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<a href="http://www.nytimes.com/2009/11/11/world/middleeast/11blackwater.html?_r=1&emc=na" eudora="autourl">
http://www.nytimes.com/2009/11/11/world/middleeast/11blackwater.html?_r=1&emc=na</a>
<br>
<font size=3>November 11, 2009<br><br>
</font><h1><font size=4><b>Blackwater Said to Approve Iraqi Payoffs After
Shootings </b></font></h1><font size=3>By
<a href="http://topics.nytimes.com/top/reference/timestopics/people/m/mark_mazzetti/index.html?inline=nyt-per">
MARK MAZZETTI</a> and
<a href="http://topics.nytimes.com/top/reference/timestopics/people/r/james_risen/index.html?inline=nyt-per">
JAMES RISEN</a><br><br>
WASHINGTON Top executives at
<a href="http://topics.nytimes.com/top/news/business/companies/blackwater_usa/index.html?inline=nyt-org">
Blackwater Worldwide</a> authorized secret payments of about $1 million
to Iraqi officials that were intended to silence their criticism and buy
their support after a September 2007 episode in which Blackwater security
guards fatally shot 17 Iraqi civilians in Baghdad, according to former
company officials.<br><br>
Blackwater approved the cash payments in December 2007, the officials
said, as protests over the deadly shootings in Nisour Square stoked
long-simmering anger inside Iraq about reckless practices by the security
company’s employees. American and Iraqi investigators had already
concluded that the shootings were unjustified, top Iraqi officials were
calling for Blackwater’s ouster from the country and company officials
feared that Blackwater might be refused an operating license it would
need to retain its contracts with the State Department and private
clients, worth hundreds of millions of dollars annually.<br><br>
Four former Blackwater executives said in interviews that Gary Jackson,
who was then the company’s president, had approved the bribes, and the
money was sent from Amman, Jordan, where Blackwater maintains an
operations hub, to a top manager in Iraq. The executives, though, said
they did not know whether the cash was delivered to Iraqi officials or
the identities of the potential recipients.<br><br>
Blackwater’s strategy of buying off the government officials, which would
have been illegal under American law, created a deep rift inside the
company, according to the former executives. They said that Cofer Black,
who was then the company’s vice chairman and a former top
<a href="http://topics.nytimes.com/top/reference/timestopics/organizations/c/central_intelligence_agency/index.html?inline=nyt-org">
C.I.A.</a> and State Department official, learned of the plan from
another Blackwater manager while he was in Baghdad discussing
compensation for families of the shooting victims with United States
Embassy officials. <br><br>
Alarmed about the secret payments, Mr. Black cut short his talks and left
Iraq. Soon after returning to the United States, he confronted Erik
Prince, the company’s chairman and founder, who did not dispute that
there was a bribery plan, according to a former Blackwater executive
familiar with the meeting. Mr. Black resigned the following
year.<br><br>
Stacy DeLuke, a company spokeswoman, dismissed the allegations as
“baseless” and said the company would not comment about former employees.
