WASHINGTON, Sep 28 (IPS) - A U.S.-based private security firm received a contract worth up to 92 million dollars from the Department of Defence amid hard questions about its involvement in two separate violent incidents in Iraq.

"Blackwater has been a contractor in the past with the department and could certainly be in the future," said the U.S.’s top-ranking military officer, General Peter Pace, at an afternoon press conference here.

The future arrived just two hours later when the Pentagon released a new list of contracts -- Presidential Airways, the aviation unit of parent company Blackwater, was awarded the contract to fly Department of Defence passengers and cargo between locations around central Asia.

The announcement comes as a cloud of suspicion is gathering around the "professional military" firm for its actions as a State Department security contractor in Iraq in which at least eight Iraqis and possibly as many as 28 were killed, including a woman and child.

Last week, the Iraqi government announced that it had revoked Blackwater's license to operate in the country.

The initial report by the State Department's Bureau of Diplomatic Security on the incident was put together by the U.S. embassy in Baghdad and details of the event where a car bomb exploded near a meeting attended by officials from the U.S. Agency for International Development. Some of the Blackwater team hired as security for the officials was involved in the shootout while apparently trying to clear an evacuation path.

In a statement issued last week, Blackwater USA spokesperson Anne Tyrrell denied any wrongdoing and said that, "Blackwater's independent contractors acted lawfully and appropriately in response to a hostile attack in Baghdad on Sunday. Blackwater regrets any loss of life but this convoy was violently attacked by armed insurgents, not civilians, and our people did their job to defend human life."

However, an official with knowledge of the investigation told the New York Times that the evacuation effort was marked by confusion and chaos -- the Blackwater employees believed they were being fired on, but this contradicted the initial Iraqi report on the incident that said there was no enemy fire. There was also apparently an incident of infighting when one guard did not heed a ceasefire call.

In a press conference Wednesday, the deputy press secretary of the State Department gave a non-denial of reports in the press that the Department of Defence has hinted to the State Department that the investigation into Blackwater should be reined in, only highlighting that the departments were working together and that the reports in the press had come from anonymous sources.

Blackwater USA, which has an estimated 1,000 employees in Iraq and 800 million dollars in U.S. government contracts, has been one of the most prominent private security firms operating in the country. Some of its notable assignments have included protecting L. Paul Bremer, the former head of the Coalition Provisional Authority, as well as Crocker, who is currently the leading U.S. diplomatic envoy to Iraq.

The firm came into the public eye in March 2004, when four of its employees were killed and mutilated by an Iraqi mob in Fallujah, the war-torn Iraqi city that was an insurgent stronghold at the time. The incident touched off the unsuccessful U.S. attempt to retake the city in April 2004.

Family members of the four employees slain in Fallujah have since sued Blackwater, alleging that the firm failed to provide necessary equipment and manpower that could have saved the employees' lives.

A separate report by the House Oversight and Government Reform Committee faulted Blackwater’s conduct in the Fallujah incident, in which Blackwater was transporting flatbed trucks when its team was ambushed.

"Blackwater embarked on this mission without sufficient preparation, resources and support for its personnel," concluded the report, saying that the firm had ignored warnings by another security company, cut the staff for the mission by putting rear gunners for both involved security vehicles on administrative duties, and went out with insufficiently armoured vehicles.

"Management in North Carolina made the decision to go with soft skin due to the cost" despite the fact that the contract paid for armoured vehicles, said a Blackwater employee quoted in the report, referring to Blackwater’s headquarters in Moyock, North Carolina.

The Congressional report noted that the Blackwater men had been sent on their mission without maps and ended up at the wrong military base, where they had to spend the night because of fighting nearby.

Control Risks Group, another security force working in the area at the time, warned Blackwater about the mission after they had twice been offered the same task but "refused both times due to the obvious risk transporting slow-moving loads through such a volatile area."

On the heels of the House Committee report, Congressman David E. Price of North Carolina will introduce legislation next week to extend the reach of U.S. civil courts to include security contractors in Iraq. The proposed bill, H.R. 2740, will also establish F.B.I. investigative units in the war zone charged with investigating allegations of misconduct.

In a letter to U.S. Secretary of State Condoleezza Rice last week, Price wrote, "The allegations related to the Sept. 16 incident have the potential to become a flashpoint in terms of Iraqi antagonism toward U.S. personnel, with wide-ranging implications for our mission and our troops. There is no question that the lack of clarity surrounding the legal options for prosecuting criminal acts has significantly undermined our efforts in Iraq."

The various investigations into security contractors working for the U.S. government in Iraq and related legislation are heralded by critics of the Bush administration’s approach to the war, pointing to the failures of the so-called [Donald] Rumsfeld doctrine, which promotes a more streamlined and greatly privatised military based on an "entrepreneurial approach" and raising questions about rampant war-profiteering.

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