Secret Desert Force Set Up by Blackwater’s Founder

 Erik Prince, the founder of Blackwater, has a new project.

ABU DHABI, United Arab Emirates — Late one night last November, a plane carrying dozens of Colombian men touched down in this glittering seaside capital. Whisked through customs by an Emirati intelligence officer, the group boarded an unmarked bus and drove roughly 20 miles to a windswept military complex in the desert sand.

Sheik Mohamed bin Zayed al-Nahyan of Abu Dhabi hired Erik Prince to build a fighting force.

The Colombians had entered the United Arab Emirates posing as construction workers. In fact, they were soldiers for a secret American-led mercenary army being built by Erik Prince, the billionaire founder of Blackwater Worldwide, with $529 million from the oil-soaked sheikdom.

Mr. Prince, who resettled here last year after his security business faced mounting legal problems in the United States, was hired by the crown prince of Abu Dhabi to put together an 800-member battalion of foreign troops for the U.A.E., according to former employees on the project, American officials and corporate documents obtained by The New York Times.

The force is intended to conduct special operations missions inside and outside the country, defend oil pipelines and skyscrapers from terrorist attacks and put down internal revolts, the documents show. Such troops could be deployed if the Emirates faced unrest in their crowded labor camps or were challenged by pro-democracy protests like those sweeping the Arab world this year.

The U.A.E.’s rulers, viewing their own military as inadequate, also hope that the troops could blunt the regional aggression of Iran, the country’s biggest foe, the former employees said. The training camp, located on a sprawling Emirati base called Zayed Military City, is hidden behind concrete walls laced with barbed wire. Photographs show rows of identical yellow temporary buildings, used for barracks and mess halls, and a motor pool, which houses Humvees and fuel trucks. The Colombians, along with South African and other foreign troops, are trained by retired American soldiers and veterans of the German and British special operations units and the French Foreign Legion, according to the former employees and American officials.

In outsourcing critical parts of their defense to mercenaries — the soldiers of choice for medieval kings, Italian Renaissance dukes and African dictators — the Emiratis have begun a new era in the boom in wartime contracting that began after the Sept. 11, 2001, attacks. And by relying on a force largely created by Americans, they have introduced a volatile element in an already combustible region where the United States is widely viewed with suspicion.

The United Arab Emirates — an autocracy with the sheen of a progressive, modern state — are closely allied with the United States, and American officials indicated that the battalion program had some support in Washington.

“The gulf countries, and the U.A.E. in particular, don’t have a lot of military experience. It would make sense if they looked outside their borders for help,” said one Obama administration official who knew of the operation. “They might want to show that they are not to be messed with.”

Still, it is not clear whether the project has the United States’ official blessing. Legal experts and government officials said some of those involved with the battalion might be breaking federal laws that prohibit American citizens from training foreign troops if they did not secure a license from the State Department.

Mark C. Toner, a spokesman for the department, would not confirm whether Mr. Prince’s company had obtained such a license, but he said the department was investigating to see if the training effort was in violation of American laws. Mr. Toner pointed out that Blackwater (which renamed itself Xe Services ) paid $42 million in fines last year for training foreign troops in Jordan and other countries over the years.

The U.A.E.’s ambassador to Washington, Yousef al-Otaiba, declined to comment for this article. A spokesman for Mr. Prince also did not comment.

For Mr. Prince, the foreign battalion is a bold attempt at reinvention. He is hoping to build an empire in the desert, far from the trial lawyers, Congressional investigators and Justice Department officials he is convinced worked in league to portray Blackwater as reckless. He sold the company last year, but in April, a federal appeals court reopened the case against four Blackwater guards accused of killing 17 Iraqi civilians in Baghdad in 2007.

Mark Mazzetti reported from Abu Dhabi and Washington, and Emily B. Hager from New York. Jenny Carolina González and Simon Romero contributed reporting from Bogotá, Colombia. Kitty Bennett contributed research from Washington.

 

Lanny Friedlander, Founder of Reason Magazine, Dies at 63

The cause was a heart attack, his lawyer, George H. Murphy, said.

Perhaps fittingly for a man who was an enigma for so long, Mr. Friedlander’s death commanded little notice outside libertarian circles.

Even within those circles, Mr. Friedlander was a phantom presence. In an obituary posted on March 26 on Reason’s Web site, Nick Gillespie, the editor in chief of reason.com and reason.tv, the magazine’s video arm, wrote that neither he nor anyone else currently at the magazine had ever met him.

In 2007, when Reason opened an office in Washington (its headquarters are in Los Angeles), Mr. Gillespie cast about for a picture of Mr. Friedlander to hang on the wall. None could be found.

Until last year, Mr. Gillespie wrote, no one at Reason was certain whether Mr. Friedlander was dead or alive.

In its dorm room days, Reason never attained a circulation of more than a few hundred copies per issue. Today, the magazine is a glossy publication with a monthly circulation of about 50,000; its Web site receives four million visits a month. Reason.tv broadcasts original and archival video programming online.

As Mr. Friedlander conceived it, Reason was neither strictly right-wing libertarian nor strictly left — in modern parlance, neither red nor blue but a purple amalgam of the two. It was genuinely purple at first, as it was run off on a ditto machine.

“When REASON speaks of poverty, racism, the draft, the war, studentpower, politics, and other vital issues, it shall be reasons, not slogans, it gives for conclusions,” Mr. Friedlander wrote in the first issue, published in May 1968 and peppered with typographical errors and misspellings. “Proof, not belligerent assertion. Logic, not legends. Coherance, not contradictions. This is our promise: this is the reason for REASON.”

