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BY: Jeremy Scahill, Matthew Cole ON A CRISP SATURDAY in November 2014, a black Mercedes SUV pulled onto the tarmac of an Austrian specialty aviation company 30 miles south of Vienna. Employees of the firm, Airborne Technologies, which specialized in designing and equipping small aircraft with wireless surveillance platforms, had been ordered to work that weekend because one of the company’s investors was scheduled to inspect their latest project.

For four months, Airborne’s team had worked nearly nonstop to modify an American-made Thrush 510G crop duster to the exact specifications of an unnamed client. Everything about the project was cloaked in secrecy. The company’s executives would refer to the client only as “Echo Papa,” and instructed employees to use code words to discuss certain modifications made to the plane. Now the employees would learn that Echo Papa also owned more than a quarter of their company.

A fit, handsome man with blond hair and blue eyes got out of the Mercedes and entered Airborne’s hanger. Echo Papa, who was often just called EP, shook hands with a dozen Airborne employees and looked over the plane. “He was the sun, and all the management were planets rotating around him,” said one person present that day.

One of the mechanics soon recognized Echo Papa from news photos — he was Erik Prince, founder of the private security firm Blackwater. Several of the Airborne staff whispered among themselves, astonished that they had been working for America’s best-known mercenary. The secrecy and strange modification requests of the past four months began to make sense. In addition to surveillance and laser-targeting equipment, Airborne had outfitted the plane with bulletproof cockpit windows, an armored engine block, anti-explosive mesh for the fuel tank, and specialized wiring that could control rockets and bombs. The company also installed pods for mounting two high-powered 23 mm machine guns. By this point, the engineers and mechanics were concerned that they had broken several Austrian laws but were advised that everything would be fine as long as they all kept the secret.

Prince congratulated everyone for making the plane “rugged” and then left. The plane was due in South Sudan, where it was urgently needed to salvage Prince’s first official contract with his new company, Frontier Services Group. Prince was eager to get the Thrush 510G in the air.

The conversion of crop dusters into light attack aircraft had long been part of Prince’s vision for defeating terrorists and insurgencies in Africa and the Middle East. In Prince’s view, these single-engine fixed-wing planes, retrofitted for war zones, would revolutionize the way small wars were fought. They would also turn a substantial profit. The Thrush in Airborne’s hangar, one of two crop dusters he intended to weaponize, was Prince’s initial step in achieving what one colleague called his “obsession” with building his own private air force.

The story of how Prince secretly plotted to transform the two aircraft for his arsenal of mercenary services is based on interviews with nearly a dozen people who have worked with Prince over the years, including current and former business partners, as well as internal documents, memos, and emails. Over a two-year period, Prince exploited front companies and cutouts, hidden corporate ownership, a meeting with Russian arms dealer Viktor Bout’s weapons supplier, and at least one civil war in an effort to manufacture and ultimately sell his customized armed counterinsurgency aircraft. If he succeeded, Prince would possess two prototypes that would lay the foundation for a low-cost, high-powered air force capable of generating healthy profits while fulfilling his dream of privatized warfare.

FROM THE EARLY DAYS of the war on terror, Prince aggressively built up an aviation wing at Blackwater and supplied aircraft to the CIA and other government agencies. His “little bird” helicopters — with armed commandos hanging from their frames — became a notorious symbol of the U.S. occupation of Iraq. By 2013, after scandals, investigations, and a $42 million settlement with the Justice Department, Blackwater had been broken up, with its pieces renamed and Prince largely excluded from their operations. But his vision of creating a private air force endured.

In early 2014, Prince and Citic Group, China’s largest state-owned investment firm, founded Frontier Services Group, a publicly traded logistics and aviation company based in Hong Kong. FSG offered services such as shipping minerals, chartering flights for executives, and occasional medevacs from remote African locations. Over the past two years, Prince has given interviews and speeches describing his vision of FSG. “This is not a patriotic endeavor of ours,” Prince said of his new company. “We’re here to build a great business and make some money doing it.” China, he said, “has the appetite to take frontier risk, that expeditionary risk of going to those less-certain, less-normal markets and figuring out how to make it happen.” But while he burnished his new image as chairman of a public company, he was secretly overseeing the clandestine attack aircraft program.

