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KAI RYSSDAL: There are at least as many private contractors in Iraq as there are American soldiers. Many of them at least as heavily armed as individual soldiers are. They're employed as private security guards, some of them, often for U.S. goverment officials. So perhaps what happened today was inevitable. The Iraqi government has revoked the business license of Blackwater USA, a private security firm based in North Carolina. Blackwater employees allegedly killed at least nine Iraqi civilians yesterday, including a police officer in a firefight. Marketplace's Steve Henn reports Blackwater has played an important but often controversial role in the war.
STEVE HENN: Details of exactly what happened yesterday in a Sunni neighborhood in Baghdad are still emerging. U.S. officials say a State Department convoy with a Blackwater escort was attacked. Blackwater did not return calls for comment today.
But what's already clear is that the fallout is going to be a major headache for both Blackwater and the U.S. State Department.
Peter Singer follows private military contractors at the Brookings Institution.
PETER SINGER: We actually just had a $1 billion contract go to a consortium of companies led by Blackwater to do diplomatic security.
This is not the first time private military contractors have killed Iraqi civilians, but it is the first time the Iraqi government has publicly pushed back hard.
SINGER: This is very important. The Prime Minister has described it as a crime. That's actually his quote. And it's a crime he wants the foreign contractors to be prosecuted for.
But the ability of the Iraqi government to prosecute any U.S. contractors in the country is severly limited.
Doug Brooks runs a trade association that represents private military companies. He believes a law on the books dating from the early days of the U.S. occupation still grants foreign military contractors legal immunity in Iraq.
DOUG BROOKS: We don't know enough about the incident to know if a crime had been committed. But if there was, it can certainly be tried under U.S. laws.
But up until now U.S. criminal prosecutions of contractors have been almost unheard of. Singer says a string of violent incidents has created a huge amount of resentment toward Western contractors in Iraq, and now the U.S. State Department is left with few appealing options for security.
In Washington, I'm Steve Henn for Marketplace.