Correction to This Article
A version of this article that appeared in the newspaper today incorrectly spelled the name of Pentagon spokesman Geoff Morrell.
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Warnings Unheeded On Guards In Iraq

"The department didn't see him as an advocate" for the security industry, Whitman said, referring to Peter. "They saw him as a conduit for information to understand the role of private security contractors in the reconstruction process."

But others saw a conflict of interest. "It violates all the best lessons of what goes into good policy and smart business," said Peter W. Singer, a Brookings Institution senior fellow who has written a book on private security. "You do not hand over these questions to parties that are not merely mildly interested but they're the ones you are seeking to regulate."

The association sometimes resisted regulation. Earlier this year, Peter opposed the military's efforts to enforce orders requiring private security firms to obtain formal weapons permits from the Iraqi government, arguing that the authorization process was unworkable. Peter did not return messages seeking comment. His deputy, H.C. Lawrence Smith, said during an interview in Baghdad this year that the association sometimes helped the military in "writing the language in contracts relating to the role that private security companies play. We don't care what the contract is about, as long as the companies are treated fairly."

Maj. Gen. Darryl A. Scott, who oversees Pentagon contracting in Iraq and Afghanistan, said the association had never "provided any input on contract language." He said he viewed it as a trade group that made unsolicited comments on policy on behalf of its membership. To employ Peter as a consultant, Scott said, "wouldn't be proper."

Fury and Frustration

On June 27, 2004, one day before he left Baghdad, L. Paul Bremer, administrator of the now-defunct U.S. occupation government, signed CPA Order 17, a decree granting contractors immunity from Iraqi law.

Two years later, Matthew Degn, a then-36-year-old civilian contractor from Seattle, arrived in Baghdad as a senior policy adviser to the Interior Ministry. One of his assignments was to help the Iraqis regulate private security. He started by reading CPA Order 17.

Degn, a no-nonsense Army veteran who had taught national security and terrorism studies at Embry-Riddle Aeronautical University, offered a blunt assessment of the document. "You have no power," he told Iraqi officials.

Hostility toward Blackwater was already high in the Interior Ministry, which was dominated by Shiite militias. The February 2006 shooting incident in Kirkuk had damaged U.S.-Iraqi relations in the area, leaving the Americans "hated and ostracized," according to Ali, the provincial council president.

Ali said he "sent official letters to the American and the British consulates and met them in my office to find out who the murderers were. They didn't do anything or give me clear answers. They only said, 'The ones who did it were from the Blackwater company.' "

A Blackwater spokeswoman did not respond to e-mails or phone messages seeking comment. U.S. officials said they could not recall the incident.

Blackwater, based in Moyock, N.C., was founded in 1996 by a former Navy SEAL, Erik Prince. In Iraq, the company protects the U.S. ambassador and other diplomats. Blackwater has lost 25 employees in Iraq, according to Labor Department figures based on insurance claims. The firm says no one under its protection has been killed.

The State Department's reliance on Blackwater expanded dramatically in 2006, when together with the U.S. firms DynCorp and Triple Canopy it won a new, multiyear contract worth $3.6 billion. Blackwater's share was $1.2 billion, up from $488 million, and the company more than doubled its staff, from 482 to 1,082. From January 2006 to April 2007, the State Department paid Blackwater at least $601 million in 38 transactions, according to government data.

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