Prince, together with a small group of loyal deputies, hid this effort from the corporate leadership at FSG by means of non-company encrypted email, aliases, and outright deception. When Prince pitched logistics contracts to African governments on behalf of FSG, he and his team simultaneously developed plans for paramilitary contracts with those same governments.

In 2013, when FSG was being created, Prince and his team were already developing a secret blueprint for weaponized crop dusters to target terrorists and assist counterinsurgency operations in Africa. Originally drafted in late 2013, the plan was updated more than 100 times through the end of 2015. The goal was to offer affordable, high-powered air superiority to Prince’s clients that could “break the paradigm of attrition warfare in low intensity conflict.” Prince’s plan predicted strong “global marketability” for the small attack planes.

The aircraft, which the blueprint suggested could be produced in a manner that would bypass export “restraints,” would be modified to carry both precision-guided munitions as well as simpler weapons systems. But, the plan noted, “Guns, Rockets and Dumb Bombs offer the most cost effective weapon load for the target set/threat environment.” The planes would contain armored cockpits, engines, and airframes, sophisticated reconnaissance equipment similar to that used on drones, as well as night-vision capabilities. The blueprint envisioned targeting groups of insurgents, boats, vehicles, and static positions. According to the plan, the aircraft would have 12 hours of endurance to conduct operations.

The modified light attack aircraft “offers affordable ability [to] raise, train and sustain the capability for the ‘long war’ necessary in Counter Insurgency,” according to the blueprint. But this aspiration was not one that Prince would openly share with the people he was recruiting to build his new public company.

BY THE SUMMER of 2013, Prince was already putting together a team to run FSG. Among the recruits was Gregg Smith, an old friend and former Marine, who would eventually become the company’s CEO. Smith was an investment banker who had helped guide Prince through the sale of Blackwater and other entities after the U.S. government began investigating his companies. That July, as they discussed their new venture, Prince and Smith took a trip to the border of Burkina Faso and Niger in West Africa, where Prince was considering investing in a magnesium mine, according to Smith. The men landed at an airstrip controlled by French forces. Niger was a dangerous country with civil unrest and a regional al Qaeda affiliate.

As they surveyed the mine, the two discussed the advantages of adding surveillance cameras to small civilian planes to fly over mining operations or oil fields. Such planes would be useful for alerting mining companies and government forces of a possible attack by insurgents or bandits. “If you’re in a conflict zone and you have an extractive mine, or even oil and gas, you want to know what’s going on around you and that’s not always easy in those types of areas,” said Smith in an interview. “Having the ability to put an aircraft in the sky that has good ISR [intelligence, surveillance, and reconnaissance] capabilities and monitor the radius around you, that’s good stuff.”

Such surveillance aircraft would be relatively inexpensive to operate and could provide what Smith and Prince both believed would be nice profits for their fledgling company, which they agreed should have a fleet of aircraft crisscrossing the African continent. “When we set up the company and had discussions about what FSG would and would not be, we were very clear it would not be a security company, it would not have armed people,” Smith told The Intercept. However, Prince and FSG did contemplate offering intelligence and surveillance services, as well as non-lethal logistical support, in war zones.

Prince was legendary for pushing the risk envelope, particularly when defining what legally constituted military or security services. Those contracts could require licenses and authorization from the U.S. government, and FSG’s new executives strongly doubted they could obtain them with Prince as the company’s chairman.

In February 2014, a month after Prince became chairman of FSG, he authorized the purchase of two Thrush 510G crop dusters made in Albany, Georgia. Each aircraft cost approximately $1 million. Prince told officials at FSG that the purchase was urgent because he had received a green light for a project to support the government of Mali in its battle against a regional al Qaeda affiliate. The plan was to have the planes fitted with aerial surveillance gear with a data link to a ground station, so that the aircraft could provide reconnaissance for forces operating on the ground. Prince claimed that Project Mike, as it was called internally, “was a go and as part of that we were going to be providing the ISR support and we would need those ASAP,” according to a source with direct knowledge of FSG’s inner workings.

Prince arranged for the planes to be equipped with cameras and other surveillance gear at Airborne Technologies in Austria. Airborne, founded in 2008, is best-known for producing a proprietary device, known as a SCAR Pod, that mounts on small aircraft and enables aerial surveillance cameras to wirelessly deliver live video and other data. In promotional material, Airborne calls it “surveillance out of the box.”

