Erik Prince Founds Frontier Services Group with Chinese State Investment from CITIC, Controlled by Chang Zhenming

Erik Prince founded Frontier Services Group (FSG), a Hong Kong-listed security, logistics and insurance company backed by Chinese state capital. Prince was introduced to Chang Zhenming, chairman of China’s state-owned CITIC investment conglomerate, in 2013, providing Prince entry to the Chinese market. CITIC Group, a state-run investment fund owned and controlled by the People’s Republic of China, became FSG’s largest shareholder, gradually increasing its stake to more than 28% by March 2018.

In December 2018, Chang Zhenming was appointed FSG’s board chairman, with Prince stepping down to deputy chairman while holding only a 9% personal stake. This represented a complete reversal of control, with the Chinese state-owned conglomerate amassing a bigger stake than Prince’s minority position. The structure gave the Chinese government effective control over a company led by the founder of Blackwater and brother of U.S. Education Secretary Betsy DeVos, creating serious conflicts of interest and potential national security concerns.

Internal Frontier documents revealed that executives were concerned the company might be skirting U.S. law requiring Americans to obtain special permits before defense-related technology can be transferred to foreign countries. FSG’s operations raised questions about whether Prince, with access to sensitive U.S. intelligence networks and methods through his Blackwater background and family connections to the Trump administration, was facilitating technology and expertise transfers to Chinese state-controlled entities.

The company would later announce investments in Xinjiang province, where China was implementing mass surveillance and detention of Uyghur Muslims, though these announcements were subsequently retracted. FSG’s Chinese state ownership created a mechanism for Prince to monetize his military and intelligence expertise and networks in service of Chinese strategic interests, operating in a gray zone between private commerce and state-directed activity that complicated enforcement of technology transfer restrictions and foreign agent registration requirements.