reported in 2016, King & Spalding found that Airborne Technologies had added military-grade sensors and hardpoints for attaching weapons. The law firm found there was even a switch inside the cockpit for the pilot to toggle between “rockets” and “guns”—although someone in Austria taped over the toggle to obscure its purpose.

The modifications transformed the ag planes into lightweight bombers. But selling military services to a foreign government requires State Department approval. Prince wasn’t authorized to broker a contract for T-Bird operations, or to sell the aircraft to another agent so they could, on their own, broker a similar deal. “FSG could be found liable,” King & Spalding warned.

A Prince spokesperson said the T-Birds “were never modified to carry weapons or any U.S. equipment.” For his part, Durrant denied the company did anything illegal with the T-Birds. “I can categorically say there was zero breaches of U.S. law whilst they were under my watch at FSG,” Durrant told The Daily Beast.

But Smith said he fired Durrant from Frontier in October 2015 after discovering that Durrant ordered the falsification of documents related to the T-Birds’ modification.

Not only could Frontier not legally sell the modified T-Birds or their services, the company couldn’t even move the planes without State Department approval. In their modified state, the T-Birds legally were stuck in Austria. In TK date, The Frontier board decided it would dismantle the planes.

That’s when the T-Birds disappeared from Austria. One wound up in Gulu, Uganda. The other reappeared in Sophia, Bulgaria, where Prince maintained a front company in conjunction with Zachary Botchev, an investor in Airborne who has a long criminal record in Texas. Bulgaria, it’s worth noting, has less stringent export laws than Austria does. “I believe the aircraft were misappropriated,” Smith told The Daily Beast.

With Smith as CEO, Frontier could have continued investigating what Smith described as the T-Birds’ “misappropriation.” But internal company politics related to Prince’s work in China saved Prince from further probes. At the time of Frontier’s initial investigation of the T-Birds’ modifications and movements in late 2015, Chinese conglomerate CITIC owned 15 percent of Frontier and, according to a company source, held a majority of seats on the company’s board.

CITIC was planning on investing $100 billion in the Chinese government’s expansive “One Belt, One Road” trade-infrastructure project. The conglomerate wanted Prince, via Frontier, to run security for parts of One Belt, One Road.

“I reported to the board of directors of FSG that I believed the aircraft had been misappropriated by Prince,” Smith said. “The board, which is controlled by CITIC, appeared only interested in Prince commencing security work on One Belt, One Road.” Frontier’s Chinese directors “did not seem overly concerned about two missing light attack aircraft,” Smith explained.

Smith resigned from the Frontier board effective May 1, 2016. Retired U.S. Navy admiral William Fallon also quit the board. Prince remained as chairman. True to Smith’s assessment, in late 2016 Frontier signed a contract to provide security for One Belt, One Road. In 2018, CITIC boosted its ownership share of Frontier to 40 percent.

A spokesperson for Frontier did not respond to a request for comment.

“When I left the business in 2016, those aircraft were in Gulu, Uganda, and Sophia, Bulgaria under the control of outside entities seemingly controlled by Erik Prince,” Smith told The Daily Beast.

Mired in controversy and entangled in export law, the T-Birds apparently still were in storage in Uganda and Bulgaria as of August 2018. “I have not seen the T-Birds since I left FSG in 2015—have no idea what they are up to,” Durrant told The Daily Beast.

But the T-Birds are listed in Prince’s written proposals for a private air force for the Afghanistan war. And according to Military Times, at least one of the proposals has on it the name of Lancaster 6, the same company whose reps in 2016 traveled to Ukraine to inquire about acquiring gunships.

Today Durrant, who sails around Dubai in a racing boat emblazoned with a Blackwater logo, is the CEO of Lancaster 6. The Prince spokesperson said Prince “is not an owner, director or anything to L6.” Durrant himself repeated that assertion.

Smith, the former Frontier CEO, rejected this explanation. “Erik will likely deny any relationship with L6, but everyone that has touched Serge since 2015 will tell you he works at Erik’s direction,” Smith said.

Prince’s various proposals indicate he still hopes to include Frontier’s old T-Birds in his private air force. According to a source in the Ukrainian defense sector, Prince himself, hoping to add gunships to the T-Birds, traveled to Ukraine in April to discuss a potential purchase of cargo planes for conversion into gunships—the same topic Lancaster 6 discussed in 2016.

In late August, U.S. Secretary of Defense James Mattis threw cold water on Prince’s renewed proposal to privatize the Afghanistan war with his own air force as the centerpiece. “When the Americans put their nation’s credibility on the line, privatizing it is probably not a wise idea,” Mattis told reporters.

But it’s the concept of a corporate air-force-for-hire, rather than any particular client or conflict, that has motivated Prince to continue acquiring his own warplanes. “It was obvious that Prince and Christian ‘Serge’ Durrant had been planning on an offensive air capability since before FSG was founded” in 2013, Smith said.

There’s no reason to believe Prince will quit now. And the next time he pitches his private air force to some government mired in a seemingly unwinnable counterinsurgency, he still could have at least two “misappropriated” warplanes to support the scheme. And that’s assuming he doesn’t also manage to build those gunships in the meantime.

—with additional reporting by Betsy Woodruff