What FSG’s executives did not know at the time was that Prince, through one of his veiled corporate entities, owned 25 percent of Airborne. Dorian Barak, Prince’s personal attorney who handled his investments, brokered Prince’s ownership stake in Airborne in early 2013 and represented Prince on the company’s board. In preparing the deal, Barak suggested that Airborne was open to expanding into the security business with Prince providing “strategic guidance,” contacts, and sales, according to a memo prepared for Prince.

Barak did not respond to a request for comment. Prince did not respond to multiple requests for comment.

Prince and his team made plans for the aircraft to be flown from the U.S. directly to Airborne’s hangar at Wiener Neustadt East airport, south of Vienna. The official contract with Airborne was to modify the planes with surveillance equipment, including a Forward Looking Infrared (FLIR) camera similar to those used on U.S. attack and spy drones.

In May 2014, both Thrush planes were flown from the U.S. across the Atlantic Ocean to Airborne’s hangar. Once they arrived in Austria, Prince asserted effective control over the modifications and an ability to make decisions for both FSG and Airborne. The Thrush project was managed by Prince’s longtime associate Christiaan “Serge” Durrant. Prince had enlisted Durrant, a former Australian special forces pilot, to run FSG’s “specialty aviation division.” By that point, Prince was brokering a secret arrangement with executives at Airborne to turn the planes into paramilitary aircraft.

THE IDEA OF arming agricultural planes for attack did not originate with Prince. In the early 2000s, a classified program run by the CIA in Colombia employed a different U.S. crop duster, the Air Tractor. During the day, on a State Department contract, the planes would spray coca fields with herbicide. But the aircraft had been modified with ISR equipment and hardware for mounting weapons, according to a former U.S. official familiar with the program, so that the planes could be used for night bombing missions against FARC rebels and cocaine cartels.

Prince was not involved with that program, but in 2008, he did purchase a Super Tucano, a Brazilian-made light attack aircraft. Prince then leased that plane to the Pentagon as a prototype, and nearly a decade later, the U.S. began providing armed Super Tucanos to Afghanistan’s air force. He also tried pitching a light attack plane to the CIA for close air support in Iraq and Afghanistan, according to two former colleagues of Prince who were involved in the offer.

In Prince’s view, according to several sources who worked closely with him for years, his idea had been stolen by the U.S. government and his competitors, one of which has a licensed contract with the government to sell weaponized Thrush planes. But Prince did not abandon his ambitions, and the Thrush modifications he was now coordinating held great promise. The planes were cheap, durable, and relatively discreet.

Months before embarking on the secret work at the Austrian hangar, Prince and his allies at Airborne began strategizing about how to confront a potentially project-ending obstacle: Austrian defense export regulations. They knew the government would view the customized Thrush planes for what they were: militarized aircraft. Austria, which played a central role in starting two world wars, has a firm policy of neutrality and stringent regulations that would apply to the export of an Austrian-manufactured paramilitary aircraft for use in a civil war.

This was not a new challenge for Prince. Through his former Blackwater enterprise, he had acquired extensive experience defying or sidestepping U.S. defense export regulations. In an effort to avoid Austrian and European export laws, Prince looked south to Bulgaria, a nation known for its lax defense export regulations and role as a hub for international arms traffickers. “It’s very difficult to manufacture [such aircraft] in Austria and keep everything quiet,” said a former Airborne employee who worked on the plane. “It’s too risky for them. So the idea was to go to Bulgaria.”

In May 2014, Kristof Nagl, Airborne’s chief financial officer, wrote to Prince explicitly discussing the creation of a front company in Bulgaria to disguise the production of weapons-readied aircraft. Nagl cited earlier discussions with Prince and Dorian Barak and confirmed for Prince that they were moving forward with “the foundation of” a Bulgarian company named LASA Engineering Ltd. “LASA shall mean light armed surveillance aircraft,” Nagl wrote. In the memo, Nagl described a structure for LASA in which Prince “provides customers and know how.” Airborne, according to Nagl, would acquire Thrush aircraft and do the reconnaissance and surveillance modifications. LASA, however, would “be used for marketing” and “selling of light armed airborne solutions,” though its promotional materials would not directly mention the word Thrush. This omission, Nagl wrote Prince, would be done “according to your wish.”

