AMY GOODMAN: The controversy continues over the role of private security companies operating in Iraq. On Monday, the Iraqi government said it will await the outcome of an investigation into last Sunday’s killing of at least 11 people by Blackwater USA before taking any action against the company.

The statement comes one day after Iraqi Prime Minister Nouri al-Maliki said the shooting deaths pose “a serious challenge to the sovereignty of Iraq and cannot be accepted.” Al-Maliki is expected to raise the issue with President Bush today during a meeting in New York.

Following the September 16th shooting in Baghdad, the Iraqi Interior Ministry banned Blackwater from operating in Iraq, but backtracked after the U.S. agreed to a joint investigation. The company resumed guarding a reduced number of U.S. convoys on Friday. An Iraqi government spokesperson told reporters in Baghdad Sunday that immediately expelling Blackwater from Iraq would create a “security vacuum.”

Meanwhile, an Interior Ministry spokesperson Saturday said Iraqi authorities had completed their own investigation into the shooting and concluded Blackwater guards were responsible for the deaths. The spokesperson told the Associated Press, the conclusion was based on witness statements, as well as videotape shot by cameras at the nearby headquarters of the National Police Command. The Interior Ministry has referred the case to a magistrate to determine whether criminal charges should be filed. However, it’s unclear if the Iraqi government could prosecute Blackwater. A directive issued by the U.S. occupation authorities in 2004 granted contractors, U.S. troops and many other foreign officials immunity from prosecution under Iraqi law.

Meanwhile, the Interior Ministry says it was also investigating if Blackwater had been involved in six other violent incidents in Iraq that left at least 10 people dead.

Jeremy Scahill joins us now, New York Times bestselling author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army. He testified on Friday at the Senate Democratic Policy Committee on abuses in private security and reconstruction contracting in Iraq, joining us now in our firehouse studio. Welcome.

JEREMY SCAHILL: Thank you, Amy.

AMY GOODMAN: So, this latest news, Jeremy, of the Iraqi government saying they might bring criminal charges, but Blackwater is back on the streets of Baghdad.

JEREMY SCAHILL: Right. I mean, I think that the fact that Blackwater mercenaries are heavily armed and on the streets of Iraq is perhaps the greatest indicator of how the Bush administration defines Iraqi sovereignty. And it was initially left up to Iraqi spokespeople to explain that Blackwater would be back on the street. And the reason that they gave — and it clearly had come from Condoleezza Rice — is that it would create a security vacuum. I have never heard a more ridiculous statement. It’s Blackwater that’s created the security vacuum for Iraqi civilians, as many as 28 of whom were gunned down last Sunday in Al-Nisoor Square in the Mansour section of Baghdad.

And what we’re seeing is that, at the highest levels of government, Maliki has now stuck his neck out. And how it plays in Washington is one thing, but how it plays in Iraq is a very different one. You have the entire Iraqi Cabinet and Muqtada al-Sadr demanding that Blackwater be expelled from the country. In fact, many Iraqi politicians are calling for all of these mercenary forces to be expelled from Iraq. This is perhaps one of the greatest crises of the occupation to date. And right now, Condoleezza Rice is clearly acting as though she’s the president of Iraq. The idea that you can have 28 people gunned down including — and we understand the shooting began when Blackwater operatives fired on an Iraqi vehicle, killing the driver. Then they launched, according to witnesses, some kind of a flamed grenade at the car and engulfed it in flames. And inside was a mother with her infant child. And that’s when the shooting began. And Iraqi witnesses, survivors, say that it was a melee, where Blackwater guys were just indiscriminately firing in the streets.

And what’s very interesting right now is that the United States could turn around and say, yes, we understand that now Blackwater bodyguards themselves will be the target, and therefore they’ll escalate the risk to the U.S. officials. In fact, Blackwater mercenaries now are probably bigger targets than Ambassador Ryan Crocker. And it shows the militancy of the administration in defending this one company, Blackwater USA. And, of course, this is a highly ideologically committed company that is supporting this crusade of the Bush administration. I think that is why we see this massive pushback right now. And it really will define whether or not there is any scrap of sovereignty within the Iraqi government.

AMY GOODMAN: The series of violent incidents that Blackwater has been involved with — why has the Iraqi government responded specifically to this one?

