The virtually total impunity from prosecution accorded to private contractors in Iraq may be coming to an end.

Under the new Status of Forces Agreement (SOFA) approved by the Iraqi government last week, US contractors will be subject to Iraqi law for the first time. Moreover, some observers believe that Iraq may be able to hold them legally accountable for offenses allegedly committed even before the SOFA was approved.

And, at the other end of the US-Iraq equation, after months of seeming inactivity  marked by continuing doubts about whether the US even has legal jurisdiction over the contractors  the US Department of Justice (DOJ) may soon bring charges against three to six contractor-employed security guards for their involvement in the shooting of 17 Iraqi civilians in Baghdad in September 2007.

The guards are employees of Blackwater Worldwide, the largest and most high-profile player in the massive army of private contractors employed by the US in Iraq

The US media is reporting that charges against the Blackwater employees may be based on a 1980s-era anti-drug law, even though drugs were not involved in the Blackwater shooting. The Anti-Drug Abuse Act of 1988, passed to help stem the nation’s crack epidemic, calls for 30-year prison terms for using machine guns to commit violent crimes of any kind, even where drugs are not involved. Prosecutors are reportedly reviewing draft indictments for manslaughter and assault.

The Blackwater guards  decorated military veterans hired to protect US diplomats overseas  were responding to a car bombing when a shooting erupted at a crowded Baghdad intersection. The guards allegedly opened fire with government-issued machine guns and turret guns mounted on their armored trucks. Blackwater claims its convoy was ambushed by insurgents. Eyewitnesses say the guards were unprovoked.

But prosecuting the guards will be an uphill battle because it remains unclear whether contractors can be charged in the US, or anywhere, for crimes committed overseas. They would need to be charged under a law covering soldiers and military contractors, but Blackwater works for the State Department, not the military. Thus it remains unclear whether that law applies to its guards.

Making the case even more complicated is the promise of immunity the State Department reportedly extended to several Blackwater guards in exchange for their sworn statements shortly after the shooting. Prosecutors cannot use these statements to support their case.

Blackwater and other security contractors might well also face prosecution by Iraqi authorities for acts committed during an earlier time when they supposedly had immunity from Iraqi law. In June of 2004, the Coalition Provisional Authority that ran Iraq after the US invasion in 2003 granted contractors immunity from prosecution. But the new US-Iraq SOFA does not explicitly prevent Iraqi officials from bringing criminal charges retroactively.

The Blackwater shooting of Iraqi civilians has sparked interest among Democrats in Congress to enact tougher rules for overseas security contractors. The most comprehensive legislation was introduced last year by Barack Obama, then an Illinois Democratic Senator and now president-elect.

The Obama measure would have extended the jurisdiction of US law to cover contractors in Iraq, placed the FBI in charge of investigating their crimes, and required the Defense Department to reveal the size and makeup of its security contractor force and define the boundaries of its activities.

Republicans in Congress, along with the White House, have consistently opposed such legislation.

The Congressional Budget Office estimates that more than 10 billion dollars has been spent on security contractors thus far in 2008 and estimated that about 25,000-30,000 employees of security firms were in Iraq as of early this year. It estimates that, if spending for contractors continues at about the current rate, 100 billion dollars will have been paid to military contractors for operations in Iraq.

It revealed that about 20 percent of funding for operations in Iraq has gone to contractors. Currently, it said, there are at least 190,000 contractors in Iraq and neighboring countries.

One such contractor, a Kuwaiti company acting as a subcontractor to the US firm KBR, was accused this week of holding approximately 1,000 men from Bangladesh, India, Nepal and Sri Lanka for one to three months without pay in crowded warehouses near the Baghdad airport waiting to begin the jobs they were brought to Iraq to perform. The jobs evidently never materialized.

Najlaa International Catering Services, the Kuwaiti company that hired them to work in Iraq, agreed to pay the men and repatriate them following their raucous protest last week outside the warehouses.

KBR is a former subsidiary of the Halliburton Corporation, the largest and arguably the most notorious of the US private contractors in Iraq. It is widely accused of multiple instances of waste, fraud and abuse in implementing the wide range of services it carries out for the US military in Iraq.

In a related development, 16 Indiana National Guard soldiers are suing KBR for knowingly exposing them to a toxic chemical in Iraq in 2003. The soldiers, who were providing security for KBR during repairs of a water treatment plant in southern Iraq after the US invasion, claim the site was contaminated by hexavalent chromium, "one of the most potent carcinogens". It alleges that KBR knew the plant was contaminated but concealed the danger.

US-based contractors working in Iraq have been the subjects of numerous lawsuits brought in US courts. In one such suit, filed last May in Los Angeles federal court, Emad al-Janabi, a 43-year-old Iraqi blacksmith, alleged he was wrongly imprisoned, beaten and forced from his home by people in US military uniforms and civilian clothing in September 2003. He was released from Abu Ghraib without charge in July 2004.

The defendants are contractors CACI International Inc. and CACI Premier Technology, Inc., of Arlington, Va.; L-3 Communications Titan Corporation, of San Diego, Calif.; and former CACI contractor Steven Stefanowicz, a Los Angeles resident known at Abu Ghraib as "Big Steve".

The suit charges that the contractors subjected al-Janabi to physical and mental torture in sessions where the defendants acted as interrogators and translators. It alleges the contractors transported him to a detainee site in a wooden box and covered with a hood; scarred his face when his eyes were clawed by an interrogator; exposed him to a mock execution of his brother and nephew; hung him upside down with his feet chained to the steel slats of a bunk bed until he lost consciousness; and repeatedly deprived him of food and sleep and threatened him with dogs.

In October 2003, during a surprise inspection of Abu Ghraib, the International Committee of the Red Cross reportedly discovered al-Janabi naked, chained and bruised in a cell in the "hard site" of the prison. The lawsuit says he was a so-called "ghost detainee" who was intentionally hidden from the Red Cross on subsequent inspections and held without appearing on the prisoner lists.

The suit noted that CACI provided interrogators used at Abu Ghraib and that L-3 employed all translators used there. Stefanowicz was linked to Abu Ghraib abuses in military court martial proceedings and was said to have directed low-level US military personnel in detainee interrogations.