JUAN GONZALEZ: We begin today’s show with an explosive new report about the private military contractor Blackwater. The New York Times is reporting the CIA hired contractors from Blackwater in 2004 as part of a secret program to locate and assassinate top operatives of al-Qaeda.

Executives from Blackwater helped the spy agency with planning, training and surveillance. The CIA spent several million dollars on the program, which the Times claims did not successfully capture or kill any terrorist suspects. Meanwhile, the Washington Post reports Blackwater had operational control over the program.

Officials say the CIA did not have a formal contract with Blackwater for this program. Members of Congress did not learn about it until earlier this year, after it had been canceled.

AMY GOODMAN: To talk more about this story, we’re joined by independent journalist Jeremy Scahill, the author of the bestselling book Blackwater: The Rise of the World’s Most Powerful Mercenary Army. He was working on this story when it broke. His article on the program will appear on thenation.com today.

Jeremy, respond to this exposé.

JEREMY SCAHILL: Well, I mean, I think that what we see here in the Times is a very small fraction — and in the Post, for that matter — a very small fraction of this story. Blackwater has had a longstanding relationship with the Central Intelligence Agency, and I go into this at great length in my book.

There are two figures that I think tell the story of Blackwater’s relationship with the CIA. One is a man named Alvin, aka Buzzy, Krongard. The other is a man named J. Cofer Black.

Buzzy Krongard was the executive director of the Central Intelligence Agency when — in 2002, the number three man at the agency. He reportedly was a friend of or an acquaintance of Erik Prince’s father, Edgar Prince. The two of them ended up meeting officially in 2002, when Buzzy Krongard and Erik Prince arranged a black contract for Blackwater with the CIA to deploy a small team of men inside of Afghanistan on the CIA payroll. It was a $5 million contract. And the official reason for Blackwater going into Afghanistan was to provide protection for the CIA operatives that were operating in Afghanistan in the early stages of the US operations there.

So, Erik Prince himself — he’s a former Navy Seal — goes over with that first team of Blackwater guys as one of the operatives, and he goes to Shkin, which is a town along the Afghan-Pakistan border, where the CIA was running a mud fortress that was called the Alamo. Prince stayed there for a little bit of time. And according to another Blackwater executive who was with Prince on that trip that we talked to for my book, Erik Prince spent a few days there and then went to Kabul to try to win more business with other US federal agencies. So that initial relationship, Buzzy Krongard with Erik Prince, started, we understand, this CIA relationship with Blackwater.

Interestingly, when we talked to Buzzy Krongard, reached him on the phone in the course of doing my book, he was sort of startled at the idea that someone was asking about Blackwater and the CIA, and he said, “I don’t know which came first, the chicken or the egg,” meaning, I don’t know if Blackwater came to us with an offer to work for the CIA or if we we came to them. Now, who knows what’s true and what’s not true?

After that, Blackwater then started a whole division of its company for security operations. That’s pretty much when Blackwater’s role as a provider of private soldiers began. So, after that contract, then Blackwater ended up getting this huge contract inside of Afghanistan.

What the Times and the Post are saying is that, beginning in 2004, Blackwater was hired informally — there was no official contact — through Erik Prince and other executives to actually coordinate assassination teams that would hunt top al-Qaeda leaders in Afghanistan and potentially in Pakistan. Now, I had heard about this program weeks ago and had been doing the work of going through and trying to track down people that could verify this information. I think a lot more is going to come out on this. This is also something — I reached a member of the House Intelligence Committee last night who told me that the Intelligence Committee is, in fact, going to probe the alleged ties of Blackwater to this secret assassination program, that Dick Cheney reportedly ordered hid from Congress.

JUAN GONZALEZ: Well, Jeremy, I was struck by how skimpy the Times report was, in terms of actual facts, other than this, as you mentioned, this — the fact that there was no written contract or agreement, that it was all a word-of-mouth agreement between Prince and some CIA officials. But to your knowledge, did Leon Panetta brief members of Congress about this when he began raising questions about past CIA programs?

JEREMY SCAHILL: Well, I talked to a member of the Intelligence Committee. I’m not going to reveal who it was. And they said that they could neither confirm nor deny that Congress was aware of an alleged role that Blackwater was playing, nor could they say whether Panetta mentioned this at the briefing. I understand from some sources that it seems that there’s inflated reports on exactly how much of an alarm bell Leon Panetta rang when he briefed the US Congress.

I think a central point here, though, is that it shows how there was no wall between the administration and Erik Prince of Blackwater. They knew that this guy was going to be a loyal foot soldier. And you take this, combined with the fact that a former Blackwater executive has alleged that Erik Prince viewed himself as a sort of crusader fighting a holy war in defense of Christianity in an attempt to, quote, “eliminate Muslims and Islam globally,” the idea that then he was working or voluntarily working on some kind of an assassination program makes perfect sense.

Remember also, Juan, that one of the top executives at Blackwater right now is a guy named Cofer Black, twenty-eight-year veteran of the CIA. He was running the assassination program for the CIA in 2002, when Blackwater first started working for the CIA. Cofer Black was head of the CIA’s counterterrorism center. He was the guy who gave orders to the CIA jawbreaker teams: go into Afghanistan, chop off Osama bin Laden’s head with a machete, and bring it back to me in a box with dry ice, because I told the President I would present it to him. He now is running Prince’s private CIA. The notion that Blackwater wouldn’t have developed that kind of a relationship and now has on its payroll three of the biggest clandestine operators of the CIA in modern history, it’s just — it’s incredible.

