The U.S. siege on Fallujah, you will remember, was a definitive moment in the occupation of Iraq that changed the course of the occupation. It began on the morning of March 31, 2004, at 9:30 a.m.

When the four Americans rolled into Fallujah in their two Pajero Jeeps, the Iraqi mujahideen in the city of mosques were waiting for them. The main drag that cuts through the city is lined with restaurants, cafes and souks, and on ordinary days throngs of people mill around. But early that morning a small group of masked men had detonated an explosive device, clearing the streets and causing shopkeepers to shutter their stores. From the moment the convoy entered the city limits, the men stood out, driving vehicles known as ‘bullet magnets" and sporting wraparound sunglasses and Tom Cruise haircuts.

Shortly after they entered Fallujah, the Jeeps began to slow. To their right were shops and markets, to the left open space. They hit some sort of a roadblock. As the vehicles came to a standstill, a grenade was hurled at the rear Jeep, quickly followed by a rib of machine-gun fire. Bullets tore through the side of the rear Pajero like salt through ice, fatally wounding the two men inside. As the blood gushed from them, masked gunmen moved in on the Jeeps, unloading cartridges of ammo and pounding their way through the windshield. Chants of "Allah ul Akbar"(God is Great) filled the air.

Soon, more than a dozen young men who had been hanging around in front of a local kebab house joined in the frenzy. By the time the rear Jeep was shot up, the Americans in the lead vehicle realized that an ambush was underway. They tried to flee or turn around to help their wounded comrades, but it was too late. The crowd quickly swelled to more than 300 people as the original attackers faded into the side streets of Fallujah. The Jeeps were soon engulfed in flames. The scorched bodies of the men were pulled out, and men and boys literally tore them apart, limb from limb. In front of the TV cameras, a young man held a small sign emblazoned with a skull and crossbones. It declared in English, "Fallujah is the graveyard of the Americans." The mob hung the charred, lifeless remains of the men from a bridge over the Euphrates River, where they would remain for hours, forming an eerily iconic image that was seen on television screens throughout the world.

Thousands of miles away in Washington, D.C., President Bush was on the campaign trail speaking at a fundraiser dinner. "This collection of killers is trying to shake our will," the president told his supporters. "America will never be intimidated by thugs and assassins. We are aggressively striking the terrorists in Iraq. We will defeat them there so we do not have to face them in our own country."

The next morning Americans woke up to the news of the gruesome killings. "Iraqi mob mutilates four American civilians" was a typical newspaper headline. Somalia was frequently invoked, referring to the incident in 1993 when rebels in Mogadishu shot down two Black Hawk helicopters, killed 18 U.S. soldiers, and dragged some of them through the streets, prompting the Clinton administration to withdraw forces. But unlike Somalia, the men killed in Fallujah were not members of the U.S. military, at least not on active duty, nor were they "civilians" as many news outlets reported. They were highly trained, private soldiers sent to Iraq by a secretive mercenary company based in the wilderness of North Carolina. Its name is Blackwater USA."

The U.S. has been employing "independent contractors" or "advisors" to engage in and/or organize covert operations all over the world since the 50s. But when the media began using the term "war contractors," people think "Halliburton," which came known to the public primarily because of its ties to its former CEO vice-President Dick Cheney. Cheney, it is widely known, still profits from Halliburton success and helped it to "win" no-bid contracts worth $billions.

But this was a different sort of war-contracting system. Now it is the large-scale outsourcing of combat functions in war zones. It is commonly reported that there are about 145,000-plus U.S. soldiers in Iraq. Seldom mentioned, however, is the fact that 126,000 corporate employees are in occupied Iraq working for private companies, under contract to the U.S. government, on behalf of the occupation in Iraq.

Among the most powerful of those operating in Iraq is Blackwater USA.

A decade ago this company barely existed. Today its contracts with the State Department, since June of 2004, total over three-quarters of a billion dollars. That doesn’t count the work that Blackwater does for the U.S. military, for the CIA and other intelligence agencies, for other private companies, for state, federal, local law enforcement and corrections departments in the U.S., and abroad.

Blackwater was founded by now 37-year old Erik Prince. Prince came from a powerhouse conservative Republican family in the state of Michigan and grew up in the Dutch Reform Church. He’s believed to be, if not the wealthiest, one of the wealthiest people ever to serve in the elite U.S. Navy SEALs.

