It’s being described as “Baghdad’s bloody Sunday.” On September 16 a heavily armed State Department convoy guarded by Blackwater USA was whizzing down the wrong side of the road near Nisour Square in the congested Mansour neighborhood in the Iraqi capital. Iraqi police scrambled to block off traffic to allow the convoy to pass. In the chaos, an Iraqi vehicle entered the square, reportedly failing to heed a policeman’s warning fast enough. The Blackwater operatives, protecting their American principal, a senior State Department official, opened fire on the vehicle, killing the driver. According to witnesses, Blackwater troops then launched some sort of grenade at the car, setting it ablaze. But inside the vehicle was not a small sect from Al Qaeda in Mesopotamia or the Mahdi Army, the “armed insurgents” Blackwater described killing in its official statement on the incident. It was a young Iraqi family–man, woman and infant–whose crime appeared to be panicking in a chaotic traffic situation. Witnesses say the bodies of the mother and child were melded together by the flames that had engulfed their vehicle.

Gunfire rang out in Nisour Square as people fled for their lives. Witnesses described a horrifying scene of indiscriminate shooting by the Blackwater guards. In all, as many as twenty-eight Iraqis may have been killed, and doctors say the toll could climb, as some victims remain in critical condition. A company spokesperson said Blackwater’s forces “acted lawfully and appropriately” and “heroically defended American lives in a war zone.” Blackwater’s version of events is hotly disputed, not only by the Iraqi government, which says it has video to prove the shooting was unprovoked, but also by survivors of the attack. “I saw women and children jump out of their cars and start to crawl on the road to escape being shot,” said Iraqi lawyer Hassan Jabar Salman, who was shot four times in the back during the incident. “But still the firing kept coming and many of them were killed. I saw a boy of about 10 leaping in fear from a minibus–he was shot in the head. His mother was crying out for him. She jumped out after him, and she was killed.”

Salman says he was driving behind the Blackwater convoy when it stopped. Witnesses say some sort of explosion had gone off in the distance, too far away to have been perceived as a threat. He said Blackwater guards ordered him to turn his vehicle around and leave the scene. Shortly after, the shooting began. “Why had they opened fire?” he asked. “I do not know. No one–I repeat no one–had fired at them. The foreigners had asked us to go back, and I was going back in my car, so there was no reason for them to shoot.” In all, he says, his car was hit twelve times, including the four bullets that pierced his back.

While the shooting in Nisour Square has put the issue of private forces in Iraq–and Blackwater’s name specifically–on the front pages of newspapers around the globe, this is hardly the first deadly incident involving these forces. What is new is that the Iraqi government responded powerfully. Within twenty-four hours of the shooting, Iraq’s Interior Ministry announced that it was expelling Blackwater from the country; Prime Minister Nuri al-Maliki called the firm’s conduct “criminal.”

The next day, the State Department ordered all non-US military officials to remain inside the Green Zone, and diplomatic convoys were halted. The Iraqi government, acting as though it was in control of the country, announced that it intended to prosecute the Blackwater men responsible for the killings. “We will not allow Iraqis to be killed in cold blood,” Maliki said. “There is a sense of tension and anger among all Iraqis, including the government, over this crime.”

But getting rid of Blackwater would not prove to be so easy. Four days after being grounded, Blackwater was back on Iraqi streets. After all, Blackwater is not just any security company in Iraq; it is the leading mercenary company of the US occupation. It first took on this role in the summer of 2003, after receiving a $27 million no-bid contract to provide security for Ambassador Paul Bremer, the original head of the Coalition Provisional Authority. Since then, it has kept every subsequent US Ambassador, from John Negroponte to Ryan Crocker, alive. It protects Secretary of State Condoleezza Rice when she visits the country, as well as Congressional delegations. Since its original Iraq contract, Blackwater has won more than $700 million in “diplomatic security” contracts through the State Department alone.

The company’s domestic political clout has been key to its success. It is owned by Erik Prince, a reclusive right-wing evangelical Christian who has served as a major bankroller of the campaigns of George W. Bush and his allies. Among the company’s senior executives are former CIA official J. Cofer Black, who once oversaw the extraordinary-rendition program and led the post-9/11 hunt for Osama bin Laden (and who currently serves as GOP presidential hopeful Mitt Romney’s top counterterrorism adviser), and Joseph Schmitz, the Pentagon Inspector General under Donald Rumsfeld.

