While a federal grand jury in Washington, D.C. investigates the deaths, Blackwater has been operating behind the scenes in Iraq to offer condolence payments to survivors and families of the dead.

 

The company released a statement this afternoon saying: "At the request of U.S. Embassy Baghdad, Blackwater has reached out to the families of those killed or injured in Nisoor Square on September 16 as part of this condolence payment process. These are customary condolence payments, and are not an admission of guilt, but recognize that Iraq is an extremely dangerous place. When faced with an enemy intent on maximizing civilian casualties, innocent people will tragically be caught in the crossfire; when that happens, their suffering should not go unrecognized."

Officials familiar with the case told ABCNews.com last month that Blackwater had resisted U.S. government demands that the company pay at least $100,000 per death, claiming the U.S. government itself hasn't paid that much in similar situations.

As ABCNews.com has reported, the federal grand jury criminal investigation is focusing on two or three Blackwater guards who opened fire, claiming they perceived a threat. Other Blackwater guards have testified to federal agents, however, that they saw no such threat.

Several of the Iraqi families have already filed lawsuits against Blackwater in U.S. courts, alleging the security guards were guilty of "war crimes."

 

 

The FBI has brought four Iraqi witnesses, including the father of a dead 9-year-old boy, to testify before a federal grand jury investigating Blackwater security guards accused of killing 17 innocent civilians last year at a Baghdad traffic square.

Blackwater guards initially told U.S. investigators they opened fire because they felt they were under attack.

But two traffic policemen assigned to the Nisour square were among the witnesses brought before the grand jury. They told ABC News they will contradict Blackwater's version of events.

 

 

 

"The only reason you need a silencer is if you want to assassinate someone," said former CIA intelligence officer John Kiriakou, an ABC News consultant.

Six Blackwater employees are under investigation by another federal grand jury, in Washington, D.C., in connection with the shooting deaths of at least 17 civilians in September 2007 at a Baghdad traffic circle. Prosecutors are expected to return indictments in the next few weeks, according to people familiar with the case.

It's possible that prosecutors ultimately will seek charges against as few as three of the guards, whose identities are still secret. Depending on the charges, an indictment would carry maximum sentences of five to 20 years.

An indictment would send the message that the Justice Department believes U.S. contractors do not operate with legal impunity in war zones. It's an untested legal theory, since the law is murky on whether contractors could be charged in U.S. courts, or anywhere, for crimes committed overseas.

The indictment against the Blackwater guards would be filed in U.S. District Court in Washington, even though the shootings occurred 6,200 miles away.

Blackwater guards opened fire in a busy intersection Sept. 16, 2007, in what witnesses said was an unprovoked attack. Young children were among the 17 civilians killed. The shootings outraged Iraqis and embarrassed the United States, further straining relations between the two nations.

Company insists ambush took place
Blackwater is adamant that its guards, who protect U.S. diplomats, were ambushed by insurgents in Baghdad's Nisoor Square.

Based in Moyock, N.C., Blackwater itself is not a target of the investigation. The company has pledged to cooperate with the investigation and said it wants to decrease its reliance on the security business.

On Friday, Blackwater spokeswoman Anne Tyrrell said "it would be inappropriate to comment" on the draft indictment.

She added: "Based on the information available to us, however, we do not believe criminal violations occurred. If it is determined that an individual acted improperly, Blackwater would support holding that person accountable."

Blackwater has been at the forefront of the debate over the use of contractors in war zones.

Capitol Hill lawmakers have described Blackwater guards as mercenaries. Human rights groups have sued the company. And Iraq's government is pushing for more authority to prosecute U.S. contractors in its own courts.

Among the issues under discussion at the Justice Department is whether prosecutors have authority to bring the case. The largest security contractor in Iraq, Blackwater operates in a legal gray area. Its guards are immune from prosecution in Iraqi courts and U.S. law does not normally apply to crimes committed overseas.

Legal quandary
To prosecute, authorities must argue that the guards can be charged under a law meant to cover soldiers and military contractors. Since Blackwater works for the State Department, not the military, it's unclear whether that law applies to its guards.

It would be the first such case of its kind. The Justice Department recently lost a similar case against former Marine Jose Luis Nazario Jr., who was charged in Riverside, Calif., with killing four unarmed Iraqi detainees. Jurors questioned whether such cases should even be brought in civilian courts.

"I don't think we had any business doing that," juror Nicole Peters said at the time. She wiped away tears after the August verdict and later hugged the defendant. "I thought it was unfair to us and to him."

Prosecutors will also face challenges over the evidence. Before the FBI began investigating the shooting, the State Department granted limited immunity to Blackwater guards who talked to investigators. The Justice Department will need to prove that its case was not influenced by any evidence gathered under that immunity deal.

Attorneys for six Blackwater guards made those arguments and more at a September meeting with top Justice Department officials. The lawyers urged prosecutors not to indict.

A decision before January about whether to indict the guards would mean that President-elect Barack Obama's incoming Justice Department team would not inherit the politically sensitive choice. But the legal hurdles will remain in a case that could drag on for a year or longer.

In December 2007, several months after the shootings, the Pentagon and the State Department agreed to give the military in Iraq more control over Blackwater and other private security contractors. Five months later, in April, the State Department renewed its multimillion-dollar contract with Blackwater for the third year of its five-year life.

Blackwater has been paid nearly $1.25 billion in federal business since 2000.

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