His father was a major leader in the community of Holland, Michigan, and in that city the Princes were the kings. His dad had a very successful business called Prince Manufacturing Corp. Prince grew up, not just watching his father build up this successful manufacturing empire that serviced the auto industry in the 1970s, 1980s and 1990s, but he saw his father use the company as a cash-generating engine to fuel and fund the rise not only of the Republican revolution of 1994 but of several of the key groups that would make up the core of what we now know as the radical religious right movement in this country.

Prince was an early intern for former presidential candidate Gary Bauer of the Family Research Council. In fact, he was in the first group of interns that Bauer took on in Washington. Bauer is one of the original signers of the Project for a New American Century, the neoconservative agenda that was adopted by the Bush administration.

Prince was also an early intern in the White House of George H. W. Bush, but he complained that it wasn’t conservative enough for him on gay issues, the budget, or the environment.

He interned in the office of California Republican Congressman Dana Rohrabacher. Rohrabacher had been an adviser to President Reagan, one of his main speechwriters. Rohrabacher was elected to Congress when the Soviets were being defeated in Afghanistan—with significant U.S. support. Rohrabacher actually fought alongside the mujahideen against the Soviets for the few months between election and taking office—something he’s bragged about publicly.

Prince enlisted in the Navy SEALs, went through the training program and had deployments in the 1990s in Bosnia, Haiti and the Mediterranean.

In 1995, tragedy struck his family. His father died suddenly of a heart attack in the elevator of the company headquarters. Prince went back to Michigan to help reorganize the family business now that the patriarch had passed away. The surviving family decided to sell Prince Manufacturing for $1.3 billion in cash.

Prince then left active duty with the Navy SEALs and headed for the Great Dismal Swamp of North Carolina, where he got together with a few other SEALs and like-minded members of the special forces community to began building up what would become Blackwater USA.

The company was incorporated in late 1996 as the Blackwater Lodge and Training Center and was sited on 5,000 acres spanning two counties in North Carolina on the Great Dismal Swamp. Though the original, publicly-stated plan was to build a sportsman’s paradise with outdoor shooting ranges, early company literature also indicated that the company intended to take advantage of accelerated government outsourcing of security and firearms-related training.

Blackwater was open for business by 1998 and quickly began profiting from domestic tragedies.

In April, 1999, Blackwater responded to the Columbine tragedy by erecting a mock high school, called it "RU Ready High," and invited law enforcement agents from around the country to come to Moyock, North Carolina, and train in how to confront the violent youth of America.

The following year, 2000, the USS Cole was bombed off the coast of Yemen, and a number of sailors were killed. It was portrayed as one of the worst so-called peacetime attacks against a U.S. vessel in history. The navy responded to that attack by awarding Blackwater a $35 million contract to train sailors in how to defend their ships and vessels against such attacks.

But the real money for Blackwater started rolling in after 9/11. Up until this point, there is no evidence to suggest that Blackwater had ever engaged in any kind of overt mercenary activities or provided soldiers of fortune to the U.S. government or any other entity.

Prince seldom gives interviews, but he was a guest on The O’Reilly Factor. Prince was talking about the federal air marshal program when there was a national debate after 9/11 about how armed air marshals should be, how many flights they should be on and whether pilots should be armed.

During the interview, Prince said that before 9/11 he was starting to get a little cynical about how seriously people took the business of training and security. He noted that, after 9/11, the phone had been ringing off the hook. Among the post-9/11 calls Blackwater received was one from the Central Intelligence Agency, which gave Blackwater a covert contract to deploy personnel inside of Afghanistan in the early stages of U.S. operations there. Prince himself actually went over for a few weeks with that initial Blackwater deployment.

That is the first known contract where we saw Blackwater shift from lodge and training to Blackwater, the mercenary company. But the serious profits that would hit Blackwater came when U.S. tanks rolled into Baghdad in March, 2003.

During the 1991 Gulf War, the ratio of soldiers to so-called contractors was about 60 to 1. The Bush administration was intent on slimming that down to almost 1 to 1, which is the state of affairs right now.

When Paul Bremer was sent into Iraq in the summer of 2003, people referred to him as the viceroy, the proconsul. It seems that Bremer’s role in Iraq was to destroy the Iraqi economy and destroy all hope for a peaceful future for that country. He was portrayed as a guy who had been influential in the creation of the Department of Homeland Security and a terror expert. It takes one to know one. He had worked for Henry Kissinger at Kissinger Associates. And he also was a sort of golden child of the neoconservative/neoliberal community.

When Bremer hit the ground in Iraq, it was Blackwater and a $27 million contract—not the U.S. military—that was tasked with keeping him alive by providing elite bodyguarding services for him.

