Update from Jeremy Scahill: A day after this story went live on TheNation.com, Senator Hillary Clinton, whose staff refused for a week to answer my questions about her position on private security forces, released a statement announcing that Clinton is now co-sponsoring legislation to “ban the use of Blackwater and other private mercenary firms in Iraq,” saying, “The time to show these contractors the door is long past due.” Read her full statement here. Her timing was interesting, to say the least. Why February 28, in the middle of a tough political campaign? Why not after last September’s Nisour Square massacre, when Blackwater operatives killed seventeen Iraqi civilians? Or, better, before it? Regardless, this makes Clinton the most significant US political figure to date to issue such a call. We will be monitoring closely how much of a legislative priority this becomes for Senator Clinton.

A senior foreign policy adviser to leading Democratic presidential candidate Barack Obama has told The Nation that if elected Obama will not “rule out” using private security companies like Blackwater Worldwide in Iraq. The adviser also said that Obama does not plan to sign on to legislation that seeks to ban the use of these forces in US war zones by January 2009, when a new President will be sworn in. Obama’s campaign says that instead he will focus on bringing accountability to these forces while increasing funding for the State Department’s Bureau of Diplomatic Security, the agency that employs Blackwater and other private security contractors. (Hillary Clinton’s staff did not respond to repeated requests for an interview or a statement on this issue.)

Obama’s broader Iraq withdrawal plan provides for some US troops to remain in Iraq–how many his advisers won’t say. But it’s clear that Obama’s “follow-on force” will include a robust security force to protect US personnel in Iraq, US trainers (who would also require security) for Iraqi forces and military units to “strike at Al Qaeda”–all very broad swaths of the occupation.

“If Barack Obama comes into office next January and our diplomatic security service is in the state it’s in and the situation on the ground in Iraq is in the state it’s in, I think we will be forced to rely on a host of security measures,” said the senior adviser. “I can’t rule out, I won’t rule out, private security contractors.” He added, “I will rule out private security contractors that are not accountable to US law.”

But therein lies a problem. The US Embassy in Iraq is slated to become the largest embassy in world history. If Obama maintains that embassy and its army of diplomats and US personnel going in and out of the Green Zone, which his advisers say he will, a significant armed force will be required for protection. The force that now plays that role is composed almost exclusively of contractors from Blackwater, DynCorp and Triple Canopy. And at present, these contractors are not held accountable under US law. Obama and a host of legal experts, including in the Justice Department, acknowledge that there may be no current US law that could be used to prosecute security contractors for crimes committed in Iraq, such as the killing of seventeen Iraqi civilians last September in Baghdad’s Nisour Square.

Obama’s proposed increase in funding to the diplomatic security division would ostensibly pave the way for a protective force composed entirely of US government personnel, but the process of building that force would likely take a long time. Short of dramatically reducing the US civilian and diplomatic presence in Iraq that necessitates such a security force, Obama may have no choice but to continue the contracting arrangements with firms like Blackwater if he is elected President.

The irony is that it was Senator Obama who sponsored a bill in February 2007 defining a legal structure to prosecute State Department contractor crimes in US courts. Obama staffers say they will “fight like hell to get it passed.” But it may not pass before the next President takes power. Even if it does and Bush signs it, serious questions will remain unresolved about how contractor crimes can be monitored effectively. The senior adviser acknowledged that Obama could find himself in a situation where, as President, he continues using forces he himself has identified as “unaccountable.” The Obama campaign, in other words, may have painted itself into a corner.

Obama campaign and Senate staffers characterize this as an inherited problem with no good alternatives. “We are in a situation where, because of bad planning and a series of disastrous policy choices by the Bush Administration, we’re forced to rely on private security contractors,” says the senior adviser. “What we’re focused on at the moment is getting the legal architecture in place that will hold these guys accountable to the same standard that [applies to] enlisted US military personnel.”