JEREMY SCAHILL: Well, you know, this is a major scandal right now, and I’ll tell you why. The U.S. embassy spokesperson said yesterday that they had never gotten any communications whatsoever from the Iraqi government about any problems with Blackwater. And that’s just an absolute fabricated lie. The fact of the matter is that, going back to at least Christmas Eve of last year, the Iraqi Interior Ministry has consistently complained about the conduct of Blackwater. The Iraqi government alleges that Blackwater has killed journalists, has killed guards in front of government buildings. They have cited a number of incidents in which Blackwater has killed several civilians or wounded others. And, in fact, a senior U.S. official who is a liaison to the Iraqi Interior Ministry, a few months ago told The Washington Post about the complaints that the Iraqis were lodging with the U.S. government, and nothing happened. So, clearly, the United States is lying. The Iraqis have consistently complained about this.

And the fact is, I think, that you had an enormous death toll on Sunday, and the Iraqis felt that they needed to go public with this. You know, last Christmas Eve, an off-duty Blackwater contractor allegedly shot and killed a bodyguard for Adil Abdul-Mahdi, the Shiite vice president of Iraq. And Abdul-Mahdi himself assured Condoleezza Rice that he was keeping that incident under wraps, that he was not going to allow it to get out in the Iraqi press. And we know this because the U.S. embassy sent a cable back to Condoleezza Rice in Washington explaining that Abdul-Mahdi clearly said it was a murder and that if Iraqis had found out about it, they wouldn’t understand how it was that this individual was walking around in the United States a free man. Now, after a dozen incidents involving Blackwater, many of which resulted in the deaths of Iraqi civilians, the government has finally asserted itself. And I don’t think it’s because Maliki has a spine. I think it’s because his government is absolutely weak. He needs to show some kind of strength. His government could fall if Blackwater continues to operate in Iraq.

AMY GOODMAN: Jeremy Scahill, this latest report out of the the Raleigh News & Observer about weapons smuggling allegations.

JEREMY SCAHILL: Right. Well, this goes back to — in January, two former Blackwater employees pled guilty to weapons-related charges that involved contraband and illicit movement of these weapons. Blackwater says that it, in fact, reported these individuals for stealing from the company. But the Justice Department has been investigating. And those two individuals who pled guilty have not been sentenced yet, because they’re cooperating in what appears to be a bigger investigation of Blackwater on arms smuggling allegations.

And what’s interesting is that Congressman Henry Waxman last week sent a letter to the State Department Inspector General Krongard saying that he had been engaged in a cover-up and saying that he had delayed the investigation and was stifling the investigation, and Waxman is going to investigate this now. And he says that the reason that the State Department inspector general is doing this is because he is a crony of members of the Bush administration and is particularly close to the State Department, whose work he is supposed to be overseeing.

AMY GOODMAN: The report said in July Turkey complained to the U.S. that they had seized American weapons from the outlawed Kurdistan Workers Party, the PKK, designated as a terrorist organization by Washington.

JEREMY SCAHILL: Right. And Blackwater is denying that it’s ever been involved with any kind of arms smuggling activity. But the fact is, Henry Waxman’s record has shown, particularly regarding Blackwater, that he is generally right about these things. So it’s going to be interesting.

AMY GOODMAN: We just have 20 seconds. But, Naomi Klein, as we wrap up this full discussion today, in your thesis in The Shock Doctrine, fit Blackwater in.

NAOMI KLEIN: Well, I mean, the thesis of the book is that in the aftermath of a great shock, you push through policies that you couldn’t do otherwise. And this — the policy of privatizing the war on terror, privatizing the homeland security front and also the offensive front in the wars abroad, this is what was done in the shock of September 11th and in the shock of the war in Iraq degenerating in the crisis atmosphere. The security vacuum that we’ve been talking about was created by deliberate policies of this government to dissolve the Iraqi army, to send a minimal number of U.S. troops. And as the invasion and occupation descended into chaos, who filled the gap? It was a corporate mission creep, and Blackwater was one of the biggest winners.

AMY GOODMAN: We’re going to have to leave it there. Naomi Klein, author of The Shock Doctrine, Jeremy Scahill, author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army, thank you both for being with us.