One of the first things that Bremer did wasn’t simply his idea—the indication is that it came from Douglas Feith, one of the leading neocons in the Pentagon—was to implement a policy known as "de-Ba’athification."

Under de-Ba’athification, hundreds of thousands of Iraqi workers were summarily fired because of some loose or real affiliation with the Ba’ath Party. This meant that there were teachers and nurses and engineers and all sorts of civilians that were immediately fired and made unemployed. Among the hundreds of thousands of Iraqis that were fired from their jobs were a quarter of a million Iraqi soldiers.

Iraqi commanders came to the gates of the Green Zone and tried to protest, tried to inform the Americans, "You’re committing political suicide by putting us out of work. You can’t stop paying us."

And like Bush has done so often, he refused to listen to anyone on the ground, so about a quarter of a million of them ended up in the Iraqi resistance fighting against the United States. "The day that Bremer fired a quarter of a million Iraqi soldiers was the day that we made 250,000 armed enemies inside of Iraq," a U.S. official was quoted as stating.

If you want to look at how we got to a situation where 3,400-plus troops have been killed, we need to go back and look at the original policies on the ground, where they send these guys literally into the resistance with their weapons.

Bremer implemented a full schedule of harsh economic policies that devastated the already crushed Iraqi economy. As he traveled the country in combat helicopters and armored vehicles, he had Blackwater bodyguards protecting him.

Return now to Fallujah, a year into the Bremer detail. In the spring of 2004, the big U.S. propaganda campaign was to hand over sovereignty to the Iraqis by June of 2004 so that Bremer could declare victory and leave the country. But in order to declare that sovereignty in Iraq, the U.S. had to crush the makings of a potential unified resistance of the Shi’ites and the Sunnis, a loose alliance that was being forged between Muqtada al-Sadr’s Madhi army forces and some of the Sunni groups at al-Anbar province. The Bush administration was intent on preventing that, but they needed a spark to do it. The Fallujah ambush of the Blackwater men provided the Bush administration with the political excuse to wage a merciless campaign against those communities.

Weeks before the Blackwater men were killed, the U.S. forces had withdrawn to the outskirts of Fallujah. U.S. commanders had determined that to take the city by force would have been to subject U.S. soldiers to unnecessary risks and high levels of casualties, and that it would also have a ricochet effect around Iraq if they laid siege to an Iraqi city. The point of view of the commanders on the ground was to take a hearts-and-minds approach to Fallujah.

Once the Blackwater ambush happened, Bush put a siege of the city on the fast track. They deployed teams of psychological operations operatives on the ground who began competing with each other from one unit to the next to see who could come up with the filthiest insults to have translated from English into Arabic and then shouted through loudspeakers as the forces began to surround the city. When they would yell out these insults and the Iraqis would come out and fire their Kalashnikovs into the air, the U.S. forces would gun them down. And the U.S. forces began referring to it as "Lollafallujah." And over the eerie soundtrack of this macabre display was the music of AC/DC or Guns and Roses.

Fallujah was a city of 350,000 people. I’ve been there several times in my years of going in and out of Iraq. When the U.S. forces surrounded the city, one of the first things they did was to bomb the main power plant, sending the city into darkness. In all, the U.S. would carry out about 37,000 air strikes against this small city. Nineteen thousand of Fallujah’s 40,000 buildings were either damaged or destroyed. Hundreds of Iraqis were killed, thousands were forcibly displaced from their homes. My good friend Dahr Jamail, an independent reporter well known to many of you, and one of the most courageous reporters in the world today, managed to make it into Fallujah during the siege, and within 24 hours of arriving he reported that U.S. snipers were firing at ambulances trying to retrieve the wounded or the dead. He said that a stench of death had overtaken the city that was so bad that residents of Fallujah had converted two large football fields into mass graves to bury people.

There were also other unembedded journalists inside the city, most notably those from Al Jazeera. What was particularly devastating to the U.S. plan in Fallujah was that Al Jazeera had a live camera feed. Their reports, and their uncut video, were giving lie to the pronouncements of U.S. spokespeople that the administration was not targeting civilians inside of Fallujah. They would say, "We’re not carrying out air strikes," and then Al Jazeera would show live footage of F16s dropping bombs. At one point a U.S. helicopter, a Cobra attack helicopter, fired a Hellfire missile at the base of a minaret of a mosque. That was followed up by F16s swooping in and dropping a 500-pound bomb on the mosque compound. The U.S. said that it wasn’t a violation of international law because insurgents and Saddam loyalists had taken over the mosque and therefore it had become a legitimate target. Because of Al Jazeera, we have an accurate sense of what happened inside of Fallujah.

