Private mercenary company Blackwater USA made headlines last fall after its security forces in Baghdad killed 17 Iraqi civilians in a gunfight. Though the Iraqi Minister of the Interior attempted to ban the company from operating in Iraq, the U.S. State Department recently renewed Blackwater’s year-long contract there. Now Blackwater is making headlines again: Jeremy Scahill reports in The Nation that the Pentagon has asked Blackwater to bid on another lucrative international security contract—this time to “fight terrorists with drug-ties” in Mexico, Bolivia and Colombia.

In “Blackwater’s Private Spies,” Scahill investigates how Blackwater and other private security companies are taking advantage of “emerging war and conflict markets,” and why Washington is investing $42 billion annually in private intelligence contractors.

Scahill reports on Blackwater’s possible expansion into Latin America:

Such an arrangement could find Blackwater operating in an arena with the godfathers of the war industry, such as Lockheed Martin, Northrop Grumman and Raytheon. It could also see Blackwater expanding into Latin America, joining other private security companies well established in the region. The massive US security company DynCorp is already deployed in Colombia, Bolivia and other countries as part of the “war on drugs.” In Colombia alone, US military contractors are receiving nearly half the $630 million in annual US military aid for the country. Just south of the US border, the United States has launched Plan Mexico, a $1.5 billion counternarcotics program. This and similar plans could provide lucrative business opportunities for Blackwater and other companies. “Blackwater USA’s enlistment in the drug war,” observed journalist John Ross, would be “a direct challenge to its stiffest competitor, DynCorp–up until now, the Dallas-based corporation has locked up 94 percent of all private drug war security contracts.” The New York Times reported that the contract could be Blackwater’s “biggest job ever.”

But, Scahill reports, the creator of Blackwater, Erik Prince, has even bigger plans: A move into privatized “CIA-style” intelligence services with a new enterprise called Total Intelligence Solutions. “The company’s leadership reads like a Who’s Who of the CIA’s ‘war on terror’ operations after 9/11,” Schahill writes.

As the United States finds itself in the midst of the most radical privatization agenda in its history, few areas have seen as dramatic a transformation to privatized services as the world of intelligence. “This is the magnet now. Everything is being attracted to these private companies in terms of individuals and expertise and functions that were normally done by the intelligence community,” says former CIA division chief and senior analyst Melvin Goodman. “My major concern is the lack of accountability, the lack of responsibility. The entire industry is essentially out of control. It’s outrageous.”

>> Read “Blackwater’s Private Spies” by Jeremy Scahill in the June 23, 2008 edition of The Nation.

>> Learn more about Blackwater USA in the New York Times special report on the company.