On Thursday, Defense Secretary Robert Gates confirmed that Blackwater is operating in Pakistan. In an interview on Express TV, Gates, who was visiting Islamabad, said, “They [Blackwater and another private security firm, DynCorp] are operating as individual companies here in Pakistan,” according to a DoD transcript of the interview. “There are rules concerning the contracting companies. If they’re contracting with us or with the State Department here in Pakistan, then there are very clear rules set forth by the State Department and by ourselves.”

Today, the country’s senior minister for the North-West Frontier Province (NWFP), Bashir Bilour, also acknowledged that the company is operating in Pakistan’s frontier areas. Bilour told Pakistan’s Express News TV that Blackwater’s activities were taking place with the “consent and permission” of the Pakistani government, saying he had discussed the issue with officials at the US Consulate in Peshawar, who told him that Blackwater was training Pakistani forces.

When Gates was asked what the US response would be if the Pakistani parliament passed a law banning private security companies, Gates said, “If it’s Pakistani law, we will absolutely comply.”

As Gates’s comments began to make huge news in Pakistan, US defense officials tried to retract his statement. As the Wall Street Journal reported, “Defense officials tried to clarify the comment Thursday night, telling reporters that Mr. Gates had been speaking about contractor oversight more generally and that the Pentagon didn’t employ Xe in Pakistan.”

Bilour’s statements are consistent with what a former Blackwater executive and a US military intelligence source told me in December–that Blackwater is working on a subcontract for Kestral, a Pakistani security and logistics firm. That contract, say my sources, is technically with the Pakistani government, which helps cloak Blackwater’s presence. From my article in The Nation:

Blackwater owner Erik Prince is close with Kestral CEO Liaquat Ali Baig, according to the former Blackwater executive. “Ali and Erik have a pretty close relationship,” he said. “They’ve met many times and struck a deal, and they [offer] mutual support for one another.” Working with Kestral, he said, Blackwater has provided convoy security for Defense Department shipments destined for Afghanistan that would arrive in the port at Karachi. Blackwater, according to the former executive, would guard the supplies as they were transported overland from Karachi to Peshawar and then west through the Torkham border crossing, the most important supply route for the US military in Afghanistan.

According to the former executive, Blackwater operatives also integrate with Kestral’s forces in sensitive counterterrorism operations in the North-West Frontier Province, where they work in conjunction with the Pakistani Interior Ministry’s paramilitary force, known as the Frontier Corps (alternately referred to as “frontier scouts”). The Blackwater personnel are technically advisers, but the former executive said that the line often gets blurred in the field. Blackwater “is providing the actual guidance on how to do [counterterrorism operations] and Kestral’s folks are carrying a lot of them out, but they’re having the guidance and the overwatch from some BW guys that will actually go out with the teams when they’re executing the job,” he said. “You can see how that can lead to other things in the border areas.” He said that when Blackwater personnel are out with the Pakistani teams, sometimes its men engage in operations against suspected terrorists. “You’ve got BW guys that are assisting…and they’re all going to want to go on the jobs–so they’re going to go with them,” he said. “So, the things that you’re seeing in the news about how this Pakistani military group came in and raided this house or did this or did that–in some of those cases, you’re going to have Western folks that are right there at the house, if not in the house.” Blackwater, he said, is paid by the Pakistani government through Kestral for consulting services. “That gives the Pakistani government the cover to say, ‘Hey, no, we don’t have any Westerners doing this. It’s all local and our people are doing it.’ But it gets them the expertise that Westerners provide for [counterterrorism]-related work.”

When I tried to get confirmation of Blackwater’s work with Kestral, I was bounced around from agency to agency. Eventually, a spokesman for the State Department’s Directorate of Defense Trade Controls (DDTC), which is responsible for issuing licenses to US corporations to provide defense-related services to foreign governments or entities, would neither confirm nor deny that Blackwater has a license to work in Pakistan or to work with Kestral. “We cannot help you,” said department spokesman David McKeeby after checking with the relevant DDTC officials. “You’ll have to contact the companies directly.” Blackwater’s spokesman Mark Corallo said the company has “no operations of any kind” in Pakistan other than one employee working for the DoD. Kestral did not respond to my inquiries.

Kestral’s lobbyist, former assistant Secretary of State for Western Hemisphere Affairs Roger Noriega, who served in that post from 2003 to 2005, would not provide comment on the contract either. Noriega, according to federal lobby records, was recently hired by Kestral to lobby the US government, including the State Department, USAID and Congress, on foreign affairs issues “regarding [Kestral’s] capabilities to carry out activities of interest to the United States.”

All of this appears to be a contradiction of previous statements made by the Defense Department, by Blackwater, by the Pakistani government and by the US Embassy in Islamabad, all of whom claimed Blackwater was not in the country. In September the US ambassador to Pakistan, Anne Patterson, denied Blackwater’s presence in the country, stating bluntly, “Blackwater is not operating in Pakistan.” In December in The Nation, after I reported on Blackwater’s work for JSOC and Kestral in Pakistan, the Pentagon did not issue any clear public denials, and instead tried to pass the buck to the State Department, which in turn passed it to the US Embassy, which in turn issued an unsigned statement saying the story was false. Shortly after my story came out in The Nation, ABC News reported that in 2006, “12 Blackwater “tactical action operatives” were recruited for a secret raid into Pakistan by the U.S. military’s Joint Special Operations Command, according to a military intelligence planner. The target of the planned raid, code-named Vibrant Fury, was a suspected al Qaeda training camp, according to the planner.”

In Pakistan, there appears to be egg on the face of the country’s Interior Minister Rehman Malik, who has said on numerous occasions that he would resign if it is proven that Blackwater is operating inside Pakistan. Today, Express TV rebroadcast Malik saying in November, “There is no Blackwater.”

What’s that old saying? “Never believe anything until it has been officially denied.”