Back in Washington, while all of this was unfolding, Blackwater’s executives kicked into high gear. The ambush of the Blackwater men happened on March 31, 2004. On April 1, 2004, the very next day, Blackwater hired a high-powered Republican lobbying firm called the Alexander Strategy Group. It was a Jack Abramoff-connected firm, founded and staffed by former senior aides to then House Majority Leader Tom DeLay. It was one of the jewels of the K Street Project. Operatives began steering Blackwater executives around Capitol Hill. Within a matter of days, Prince and other company executives had face-to-face meetings with the men who ran the Congress both in the House and in the Senate. They met with the men who were in control of the war-contracting system. By June of 2004, Blackwater was awarded a $320 million contract with the U.S. State Department to provide so-called diplomatic security services. I call that, "making a killing off of the killings."

While Blackwater was busy working the hill, while Blackwater was starting to rake in the hundreds of millions of dollars of government contracts, the family of those four men who were killed in Fallujah began going through a process that’s become very common in our society. They started to ask why and how did their loved ones die in Iraq.

Katy Helvenston, whose son Scott Helvenston was one of the guys who was strung up from the bridge, told me the story—I’ve gotten to know these families very well over the past couple of years—of how she learned of her son’s death and didn’t even know it was him. She was at her home office in Leesburg, Florida, working at her computer, and had CNN on in the background. She heard a report that civilian contractors had been ambushed and killed in Fallujah. She turned around and she watched these bodies hanging from a bridge, then turned it off and she said to herself, "This is getting so bad, they’re even killing civilians." She was horrified to see the scene, but it didn’t even occur to her, even remotely, that that could have been her son, because he was not a civilian, nor a contractor. Contractors are people that do construction work. Her son was guarding Paul Bremer. Paul Bremer didn’t go into Fallujah.

It became clear it was Blackwater. She got out a map, and realized Fallujah is not that far from Baghdad. But her son had only been in Iraq less than a week. He wouldn’t have been in the most dangerous city in the country. Then the call came from Blackwater and they said, "We haven’t heard from Scott. We did a reverse 911, and his name is among those that haven’t called in."

Helvenston began back-and-forthing with Blackwater, and eventually they confirmed that, in fact, her son was one of the Blackwater contractors who had been killed. At this point Helvenston had no reason to presume malice on the part of Blackwater. Neither did Donna Zovko, whose son Jerry was over there. Nor did Rhonda Teague, whose husband, Mike Teague, was over there. They all viewed Blackwater as a patriotic American company that was founded by Navy SEALs, that was a special forces community, just like their loved ones.

They began calling the company and asking for details, and they started to read news reports. What’s this about them being in Jeeps instead of armored vehicles? And what’s this about only four guys? I thought protective security details were traveling in teams of six. And why didn’t they have heavy weapons?

They said that Blackwater wasn’t being transparent with them; it seemed to be hiding something. So they ratcheted up their pressure. "We demand answers. We want to see the paperwork. We know that you’ve investigated it."

They say Blackwater systematically was refusing to answer their questions.

Finally, under siege from these families, Blackwater took some time away from all the lobbying for contracts and said, "We’re going to hold a memorial service for your loved ones in October of 2004. We’ll invite you out. You can see our big, private military base [which at that point had grown to almost 7,000 acres] "and our man-made lake for amphibious assault training, and our mock urban setting for counterinsurgency warfare training."

The families flew out to Moyock, North Carolina. The company said, "We’re not only going to have a memorial service, but we’re going to give you an opportunity to ask questions of Blackwater representatives, which is what all of you have been asking us for."

Donna Zovko sat down with Blackwater representatives. The way she tells it, she pressed them, "I want to see your after-action report. I want to see the incident report, the investigation that you did. I want to know what happened to my son that day."

She kept pressing it, and it got contentious. As she started to demand to see the paperwork, she claims that a Blackwater representative stood up from the table and said, "It’s a classified document and you will have to sue us to get it."

Her son, Jerry Zovko, was strung up from that bridge, and the Blackwater representatives told her, "You will have to sue us to get the report detailing how your son was killed."

The families left that compound that day in Moyock, North Carolina, devastated.