So embedded is Blackwater in the US apparatus in Iraq that the incident in Nisour Square has sparked a crisis for the occupation that is both practical and political. Now that Blackwater’s name is known (and hated) throughout Iraq, the bodyguards themselves are likely to become targets of resistance attacks, perhaps even more so than the officials they are tasked with keeping alive. This will make their work much more difficult. But beyond such security issues are more substantive political ones, as Blackwater’s continued presence on Iraqi streets days after Maliki called for its expulsion serves as a potent symbol of the utter lack of Iraqi sovereignty.

Maliki has been under heavy US pressure to back off his initial demands. While Rice immediately called the Iraqi prime minister ostensibly to apologize, she made a point of emphasizing publicly that “we need protection for our diplomats.” A few days later, Tahseen Sheikhly, a representative of Maliki’s government, stated, “If we drive out this company immediately, there will be a security vacuum. That would cause a big imbalance in the security situation.” Given the carnage of September 16, it was a difficult statement to wrap one’s head around.

Maliki then agreed to withhold judgment on Blackwater’s status, pending the conclusion of a joint US-Iraqi investigation. If he ultimately goes along with the United States and tolerates Blackwater’s presence, the political consequences will be severe. Among those calling for the firm’s expulsion is Muqtada al-Sadr. A cave-in by Maliki could weaken his already tenuous grip on power and reinforce the widespread perception that he is merely a puppet of the US occupation. Clearly aware of this, while visiting the United States a week after the shootings, Maliki went so far as to call the situation “a serious challenge to the sovereignty of Iraq” that “cannot be accepted.”

In Baghdad there is great determination to bring the perpetrators of the Nisour Square slaughter to justice. An investigative team made up of officials from Iraq’s Interior, National Security and Defense ministries said in a preliminary report that “the murder of citizens in cold blood in the Nisour area by Blackwater is considered a terrorist action against civilians just like any other terrorist operation.” But Iraqi investigators claim that they have received little or no information from the US government and have been denied access to the Blackwater operatives involved in the shootings. A US official appeared to dismiss the validity of the Iraqi investigation, telling the New York Times, “There is only the joint investigation that we have with the Iraqis.”

Still, Iraqi officials announced their intent to bring criminal charges against the Blackwater forces involved in the shooting, and the report stated, “The criminals will be referred to the Iraqi court system.” Abdul Sattar Ghafour Bairaqdar, a member of Iraq’s Supreme Judiciary Council, the country’s highest court, recently said, “This company is subject to Iraqi law, and the crime committed was on Iraqi territory, and the Iraqi judiciary is responsible for tackling the case.”

Unfortunately, things are not quite so simple.

On June 27, 2004, the day before Paul Bremer skulked out of Baghdad, he issued a decree known as Order 17, which granted sweeping immunity to private contractors working for the United States in Iraq, effectively barring the Iraqi government from prosecuting contractor crimes in domestic courts. The timing was curious, given that Bremer was leaving after allegedly “handing over sovereignty” to the Iraqi government.

Shortly after the Nisour shooting, Maliki said he wanted to change Order 17 to permit prosecution in Iraqi courts of criminal activities committed by contractors. The Iraqi Parliament could also try to pass a law repealing it altogether. Michael Ratner, president of the Center for Constitutional Rights, characterizes Order 17 as a clear violation of Iraqi sovereignty but points out that it contains a provision that allows the United States to waive the immunity with regard to individuals. “A possible first step for Iraq is to ask the US to waive the immunity of those involved in the killing,” says Ratner, who concedes that this is an unlikely move from Washington, “as it would frighten other private contractors.” He also said the immunity is a part of the US strategy for using private companies like Blackwater to deter resistance attacks on occupation personnel. “None of this is by chance; their very purpose is to brutalize and strike fear into the people of Iraq–that is why they are back on the streets.”

