RALEIGH, N.C. — Federal prosecutors launched a scathing assessment of Blackwater Worldwide's former president Wednesday, declaring in an initial court appearance that he operated the security firm with "sheer arrogance" and a "scofflaw attitude."
Gary Jackson and four past colleagues indicted last week appeared Wednesday morning before a judge who allowed them to go free as they await trial. A magistrate judge denied a government request to place a bond on each defendant but ordered them to turn over passports and refrain from possessing firearms.
The first court hearing offered a brief glimpse into the combative nature of a case that pits the federal government against former officials at a company that for years played a crucial role as a government contractor protecting U.S. officials in war zones.
Prosecutors slammed Jackson, arguing that he flouted federal regulations while building the lucrative security enterprise. As an example, assistant US attorney John Bowler said Jackson participated in an effort to falsify federal documents to hide that the company had provided guns as a gift to the king of Jordan.
"It is just another display of sheer arrogance and scofflaw attitude," Bowler said.
Ken Bell, an attorney for Jackson, said federal officials were frequently aware of Blackwater's activities and were on scene when the company provided weapons to Jordanian officials. He dismissed the charges as nothing more than "regulatory offenses."
"At most, certain forms were not filled out," he said.
The charges against Jackson, 52, include a conspiracy to violate firearms laws, false statements, possession of a machine gun and possession of an unregistered firearm. Also indicted were former Blackwater general counsel Andrew Howell, 44; former executive vice president Bill Mathews, 44; former procurement vice president Ana Bundy, 45; and former weapons manager Ronald Slezak, 65.
Each of the defendants was charged as part of a conspiracy to violate firearms laws. Mathews also was charged with possession of a machine gun and possession of an unregistered weapon. Howell was charged with two counts of obstruction of justice. Slezak was charged with false statements. Bundy was charged with obstruction of justice.
All five, wearing suits, quietly sat together in the first row of a cramped courtroom, talking only when a judge asked them brief questions. Next to them was a group of tattooed defendants who wore T-shirts and handcuffs during their first appearance on drug charges.
Jackson and other top officials at Blackwater left the Moyock-based firm last year during a management shake-up, around the time the company changed its name to Xe Services.
Blackwater has been trying to rehabilitate its image since a 2007 shooting in Baghdad that killed 17 people, outraged the Iraqi government and led to federal charges against several Blackwater guards. The accusations later were thrown out of court after a judge found prosecutors mishandled evidence.
In the current case, prosecutors cited several cases in which they say Blackwater bypassed federal rules. In one, they accused the company of setting up a straw purchase in which the firm acquired machine guns such as AK-47s by using a North Carolina sheriff's letterhead. In another, they said the company converted long-barrel rifles to short-barrel weapons for its contractors and didn't register the guns as federal rules require.
Bell said the automatic weapons were acquired in conjunction with the Camden County Sheriff's Office. He said Blackwater had all the licenses required to manufacture short-barrel weapons, something he said contractors needed to do their government work.
"They were not able to perform these functions – and keep themselves alive – with long-barrel weapons," he said.
The maximum penalty for each charge ranges from five to 10 years in prison and a fine of up to $250,000.