Mr. Black did not respond to telephone calls and e-mail messages seeking
comment.<br><br>
Reached by phone, Mr. Jackson, who resigned as president of Blackwater
early this year, criticized The New York Times and said, “I don’t care
what you write.” <br><br>
The four former Blackwater executives, who had held high-ranking posts at
the company, would speak only on condition of anonymity. Two of them said
they took part in talks about the payments; the two others said they had
been told by several Blackwater officials about the discussions. In
agreeing to describe those conversations, the four officials said that
they were troubled by a pattern of questionable conduct by Blackwater,
which had led them to leave the company. <br><br>
Blackwater continued operating as the prime contractor providing security
for the United States Embassy in Baghdad until spring, when the Iraqi
government said it would deny the company an operating license. The State
Department replaced Blackwater with a rival company in May, but
Blackwater still does some work for the department in Iraq on a temporary
basis. <br><br>
Five Blackwater guards involved in the shooting are
<a href="http://www.nytimes.com/2008/12/09/world/americas/09iht-09blackwater.18506761.html">
facing federal manslaughter charges</a> and their trial is scheduled to
start in February in Washington. A sixth guard pleaded guilty in
December. Blackwater, now known as Xe Services, has never faced criminal
charges in the case, although the Iraqi victims brought a civil lawsuit
in federal court against the company and Mr. Prince. <br><br>
Separately, a federal grand jury in North Carolina, where Blackwater has
its headquarters, has been conducting a lengthy investigation into the
company. One of the former executives said that he had told federal
prosecutors there about the plan to pay Iraqi officials to drop their
inquiries into the Nisour Square case. If Blackwater followed through,
the company or its officials could face charges of obstruction of justice
and violating the Foreign Corrupt Practices Act, which bans bribes to
foreign officials.<br><br>
Officials at the United States Attorney’s Office in Raleigh declined to
comment on their investigation, and it is not clear whether the payment
scheme is a focus of the grand jury.<br><br>
Federal prosecutors in North Carolina have interviewed a number of former
Blackwater employees about a variety of issues, including allegations of
weapons smuggling, according to several former Blackwater workers who say
they have testified before the grand jury or been interviewed by
prosecutors, as well as lawyers familiar with the matter. Two former
employees have pleaded guilty to weapons charges and are believed to be
cooperating with prosecutors. <br><br>
Since 2001, Blackwater has undergone explosive growth, not only from
security contracts in Iraq and Afghanistan, but also from classified work
for the Central Intelligence Agency that included taking part in a
now-defunct program to
<a href="http://www.nytimes.com/2009/08/20/us/20intel.html">assassinate
leaders of Al Qaeda</a> and to
<a href="http://www.nytimes.com/2009/08/21/us/21intel.html">load missiles
on Predator drones</a>.<br><br>
The Nisour Square shooting was the bloodiest and most controversial
episode involving Blackwater in the Iraq war. At midday
on<a href="http://www.nytimes.com/2007/10/03/world/middleeast/03firefight.html">
Sept. 16, 2007</a>, a Blackwater convoy opened fire on Iraqi civilians
in the midst of the crowded intersection, spraying automatic weapons fire
in ways that investigators later claimed was indiscriminate and even
launching grenades into a nearby school. Seventeen Iraqis were killed and
dozens more were wounded. <br><br>
The matter set off an international outcry and intense debates in Iraq
and the United States over the role of private contractors in war zones.
Many Iraqis condemned Blackwater, which they had long seen as an
arrogant, rogue operation, and Prime Minister
<a href="http://topics.nytimes.com/top/reference/timestopics/people/m/nuri_kamal_al-maliki/index.html?inline=nyt-per">
Nuri Kamal al-Maliki</a> declared that the Blackwater shooting was a
challenge to his nation’s sovereignty. His government opened
investigations into the episode and previous fatal shootings by
Blackwater guards, and threatened to bar the company from operating in
the country. <br><br>
Those responses deeply worried Blackwater officials. Before the Nisour
Square shootings, the company had operated in Iraq without a license
largely because the Iraqi government had never enforced the rules. Being
blocked from the country would have been costly the State Department
deal was Blackwater’s single biggest contract. From 2004 through today,
the company has collected more than $1.5 billion for its work protecting
American diplomats and providing air transportation for them inside
Iraq.<br><br>
“It would hurt us,” Mr. Prince, the chairman, said in an interview in
January about losing the diplomatic security contract. “It would not be a
mortal blow, but it would hurt us.”<br><br>
The former Blackwater executives said it was not clear who proposed
paying off Iraqi officials. But after Mr. Jackson, the former company
president, approved the plan, the cash for the payoffs was taken from
Amman and given to Rich Garner, then a top manager in Iraq, the former
executives said. One of those executives said that officials in Iraq’s
Interior Ministry, which is responsible for operating licenses, were the
intended recipients.<br><br>
Mr. Garner, who still works for Blackwater, could not be reached for
comment. The former executives said they did not know whether Mr. Garner
was involved in decisions about the bribery scheme. <br><br>
At that time, Mr. Black was in a series of discussions with Patricia A.