Donna Zovko and Katie Helvenston got to be friends, and started flying back and forth from Leesburg, Florida to Cleveland, Ohio. They became voracious readers of anything about the ambush of their sons. They started to hear from other contractors who had served with them in the Blackwater detail over in Iraq, and they realized that something was fishy about the whole story that was being floated. So they decided to take Blackwater up on the challenge. In January of 2005, they filed a ground-breaking wrongful-death lawsuit against Blackwater USA, charging that the company had defrauded their loved ones and, as a result, was responsible for their deaths.

I got my hands on the contract that those four men signed when they signed up for employment in Blackwater. There is almost a page, a lengthy paragraph, that describes every manner of death that could hit a human being—debris falling from the sky, decapitation by fixed-wing or rotary aircraft—every possible way, however remote, that someone could be killed. And it says, in clear English, that if they get killed or injured in the war zone, that Blackwater could not be held liable.

One could look at it and say, "That’s the end of the story." But then we got our hands on another contract, the one that governed their mission that day. Those guys weren’t even guarding the U.S. military that day. They weren’t guarding a diplomat; they weren’t guarding Bremer. They were working for another private company guarding catering convoys. When they rolled into Fallujah, the Pajero Jeep driven by one Blackwater guy was followed by three empty flatbed trucks being driven by Iraqis, followed up by another Blackwater Jeep. Their mission was to go to one end of Fallujah, pick up some kitchen equipment, and bring it back to the other end of Fallujah.

According to the contract for that mission, Fallujah was named as one of the dangerous cities in Iraq. It said that security details should have three men per vehicle—a driver, a navigator, and a rear gunner. They were sent out with two men to a vehicle—the driver, the navigator, and no rear gunner. It said that they should have been in armored vehicles. They were in Pajero Jeeps with bumpers that the men had reinforced. They were not in armored vehicles. It said that they should have been equipped with a heavy calibre machine gun. They claim that they didn’t have that either. The families also say that they weren’t allowed to do a pre-trip risk assessment and that Scott Helvenston hadn’t even been in Iraq for a week and he was supposed to get a chance to familiarize himself with the hostile territory he was going to be operating in. None of those things that were contractually obligated were provided to their loved ones, and therefore the contract that the men had signed with Blackwater saying "We won’t sue you" was null and void because Blackwater had defrauded them by not providing them with these safeguards.

Blackwater fought back ferociously against this lawsuit. But it’s interesting: Blackwater didn’t take it up on the merits of the allegations. The company hasn’t made much of a case denying anything that the families have said except to deny in general that they’re true. Instead, Blackwater’s taken a very novel tack. They’ve argued—and they’ve had Fred Fielding, Ken Starr, Greenberg Traurig and seven or eight law firms working with them—that because Donald Rumsfeld and the Pentagon recognized Blackwater and other contractors as an official part of the U.S. total force, the U.S. war machine, that Blackwater should be entitled to the same immunity from civilian litigation that’s enjoyed by the U.S. military.

In other words, Blackwater was claiming, "we can’t be sued in a civilian court."

At the same time, in 2004, Blackwater’s high-paid Alexander Strategy lobbyists were talking in the press and elsewhere about how it would be inappropriate to apply the uniform code of military justice—the court-martial system—to Blackwater because they’re civilians. So when it’s convenient, they’re military, when it’s convenient they’re civilians. That’s the tack that they’ve taken.

Blackwater fought to have the case removed to federal court, because it was originally filed in North Carolina state court where there would be no cap on damages that a jury could award to the estates of these four men. They thought that they would have a better hearing. Then they fought to have it thrown out at the Supreme Court level. Twice they filed appeals with the U.S. Supreme Court. Even though it’s dominated by Republican appointees, Chief Justice John Roberts presiding—and it was Ken Starr who was bringing it—twice the Supreme Court rejected Blackwater’s appeals. Now the way is paved for this case to proceed in state court in North Carolina.

The war industry is watching this hawkishly. The stakes are incredibly high. In fact, some people compare it to the tobacco litigation of the 1990s. Once that first domino goes down, it can set off a chain reaction. You would think that other companies would avoid anything to do with this like the plague, but KBR, the mother of all contractors in Iraq, actually filed an amicus brief supporting Blackwater in the case. The stage is set for this trial to go forward. It’s David v. Goliath; the war industry against these four families. In an act of extraordinary cynicism, after they failed to get it to federal court, after they failed to have it thrown out and, after it was rejected by the Supreme Court, Blackwater filed a counterclaim against the estates of the four men, seeking $10 million.