Former CIA case officer Robert Baer says that the cleanest solution would be for the United States to rescind Order 17. “Do we let Iraqi Embassy private security contractors race around Washington or New York, machine guns sticking out the window, to prevent carjackings?” asked Baer. “This would effectively close down private security companies. There is no reason the State Department cannot provide its own security.” He points out that State Department security officers are under diplomatic immunity, but if there’s a questionable shooting, the Iraqi government would have the option of expelling the perpetrators under the Vienna Convention.

This discussion of Order 17 is important but in practical terms it may well be moot, as it is hard to imagine the United States allowing the prosecution of US private security forces in an Iraqi court. Industry representatives say that in cases where contractors are alleged to have committed crimes or engaged in misconduct, Washington has told them to get the contractors in question out of Iraq quickly. As one private security contractor recently told the Washington Post, “We were always told, from the very beginning, if for some reason something happened and the Iraqis were trying to prosecute us, they would put you in the back of a car and sneak you out of the country in the middle of the night.”

That is precisely what happened after an incident that occurred last Christmas Eve, in which an off-duty Blackwater operative allegedly shot and killed the Iraqi bodyguard of Vice President Adil Abdul-Mahdi inside the Green Zone. Blackwater officials confirm that they whisked the contractor safely out of Iraq, which they say Washington ordered them to do. Iraqi officials labeled the killing a “murder.”

Blackwater says it fired the contractor, but he has yet to be publicly charged with any crime. Representative Dennis Kucinich, a member of the Committee on Oversight and Government Reform, has suggested that “there’s a question that could actually make [Blackwater’s] corporate officers accessories here in helping to create a flight from justice for someone who’s committed a murder.” According to a memo from the US Embassy to Secretary Rice, after the shooting, Abdul-Mahdi tried to keep the story under wraps because he believed “Iraqis would not understand how a foreigner could kill an Iraqi and return a free man to his own country.”

While there may be a debate about subjecting private forces to Iraqi courts, legal mechanisms do exist to prosecute armed contractors in US courts for crimes committed in Iraq. But the Bush Justice Department would have to press charges, and that hasn’t happened. US contractors in Iraq reportedly have their own motto: “What happens here today stays here today.”

While much of the media attention stemming from the September 16 killings focuses on the current crisis, this is hardly a new situation. In just the past nine months, Blackwater forces have been at the center of several other fatal shootings that sparked protests from the Iraqi government.

There was the Christmas Eve incident, and then, in May, Blackwater forces engaged in back-to-back deadly actions in a Baghdad neighborhood near the Iraqi Interior Ministry. In one incident, Blackwater forces fired on an Iraqi vehicle they said had veered too close to their convoy, killing a civilian driver. As with the September 16 shooting, witnesses say it was unprovoked. In the ensuing chaos, the Blackwater operatives reportedly refused to give their names or details of the incident to Iraqi officials, sparking a tense standoff between Blackwater and Iraqi forces, both of which were armed with assault rifles. It might have become even bloodier if a US military convoy hadn’t arrived on the scene and intervened. A day before that incident, in almost the same neighborhood, Blackwater operatives found themselves in a gun battle lasting nearly an hour that drew in US military and Iraqi forces, in which at least four Iraqis are said to have died. US sources said the Blackwater forces “did their job,” keeping the officials alive.

Iraqi officials allege that there have been at least six deadly incidents involving Blackwater in the past year alone, which in addition to the September 16 death toll have caused ten Iraqi deaths. An Iraqi official says they show Blackwater “has a criminal record.” Among these are a February 4 shooting allegedly resulting in the death of Hana al-Ameedi, an Iraqi journalist, near the Foreign Ministry; a February 7 shooting in which three guards were allegedly killed outside Iraqi state television offices; a September 9 shooting during which five Iraqis were killed near a government building in Baghdad; and a September 12 shooting that wounded five people in eastern Baghdad.

US and Iraqi officials reportedly discussed Blackwater’s impunity months before the September shooting. “We tried several times to contact the US government through administrative and diplomatic channels to complain about the repeated involvement by Blackwater guards in several incidents that led to the killing of many Iraqis,” said deputy Interior Minister Hussein Kamal. However, US Embassy spokesperson Mirembe Nantongo said, “We have no official documentation on file from our Iraqi partners requesting clarification of any incident.” That statement is contradicted by another US official. Matthew Degn, who served as a liaison to the Iraqi Interior Ministry until August, told the Washington Post that Iraqi officials sent a flurry of memos to Blackwater and US officials well before the September 16 shootings and were rebuffed in their requests for action. “We had numerous discussions over [Iraqi government] frustrations with Blackwater, but every time [Iraqi officials] contacted the [US] government, it went nowhere.”

