Blackwater Could Lose License to Work in Iraq

** FILE ** In a file photo Plainclothes contractors working for Blackwater USA take part in a firefight as Iraqi demonstrators loyal to Muqtada Al Sadr attempt to advance on a facility being defended by U.S. and Spanish soldiers, Sunday, April 4, 2004 in the Iraqi city of Najaf. (AP Photo/Gervasio Sanchez)

WASHINGTON (AP) - The State Department faces serious challenges
protecting U.S. diplomats in Iraq and may no longer be able to rely
on Blackwater Worldwide to do the job, according to an internal
A report from the department's inspector general says the agency
must deal with the prospect that Blackwater - its main private
security contractor in Iraq - could lose its license to work in
Iraq. Officials say that means preparing alternative arrangements.
"The department faces the real possibility that one of its
primary worldwide personal protective services contractors in Iraq
- Blackwater (Worldwide) - will not receive a license to continue
operating in Iraq," the recently completely report says.
A copy of the 42-page report, labeled "sensitive but
unclassified," was obtained by The Associated Press on Wednesday.
Officials said the report is a prelude to a decision on whether
to renew Blackwater's Iraq contract, which expires next year. A
recommendation on that is expected after an investigation is
completed into last September's incident in Baghdad's Nisoor Square
in which Blackwater guards killed 17 Iraqis, they said, requesting
anonymity because the report is not public.
Five Blackwater guards have been indicted by a U.S. federal
grand jury on manslaughter and other charges stemming from that
incident. The company was not charged.
The State Department had no immediate comment on the report
itself, but deputy spokesman Robert Wood said that after the Nisoor
Square probe is finished, officials would look at "whether the
continued use of Blackwater in Iraq is consistent with the U.S.
government's goals and objectives."
A decision on how U.S. diplomats in Iraq are to be protected
will be left to the Obama administration, which will be in place
when Blackwater's contract comes up for renewal in spring.
Sen. John Kerry, D-Mass., the incoming chairman of the Senate
Foreign Relations Committee and a longtime critic of Blackwater and
the use of private security companies, welcomed the report and
said, "The era of Blackwater must finally end."
"It will benefit the incoming administration to have
reassurance from the State Department that Blackwater's contract
should be seriously questioned, but it's disheartening that it took
15 months from a tragedy in Baghdad for the Bush administration to
reach an overdue conclusion," Kerry said.
Sen. Bob Casey, D-Pa., a member of the Foreign Relations
committee, said that without preparing for the possibility of
Blackwater losing its license, "our overreliance on this one
company for protective services in Iraq will place our diplomats in
a difficult position."
It is not clear how the State Department would replace
Blackwater. The department relies heavily on contractors to protect
its diplomats in Iraq, as it does not have the manpower or
equipment to do so. No other private security contractor has the
North Carolina-based firm's range of resources, particularly its
fleet of helicopters and planes.
The report suggests that one way to fill the void would be for
the State Department's Diplomatic Security Service to beef up its
presence in Iraq.
Secretary of State Condoleezza Rice ordered a review of the
department's use of private security firms after the Nisoor Square
incident. The inspector general's report is an analysis of how
recommendations in that review have been implemented.
Blackwater spokeswoman Anne Tyrrell declined to comment, saying
the company has not yet seen the report. The company has said in
the past, though, that it plans to largely get out of the security
contracting business to concentrate on training and other projects.
Blackwater has won more than $1 billion in government contracts
under the Bush administration, a large portion of which has been
for work in Iraq, where its duties include guarding diplomats based
at the U.S. Embassy in Baghdad.
Separately, the State Department on Wednesday issued new
regulations to boost its monitoring of how Blackwater exports
sensitive equipment, such as guns and ammunition. The new rules
force Blackwater and its affiliates to file extra paperwork and
progress reports.
The department said the oversight, which took effect earlier
this month, is necessary to ensure that Blackwater "is both
capable and willing" to comply with U.S. export laws. Blackwater
has acknowledged that it made numerous mistakes with exports over
the years and has established a panel of experts to ensure it
follows the law.
Federal prosecutors have probed how Blackwater handled its arms
shipments to Iraq. The company has denied accusations it is
smuggling guns and argues that most of its violations have been
failures of paperwork and timeliness.
Associated Press writers Matt Apuzzo in Washington and Mike
Baker in Raleigh, N.C., contributed to this report.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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