JUAN GONZALEZ: Well, is it conceivable that the special ops role of Blackwater with the CIA could have affected how the government reacted to the killings that the Blackwater employees were involved in in Iraq?

JEREMY SCAHILL: Well, plausible deniability. Look, if you have a — you create as many barriers between the executive branch and the actual assassinations, because of prohibitions on assassination. This has become a huge issue now in this country. If you can sort of say, this was an arrangement, a private arrangement, between the head of this company and some rogue people at the CIA, then what you’re doing is you’re — and Blackwater is perceived by many as a sinking ship right now.

Part of what could be happening here is that they’re trying to really say Blackwater was actually responsible for all of it, when I think there’s a lot of evidence to indicate that this was an official policy, that Dick Cheney, if he didn’t create the program, was involved with the concealment of the program from the Congress. Look, I had somebody in Congress tell me last night, “Erik Prince was apparently trusted more than the US Congress by the White House, because he knew about this program, and we didn’t.” So, I mean, I think, yes, Blackwater — there’s ample evidence to suggest that Blackwater was involved with this program. And I think we need to probe the role. But there’s also the political reality that the Cheney folks are circling the wagons in an attempt to try to absolve themselves of any criminal culpability.

AMY GOODMAN: Jeremy Scahill, can we get the name straight? What is Blackwater called today?

JEREMY SCAHILL: Well, Blackwater has, you know, twenty different iterations, and they have all sorts of companies. In Afghanistan right now, they’re working for the State Department under the banner of U.S. Training Center. They’re working for the Department of Defense under Paravant. They’re working for — with their aviation wing through Presidential Airways. The official name of the company, how they do business overtly with the US government, is through U.S. Training Center. I understand that they also have some companies that are used for covert operations. TigerSwan is a company that I understand has been used for some of their covert work.

AMY GOODMAN: And the New York Times refers to them as Xe Services, X-E.

JEREMY SCAHILL: Yeah, that’s so last week. Amy. I mean, you know, they change — it changes pretty much every week.

The other thing is they have a — they have an offshore operation, which is a classic, old-fashioned mercenary operation called Greystone, which I understand still does business in Iraq.

And let’s remember, Blackwater is not just working for the US government; they work for the International Republican Institute, a John McCain-affiliated organization that’s been involved with interference in democratic processes in countries around the world and destabilizing countries. There are reports that they’ve been in Pakistan recently. And there’s — I understand there’s going to be some probing of that. In fact, Representative Jan Schakowsky, on August 6th, wrote a letter to Secretary of State Hillary Clinton asking for information about Blackwater’s alleged role in Pakistan right now. This is a company that continues to work at every level, secret and overt, of the US government.

AMY GOODMAN: And let’s talk about Blackwater’s relationship with the Obama administration, the contracts it currently has.

JEREMY SCAHILL: Right. Well, I mean, I’ve spent the better part of the past month pursuing this, and Blackwater has one official remaining overt contract in Iraq. The State Department has confirmed that Blackwater still is armed in Iraq. They’re working technically on an aviation contract, though the State Department told me that their men are allowed to carry weapons and that it’s countrywide in Iraq. Blackwater has these Little Bird helicopters that have become a central part of the transportation of US officials, occupation officials, around Iraq. That is supposed to end on September 3rd. The Obama administration increased the value of that contract in late July by $20 million to $187 million. So Blackwater has made over a billion dollars in Iraq on diplomatic security, as they call it, though some would say they’re involved in the most undiplomatic work possible. They have that contract.

In Iraq, they’re on the third year of a five-year contract for private security services for the US State Department, where they are one of the premier forces transporting US diplomats around the country. When Ambassador Holbrooke, for instance, goes to Afghanistan, his security detail is in part made up of private soldiers. Hillary Clinton, who said that she would ban Blackwater, if elected president, now is the employer of Blackwater in Afghanistan. For the Department of Defense, Blackwater works in a capacity training the Afghan military forces. These are massive, massive contracts that Blackwater still has with the Obama administration.

JUAN GONZALEZ: And in the about thirty seconds that we have left, could you give us a sense — the Times is reporting that these assassination teams did not actually kill anybody. Is that your understanding, as well?

JEREMY SCAHILL: I would raise very serious questions about that, and I’ll tell you why. Cofer Black, when he was head of the CIA’s counterterrorism center, said, shortly after Blackwater started working for the CIA, that they had killed thousands of people and that they either killed or detained thousands of people as part of their covert program. Blackwater is alleged to have been working under the CIA’s paramilitary assassination program.

I think that before we go off to the races with declarations about how programs of this nature didn’t work, let’s remember one very important fact. These guys are former Navy Seals. They are the most sophisticated, highly trained operatives in the US military. That was the bonus of hiring Erik Prince. You are getting, off the books, off the map, unknown, plausibly deniable paramilitary operatives, who were the most seasoned veterans of US covert operations, to work essentially a black program in Afghanistan and Pakistan. I doubt very seriously that, if Blackwater was involved, no one got killed.

AMY GOODMAN: Jeremy Scahill, thanks so much for being with us. His article will appear at thenation.com today. Jeremy Scahill, award-winning investigative journalist, author of the bestseller Blackwater: The Rise of the World’s Most Powerful Mercenary Army. Good luck on Friday night, tomorrow night, on Bill Maher. Jeremy will be on with Jan Schakowsky, Jay Leno and NBC’s Chuck Todd.