Just days before two former Blackwater

employees alleged in sworn statements filed in federal court that

the company's owner, Erik Prince, "views himself as a Christian crusader

tasked with eliminating Muslims and the Islamic faith from the globe,"

the Obama administration extended a contract with Blackwater for more

than $20 million for "security services" in Iraq, according to federal

contract data obtained by The Nation. The State Department

contract is scheduled to run through September 3. In May, the State

Department announced it was not renewing Blackwater's Iraq contract, and

the Iraqi government has refused to issue the company an operating

license.

"They are still there, but we are transitioning them out," a State

Department official told The Nation. According to the State

Department, the $20 million represents an increase on an aviation

contract that predates the Obama administration.

Despite its scandal-plagued track record, Blackwater (which has

rebranded itself as Xe) continues to have a presence in Iraq, trains

Afghan forces on US contracts and provides government-funded training

for military and law enforcement inside the

United States. The company is also actively bidding on other government

contracts, including in Afghanistan, where the number of private

contractors is swelling. According to federal contracting records

reviewed by The Nation, since President Barack Obama took office

in January the State Department has contracted with Blackwater for more

than $174 million in "security services" alone in Iraq and Afghanistan

and tens of millions more in "aviation services." Much of this money

stems from existing contracts from the Bush era that have been continued

by the Obama administration. While Obama

certainly inherited a mess when it came to Blackwater's entrenchment in

Iraq and Afghanistan, he has continued the widespread use of armed

private contractors in both countries. Blackwater's role may be slowly

shrinking, but its work is continuing through companies such as DynCorp

and Triple Canopy.

"These contracts with Blackwater need to stop," says Representative Jan

Schakowsky, an Illinois Democrat and a member of the House Select

Committee on Intelligence. "There's already enough evidence of gross

misconduct and serious additional allegations against the company and

its owner to negate any possibility that this company should have a

presence in Iraq, Afghanistan or any conflict zone--or any contract with

the US government."

On July 24 the Army signed an $8.9 million contract with

Blackwater's aviation wing, Presidential Airways, for aviation services

at Bagram Air Base in Afghanistan. Bagram, home to a massive--and

expanding--US-run prison,

has been the subject of intense criticism from the ACLU and human

rights

groups for holdings hundreds of prisoners without charges and denying

them habeas corpus and access to the International Committee of the Red

Cross.

The Blackwater aviation contract for Afghanistan is described as "Air

Charter for Things" and "Nonscheduled Chartered Passenger Air

Transportation." The military signed an additional $1.4 million contract

that day for "Nonscheduled" passenger transportation in Afghanistan.

These payments are part of aviation contracts dating back to the Bush

era, and continued under Obama, that have brought Blackwater tens of

millions of dollars in Afghanistan since January. In May, Blackwater

operatives on contract with the Department of Defense allegedly killed

an unarmed Afghan civilian and wounded two others. Moreover,

Presidential Airways is being sued by the families of US soldiers killed

in a suspicious crash in Afghanistan in November 2004.

The sworn affidavits from the former Blackwater employees, first reported by

The Nation on August 3, have sparked renewed calls on Capitol

Hill for the Obama administration to cancel all business with

Blackwater. "I believe that the behavior of Xe, its leadership, and many

of its employees, puts our government and military personnel, as well as

our military and diplomatic objectives, at serious risk," Schakowsky

wrote in an August 6 letter to Secretary of State Hillary Clinton.

"Given this company's history of abuse and in light of recent

allegations, I urge you not to award further contracts to Xe and its

affiliates and to review all existing contracts with this company."

Schakowsky sent a similar letter to Secretary of Defense Robert Gates.

Meanwhile, VoteVets.org, a leading

veterans' organization, has called on the House Committee on Oversight

and Government Reform and the Senate Foreign Relations Committee to

investigate the allegations contained in the sworn declarations

submitted in the Eastern District of Virginia on August 3. VoteVets.org,

which has more than 100,000 members, also appealed to the House and

Senate Judiciary Committees to "immediately hold hearings, and make

recommendations on a new legal structure" to hold private military

contractors accountable for alleged crimes.