Iraq’s anger would be understandable even if the only incident involving Blackwater was the Nisour shootings–more so if you take into account the past year of the company’s actions. But this is a four-year pattern that goes beyond Blackwater. The system of “private security” being paid billions in US taxpayer dollars has not only continued despite rampant abuses; it has flourished. Blackwater and its ilk operate in a demand-based industry, and with US forces stretched thin, there has been plenty of demand. According to the Government Accountability Office, there are as many as 180 mercenary firms in Iraq, with tens of thousands of employees. Without the occupation and continued funding for the war, these companies would not be in Iraq.

Even though this scandal is about a system, not about one company or “a few bad apples,” Blackwater does stand out. While it has no shortage of US and British competitors in Iraq, no other private force’s actions have had more of an impact on events in Iraq than those of the North Carolina-based company. Blackwater’s primary purpose in Iraq, at which it has been very effective, is to keep the most hated US occupation officials alive by any means necessary. This has encouraged conduct that places American lives at an infinitely higher premium than those of Iraqi civilians, even in cases where the only Iraqi crime is driving too close to a VIP convoy protected by Blackwater guards.

It isn’t just the Iraqi government and the country’s civilian population that are angered by Blackwater’s conduct. Col. Thomas Hammes, the US military official who once oversaw the creation of a new Iraqi military, has described driving around Iraq with Iraqis and encountering Blackwater operatives. They “were running me off the road. We were threatened and intimidated,” Hammes said. But, he added, “they were doing their job, exactly what they were paid to do in the way they were paid to do it, and they were making enemies on every single pass out of town.” Hammes concluded they were “hurting our counterinsurgency effort.”

Just as the world was learning of the September 16 Blackwater shooting in Baghdad, another scandal involving the company was breaking in the United States. Allegations surfaced that weapons brought into Iraq by Blackwater may have ended up in the hands of the Kurdish militant group the PKK, which is designated a “foreign terrorist organization” by the State Department. According to a September 18 letter sent by Representative Henry Waxman to State Department Inspector General Howard Krongard, a federal investigation into whether Blackwater “was illegally smuggling weapons into Iraq” was obstructed by Krongard, who, Waxman charged, is a partisan operative with close ties to the Bush Administration. Waxman cited a July e-mail message from Krongard in which he ordered his staff to “stop IMMEDIATELY” cooperating with the federal prosecutor investigating Blackwater until Krongard himself could speak to him. Waxman said Krongard’s actions caused “weeks of delay” and that by subsequently assigning a media relations staffer instead of an investigator to aid the prosecutor, Krongard had “impeded the investigation.” Blackwater, for its part, denies that it was “in any way associated or complicit in unlawful arms activities” and is cooperating in the federal investigation. Waxman has announced that he will hold hearings on the issue in October.

In keeping with Krongard’s stance, the State Department has responded to the widening Blackwater inquiry with stonewalling and evasion. Indeed, Blackwater’s attorney told the House Oversight and Government Reform Committee, which Waxman chairs, that State had directed the company “not to disclose any information” regarding its Iraq security contract without written authorization. After Waxman protested, the department specified that this restriction applied only to classified information. Waxman, for his part, is looking for answers from the top gun: He sent Blackwater CEO Erik Prince a letter requesting his presence at a hearing. “One question that will be examined is whether the government’s heavy reliance on private security contractors is serving U.S. interests in Iraq,” Waxman informed Prince. “Another question will be whether the specific conduct of your company has advanced or impeded U.S. efforts.”

Those are good questions. But it is unfortunate that it has taken four years of the most privatized war in US history for Congress to ask them. Last time Prince was invited to appear before Congress, he sent his lawyer instead. This time Waxman could choose to use the power of the subpoena. As has finally become clear to some in Congress, war contracting is not merely about squandered taxpayer dollars. It is about life and death. The stakes are far too high to let Prince and his cronies call (or fire) any more shots.