Under the proposed arrangement, LASA would purchase the Thrush aircraft modified by Airborne directly from the company at its standard price “so all margin will stay as always with” Airborne. The transformation of the planes to light attack aircraft would be laundered in Sofia. LASA would get the necessary export licenses from the Bulgarian government so that the planes could be sold or deployed abroad.

The advantage of the corporate front, according to Nagl, was that they could get “indirect access to potential clients which we have to refuse now and the ‘export risk’ is covered by” the newly formed Bulgarian entity. He also proposed that the partners involved in the deal put up a percentage of the cost of creating LASA, which “will not need any significant investment.”

In response to detailed questions from The Intercept, a lawyer representing Nagl and Airborne claimed that the assertions in this article are “incorrect except for the fact that our client is offering to the market ISR modifications on various aircraft, including Thrush.” He added: “Our client obtained all required export licenses in all past transactions and will keep doing so also in the future.” The lawyer asserted that Nagl and Airborne “strictly follow all relevant and applicable export control laws and regulations.” The firm that sent the letter, Specht & Partner, has also represented Prince in Austria. After the deadline for this article, Airborne’s lawyer sent further comment, writing that the company never manufactured or sold an armed aircraft and “does not hold (directly or indirectly) shares in a company” that did so.

Prince made arrangements to visit Bulgaria in May 2014 for an Airborne meeting and a tour of the Arsenal factory in Kazanlak. Arsenal is the largest arms manufacturer in Bulgaria, and Prince was interested in viewing its line of “aerial weaponry,” including guns, rockets, bombs, and weapons management systems for aircraft, according to an internal document reviewed by The Intercept.

The next month, according to internal documents, Shawn Matthews, an FSG contractor and former Australian special forces pilot who served as Durrant’s deputy on the Thrush program, went to Bulgaria to meet with Peter Mirchev, a Bulgarian arms dealer who supplied Viktor Bout. (Bout is currently serving a 25-year prison sentence in the U.S. for attempting to sell weapons to the FARC in Colombia.) When an FSG official learned that Matthews had met with Mirchev, he instructed Matthews and Durrant to cease all contact with him. It is not known what Matthews and Mirchev discussed, but the FSG official warned Prince’s men not to pursue arming the Thrush aircraft, saying that it would be a clear violation of U.S. law. Matthews declined to comment on the record. Durrant declined to comment.

According to the former Airborne employee and a second company whistleblower, almost all of the modifications would actually be performed in Austria. By the time the aircraft reached Bulgaria, an engineer could complete a simple installation of hardware. “The final installation of the weapons would be done in Bulgaria,” said the former employee.

FOR NEARLY TWO decades, Prince has steadily built a labyrinthine network of entities and supply-chain businesses in his quest to provide full-spectrum, “turn-key” military “solutions.” With an ownership stake in Airborne, and a front company in Bulgaria, Prince, aided by his lawyer Dorian Barak, was buying in to and expanding an entire ecosystem of paramilitary services: surveillance, weapons, engineering, and a clandestine apparatus for bypassing national and international defense regulations.

Two common threads emerge when examining many of Prince’s recent military proposals and offshore companies: He owns multiple parts of the supply chains for the deployment of private armed forces to foreign countries; and, since at least 2012, he has failed to implement them.

The plan that Prince and his team devised to weaponize the Thrush crop dusters was an engineering nightmare. Prince’s men treated Airborne’s hangar as their private Frankenstein laboratory where they directed engineers and mechanics in a perilous experiment to transform an agricultural airplane into a jerry-rigged flying tank. And Prince wanted it done fast.

The Intercept has reviewed dozens of documents relating to the modifications of the Thrush aircraft in Austria. The former Airborne employee, who played a central role in the modifications performed on the Thrush, agreed to speak with The Intercept on the condition of anonymity because of the sensitivity of the program and fears of retaliation by Prince and Airborne.

It was clear almost as soon as the Thrush planes arrived at the hangar outside Vienna that the goal was to create military-grade attack aircraft, according to the former employee. He said that Nagl, Airborne’s chief financial officer, and Wolfgang Grumeth, the firm’s CEO, must have known that the modifications they were performing would likely be prohibited under Austrian regulations. Airborne’s employees, who had worked on sensitive projects for various governments, were led to believe they were engaged in a secret but legitimate contract.