By all accounts Mr. Friedlander was an intuitive genius of design, publishing issues in the magazine’s post-ditto period that had stark, evocative graphics; coolly elegant sans serif typefaces; and layouts that reinforced the editorial content.

He seemed likely to have been headed for a vibrant career had it not been for the schizophrenia that took hold of him in his early 20s.

Lanny Friedlander was born in Boston on Dec. 7, 1947. His mother suffered from mental illness while he was growing up, Mr. Murphy said in a telephone interview on Friday, and his parents eventually divorced. Mr. Friedlander entered Boston University but, experiencing the first signs of his own illness, left before graduating.

In the early 1970s, unable to run Reason effectively, Mr. Friedlander sold it to a consortium of its writers. (It is now owned by the Reason Foundation.) He was retained as an editor there for only a short time.

At some point during these years, Mr. Friedlander, who opposed the draft, enlisted briefly in the Navy amid the Vietnam War. His illness was detected before he could be sent overseas, and he was discharged.

He fetched up in New York, where he worked as a graphic designer and appears to have driven a cab, Mr. Murphy said. In the early 1970s he made a pilgrimage to Paris to visit the grave of Jim Morrison, the lead singer of the Doors. There, Mr. Friedlander became agitated and was sent home by the authorities.

He spent much of the rest of his life in psychiatric hospitals and had lived most recently at a Veterans Affairs halfway house in Lowell. At times he declined to take medication, Mr. Murphy said, because he felt it made the world run painfully slowly, like a 78 r.p.m. record played at 331/3.

Mr. Friedlander’s survivors include his father, Herbert, and a brother, Daniel.

In December, Ronald Bailey, Reason’s science correspondent, received a letter from Mr. Friedlander in response to an article he had written on developments in genomics.

Writing by hand in block letters, Mr. Friedlander said, “I think you should take your thinking one step further and write about the prospects of immortality in the foreseeable future.” He continued, “I also wonder if magicians can reverse the effects of old age.”

At the bottom of the letter, he wrote: “P.S. I started Reason magazine in 1968.”

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Gift to M.I.T. from Bose Founder Raises Tax Questions

But Amar G. Bose, who received his bachelor’s, master’s and doctoral degrees from M.I.T. and was a professor there from 1956 to 2001, placed some unusual restrictions on the Bose shares he donated to the university.

While the shares give the university majority ownership, they are nonvoting and thus confer no control over the company and its operations. Nor can M.I.T. sell the shares. It will receive dividends from Bose, which Nathaniel W. Nickerson, a spokesman for the university, said in an e-mail would be “used broadly to sustain and advance M.I.T.’s education and research mission.”

While Mr. Nickerson said it was “a very significant gift,” he would not discuss the financial details, including the potential value, saying that Dr. Bose and the Bose Corporation want to “keep details of financial matters confidential.”

M.I.T. officials, in announcing the donation, praised Dr. Bose’s teaching and research. “Amar Bose gives us a great gift today, but he also serves as a superb example for M.I.T. graduates who yearn to cut their own path,” Susan Hockfield, the university’s president, said in an article on its Web site.

Dr. Bose could not be reached for comment.

But some tax experts said the gift and the lack of detail about it raised questions. “We don’t know much about the terms of this gift, but it seems like it clearly falls into a gray area that has been of concern to Congress,” said Dean Zerbe, national managing director of the tax consulting firm Alliantgroup. “The university needs to be more forthcoming about the arrangements behind this donation so we can get a clear picture of what’s going on.”

Roger Colinvaux, an associate law professor at Catholic University and previously a staff member of the Congressional Joint Committee on Taxation, also said the gift raised questions for him. “If the shares truly can’t be sold so that there is some restriction on the university’s ability to transfer stock, then it would suggest it is a contribution of partial interest only, which would not be deductible as a charitable contribution,” said Mr. Colinvaux, who recently published an article in The Florida Tax Review that argues that the laws governing charity are outdated and inadequate. But Erik Dryburgh, a nonprofit lawyer, said he did not see a problem with the gift. “On its face, I don’t see the abuse or potential abuses that were present in some of the more abusive gift transactions we saw in the past,” Mr. Dryburgh said.

Mr. Zerbe and Mr. Colinvaux, though, said the gift brought to mind various tax shelters involving charities that came under scrutiny during the time they worked in Congress.

Mr. Nickerson, however, denied that Dr. Bose’s gift was similar to those tax strategies. “Further, it would not be appropriate for us to discuss the taxes of any of M.I.T.’s donors,” he said.

Most of the tax shelters cited by Mr. Zerbe and Mr. Colinvaux involved an elaborate strategy where privately held companies gave nonvoting shares to a charity and then, after a period of time, bought them back. The transactions attracted the attention of regulators puzzled by why donors would give nonprofit groups nonvoting shares, whose value — and thus potential for tax deduction — is limited by their nonvoting nature.

In 2003, the Senate Permanent Subcommittee on Investigations looked into such transactions and found that in some cases, they were an elaborate way of using a charity’s tax-exempt status to erase tax liabilities for the other shareholders of the company involved.

A charity involved in such a tax strategy would receive income from the company in proportion to the size of its holdings of nonvoting stock. But while that income was taxable, it was not distributed to the charity and stayed at the company to be reinvested.

The charity did not owe taxes on the income, anyway, because it was tax-exempt.

Later, the charity would sell the nonvoting shares back to the company at fair market value, and the company would distribute the income, tax-free, that had been associated with those shares among its other shareholders.

In other, similar cases, charities that received nonvoting stakes in privately held companies through gifts of stock used large losses they had incurred on unrelated businesses to offset taxes for other shareholders. Mr. Dryburgh wrote a paper on that type of tax shelter.

In 2004, the I.R.S. listed as “restricted” such transactions and denied deductions associated with them.