Last week saw a rather surprising conclusion to the federal government’s nearly six-year criminal probe of the weapons practices of controversial private security contractor Blackwater (now called Academi).

In 2010, the Department of Justice (DOJ) charged five former Blackwater employees—former executives Gary Jackson, Andrew Howell (who once took serious exception to Blackwater’s profile in POGO’s Federal Contractor Misconduct Database), William Mathews, Jr., and Ana Bundy, and former armorer Ronald Slezak—with violating federal firearms laws, filing false statements, and obstructing justice. The government had already nabbed former employees Kenneth Cashwell and William Grumiaux, both of whom pleaded guilty in 2008 to possessing stolen firearms and helped the DOJ build its case against the higher-ups.

But last Thursday, the government dropped all charges against Howell, Bundy, and Slezak, and announced that Jackson and Mathews pleaded guilty to a single misdemeanor weapons recordkeeping charge. They were sentenced to three years of probation, four months of house arrest, and a $5,000 fine. Under the original indictment, both men were facing decades in prison on numerous felony charges. The plea deal happened very quickly, outside of public scrutiny, and with no explanation from the DOJ.

Academi took last week’s news in stride, reacting as if the case involved another company. “The court decision involves former Blackwater executives, none of whom have ever worked for ACADEMI or the current ownership,” the company told POGO. “ACADEMI is an independent company with no affiliation to the former owner, management or these employees.”

It was an odd outcome for such a major misconduct probe with serious national security implications. In addition to the 2008 guilty pleas, Blackwater paid the State Department $42 million in 2010 to settle hundreds of alleged weapons export violations under the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). Last year, Blackwater also entered into a deferred prosecution agreement with the DOJ and paid $7.5 million to resolve a total of 17 criminal charges relating to the possession and exportation of firearms and other defense articles.

Blackwater’s special status as an important contractor to the military, the State Department, and the intelligence agencies has led to speculation that the government was a victim of “graymail,” or a legal gambit to force prosecutors to back off by threatening to reveal sensitive national security information. The defendants had long maintained that the actions for which they were being prosecuted were done at the behest of, and with the full knowledge of, the government. They introduced statements from ex-CIA officials claiming that they knew that Blackwater had been acting at the CIA’s direction and filed motions seeking evidence of the CIA’s role in specific weapons transactions. According to the New York Times, the DOJ denied that the CIA had played any role in Blackwater’s activities, a somewhat unconvincing denial in light of what has been reported over the years about the shadowy relationship between the CIA and Blackwater.

Whether or not the graymail allegation is true, this case offers another example of the downside of the government’s reliance on contractors. Some contractors are too big to debar; others, like Blackwater, may be too deeply entrenched in our country’s national security apparatus to face the full brunt of the criminal justice system.