Grumeth did not respond to a request for comment, but Airborne’s attorney stated that the company is “strictly following all Austrian as well as international applicable laws and regulations in connection with their business.”

Work began in Austria on one of the Thrush planes in July 2014. Durrant’s deputy, Shawn Matthews, embedded at the Austrian hangar to oversee the modifications, which Airborne’s employees were instructed to describe using code words such as “aeromagnetic” and “sensor” to replace discussion of weapons.

The initial modifications involved attaching the SCAR Pod and surveillance camera. In addition to the cameras and other reconnaissance systems, according to the former employee, they installed heavy armor on the plane, replaced the Thrush’s windows with 19 mm thick ballistic glass, and lined the cockpit with Kevlar. They placed special meshing in the fuel tank so that it would not explode if struck by bullets or shrapnel, and attached a camera mount that allowed the surveillance package to be lowered once the plane was aloft so it could be used as a laser platform to assist targeting.

It was already apparent to most of the staff working on the plane that the modifications, requested by a company they knew only as Frontier, were deeply problematic. “It was clear they didn’t care about certification,” the former Airborne employee said, describing the attitude of Prince’s team. “If you make a modification to an aircraft and you do not certify it, then the operation of the aircraft is completely illegal. In Europe, it is very illegal. You are breaking a lot of laws.” He recalled one of Prince’s deputies saying that the aircraft would be used for surveillance operations in Africa and “no one there cares about certifications.” The former employee said he and other personnel working on the Thrush project were told that certification and licensing were the aircraft owner’s problem. The message was: “We do not have a risk as long as everyone keeps quiet.”

IN AUGUST 2014, a month after Nagl’s communication with Prince about establishing LASA, the company was officially open for business in Sofia — or rather, an entity named LASA filed papers with the Bulgarian government. Prince’s man in Bulgaria was Zachary Botchev, a U.S.-educated businessman whose professional biography states that he created the largest ceramic tile producer in the Balkans and started a jet airline company.

Botchev was an initial investor in Airborne and at one point controlled a third of the company’s stock. Botchev and Nagl had worked together before the founding of Airborne, according to the former employee. “The idea,” he said, was that Botchev would eventually “buy an airfield in Bulgaria and they would weaponize the planes there.”

Botchev did not respond to multiple requests for comment.

In the memo Nagl sent to Prince outlining the plan for establishing LASA, he stated that Botchev would provide local contacts in Bulgaria for export licenses and “products.” He was also tasked with selecting LASA’s managing director. It was Botchev who arranged Prince’s tour of the weapons factory in Bulgaria.

Botchev is a convicted felon with a warrant out for his arrest in the U.S., according to court files. He was found guilty of felony burglary for stealing trade files from an employer in Texas while living in Dallas in the 1990s. Botchev violated the terms of his probation and fled the U.S.

According to LASA’s corporate filings with the Bulgarian government, its official address and phone number are the same as a Bulgarian aviation company, controlled by Botchev, that claims a “close partnership” with Airborne. On LASA’s sparse website, the contact email goes to a sales address for Botchev’s company. LASA’s founding documents and other forms filed with the Bulgarian government do not mention Prince, Airborne, FSG, or the Thrush aircraft. On paper, LASA was established by a consortium of Botchev-linked businesses that shared a handful of common addresses and phone numbers.

In an email, a lawyer for LASA wrote that the company was “in full compliance to all respective” laws and could not comment on “commercial arrangements.”

Botchev’s associates, who populate a murky network of Bulgarian companies, constitute 100 percent of LASA’s ownership and management. Among the addresses provided to the Bulgarian government by LASA and other Botchev-affiliated companies is a graffiti-covered building in Sofia and an office in a blighted strip mall. In its filings, LASA described its business as engineering in Bulgaria and abroad, obtaining licenses, technology brokering, domestic and foreign trade, “as well as any other commercial activity not prohibited by law.” There was no mention of weaponizing or modifying aircraft.

