Blackwater Operating in Iraq Illegally, Alleges Lawsuit

Blackwater (renamed "Xe") has been kicked out of Iraq. Baghdad has revoked its operating license, and the State Department cancelled its long-standing private security contract earlier this year, replacing it with competitors DynCorp and Triple Canopy. But ridding Mesopotamia of Erik Prince and his hired guns is apparently not that simple. According to a lawsuit (PDF) filed Wednesday in the US District Court in Alexandria, Virginia, Blackwater continues to operate in Iraq under the mantle of Greystone Ltd., one of an array of smaller sub-companies under the Blackwater/Xe umbrella. (Dan Schulman and I wrote an in-depth piece about Greystone and its practice of hiring Third-World mercenaries for duty in Iraq in the March/April 2008 issue of Mother Jones.)

The contract in question is with a State Department-funded group called the International Republican Institute (IRI). Nominally nonpartisan, it claims to be promoting good governance and the rule of law in Iraq. In reality, the organization's leadership is heavily populated with Republicans, including Senator John McCain, who serves as chairman of the board. Bill Sizemore of HamptonRoads.com reports that, between 2005 and 2007, the IRI paid Blackwater $17 million annually for security services, almost a quarter of the group's $75-million annual budget.

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The lawsuit is one of several filed by DC firm Burke O'Neil LLC on behalf of Iraqis, who claim to be victims of Blackwater operators. In this case, the plaintiffs are suing for the unlawful deaths of an elderly Iraqi woman and an Iraqi college student killed allegedly by Greystone operators while driving on a road near Hilla on August 13, 2007. (Anne Tyrrell, Blackwater's spokesperson, told Sizemore that the lawsuit is "riddled with errors" and denied that Greystone was operating anywhere near Hilla at the time of the incident.)

The lawsuit alleges that Blackwater's continued presence in Iraq, via Greystone, is illegal. From the written complaint:

Xe-Blackwater constantly operates in an illegal fashion, sending a clear message to its personnel that they should consider themselves free to act with impunity. As but one recent example, Xe-Blackwater continues to provide armed protection services in Iraq despite the fact the Iraqi government has refused to grant Xe-Blackwater the licenses needed to do business and carry weapons in Iraq.

That is, Xe-Blackwater is providing armed protection services under contract to the International Republican Institute ("IRI"), an American government-funded organization operating in Iraq. Xe-Blackwater, seeking to obscure its continued illegal operation in Iraq, directed its employees to enter into new contracts under the Greystone name rather than the Blackwater name. But Greystone is simply another corporate incarnation of Xe-Blackwater, and it is not license to carry weapons in Iraq.

For its part, the IRI issued a statement Wednesday, acknowledging its Blackwater contract: “Like the U.S. State Department, which continues contracts with Blackwater for both security and services, the International Republican Institute (IRI) has an ongoing contract with Blackwater for security in Iraq. As a U.S. State Department grantee, should Blackwater not be able to operate legally in Iraq, IRI would hire a new security firm.”