Butenis, the deputy chief of mission at the American Embassy in Baghdad,
about compensation payments to the Nisour Square victims. According to
former Blackwater officials, Mr. Black was furious when he learned that
the payoff money was being funneled into Iraq, and he swiftly broke off
the talks with Ms. Butenis. <br><br>
“We are out of here,” Mr. Black told a colleague, one former executive
said. After returning to the United States, Mr. Black and Robert Richer,
who had also joined Blackwater after a C.I.A. career, separately
confronted Mr. Prince with their concerns about the plan, one former
Blackwater executive said.<br><br>
Mr. Richer left Blackwater in February 2008, followed by Mr. Black
several months later, amid a battle inside Blackwater between former
C.I.A. officers working at the company’s office outside Washington and
executives at Blackwater’s headquarters in North Carolina.<br><br>
The former officials said that Mr. Black, Mr. Richer and others believed
that Blackwater had cultivated a cowboy culture that was contemptuous of
government rules and regulations, and that some of the company’s leaders
former members of the
<a href="http://topics.nytimes.com/top/reference/timestopics/organizations/n/us_navy/index.html?inline=nyt-org">
Navy Seals</a> including Mr. Prince and Mr. Jackson had pushed the
boundaries of legality. Contacted by telephone, Mr. Richer would not
discuss specifics of why he left the company. <br><br>
A senior State Department official said that American diplomats were not
aware of any payoffs to Iraqi officials. Ms. Butenis, now the United
States ambassador to Sri Lanka, declined to comment for this article. But
other State Department officials confirmed that embassy officials had met
with Blackwater executives to encourage them to compensate the victims of
Nisour Square.<br><br>
The United States military had a well-established program for paying
families of civilian victims of American military operations, but at the
time of the Nisour Square shooting, the State Department did not have a
similar program, officials said.<br><br>
In interviews, three Iraqis wounded in Nisour Square said that Blackwater
had made payments of several thousand dollars to them and other victims.
Still, some of them joined the civil lawsuit against Blackwater.
Settlement talks collapsed Tuesday, according to Susan Burke, a lawyer
for the victims.<br><br>
Even after the furor that was set off by the shootings, State Department
officials made it clear that they did not believe they could operate in
Baghdad without Blackwater, and Iraqi officials eventually dropped their
public demands for the company’s immediate ouster. <br><br>
Raed Jarrar, the Iraq consultant to the American Friends Service
Committee, said in a recent interview that the Maliki government had gone
too easy on Blackwater. “They had two different messages,” he said. “The
Iraqi public, and even the Iraqi Parliament, was told that all private
contractors would be pulled out of the country, while the contractors and
the State Department were told the opposite.”<br><br>
In late 2008, the Bush administration and the Iraqi government hammered
out an agreement governing the role of security contractors in Iraq.
Under the new rules, security contractors lost their immunity from Iraqi
laws, which had been granted in 2004 by
<a href="http://topics.nytimes.com/top/reference/timestopics/people/b/l_paul_iii_bremer/index.html?inline=nyt-per">
L. Paul Bremer III</a>, the head of the Coalition Provisional Authority,
which ran the country after the start of the American-led war. The Iraqi
government also made it mandatory for security contractors to obtain
licenses to operate in the country. <br><br>
In March 2009, the Iraqis said that Blackwater would not be awarded a
license. Two months later, the State Department replaced the company with
a competing security contractor, Triple Canopy.<br><br>
Barclay Walsh contributed research from Washington, and Mohammed Hussein
from Baghdad. <br><br>
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