This is just one story in a sea of stories about Blackwater, Triple Canopy and DynCorp. We have a shadow army that’s operating in Iraq, 130,000 strong, and no one is effectively paying attention to what they’re doing on the ground. Several ranking Congress members have told me that for years they’ve tried to get detailed operations about Blackwater and other companies and have been stonewalled at every turn, sometimes by the government bureaucracy, sometimes by the companies themselves. These 130,000 private personnel are acting in the names of U.S. taxpayers, in the name of U.S. foreign policy.

The military has a court-martial system. There have been 64 murder-related court-martial charges brought against soldiers in Iraq, 64. I think that’s a shockingly low number given the fact that upwards of three-quarters of a million Iraqi civilian noncombatants have died since the beginning of the U.S. invasion.

There is some system, theoretically, in place to prosecute crimes of soldiers. There have been tens of thousands, perhaps hundreds of thousands, of individual private contractors that have gone in and out of Iraq since March of 2003. Only two have been prosecuted for any kind of crimes. None of those prosecutions have involved crimes against Iraqis and none of them have been against armed mercenaries like those that work for Blackwater, DynCorp and Triple Canopy. Of the two prosecutions, one of them was a KBR employee who was alleged to have stabbed a co-worker in a kitchen. The other was a contractor who pled guilty to possession of child-porn images on his computer at Abu Ghraib prison. Those are the two prosecutions of this private army that Bush has deployed in Iraq.

Another reason why the Bush administration uses these contractors, in addition to the plausible deniability of this shadow force, is that we don’t know how many private contractors have been killed. Many of them, tens of thousands, are doing jobs that historically are the role of other soldiers, where there would have been some system of accountability and counting of the dead and the injured. What we do know is that, as of December of last year, at least 770 contractors have been killed. And the reason we know that is because their families have applied for federal death benefits through the U.S. Department of Labor.

We also know that more than 7,700 have been than wounded, because they’ve applied for injury benefits through the U.S. Department of Labor. So at a minimum we’re talking about 770 dead and 7,700 wounded that don’t get counted in any official toll. It masks the human cost of the occupation on that end, not to mention the crimes that must be committed regularly by these forces against Iraqis.

We’ve seen voluminous reports of the out-of-control conduct of these contractors. And there are no prosecutions of them happening. In fact, an off-duty Blackwater contractor on this past Christmas Eve allegedly shot and killed an Iraqi bodyguard for a senior Iraqi official. Blackwater whisked him out of the country. When Congressman Dennis Kucinich was questioning Blackwater’s lawyer at a hearing in the oversight committee on February 7, the lawyer for Blackwater confirmed that the incident had taken place. Kucinich said, "I want the record to reflect that Blackwater executives may have been complicit in the flight of a murder suspect from Iraq."

Unfortunately, when the U.S. was talking about this handover of sovereignty to Iraq, the last thing Paul Bremer did before he left Baghdad in June of 2004 was issue an edict known as "Order 17" which granted sweeping immunity to all contractors from prosecution in Iraqi courts. That’s some sovereignty granted to the Iraqis. Under Bremer’s decree, a contractor could walk up to someone in the street, murder him and nothing could happen to them in an Iraqi court.

Late last year, Senator Lindsay Graham, conservative Republican from South Carolina and a former JAG lawyer for the Air Force, manipulated some language in the defense authorization bill that President Bush signed into law. He said, "The contractor shall fall under the jurisdiction of the Uniform Code of Military Justice (UCMJ)." The industry went bonkers at this. They started pulling out their "we’re-civilians" argument again. It’s actually one area where civil-liberties activists and the mercenaries may find some common ground, because the civil-liberties activists would view it as a creep toward putting civilians under military law.

Another approach, one which is being favored by the Democrats, is to expand something called the Military Extraterritorial Jurisdiction Act, which was passed in 2000. What that basically says is that contractors should be prosecuted in U.S. civilian courts. The Democrats want to actually send more personnel over to Iraq, to open up an FBI field investigative unit. The idea is that, while U.S. personnel are running around monitoring the activities of these 130,000 private contractors, they will be gathering evidence, investigating crimes, interviewing Iraqi witnesses, building enough evidence to then bring indictments. Then someone is going to go and arrest former Navy SEALs, supposedly, take them into custody, fly them back to the United States, and then prosecute them in a U.S. court. And all of it will be decided by our highly biased U.S. Justice Department. That’s the Democrats best laid plan right now.

Let’s talk about the breakdown of who these forces are. About 50,000 of those work for KBR. They don’t carry weapons. They do laundry for the troops, they do food services, and they drive trucks. They do the work that traditionally was done by U.S. soldiers.