In Iraq right now, the number of private contractors is basically equal to the number of US troops. While Obama advisers say they plan to “have a serious look” at the role of contractors in Iraq, one adviser seemed to indicate that unarmed contractors would continue to operate at significant levels. “These contractors are not only providing private security functions like Blackwater. They’re rebuilding schools, they are serving food, they’re doing logistics, they’re driving trucks, and the important question is, If you take those 100,000-plus contractors out of Iraq, what do you replace them with? Inevitably the answer is, You replace them with US military.”

But, the senior adviser notes, “ideally we would have diplomatic security personnel, US government personnel, not subcontracted but US Bureau of Diplomatic Security agents providing security to all our ambassadors.”

Says another Obama adviser, “If we could start this whole war from the beginning, what would we have done versus what can we do now, now that we’re in the middle of it? In an ideal world, we would not have these contractors, but that’s not the world we operate in right now.”

The State Department has only an estimated 1,450 diplomatic security agents worldwide who are actual government employees, and only thirty-six are deployed in Iraq. In contrast, Blackwater has nearly 1,000 operatives in Iraq alone, not to mention the hundreds more working for DynCorp and Triple Canopy. Moreover, the State Department says it could take years to identify prospective new agents, vet them, train them and deploy them. In short, this would be no small undertaking by a President Obama. As Ambassador Ryan Crocker said in late 2007, “There is simply no way at all that the State Department’s Bureau of Diplomatic Security could ever have enough full-time personnel to staff the security function in Iraq. There is no alternative except through contracts.”

Making diplomatic security a military operation would pose serious challenges as well. As the New York Times reported late last year, “the military does not have the trained personnel to take over the job.” Even if the military trained a specialized force for executive protection and bodyguarding in Iraq, this arrangement would mean more US military convoys traveling inside Iraq, potentially placing them in deadly conflict with Iraqi civilians on a regular basis.

The private security industry knows well that it has become a central part of US policy in Iraq and Afghanistan. Extricating the firms from this position would require a major and aggressive undertaking with significant Congressional support, which is by no means guaranteed. In fact, Blackwater appears to see a silver lining in the prospect of US forces being withdrawn or reduced in Iraq. Joseph Schmitz, chief operating officer of Blackwater’s parent company, The Prince Group, said, “There is a scenario where we could as a government, the United States, could pull back the military footprint, and there would then be more of a need for private contractors to go in.” The Obama senior adviser called Schmitz’s comment “an unfortunate characterization.”

Illinois Democrat Jan Schakowsky, one of Congress’s sharpest critics of the war contracting system, says of Schmitz’s remark, “That’s why some of us have been really careful about not just talking about a troop withdrawal but a contractor withdrawal as well.” Obama, she says, should make it impossible for Schmitz and others “to think that Barack Obama would be creating new opportunities for Blackwater after our troops are withdrawn.” The clearest way for him to do that would be to endorse legislation banning the use of Blackwater and other mercenary firms in Iraq. In November Schakowsky and Vermont Senator Bernie Sanders introduced the Stop Outsourcing Security (SOS) Act, which mandates that US personnel undertake all diplomatic security in Iraq within six months of enactment. The bill has twenty-three co-sponsors in the House and one–Sanders–in the Senate. Sanders said he’d “love” it if Obama and Clinton signed on. “If either of them came on board, we’d certainly see more Democratic support,” says Sanders. Will Obama do that before November? “The answer is no, in all candor,” says the senior Obama adviser. “Obviously it’s a dynamic situation, and he’ll continue to analyze it.”

Schakowsky is pressing Obama to support the bill and says that if he becomes President she will urge him to “cancel” any remaining Blackwater contract in Iraq: “There’s plenty of justification to say this company is trouble, and there’s no point in continuing our contract with them.”

The senior adviser said, “Senator Obama is concerned that Blackwater remains in Iraq, and he’s concerned that they remain in Iraq and other countries totally unaccountable to US law and totally unaccountable to the law in the country in which they are operating.” Which raises the question: If he’s so concerned, why not throw his support behind a ban on the use of these forces in Iraq?