Ex-employees: Blackwater OK'd bribes after deaths

By Mark Mazzetti and James Risen

WASHINGTON

Top executives at Blackwater Worldwide 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.

Moyock, N.C.-based Blackwater approved the cash payments in December 2007, the officials said, as protests over the deadly shootings in Nisoor Square stoked long-simmering anger inside Iraq about practices by the security company's employees.

American and Iraqi investigators already had concluded that the shootings were unjustified, top Iraqi officials were calling for Black-water'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.

Four former Blackwater executives said in interviews that Gary Jackson, who was then the company's president, had approved the bribes and that 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.

Blackwater's strategy of buying off the government officials, which would have been illegal under American law, created a deep rift in the company, according to the former executives. They said Cofer Black, who was then the company's vice chairman and a former top CIA 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 U.S. Embassy officials.

Alarmed about the secret payments, 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. Black resigned the next year.

Stacy DeLuke, a company spokeswoman, dismissed the allegations as baseless and said the company would not comment about former employees. Black did not respond to telephone calls and e-mail messages seeking comment.

Reached by phone, Jackson, who resigned as president of Blackwater early this year, criticized The New York Times and said, "I don't care what you write."

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 they were troubled by a pattern of questionable conduct by Blackwater, which had led them to leave the company.

A senior State Department official said U.S. diplomats were not aware of any payoffs to Iraqi officials.

Blackwater continued operating as the prime contractor providing security for the U.S. Embassy in Baghdad until the 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.

Five Blackwater guards involved in the shooting are facing federal manslaughter charges, 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 Prince.

Separately, a federal grand jury in North Carolina has been conducting a lengthy investigation into the company. One of the former executives said he had told federal prosecutors there about the plan to pay Iraqi officials to drop their inquiries into the Nisoor 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.

Officials at the U.S. 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.

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.