In September 2014, Durrant told FSG that some of the modifications and testing of the Thrush would need to be performed in Bulgaria, and that he had a deal for LASA to be the vendor. When FSG began vetting LASA, it found almost no publicly available information that would indicate LASA had ever done any business of any kind. The company did not appear to have previous contracts to modify aircraft, nor did it have a factory or staff to perform such work. According to its 2014 financial filings in Bulgaria, LASA paid less than $5,000 in salaries. One FSG officer involved with the review said LASA looked like a “paper company.” Prince and his deputies were “deliberately vague,” the officer said, in explaining the nature of the additional modifications and testing and why it was necessary to hire LASA.

KRISTOF NAGL INFORMED Airborne’s Thrush team in Austria that September that they would have to work substantial overtime to finish the modifications, according to the former employee and the other whistleblower. People who worked for FSG on the project with Prince described him as running the Thrush program as though FSG were not a public company with a CEO or shareholders, but rather his private enterprise. One described Prince directing Airborne to equip the Thrush with “more toys” without alerting anyone at FSG. “We were very busy with this aircraft,” the former Airborne employee said. “There was no time for thinking, just for work because we had to make a lot of modifications on these aircraft. We were working day and night, Saturday and Sunday nights.”

Prince’s team told Airborne’s engineers they wanted the ability to mount 23 mm Russian machine guns on both sides of the plane. Those guns create a powerful recoil that Airborne’s engineers struggled to offset with complex, additional modifications. They worked around the clock and replaced the airplane’s entire electrical system. As the deadline for the Thrush’s deployment grew near, Prince’s men faced a new challenge: They were unable to purchase pylons, the hardware necessary for mounting bombs and rockets on planes.

After failed attempts to acquire them through multiple countries, they conceded defeat. The plane would have to deploy without the pylons. But they instructed Airborne to begin building customized pylons capable of carrying both Russian and NATO munitions that could be added later. According to Prince’s original Thrush blueprint, the aim was to patent a new pylon. Creating such a device was a challenge, but Airborne’s engineers would eventually succeed in building it, according to the former Airborne employee. “It was really an impressive engineering accomplishment,” he said, pointing out that Western and Russian bombs required different mounts. “You could arm those aircraft with any weapons — NATO or Warsaw pact — with the pylons we built. It was kind of incredible.”

In October 2014, Prince finally prevailed in getting FSG to sign a contract to have one of the Thrush aircraft further modified and tested by LASA in Bulgaria, with work set to commence the following spring. “The boss wants this,” one of the people involved with the deal said he was told by Serge Durrant. The boss was Prince, though the exact nature of the additional modifications remained vague.

By that point, Airborne had already attached more than 1,500 pounds of equipment to one of the Thrush planes. The engineers were told that the plane needed to be sent to Africa right away — they had been led to believe the destination was Kenya. Under pressure from Airborne’s management and Prince’s men, the former Airborne employee said they hastily organized a 30-minute test flight in Austria. It was a disaster. “After all these modifications, we had only one test flight. We had no maintenance guy who signed off on it, no paper, just jumping in and flying,” he said. “We found 30 problems and we only had two days to fix the problems because they needed to ferry it to Africa.”

Despite a range of safety concerns from Airborne’s technicians, a few days later, the heavily modified Thrush took off for Africa. But the pilot had to abort the journey and make a premature landing because of a damaged fuel pump. After the plane was repaired, it was flown to Malta, where a plane spotter snapped a picture of the aircraft. The Thrush, according to its tail number, had been registered in the European mini-state of San Marino. The photo the plane spotter posted on a hobbyist website showed an armored aircraft with a distinctly military appearance and clearly visible drone-style surveillance gear. Eventually the aircraft was flown back to Austria, where Airborne workers would spend three weeks repairing it.

As staff worked on the aircraft one Saturday that November, according to the former Airborne employee, Nagl announced they were expecting a special visitor on-site. Nagl did not name the visitor, the former employee said, but described him as “something like an owner of our company” who was “very important.” The visitor, arriving in the black Mercedes SUV, was the mysterious Echo Papa. “We had no idea who this guy was. When he entered the hangar, I knew his face, but I couldn’t recall his name.” One of his colleagues told him the man was Erik Prince of Blackwater.

The former employee had read about Prince years earlier in the local paper, and he immediately Googled him at a computer in the hangar. “Erik Prince is the co-owner of our company?” he recalled thinking in disgust. That was the moment he realized that the Thrush he helped to modify was not intended for what he and his colleagues considered a legitimate client, “but had been built for Erik Prince stuff....”

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