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"Given the charges made against Xe and Erik Prince in these sworn

statements, which include smuggling and use of illegal arms inside of

Iraq, as well as the encouraged murder of innocent Iraqis, it is

essential that these loopholes be closed, retroactively, so that Xe,

Prince, and his employees cannot escape proper prosecution in the United

States now or in the future," wrote the group's chair Jon Soltz, an Iraq

War veteran, in a letter to Senator John Kerry and other lawmakers. "It

is absolutely crucial that we show Iraqis and the rest of the world that

no matter who you are or how big your company is, you will be held

accountable for your conduct--especially when in a war zone. Failure to

do so only emboldens our enemy, and gives them yet another tool to

recruit more insurgents and terrorists that target our men and women in

harm's way."

For its part, Blackwater/Xe issued a statement responding to the sworn

statements of two of its former employees. The company called the

allegations "unsubstantiated and offensive assertions." It said the

lawyers representing alleged Iraqi victims of Blackwater "have chosen to

slander Mr. Prince rather than raise legal arguments or actual facts

that will be considered by a court of law. We are happy to engage them

there."

What Blackwater/Xe's statement did not flatly say is that the

allegations are untrue. "I would have expected a crisp denial," says

military law expert Scott Horton, who has followed this case closely.

"The statement had the look of a denial to it, without actually refuting

the specific allegations. I can understand why from the perspective of a

corporate public affairs officer--just repeating the allegations would

be harmful and would add to their credibility."

Blackwater also claims that the accusations "hold no water" because,

even though the two former employees said that they had already provided

similar information to federal prosecutors, no further Blackwater

operatives or officials have been indicted. The company claims that

according to the US attorney, the indictment of five Blackwater

employees for the September 2007 Nisour Square shootings is "very narrow

in its allegation" and does not charge "the entire Blackwater

organization in Baghdad."

But, as Blackwater certainly knows, there are multiple prosecutors

looking into its activities on a wide range of issues, and more than one

grand jury can be seated at any given time. Simply because indictments

were not announced regarding other actions when the Nisour Square

charges were brought by the Justice Department does not mean Prince,

Blackwater and its management are in the clear.

"We know that the federal criminal investigation is still ongoing, so

this prosecutor's statement was not really anything definitive," says

Horton. "Second, the presumption in US law is that, with fairly rare

exceptions, crimes are committed by natural persons, not by legal

entities like corporations. A corporation might be fined, for instance,

but if it's deeply entangled in criminal dealings, it's the officers who

would be prosecuted. Among other things, of course, it's impossible to

put a corporation in the slammer. So saying that Blackwater wasn't

charged with any crime really doesn't mean much."

Blackwater says it will formally respond to the allegations against

Prince and Blackwater in a legal motion on August 17 in federal court in

the Eastern District of Virginia, where Prince and the company are being

sued for war crimes and other alleged crimes by Susan Burke and the

Center for Constitutional Rights.

On August 5, Blackwater's lawyers filed a motion with the court

reiterating their request for a gag order to be placed on the plaintiffs

and their lawyers. That motion largely consisted of quotes from two

recent Nation magazine articles covering the case, including one

about the allegations against Prince. Despite the fact that the

affidavits of "John Doe #1" and "John Doe #2" were public, Blackwater

accused the lawyers of "providing this information" to the media.

Blackwater's lawyers charged that the plaintiffs' attorneys comments to

The Nation were intended "to fuel this one-sided media coverage

and to taint the jury pool against [Erik Prince and Blackwater]," adding

that The Nation articles and the "coordinated media campaign" of

the lawyers "demonstrate a clear need for an Order restraining

extrajudicial commentary by the parties and their counsel." On August 7,

Judge T.S. Ellis III, a Reagan appointee, denied Blackwater's motion.