Then you have tens of thousands of them that are working as armed mercenaries, like those who work for Blackwater. According to the U.S. Government Accountability Office, 48,000 people currently work for private military companies in Iraq (mercenary companies). Of those, 20- to 25,000 are believed by senior Congressional representatives from the intelligence and oversight committee to be actually working as armed mercenaries with no effective system of oversight, no effective system of accountability, no effective laws being applied against them.

What’s interesting is that Blackwater in particular portrays itself as this all-American operation. But it hardly just deals in former Navy SEALs and Army Rangers and Delta Force. No. Blackwater has gone all over the world to recruit mercenaries.

The Bush administration failed to build a coalition of "willing" nations to invade and occupy Iraq, so instead they built a coalition of "billing" corporations.

These companies are being used to chisel away at democratic processes in this country. They love to say, "We keep a draft off the table." This is one of the mantras of the mercenary industry. To an extent it’s probably true. But what they’re doing is taking away what is a necessary, natural resistance to offensive, hegemonic, aggressive wars, and privatizing the force so that we don’t have to worry about "breaking the military" or the draft.

Some of the best-paid U.S. mercenaries in Iraq can clear $30,000 in one month, much of it tax-free, which a lot of U.S. soldiers get paid in one year, and they’re in the exact same war zone. What message does it send to those soldiers who are being forced to go over there right now? It sends them a message that the mercenaries are more important to the administration, they’re paid much better, they have better equipment; or it sends a message that you should just leave the military and go on over to the mercenary sector. So much of this jumping ship has happened that there is slang in Iraq now for going to the private sector from the military. They call it "going Blackwater."

A number of senior military officials have spoken up about the conduct of these forces in the field and how it’s affected or impacted the morale of the active-duty forces. The Government Accountability Office itself, in a report last year, said, "Private security contractors continue to enter the battle space without coordinating with the U.S. military, putting both the military and security providers at greater risk."

One of the top commanders who was responsible for security in Baghdad, Brigadier General Karl Horst, a deputy commander of the Third Infantry Division, said, "These guys run loose in this country and do stupid stuff. There is no authority over them, so you can’t come down on them hard when they escalate force. They shoot people and someone else has to deal with the aftermath. It happens all over the place."

General Barry McCaffrey, retired, went to Iraq. He said, "We’re overly dependent on civilian contractors. In extreme danger they won’t fight."

I’m not so much concerned with the military uses of these forces as I am with the political uses of these forces on the part of the administration. What Blackwater is doing in Iraq right now is guarding the U.S. ambassador, guarding the senior occupation officials, and guarding several regional occupation headquarters. They say, "We’re a defensive security company, we’re not a mercenary army."

But the fact is that they’re on the vanguard of an offensive war of aggression. They’re protecting the people that are making that occupation possible, and they’re making a tremendous amount of money for doing so.

Blackwater was a company that didn’t exist a decade ago. Today it’s risen to become one of the most powerful private actors in the so-called global war on terror. It currently has operatives in nine countries around the world. The vice president of the company says that they have 21,000 private forces on standby that could be deployed at a moment’s notice.

Everywhere we see the Bush administration’s wars and coming wars popping up, we see Blackwater popping up with them. And it’s not just elsewhere in the world. It’s also here inside of the U.S.

Katrina. I was in New Orleans right after Hurricane Katrina hit. At the time that I was there, a few days after the hurricane hit, there was no serious relief operation. The most serious relief operation I saw was actually organized by Vets for Peace, who came down there in great numbers. They began simply doing what needed to be done: They were visiting the elderly, bringing them medicine, trying to make sure that people had potable water, trying to make sure that people had food, trying to help in rescue operations.

It was Vets for Peace, a bunch of other people who just came into the region to try to help, and then local Cajuns, who were literally riding their boats through the streets of New Orleans trying to rescue people. That’s the relief operation I saw in the early stages.

There was no National Guard to speak of responding in those days. I saw one FEMA vehicle the entire time I was in New Orleans, and it appeared to have been abandoned in the middle of a street. I didn’t see any Red Cross presence inside of the city of New Orleans. They were way at the outskirts of it.

I was standing in the French quarter on Bourbon Street talking to two New York City police officers. They had come down from New York with the New York firefighters to help. We had just started chatting when this compact sped up next to us, and it had no license plates on it. Three massive guys got out of it. They were wielding M4 assault rifles, pistols strapped to their legs, flak jackets, dressed in all khaki. They come up to the cops and said, "Where are the rest of the Blackwater guys?"

