Blackwater immunity deal may complicate Iraq probe

WASHINGTON (Reuters) - A grant of limited immunity by State Department investigators to Blackwater security guards accused of killing 17 Iraqis last month could complicate efforts to bring charges against them, U.S. government officials said Tuesday.

The officials confirmed media reports that State Department investigators had given limited immunity protecting Blackwater guards' statements from being used against them.

But the officials said the guards could still be subject to prosecution using other evidence in the probe into the Sept 16 incident, which is now being led by the FBI.

"They have to reconstruct the case around (avoiding) the statements," that had already been given, a government official said.

Another official said the FBI investigators had not known of the immunity provisions. "Law enforcement said they didn't know what DSI (the State Department's Department of Special Investigations) was doing on the ground," he said.

The FBI took control of the investigation from the State Department early this month. Blackwater says its guards acted lawfully after being shot at, but the Iraqi government says its guards "deliberately killed" the 17 people.

The killing of the Iraqis created tensions between the Iraqi government and Washington, and the Iraqi government took steps Monday to tighter controls on private contractors.

It approved a draft law that would scrap a decree issued by the U.S.-led Coalition Provisional Authority (CPA) in 2004, before it handed over control to Iraqis, which granted foreign contractors immunity from prosecution in Iraq.

The issue of whether and how contractors could be pursued by U.S. courts is under discussion in Washington.

U.S. Sen. Patrick Leahy of Vermont, the Democratic chairman of the Senate Judiciary Committee, called the immunity provisions in the Blackwater case part of a "well-worn pattern" of the Bush administration avoiding accountability.

"If you get caught, they will get you immunity. If you get convicted, they will commute your sentence. They are the amnesty administration," Leahy said.

U.S. Rep. Henry Waxman of California, the Democratic chairman of the House committee on government oversight, asked Secretary of State Condoleezza Rice to provide documents on the immunity provisions and provide officials to brief staff.

Rice met Defense Secretary Robert Gates at the Pentagon to discuss private security contractors and how to improve coordination between the two departments on the issue.

A report by State Department experts last week called for "legal clarity" on the issue of contractor accountability.

Rice spokesman Sean McCormack said she had made clear anyone who broke rules would have to be held to account, adding that she had also taken steps to improve oversight of contractors.

North Carolina-based Blackwater has about 1,000 employees in Iraq who protect U.S. diplomats and other officials. Iraq says there are more than 180 mainly U.S. and European security companies in Iraq, with estimates of the number of private contractors ranging from 25,000 to 48,000. (Additional reporting by Arshad Mohammed and Sue Pleming)