By Chris McGreal
The Obama administration has awarded $220m (£146m) in new contracts to the military contractor formerly known as Blackwater to provide security in Afghanistan. This is despite accusations against the company of murder and indiscriminate killings of civilians in Iraq and investigations into alleged corruption and sanctions busting.
Blackwater contractors in central Baghdad, July 2005: The company was recently given a week to leave Iraq after murder accusations. Photograph: Ahmad Al-rubaye/AFP/Getty Images
The contracts have drawn stinging criticism in Congress and assertions that because of Blackwater's reputation for indifference to innocent lives it will jeopardise the mission in Afghanistan.
But Leon Panetta, the head of the CIA, has defended the new contracts by saying the company, which changed its name to Xe Services as part of an image makeover, has "shaped up their act".
The state department has agreed to pay Xe Services $120m to provide security to new diplomatic premises being built in Afghanistan, including consulates outside Kabul. The CIA has awarded a separate contract worth $100m to "secure its bases" in Afghanistan.
Congressman Jan Schakowsky said: "I'm mystified why any branch of the government would decide to hire Blackwater, such a repeat offender. We're talking about murder … a company with a horrible reputation that really jeopardises our mission in so many different ways."
Panetta said the CIA had little alternative: "I have to tell you that in the war zone we continue to have needs for security. You've got a lot of forward bases. We've got a lot of attacks on some of these bases. We've got to have security.
"Unfortunately, there are few companies that provide that kind of security."
Panetta also revealed that Xe Services underbid rivals by $26m.
Blackwater became notorious in Iraq as a private army that "roamed the streets of Baghdad killing innocent civilians", according to one of the many lawsuits against it. Its guards were involved in a series of killings of unarmed civilians. The most notorious case was the death of 17 Iraqis shot by Blackwater employees in Baghdad's Nisoor square in 2007.
Five Blackwater guards were prosecuted in the US over the killings but the case was dismissed on procedural grounds. The men could not be tried in Iraq because of an immunity agreement imposed by Washington. The Iraqi government recently gave the company a week to get out of the country.
A US congressional committee report in 2007 described Blackwater as "being staffed with reckless, shoot-first guards who were not always sober and did not always stop to see who or what was hit by their bullets".
Two former Blackwater guards are facing murder charges in the US over the killing of two Afghan civilians after they opened fire on a car following a traffic accident in Kabul.
The company has been forced to pay compensation to Iraqis over the deaths of civilians on several occasions as part of legal settlements seen as an implicit admission that some of its guards were responsible for unjustifiable killings.
Blackwater has also been under investigation by the American authorities for alleged bribery of officials in Iraq, Jordan and Sudan, and for attempting to bust sanctions on Sudan.
Last week Erik Prince, Blackwater's founder, said he was getting out of business dealings with the US government. He put Xe up for sale earlier this year. "After three-and-a-half years of an assault by some of the bureaucracy, a sort of proctology exam brought on by some in Congress, it's time to hang it up, because some in Washington view politics as more important than performance in the field."
Prince, a former member of the US navy's special forces who had close ties to senior officials in President George Bush's administration, gave up day to day control of operations last year as the company tried to improve its image, although he remains as chairman of the board.
The state department did not respond to a request for comment but it has previously defended contracts with Blackwater by saying it does not have the staff or means to provide security without employing an outside contractor.