Founder of controversial security firm Blackwater steps down as CEO

Erik Prince, founder of the controversial Blackwater Worldwide security firm, announced his resignation yesterday as head of the company, recently renamed Xe.

Prince appointed a new president and chief operating officer in a management shake-up that he said was part of the company's "continued reorganisation and self-improvement." It comes less than a month after changing the company's name to Xe in an effort at re-branding.

"As many of you know, because we focus on continually improving our business that Xe is in the process of a comprehensive restructuring," Prince wrote in a note to employees and clients. "It is with pride in our many accomplishments and confidence in Xe's future that I announce my resignation as the company's Chief Executive Officer."

Joseph Yorio, recently a vice president at DHL and a former Army special-forces officer, will serve as president, replacing retiring executive Gary Jackson. Danielle Esposito, who has worked within Xe for nearly 10 years, will be the new chief operating officer and executive vice president, the company said.

The CEO position remains open.

Prince, who will retain his position as chairman but remove himself from day-to-day operations, founded Blackwater in 1997, initially to provide training to law enforcement and military personnel. But after 9/11, the bombing of the USS Cole and the start of the Iraq war, the company built a large presence in providing private security.

The company's lucrative contract to protect US diplomats in Iraq comprises about one-third of Xe's revenue, but the US State Department announced that it would not rehire the firm after its contract expires in May. The company has one other major security contract, the details of which are classified.

A 2007 shooting in Iraq involving Blackwater guards drew outrage from politicians in Baghdad and Washington and demands that the company be banned from operating in Iraq. Late last year, prosecutors charged five of the company's contractors - but not Blackwater itself - with manslaughter and weapons violations. In January, Iraqi officials said they would not give the company a license to operate.

The indictment of the five men represents the first prosecution of non-Defense Department contractors under the Military Extraterritorial Jurisdiction Act. The act was amended in 2004 to allow the Justice Department to prosecute such personnel providing services "in support of the mission of the Department of Defense overseas."