As though they had just said "What time is it?" the cops said, "Oh, they’re just up the street."

They told them the name of some hotel. The guys got back into their vehicles and they sped away. I said to the cops, "Blackwater? You mean like the guys over in Iraq?"

They said, "Oh, yes. They’re all over the place down here."

I said, "Well, I’d be interested in talking to them. Which way can I go to find them?"

They said, "You can go either way on this street."

I walked deeper into the French Quarter down Bourbon Street, and sure enough, I found a handful of Blackwater guys sort of congregating on a corner. I went up and started talking to them. I was with a female colleague, and they were very interested in her chest. While they were staring at her chest, I was asking questions of them. I said, "So what are you guys doing down here?"

They said, "We’re going to help."

I said, "Who sent you down here?"

They said, "Our boss."

I thought to myself, unless your boss is the president of the United States, the governor of the state of Louisiana, or the chief of police of New Orleans, something is really fishy here.

I started pressing them as to who they were working for, and they hemmed and hawed. One of them had a name tag that said "Operation Iraqi Freedom," and he was talking about his explosion-proof BMW that he had over in Iraq and how this is a vacation for him and he wants to get back to where the real action is and there is not enough real action here in New Orleans, whatever that meant.

I found that disturbing. As we talked, I pressed them, saying, "But who authorized you to have M4s and be riding around in unmarked vehicles?"

One guy finally pulled under his flak jacket and whipped out a gold badge, and said, "I was deputized by the governor of the state of Louisiana."

He told me in the course of the conversation, "We’re authorized to use lethal force if we deem it necessary."

I said, "Were you hired by the state of Louisiana?"

He was kind of looking at his friends. Then I heard a guy on his cell phone in the background, saying, "You don’t want to work for Blackwater down here. They’re only paying $350 a day."

$350 a day for these guys to be down there? Then another guy said something about a Department of Homeland Security camp that they were staying at outside of New Orleans. I said, "Are you working for the Department of Homeland Security?" At that point the guy said, "Way above my pay grade." I kept asking and wasn’t getting anywhere finding out what they were doing. I asked what their ultimate mission was, and they said, "We’re here to confront criminals and stop looters."

But they wouldn’t tell me who they’re working for.

Some reporters and I started pressing the federal government. Did you hire private security? The federal government said, "No. We have all the security that we need."

The reason there was no National Guard in New Orleans is because they were in Iraq and Afghanistan.

It turns out I was able to get Blackwater’s contract with the Bush administration. When the Bush administration sent the National Guard over to Iraq and Afghanistan, they turned around and hired a politically-connected private mercenary army to deploy on the streets of a U.S. city. I got Blackwater’s contract with the Department of Homeland Security Federal Protective Service. Blackwater billed taxpayers $950 per man per day, and they didn’t have just a couple dozen guys. At one point they had 600, stretching from Texas through Mississippi and the Gulf. They were pulling in $240,000 a day.

Blackwater gave back to the hurricane Katrina effort. It held a fundraiser in November, 2005. Paul Bremer was the keynote speaker. The event raised $138,000 which was given to the Red Cross. I don’t even know if the Red Cross has arrived in New Orleans yet.

Blackwater was not only working for the Bush administration in New Orleans engaged in these security operations of confronting criminals and stopping looters, but they also worked for private business owners. In fact, in many ways, it was sort of the Baghdad on the Bayou. All these war contractors descended on the place. The same guys who were connected in Iraq were now connected instantly in New Orleans and Mississippi and Texas.

Blackwater, out of its operations in Katrina, started a whole new division of the company for domestic operations, and they began aggressively pursuing more markets inside of the United States.

This story has been systematically underreported by the media in this country. There is a smattering of business reporters who have done a decent job of going after it and a handful of other reporters, most notably those who work for the local papers in Blackwater’s backyard, including Bill Sizemore and Joanne Kimberlin of the Virginian-Pilot who did a six-part series last summer on Blackwater that was really interesting and Jay Price and Joseph Neff of the Raleigh News & Observer. You have some people who have been on this story.

But we, I think, have reached the lowest point in the history of media in this country. We have an controlled media system. I often wonder how it would look any different if we did have state media in this country. I also feel like the reporting that we see would make the barons of the Soviet media empire blush with embarrassment as to how shamelessly pro-statist it is.

We live in an infotainment culture where it’s much more important who Anna Nicole Smith’s baby’s father is than it is how many people are being killed in Iraq.